Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at
Speaker 1: Bloomberg and Humble Donna higher across as a reporter with Bloomberg,
Speaker 1: and this week on the show, well, there's no getting
Speaker 1: around it. The world has changed a tremendous amount in
Speaker 1: just the last six weeks. Russia's invasion of Ukraine is
Speaker 1: not only destabilized Eastern Europe, but it's threatening to cause
Speaker 1: disruption in global alliances and macroeconomics the likes of which
Speaker 1: most of us have never seen in our lives. We'll
Speaker 1: try to unpack it all with a very well known
Speaker 1: economist who focuses on global economics. But first, Bolda, I
Speaker 1: thought of you the other night because my daughter is
Speaker 1: she's very good at matt She's taking a P calculus
Speaker 1: and she was doing her homework and I confess I'm
Speaker 1: a little rusty on my calculus. I haven't used it
Speaker 1: in about thirty years. And so she knows this, and
Speaker 1: she knows not to ask me any advice on calculus.
Speaker 1: And you know, I'm sitting in the room watching basketball
Speaker 1: and she she comes at me with a worksheet with
Speaker 1: a bunch of calculus problems on it. I think she
Speaker 1: sends the panic in my eye and she said, don't worry, Dad,
Speaker 1: it's not a calculus question. It's a grammar question. I've
Speaker 1: noticed a grammar problem in this word problem and I
Speaker 1: and I need you to tell me if this is
Speaker 1: right or wrong. And I thought this sounds like Fildonna.
Speaker 1: Like Fildonna, you would you would like refuse to answer
Speaker 1: that calculus question until the grammar, as she was resolved.
Speaker 1: I feel like I'm one of those annoying people who
Speaker 1: will point out grammar mistakes to other people, you know,
Speaker 1: even when they're talking, or especially if Bloomberg with with
Speaker 1: all of our stories, I'll email people, I'll say you
Speaker 1: misspelled this, and it very rarely goes appreciated. Let the
Speaker 1: record show you're the one who said annoying, not me.
Speaker 1: But by the way, about that, yeah, okay, but the
Speaker 1: the segway you're waiting for the segway? I know. And
Speaker 1: and I was thinking about the calculus of global relations
Speaker 1: right now. I think it's about as tricky of an
Speaker 1: equation as we've seen in years, and I think we
Speaker 1: got the perfect guests to solve it for us. What
Speaker 1: do you think we do. That's a great transition. I
Speaker 1: wasn't sure where you're you were going with it at first,
Speaker 1: but great transition. I'm really really excited to have Adam Posen,
Speaker 1: president of the Peterson Institute for International Economics, join our
Speaker 1: show today. Adam, thank you so much for coming on
Speaker 1: the podcast. Thank you, and thank you for not seguaying
Speaker 1: to me about being annoying that would have been, or
Speaker 1: about calculus. Thank you, Adam. I know I'm not the
Speaker 1: only one who's I've lost all of my my high
Speaker 1: school and college calculus. It's just gone. It's like a
Speaker 1: new language to me. It's great to me. Yeah. But
Speaker 1: as to her was when you're doing calculus homework, don't
Speaker 1: worry about the grammar. You're wasting your time. Just just
Speaker 1: just just georder. I think I think I think your
Speaker 1: daughter is onto something right A demonstrate it's how the
Speaker 1: question is phraised. Even if it's a word problem that matters.
Speaker 1: As you are about to demonstrate, it doesn't matter, Adam.
Speaker 1: I want to start out very broadly speaking. I was
Speaker 1: hoping you could just lay out what the Peterson Institute
Speaker 1: is for our audience and what you guys are all
Speaker 1: about sure, thank you. We're a nonprofit, nonpartisan what's called
Speaker 1: the think tank or research institute. We are committed to
Speaker 1: the idea that globalization well managed to open it for
Speaker 1: your trade remove of ideas and people is welfare and
Speaker 1: ancing is which is he can speak for better for
Speaker 1: the people of the world and people of the US,
Speaker 1: and that there are policies that matter in managing that.
Speaker 1: So our staff, which is about senior scholars, half full
Speaker 1: time half academics nolsewhere are people who have generally served
Speaker 1: in senior roles in government and at some point in
Speaker 1: their life got a PhD into some research and now
Speaker 1: do policy work instead of teaching or instead of making
Speaker 1: a big map. You know, I want to get into
Speaker 1: sort of the nitty gritty of the current events around
Speaker 1: the world. Um, but I wanted to first take a
Speaker 1: step back and just talk about the notion of globalization. Uh.
Speaker 1: And and the term globalists. You know, this has obviously
Speaker 1: become sort of a a loaded term among many in
Speaker 1: politics on the right, especially um um, starting on you know,
Speaker 1: during the Trump administration and now obviously you know, uh,
Speaker 1: this whole notion of what you know, what's going to
Speaker 1: happen to the global order of economics after Russia's invasion. Uh.
Speaker 1: You wrote a really interesting piece on this, asking, you know,
Speaker 1: is this the end of globalization? But I was sticking
Speaker 1: back to when I was a kid, and I think
Speaker 1: you and I are pretty much in the ballpark of
Speaker 1: same age, you know, meaning we're very young guys obviously
Speaker 1: um strapping, trapping bright futures. But I was thinking back to, say,
Speaker 1: the seventies and eighties, when we're kids, and there was
Speaker 1: very much a major push back to globalization back then.
Speaker 1: You know, Japan was sort of emerging as a major
Speaker 1: manufacturing powerhouse UM OPEC. There was a lot of resentment
Speaker 1: towards OPEC because of the oil embargoes of the seventies,
Speaker 1: and there was very much this sort of nationalist made
Speaker 1: in America push UM and and year after year you'd
Speaker 1: hear politicians saying, you know, I'm gonna fix this. We're
Speaker 1: gonna bring back manufacturing. We're gonna bring back you know,
Speaker 1: the steel mills and everything else, all these other good
Speaker 1: blue collar jobs. But it all ended up to be
Speaker 1: sort of just talk, right, and through the years it
Speaker 1: seemed like sort of a further integration of the US
Speaker 1: and the global economy was almost inevitable, like like gravity, right,
Speaker 1: you know, um, with better technology, better transportation, air travel,
Speaker 1: that it was just inevitable that the world was gonna
Speaker 1: trade with each other more and become sort of more
Speaker 1: liberal globally as far as trade goes. So I'm wondering,
Speaker 1: is this episode we're experiencing now and really which started
Speaker 1: under the Trump administration, is it a different Is this
Speaker 1: a game change or a nours it? You know, is
Speaker 1: it sort of the same idea that there's this pushback,
Speaker 1: but that sort of that gravity of globalization will will
Speaker 1: take over again and the world will bend towards that
Speaker 1: that outcome eventually. It's actually a little worse than you
Speaker 1: portray it. Um. The it isn't just since Trump. We
Speaker 1: we published some research in colleagues did about two years
Speaker 1: ago where we decided to look at the facts, and
Speaker 1: the US has actually been deglobalizing or closing itself off
Speaker 1: more accurately basically since roughly two um, so it's twenty years.
Speaker 1: It accelerated on their Trump and but it and it
Speaker 1: got more vocal. But actually we have been falling behind.
Speaker 1: And when I say coming behind, I mean that quite
Speaker 1: literally the rest of the world, including high income democracies
Speaker 1: like those in Europe and Japan, but also places that
Speaker 1: you would not think of as terribly liberal or open
Speaker 1: have been continuing to open up. The US is a
Speaker 1: very big outlire. It's not just trade, it's for direct investment,
Speaker 1: it's trade deals, it's immigration, the whole host of dimensions
Speaker 1: on which the US has been closing itself off increasingly
Speaker 1: for twenty years. So you're right that the perception is
Speaker 1: the globalization most dish other not that wiped out everything
Speaker 1: in front of it. But that's actually a false characterization.
Speaker 1: What has happened and I do think is the turning
Speaker 1: point now, and there I agree with you, is that
Speaker 1: these longer term worries about China not playing fair and
Speaker 1: taking advantage of us, and this long term political sense
Speaker 1: in the US that we we have to protect the
Speaker 1: the limited number of manufacturing jobs in the world is
Speaker 1: the problem. Those things are accelerated and reinforced by what's
Speaker 1: happening now in Ukraine, by the Russian invasion. And so
Speaker 1: I do think we're at a turning point where the
Speaker 1: world is starting to break into economic blocks in a
Speaker 1: way we haven't seen. As you said, you're in all time.
Speaker 1: So you have been writing quite a bit just to
Speaker 1: bring this all back to the recent event. You've been
Speaker 1: writing quite a bit about this, which is why I'm
Speaker 1: so happy to have you on the podcast this week.
Speaker 1: But in one of your recent pieces, you did write
Speaker 1: exactly that that the world is splitting into two camps,
Speaker 1: one center on China, one around the US. So I
Speaker 1: wanted to ask you to to talk about them, what
Speaker 1: that looks like and how that develops. Yeah, and I'm
Speaker 1: grateful to you. Feel done for inviting me on the
Speaker 1: show and noticing what I've been writing. And then you're
Speaker 1: doing a think think that God is helping people notice
Speaker 1: what you're saying. Um, I think the splitting into two
Speaker 1: camps isn't going to be absolute. So you know, Trump
Speaker 1: and his US trade representative Lightheiser had this term decoupling
Speaker 1: from China, which they didn't really do, but to the
Speaker 1: extent they tried it, As my colleague at Peterson, Chad
Speaker 1: Bound and others are documented the failed. Um. But what
Speaker 1: I do think is happening is what I call corrosion
Speaker 1: of globalization. That there were these linkages along multiple lines,
Speaker 1: including people going back and forth, ideas going back and
Speaker 1: forth business norms as well as things like trading in
Speaker 1: hard woods manufacturers, um, and that's going to get increasingly separated.
Speaker 1: I think actually the trade stuff will continue more than
Speaker 1: other things because it's harder to control and it's harder
Speaker 1: to substitute for. But you know, we're already seeing restrictions
Speaker 1: on American ownership in China and vice versa on Chinese
Speaker 1: ownership in the US. We're already seeing a lot of
Speaker 1: suspicion about Chinese grad students and otherwise students and professors
Speaker 1: in the US. I think a lot of its Exandrea.
Speaker 1: But whatever it is, we're gonna end up in a
Speaker 1: world where there's going to be a lot of restrictions
Speaker 1: focused on keeping technology moving between the US and China
Speaker 1: and between US and allies and Chinese want. And that's
Speaker 1: a world that probably a slower innovation that reinforces the
Speaker 1: divisions because you start having different technical standards, you start
Speaker 1: having different product lines, and and so it just becomes
Speaker 1: real self reinforcing, you know. And Adam, I want to
Speaker 1: uh sort of ask you to put on your Central
Speaker 1: bankers hat um and and listeners who aren't familiar with that,
Speaker 1: AMA don't read his Wikipedia pages. One of these fascinating resumes.
Speaker 1: We would need a whole another podcast to go through
Speaker 1: it all. But work for some time at the Federal Reserve,
Speaker 1: the Bank of England. UM. I don't know if you
Speaker 1: work for consulted with the Bundesbank in Germany. UM long ago.
Speaker 1: Thank you, Thank you for touting not mine. It's a
Speaker 1: good one. It's a good one. I encourage people to
Speaker 1: read it. But I want to talk specifically about UM inflation.
Speaker 1: You know, one of the things people like to say
Speaker 1: about this deterioration of globalization is that it will be
Speaker 1: an upward pressure on inflation obviously going forward. But you know,
Speaker 1: when we look at this red hot inflation that we're
Speaker 1: seeing right now, there's a lot of finger pointing going on. Obviously.
Speaker 1: You know, there's some research from the FED sort of
Speaker 1: pointing out the finger at fiscal policy. UM. I think
Speaker 1: a lot of people are pointing their finger at the
Speaker 1: FED for keeping policy so loose, uh, perhaps for too long. UM.
Speaker 1: The de globalization and obviously the supply chain issues that
Speaker 1: we've seen around the world. I wonder if if in
Speaker 1: your head it's possible to rank sort of what the
Speaker 1: contributors have been uh to inflation. And you know, with
Speaker 1: the benefit of hindsight, is there anything you think the
Speaker 1: FED or Congress and the government did wrong far as
Speaker 1: monetary or fiscal policy to get us in this situation. Yeah,
Speaker 1: I think that the story is a little more complicated
Speaker 1: in terms of the linkage between globalization and foreign policy.
Speaker 1: I think the reduction in openness it does, uh diminish
Speaker 1: the amount of downward price pressure you get from abroad
Speaker 1: and diminishes competition, and over time that's bad for both
Speaker 1: inflation and productivity. But I think in the short term
Speaker 1: it's actually kind of disinflationary because it lowers the return
Speaker 1: on capital because you're investing duplications and redundancies. It lowers
Speaker 1: the diversification of capital because you're having to keep more
Speaker 1: money at home, either because of regulation or fear, and
Speaker 1: so in the first instance, it slows things down. In
Speaker 1: terms of why we have such inflation in the US
Speaker 1: right now, I think a chunk of it is stuff
Speaker 1: that nobody foresaw. That people myself included lots of much
Speaker 1: smarter people in the central banking community, didn't fully get
Speaker 1: just how big a deal it was going to be
Speaker 1: to reopen the economy. After COVID shutdowns, and in particular
Speaker 1: how disruptive that would be to labor markets. Now, it's
Speaker 1: interesting if you compare the US and Europe. The euro
Speaker 1: areas saying before the Russians in the Ukraine, their inflation
Speaker 1: rate was meaningfully lower than the US, and you know,
Speaker 1: and their difference between core and headline inflation, meaning how
Speaker 1: much of it was just attributable to energy versus more
Speaker 1: general inflation was much bigger than the US. And I
Speaker 1: think that was consistent with the story that we did
Speaker 1: much better than the US had done in two thousand
Speaker 1: eight pen and in the past about looking after people
Speaker 1: when there was an external but an exologia crisis, in
Speaker 1: this case, the pandemic, but we didn't do it quite
Speaker 1: as well as the Europeans. That the Europeans ran their
Speaker 1: programs to encourage people to stay in their jobs. They
Speaker 1: subsidize people working part time or people being furloughed but
Speaker 1: not laid off, whereas some classic US fashion, most workers
Speaker 1: who had to get aid had to actually lose their job,
Speaker 1: and I think that led to a lot of the
Speaker 1: job switching and bidding and mismatch that we saw um
Speaker 1: driving up wages. But the other thing, and here people
Speaker 1: like my colleagues leve a blond charge Jason Furm and
Speaker 1: Larry Somers, I think are right. Is the American Rescue
Speaker 1: Package of early, the big additional fiscal package to the
Speaker 1: Biden administration path through Congress, really was too much and
Speaker 1: too short a time. I mean, we we didn't need
Speaker 1: as much as we spent then, and it was all
Speaker 1: spent in a pretty short order, and so you did
Speaker 1: get overheating. So then you turn to the FED, and
Speaker 1: I promise I won't go on forever, But then you
Speaker 1: turn to the FED. I think the FED took a
Speaker 1: reasonable gamble, which was that if we run the economy hawk,
Speaker 1: which is a lot of good reasons to want to do,
Speaker 1: especially since we kept under shooting inflation for years before
Speaker 1: this UM, there's a chance E company overheat, but we
Speaker 1: can afford to see how loo we can go. I
Speaker 1: think the FED took the gamble, but I think they
Speaker 1: should have and I would have, sitting in their place,
Speaker 1: made the same game. But I think by the time
Speaker 1: the Biden administration announced the American Rescue Package, and certainly
Speaker 1: by middle of one, it was very clear the gamble
Speaker 1: turned out badly and they should have been changing policy
Speaker 1: and admitting they should need a change policy, meaning move
Speaker 1: towards tightening. By that, I don't fully get what happened
Speaker 1: essentially between April and December of last year. Adam. I
Speaker 1: think I can speak for Voldada, and when I say
Speaker 1: that journalists like us, we like it when people like
Speaker 1: you go on forever. So so I love to hear
Speaker 1: myself talk perfect Adam. What about the supply chains component
Speaker 1: of this. I heard another interview you did with the
Speaker 1: Marketplace podcast a couple of weeks ago, and you were
Speaker 1: talking about how there's this fear potentially with other countries
Speaker 1: that they're thinking maybe US, the US and others could
Speaker 1: start to cut them off. Countries are moving production. I
Speaker 1: think the term that's used a lot is on shore
Speaker 1: or on shoring, And you know, we're hearing announcements from
Speaker 1: from countries like Hungary. They're reporting food because of the
Speaker 1: issues around supply chains and what's happening obviously with Russia
Speaker 1: and Ukraine. So how does how does that play a
Speaker 1: part in all of this? Oh, it definitely plays a part. Atlanta,
Speaker 1: and we've got you know, the first thing that we
Speaker 1: said about supply chains is that they weren't designed and
Speaker 1: any sort of popped down way they were. They were
Speaker 1: they sort of grew up organic. You had these large
Speaker 1: multinational companies who would make individual decisions at the working
Speaker 1: level of this departments as I got to cut cost,
Speaker 1: Oh I can move this from US to China, or
Speaker 1: from China to all and or if you're German, from
Speaker 1: Boland to Romania, um and and each individual decision may
Speaker 1: have made sense, but then it ended up with a
Speaker 1: situation which was revealed exposed to be we had really
Speaker 1: overextended this projects. And similarly lots of small businesses as
Speaker 1: well as large businesses that oh, this is great just
Speaker 1: in time delivery. I don't need to worry about inventory.
Speaker 1: I can get what I need whenever I wanted. Oops,
Speaker 1: that didn't really work out. And so I think there
Speaker 1: is just a genuine learning experience and adjustment that's worth
Speaker 1: doing in in terms of recalibrating what's in the supply
Speaker 1: chains and thinking about the more top down the sense
Speaker 1: as a risky portolio of investments rather than as a
Speaker 1: system you could rely out. And my colleagues at Peterson
Speaker 1: I mentioned chap Bow, but also Mary Lovely in particular,
Speaker 1: have been doing a lot of interesting work on this um.
Speaker 1: But then as you mentioned there there it starts being
Speaker 1: this sort of political angle to it, and that's you
Speaker 1: angle to it, and that's where things really get as
Speaker 1: a trouble. The basic economic instinct and analysis is you're
Speaker 1: better off diversifying than trying to be self reliant, and
Speaker 1: you're better off stockpiling than trying to insist on production. Uh. First, directly,
Speaker 1: just over time, is put your less at risk or
Speaker 1: where you get yourself from the second, because if you
Speaker 1: go into a world where everybody's scared the other people
Speaker 1: won't give them what they want, then you get hoarding,
Speaker 1: which is what we saw sadly at the start of
Speaker 1: the COVID pandemic, where the rich country's hoarded medical equipment
Speaker 1: and vaccines rather than allowing each other the poor countries
Speaker 1: to get accessed and so and so. Now we see
Speaker 1: this situation where Germany made itself much to dependent on
Speaker 1: one supplier of energy as to Italy in this case Russia,
Speaker 1: and it would be better if they had been more diversified.
Speaker 1: But um, you know, uh, that's not the way it
Speaker 1: worked out. And yet we still have Americans officials like
Speaker 1: us t R. Ambassador tie or or or even President
Speaker 1: by himself saying we need to make more at home,
Speaker 1: we need manufacturing at home. Frankly, it's gonna make us
Speaker 1: wor saw. I feel like there is a certain element
Speaker 1: of politician who wants to bring the manufacturing back on shore,
Speaker 1: but also cap immigration um. And it seems it seems
Speaker 1: to me like you can have one or the other.
Speaker 1: If you try to do, you're gonna be in trouble.
Speaker 1: I don't I don't see how we couldn't say a
Speaker 1: fox Con type of manufacturing facility or a semiconductor foundry
Speaker 1: without you know, some supply of both low skill and
Speaker 1: high skill skill immigrants to pull that off. Is that
Speaker 1: is that basically you know the deal. I think they're
Speaker 1: exactly right on two counts. First, that for all the
Speaker 1: talk about economics, these are very much political decisions um
Speaker 1: that not by the individual companies necessary, but the elected officials.
Speaker 1: That often it's the same people who are anti immigration
Speaker 1: are also anti trade, also anti foreigner in other ways.
Speaker 1: And we saw this in the UK and Brexit as well.
Speaker 1: That it you know, it wasn't just this rational decision. No,
Speaker 1: I don't want to have too much regulation from the EU.
Speaker 1: The same people who were voting for Brexit were the
Speaker 1: same people who were nasty the refugees, for the most part,
Speaker 1: who were the same people who are just generally suspicious
Speaker 1: of foreigners. So there's that element. But you made a
Speaker 1: very important point that immigration is critical through all kinds
Speaker 1: of processes, not just manufacturing services, the functioning of the
Speaker 1: US economy. And this has been true across our entire history.
Speaker 1: This is frankly true going back to the ancient Egyptians
Speaker 1: where they brought in these the Israelites of the time
Speaker 1: to work in the fields. You know, you really set
Speaker 1: your economy back when you don't make good use of
Speaker 1: the people who want to come work there. And and
Speaker 1: so this is reassuring. When it is combined for ideological
Speaker 1: reasons or even unwittingly with anti immigration, is definitely going
Speaker 1: to fail. I also wanted to ask you how these
Speaker 1: trends manifest themselves for the average person. So it's the
Speaker 1: average American. You know, if if the average American is
Speaker 1: looking around, how do we see some of these trends
Speaker 1: playing out? I think you mentioned we're going to have
Speaker 1: less innovation, but how else is the all changing around us?
Speaker 1: On an everyday basis sort of yeah, I think well,
Speaker 1: I mean, clearly, part of it is the short term inflation,
Speaker 1: and that's very meaningful people, meaningful for people. Part of
Speaker 1: it is we're already starting to see less variety in
Speaker 1: our stories and you know, and evenage sometimes when people
Speaker 1: say that is, oh, you will feed liberal, you want
Speaker 1: twenty kinds of trees and competter. But it also means
Speaker 1: things very practically in terms of what kinds of cars
Speaker 1: are available, what kinds of computer capacities are available, what
Speaker 1: kinds of training frankly is available. Because you start pulling out,
Speaker 1: for example, the thousands of Chinese graduate students and researchers
Speaker 1: from the US science system, we don't have enough people
Speaker 1: to teach a lot of classes, uh, and to to
Speaker 1: enable us to develop our our science capabilities. And so
Speaker 1: we're already starting to see some of these things. I
Speaker 1: think we're also going to see very soon. Um, you know,
Speaker 1: probably after some correction in the stock marked whenever the
Speaker 1: I explain to you, which they will. Um, you're gonna
Speaker 1: see somewhat lower returns going forward because people are not
Speaker 1: going to be able to diversify and and money sort
Speaker 1: of shut up in inside the US doesn't have to
Speaker 1: elicit as competitive a yield. So I think people are
Speaker 1: going to really start feeling it very soon. Adam, I
Speaker 1: gotta say I personally, I do want the twenty types
Speaker 1: of cheese. Um, you can call me what everyone, I'm
Speaker 1: I'm done with that. But speaking of food, UM, that's
Speaker 1: a big topic these days. I don't know if this
Speaker 1: takes you out of your ears comfort zone at all,
Speaker 1: because it's not often that sort of food and grain
Speaker 1: and fertilizer prices enters the discussion of macro economics. But
Speaker 1: I feel like they are now and and perhaps will
Speaker 1: even more so in the future. You know, obviously Ukraine
Speaker 1: Russia are both big producers of wheat, huge producers of
Speaker 1: all manner of fertilizers. Um. You know, there's a lot
Speaker 1: of talk about potential shortages of both. We've already seen
Speaker 1: the prices go through the roof. You know, how are
Speaker 1: you thinking about this in economic terms and really geopolitical terms?
Speaker 1: I mean, is this the sort of the setup for
Speaker 1: the type of Arab spring that we saw where high
Speaker 1: food prices sort of led to a lot of destabilization
Speaker 1: in the Arab world? Um? How big of a risk
Speaker 1: is this just for the world in general and the
Speaker 1: next year or two. It's a very astute question. And
Speaker 1: again my colleagues of Peterson instut we have some experts
Speaker 1: working on this. One is a political scientist, Colin Hendrix,
Speaker 1: who thinks about this very much and the geopolitical context,
Speaker 1: but also our colleagues Katherine Ross and Sherman Robinson have
Speaker 1: worked on food issues. The most important point is to
Speaker 1: understand that this is very much an issue for the
Speaker 1: developing world. And so that's why I say you're very
Speaker 1: right to mention where example Arab spring, Um that it
Speaker 1: turns out that Egypt and other parts of North Africa
Speaker 1: and the Middle East are a very heavily dependent on
Speaker 1: we think of peter bread for a large part of
Speaker 1: the diet of for people and be they are very
Speaker 1: dependent on Ukraine and Russia for that Um. And again
Speaker 1: some of what we said about medical technology as rich
Speaker 1: folk in the U s and I know not everybody
Speaker 1: in the US is rich, but on average by world standards,
Speaker 1: So it's Ridge spoke. In the US we get the
Speaker 1: stuff because we're willing to pay the higher price, and
Speaker 1: the developing world doesn't. UM and Secretary Yelling Treasure Yelling's
Speaker 1: latest speech talks a little bit about some of these things. UM,
Speaker 1: So it is an energy crisis, are very real for
Speaker 1: a lot of these countries. The people in these countries
Speaker 1: that they are net importers of an energy and energy
Speaker 1: is priced in dollars, which means it's very expensive for
Speaker 1: people in these countries. So there's a lot going on
Speaker 1: there that's pretty scary and could have lasting geopolitical effects
Speaker 1: in the sense of maybe not revolutions, but changes in government,
Speaker 1: radicalization of people, and social unrest because you know, hunger
Speaker 1: and lack of energy is is a big deal. Um
Speaker 1: to understate it, so I I can just go on.
Speaker 1: I don't want to, because it's it's it, this is
Speaker 1: the reality, and it's there are things the globe can
Speaker 1: do about it, even in the context of global warming.
Speaker 1: There are things we can do, but it requires a
Speaker 1: level of global coordination that we were inadequate in providing,
Speaker 1: we being the rich country governmance UM during COVID and
Speaker 1: so I'm not very confident we're going to respond any
Speaker 1: better this time around US. What what types of responses
Speaker 1: because we did see the US, the EU and a
Speaker 1: bunch of other countries response very respond very forcefully to
Speaker 1: to Russia in terms of all of the sanctions that
Speaker 1: have been put on, and that a lot of people
Speaker 1: were saying did show the sort of unity among the
Speaker 1: cohort of western or democratically uh democratical country. So I
Speaker 1: think that's a fair point. Um in the piece you
Speaker 1: already excited, I've written about that. I think the unity
Speaker 1: and an activism that the European Union has shown on
Speaker 1: this being the SANK coordinated sanction for fron not just
Speaker 1: the US, but Singapore, Australia, Switzerland and Korean is really impressive.
Speaker 1: But that's and even though that costs the money that
Speaker 1: is offense, it's another thing to then say, oh, let's
Speaker 1: worry about the spillovers on people in Africa or South
Speaker 1: Asia or Central America. UM, And unfortunately those those are
Speaker 1: separate issues. And again I'm not blaming the Europeans. I mean,
Speaker 1: on on a year to year basis, they give five
Speaker 1: to tenfold in aid UH and open up their markets
Speaker 1: to trade as much or more than the US does
Speaker 1: from developing countries. But you know, I just I would
Speaker 1: there is terrible things that happened during covid UM that's
Speaker 1: already put burdens on these countries. The US having inflation
Speaker 1: and having to raise rates put another burden on these countries,
Speaker 1: and then shortages of energy and food is a third bird.
Speaker 1: So you know, people at the i m F, like
Speaker 1: the managing director and the new deputy Managing director kee
Speaker 1: To Cobenough, have been speaking about this. But you said
Speaker 1: at the start about what are the policies, I don't
Speaker 1: seem much out there in the in the bucket of proposals.
Speaker 1: I mean, there should be coordinated buying and transferring of
Speaker 1: of limited resources over a temporary period. There should be
Speaker 1: strategic reserves like we have for energy, for food and
Speaker 1: medicine for people in the developing world. There should be
Speaker 1: efforts to assure countries that if they are willing to
Speaker 1: export and sell their grain or or their soybean oil
Speaker 1: or whatever, that they will be able to get trade
Speaker 1: in return, because that's the only way you get countries
Speaker 1: to be willing to export to others. Um And as
Speaker 1: we mentioned, as we discussed, the Biden administration is not
Speaker 1: being very good about that. So there's a lot to
Speaker 1: do um and I hope I am completely wrong about
Speaker 1: how little. In my view, uh, the the US is
Speaker 1: likely to do on this front, God dam to bring
Speaker 1: it back um soil to the realm where Bill down
Speaker 1: and I exist in you know, focused on markets, um U,
Speaker 1: a couple of things. I'm curious what you think about.
Speaker 1: Um What is obviously there's a lot of talk about
Speaker 1: how the US and European sanctions against Russia could potentially
Speaker 1: disrupt the dollars role as sort of the most important
Speaker 1: international currency. You know, there's already been talk about UH
Speaker 1: Saudi Arabia perhaps selling oil to China priced in yuan,
Speaker 1: Russia's demanding rubles um for its energy. Um So, I'm curious,
Speaker 1: and from what I've read of yours, I I don't
Speaker 1: get that you buy sort of the death of the
Speaker 1: dollar story. Um So, wonder if you could talk a
Speaker 1: little bit about that, and also what you're thinking about
Speaker 1: interest rates going forward. I mean, it just seems like
Speaker 1: there's no lid on rates at this point and nothing
Speaker 1: that's gonna stop this ascent in yields. Um So, I'm
Speaker 1: curious how you're thinking about both the dollar and and
Speaker 1: interest rates right now. And obviously this is what a
Speaker 1: lot of us are thinking about. And I'm spending most
Speaker 1: of my thinking time as the post management. I'm on
Speaker 1: this um in terms of the dollar. There's no question
Speaker 1: that the first instinct of people seeing what the US
Speaker 1: alliance did to Russian all of ours to Russian companies
Speaker 1: to boot into the Russian economy, say oh my god,
Speaker 1: I would be better off if I had some way
Speaker 1: of getting around the US add some way of having
Speaker 1: assets to either couldn't be frozen or could be used
Speaker 1: no matter what the US did. And this is particularly
Speaker 1: true for you know, people who borderline criminal regimes, people
Speaker 1: who are politically deemed enemies of the US, people with
Speaker 1: cleptocratic reviews. But it's also frankly even for a lot
Speaker 1: of businesses, individuals, companies, even country that might agree with
Speaker 1: the sanctions on Russia in the case of this invasion,
Speaker 1: but then are forced to think, but you know, the
Speaker 1: US is not that politically reliable. What happens if they
Speaker 1: suddenly turn on me? Uh? There shows they're willing to
Speaker 1: do that. So there is that sense of people thinking,
Speaker 1: oh my god, I wish I had in alternives at
Speaker 1: the doll But the fact is there's a different problem
Speaker 1: that over overrides that, which is you need and alternatives,
Speaker 1: And if we're in a world where it's not just
Speaker 1: the US throwing its weight around, but the world which,
Speaker 1: as we've said, I think is dividing along political to
Speaker 1: your political lines. Then you're sort of stuck with, well,
Speaker 1: I can put my money in China or in Chinese assets,
Speaker 1: but then can I get it out from there? Will
Speaker 1: it be useful to me? And you look at things
Speaker 1: like the Chinese authorities deciding no, Jack Ma, you can't
Speaker 1: do an anti I p L because you've annoyed us,
Speaker 1: or you know, know all of you who owned assets
Speaker 1: in private school teaching those assets are now worthless, or
Speaker 1: you know, we're maintaining capital controls on even resident Chinese
Speaker 1: born people on how much money they can take out
Speaker 1: of the the economy. So you end up with a
Speaker 1: world where people are not thrilled about being under the dollar,
Speaker 1: but because of the security situation, um the alternatives become
Speaker 1: even less attractive, and people are pushing more money frankly
Speaker 1: into say fassets. What are considers say facets like the
Speaker 1: dollar UM. So I think over the long term, meaning
Speaker 1: five years or more, out you will see some pressures
Speaker 1: against the dollar or attempts to create other financial systems
Speaker 1: or to build up what the Chinese payment system looks
Speaker 1: like but for the next several years, I don't see
Speaker 1: it as as on net having much effect on the dollar.
Speaker 1: If anything, the general facility environment will lead to more
Speaker 1: of excess savings chasing the dollar because there's not as
Speaker 1: many places the money. So can you actually talk more
Speaker 1: about that, about these places where money can go and
Speaker 1: where people will be turning to In terms of investments,
Speaker 1: I think you wrote recently that there will be new
Speaker 1: limits on where people can investor savings and that's going
Speaker 1: to drive down the range of diversification and average returns.
Speaker 1: So where do you see investors people putting their money.
Speaker 1: It's a really good question, and and I think you
Speaker 1: know it's there's obviously this idea among tech pros and
Speaker 1: the Britarians and unholy breedings of them that cryptocurrency, cyber
Speaker 1: currencies are going to be the answer. I mean, if
Speaker 1: it it's just like we were talking about the ideology
Speaker 1: of anti quopalization, the anti statist ideology leads to people saying, hey,
Speaker 1: this is exactly what we set up cyber for, and
Speaker 1: be it be a big coin or whatever, because the
Speaker 1: whole point is, look, the state does appropriate your money.
Speaker 1: The Russians are appropriating things that the Americans are expropriating.
Speaker 1: This is why you want an asset that's outside the state.
Speaker 1: But again this sort of misses the point. The reason
Speaker 1: we have assets based on state isstruance, meaning cash and treasuries,
Speaker 1: is because only the state can guarantee things. And in fact,
Speaker 1: I think whatever happened that at the crypto fest that
Speaker 1: you went to in Florida. Um, the the future for
Speaker 1: these these currencies is not very good because in the
Speaker 1: kind of situation we're in, they're going to be confronted
Speaker 1: with either you're adhering to the sanctions that we're putting
Speaker 1: on banks in other places to make sure that your
Speaker 1: your fake burreency doesn't become a way to avoid sanctions.
Speaker 1: And if the firms agree to that, then they lose
Speaker 1: some of their appeal to the libertarian nut jobs. UM.
Speaker 1: And on the other hand, if they don't agree to that,
Speaker 1: then they're basically violating sanctions that are subject to criminal prosecution.
Speaker 1: So you know, it may or may not kill them.
Speaker 1: But if I were sitting in I don't mean the individuals,
Speaker 1: I mean these current these fake currencies, UM. If I
Speaker 1: were sitting in of a regulatory seat in the UTH
Speaker 1: government right now. I would be using this as my
Speaker 1: excuse to force as many of these these entities to
Speaker 1: choose one side or the other. And anybody who chooses
Speaker 1: to say I'm not going to come slide with sanction
Speaker 1: but um, so you know, so then comes what do
Speaker 1: you what else are you gonna put your money? And
Speaker 1: then so you're gonna end up. You know. I think
Speaker 1: the euro potentially is a big winner from this process.
Speaker 1: UM and the more Europe acts and concert and and
Speaker 1: the issues, they have a real opportunity to issue euro bonds.
Speaker 1: There's an alternative safe asset to the US UM to
Speaker 1: the dollar, and and there would be huge demand for
Speaker 1: that UM. But besides Europe, I don't see any other
Speaker 1: new asset classes that will will be able to retain
Speaker 1: all the attributes you want, which is liquidity, property rights,
Speaker 1: and wide acceptance. Mike, just to catch catch our listeners up,
Speaker 1: Adam is referring to the cryptoconference that I'm attending this
Speaker 1: week in Miami. Yeah, Gildana is surrounded by that what
Speaker 1: Adam called the unholy breed of techno bros and libertarians.
Speaker 1: But that I hope you run it a Lambeau for
Speaker 1: the week. You could put that on the expense account
Speaker 1: rental Lambeau. You think, I think we should, I'll do it.
Speaker 1: We should fly Adam down to sit in the back
Speaker 1: seat of the Lamb but I'm not sure they have
Speaker 1: back seats actually, but he could sit in the Lambeau
Speaker 1: and you could, you know, give rides to techno bros.
Speaker 1: And have Adam. That would be a good would be
Speaker 1: a good separate, separate podcast. I I wanted to ask
Speaker 1: you a little bit about Um Peterson's relationship with the
Speaker 1: government there in d c UM and the White House.
Speaker 1: From what I read, you know, uh, you know Peterson. Obviously,
Speaker 1: to me, it sounds like you try to take a nonpartisan,
Speaker 1: sort of objective approach to things, UM. And you've formerly
Speaker 1: had a dialogue with both Republican and Democratic administrations, you know,
Speaker 1: the Bush administration, the Clinton administration. UM, it sounds to
Speaker 1: me like that all sort of ended with the Trump
Speaker 1: administration and correct me and if I'm wrong about that,
Speaker 1: But I'm curious, what's it What is it like now?
Speaker 1: Is there again sort of a dialogue with a Biden administration?
Speaker 1: And if you know, you've got five minutes with Joe Biden,
Speaker 1: what would sort of be your advice to him right
Speaker 1: now with this this economic situation very clear, I do
Speaker 1: not have access to the president, and uh it is
Speaker 1: very rare in my career that I have had access
Speaker 1: to President may be president. Um. But we are generally,
Speaker 1: with the exception of the Trump years, seen as people
Speaker 1: who honestly are trying to make a difference on policy,
Speaker 1: people whose views broadly are worth considering. Even if it
Speaker 1: turns out that we uh might disagree on some things
Speaker 1: that people who are evidence based, and therefore, as a
Speaker 1: result of all that, people are reasonably influential in certain spheres.
Speaker 1: And I mean that's the goal of being a think tank,
Speaker 1: to be seen as in line with your values, honestly
Speaker 1: making arguments that the policymakers should consider. And um. And
Speaker 1: occasionally you get residents and you're able to get them
Speaker 1: to do things you want them to do, com persuade
Speaker 1: them that they should do it. So under the Trump administration,
Speaker 1: like people in all kinds of fields and areas, you
Speaker 1: know it was your political enemy. You disagree with us,
Speaker 1: therefore we're gonna say nasty things about you. I'm grateful
Speaker 1: and glad we never got horribly attacked. We never got
Speaker 1: that by you know, some some flash mob either on
Speaker 1: the Internet or in general, that the Trump associated people
Speaker 1: have been known to sit on people they don't like.
Speaker 1: We've been fortunate that way. But you know, we essentially,
Speaker 1: with the exception of people at the Council of econocguisers,
Speaker 1: we essentially had no contact with senior officials in the
Speaker 1: Trump aministration in the forty years of the institute's existence
Speaker 1: or thirty five years prior to that. UM, we had
Speaker 1: varying degrees of influence, but we always were in conversation. UM.
Speaker 1: We were in conversation constructively with people in the first
Speaker 1: Bush administration, very actively in conversation with and hope helpful
Speaker 1: I think to people in the Plan administration. We continued
Speaker 1: that in the second Bush administration. We continued that in
Speaker 1: the Obama administration. So then you get to the Biding administration,
Speaker 1: and you know, it's like again, like everybody else, nothing
Speaker 1: special to us. The Bid administration respects will of law,
Speaker 1: and respects the idea that people can disagree, and respects
Speaker 1: that you should try to do the best thing in government,
Speaker 1: and whatever else you think of the Buying administration, those
Speaker 1: three things are very true and are good things. So
Speaker 1: we do have some resumption of normal interaction with senior
Speaker 1: officials in the administration. But big but um the administration,
Speaker 1: including some people I know well personally and have spoken to,
Speaker 1: is in I think, a very different and wrong position
Speaker 1: on a lot of trade issues and a lot of
Speaker 1: globalization related issues. And they believe that people like us
Speaker 1: and some of our current staff and affiliates who were
Speaker 1: officials in the Clinton and Obama administrations were equally as
Speaker 1: wrong in their approach to trade and globalization, and that
Speaker 1: it's politically and economically important to put that aside. So
Speaker 1: we are agreed to disagree, and we don't have anywhere
Speaker 1: near as much interaction with the people on the same
Speaker 1: trade side of the administration as we do with people
Speaker 1: on the finance macroeconomic side administration. That's fair, I mean,
Speaker 1: that's very different from being shut out and people denying
Speaker 1: what you say. But I wish we had a bit
Speaker 1: more opportunity to persuade some of our colleagues in the
Speaker 1: Biden administration that where they're essentially continuing Trump administration policies
Speaker 1: on immigration, on trade, on foreign direct investment, they're making
Speaker 1: a mistakes in terms of globalization in this scenario that
Speaker 1: we've been talking about about the corrosion of globalization. I
Speaker 1: actually wanted to ask if what the upsides are to this,
Speaker 1: because I heard an interview recently with a Washington Post
Speaker 1: reporter who actually was talking in response to one of
Speaker 1: your recent articles, and she was going over everything we've
Speaker 1: just been talking about, but she was saying that there
Speaker 1: is potentially some upside and that, for instance, millennials are
Speaker 1: welcoming to some of the aspects of some of the
Speaker 1: changes that we see, including maybe better workplace practices and
Speaker 1: that type of things. So I want to ask what
Speaker 1: some of these maybe more positive developments might be yes
Speaker 1: and and there. For example, I frankly agree with a
Speaker 1: lot of the things the bid administration has wanted to do,
Speaker 1: even though they didn't get through Congress yet a lot
Speaker 1: of them, um, and I agree with a lot of
Speaker 1: things they're doing on executive order basis. Well. The sad
Speaker 1: fact is that the US treats its workers worse than
Speaker 1: any other high income democracy, at least in economic terms.
Speaker 1: We we we give a lower shar of the economy
Speaker 1: to labor wages as supposed to capital. We do not
Speaker 1: provide universal health insurance. We do not provide universal higher education.
Speaker 1: We do not provide high quality education. We don't even
Speaker 1: provide water. It's drinkable in some places. And even in
Speaker 1: countries that are far behind US in perr capita income,
Speaker 1: they mostly do provide all those things additionally at some
Speaker 1: economic costs, but I think justifiably and not at huge
Speaker 1: economic cost. These countries have more labor regulation that protect workers. Um,
Speaker 1: they protect them more from abuse by by their employers,
Speaker 1: they protect them more from uh, what happens since they
Speaker 1: get unemployed, to protect them more in terms of health
Speaker 1: and safety. You know, the US is totally behind, in
Speaker 1: my view, on all these things, and you could move
Speaker 1: the US along way in that direction before getting anywhere
Speaker 1: close to where the economic costs become large versus what
Speaker 1: you're doing to help. And the Biden administration has heard people,
Speaker 1: including the current nominee for the Federalers or Board of Governors,
Speaker 1: Lisa from Michigan State University, pointing out that lost it's
Speaker 1: not only that, it's not only unfair, but you're leaving
Speaker 1: money on the table in the sense of all this
Speaker 1: talent long women among people of color, that you're not
Speaker 1: fully developing and using, and I think that's undeniable. And
Speaker 1: although on that issue, uh, we're no less, we're bad,
Speaker 1: but the differential between our badness and you say European
Speaker 1: badness is just great. Um. So hopefinitely, Donald. When you
Speaker 1: talk about the younger people and what they want, you know,
Speaker 1: I think it would be a great thing if we
Speaker 1: got more political pressure for that, uh, that including the
Speaker 1: major acts to make it easier to unionize. That including
Speaker 1: much higher health and safety standards, which to me would
Speaker 1: be a very logical conclusion of the COVID experience. Um.
Speaker 1: The removal and a free market way of some of
Speaker 1: these restrictions state by state about what your qualifications are.
Speaker 1: The removal of some of these terrible non compete agreements
Speaker 1: or nondisclosure agreements. Said, workers in very you know, non
Speaker 1: technical jobs or not like fancy consultants still get constrained
Speaker 1: so that they can't change jobs easily. There's a lot
Speaker 1: of stuff. A colleague of ours at Peterson who's primarily
Speaker 1: at m IG Sloan School, Anna Stansbury, has done some
Speaker 1: very powerful work saying, you know, you can raise them
Speaker 1: in on wage, but even before you do that, you
Speaker 1: got to make sure the workers can force employers to
Speaker 1: actually pay them in a wage, have to enforce it. Um.
Speaker 1: There's a whole agenda to be done, and it is
Speaker 1: very worthwhile to keep asking the obvious question. You know,
Speaker 1: if Germany and France, and England and Australia and Canada,
Speaker 1: for that matter, even Spain and Portugal, you know, manage
Speaker 1: to provide all this for the workers and their economies,
Speaker 1: don't pray eater, why don't we? Yep? Absolutely well. But
Speaker 1: I will say there's one aspect of this podcast where
Speaker 1: globalization is very very very important, you know, or you
Speaker 1: know what I mean. The craziest, weirdest thing, the craziest
Speaker 1: things we saw this week. I've got a special global
Speaker 1: crazy thing for Adam. But first let's let's hear yours first. Well,
Speaker 1: I'm going to go with something that I've been seeing
Speaker 1: at the bit coin Miami conference this week, and there's
Speaker 1: a couple of sort of uh, you know, attention grabbing
Speaker 1: things that have been happening. One is that the Mayor
Speaker 1: of Miami unveiled a statue of a of a It
Speaker 1: looks very much like the charging bull statue on Wall Street,
Speaker 1: except this one is more uh, I don't know it
Speaker 1: sort of looks like a transformer. It has laser eyes
Speaker 1: and it's meant to speak to the crypto crowd. And
Speaker 1: then just hearing some of the panels and some of
Speaker 1: the speeches. Mike Novograts who is you know, he's the
Speaker 1: CEO of Galaxy Digital. He came out and he said
Speaker 1: he could see the quin going to a million dollars
Speaker 1: eventually a million dollars per coin, so that he doesn't
Speaker 1: own any of that interests interest, no pually effective analysis there,
Speaker 1: I'm sure filled outa your conference is uh, there's an
Speaker 1: abundance of crazy things. Well to well to wrap them
Speaker 1: up all the ones you saw next week too, because
Speaker 1: I think you're there or something. Yeah, how about you, Adam,
Speaker 1: have you seen anything crazy this week? Yeah, there's a
Speaker 1: kind of crazy stuff out there obviously. Um. To me,
Speaker 1: the craziest thing is I is the disjunction between currency
Speaker 1: movements and reality. So you know, Turkeys there, they've got
Speaker 1: I think a six annualized inflation rate at the moment,
Speaker 1: which is a lot, and yet somehow are no I'm
Speaker 1: still going and the Turkish lira hasn't gone to zero. Similarly,
Speaker 1: I'm happy to be in London at the moment, and
Speaker 1: I love London. As you mentioned, I used to work
Speaker 1: at Bank going on as a PC member for a while.
Speaker 1: But you know, I look at Briggs that, I look
Speaker 1: at how badly the U K is in terms of
Speaker 1: labor supply and energy supply and market opportunities, and I'm like,
Speaker 1: why the hell is the pound up and stopped? They've
Speaker 1: stopped supposedly taking money from Russian all of arts, so
Speaker 1: I really don't know what's keeping the pound up anyway,
Speaker 1: those are the things i'd be looking at. That's pretty good.
Speaker 1: That's pretty good. And now I've read the rule is
Speaker 1: back to where it was before the word begin Yeah,
Speaker 1: I mean that I just have to be very clear
Speaker 1: that the you know, as far as we can understand it.
Speaker 1: And I callague something coming out of this. That's because
Speaker 1: there's no actual the number is whatever. It's a it's
Speaker 1: a print on the screen, not not a true. Uh
Speaker 1: not a true. I well, Adam, I'm going to leverage
Speaker 1: your Bank of England experience for my crazy thing because
Speaker 1: and correct me if I'm wrong. But I picture when
Speaker 1: Bank of England policymakers get together that about of the
Speaker 1: discussion is official business, and then the other is all
Speaker 1: about soccer. Is that Is that a good ratio, you think, Bradley,
Speaker 1: It's all about cricket, which I even understand. All right,
Speaker 1: I'm sure there's some football. I'm sure there's some football.
Speaker 1: Now there's some but all right, well, what a cricket
Speaker 1: crazy thing next next week. But in this week one
Speaker 1: of the most rage inducing incidents in international football for
Speaker 1: fans of the English side was in Night six quarterfinal
Speaker 1: World Cup game. Uh. England was playing Argentina, which had
Speaker 1: the famous player Diego Maradonna. I've actually talked about this
Speaker 1: on the podcast before, but Maradonna scored in that game
Speaker 1: what's known as the hand of God goal, because he
Speaker 1: went up for a header and it went in and
Speaker 1: the refs didn't notice that he had used his hand, uh,
Speaker 1: but all the photographers caught it. The replay showed it.
Speaker 1: In England fans were outraged, but the goal went in
Speaker 1: the books and they asked him afterward, they said, well,
Speaker 1: how did you score that goal? Wasn't it a handball? Actually?
Speaker 1: And he said, as a little bit of the head
Speaker 1: of Diego Maradodonna and a little bit of the hand
Speaker 1: of God. That was so famously became known as the
Speaker 1: hand of God goal. He scored a second goal in
Speaker 1: that game that was much more impressive. He charged like
Speaker 1: sixty yards straight ahead. Um and all the defenders were
Speaker 1: expecting him to fake left or right and they kind
Speaker 1: of dumbled over themselves, but he charged straight ahead. And
Speaker 1: Mervin King, the former head of the Banquette of England,
Speaker 1: actually referenced that in a speech one time, saying, you know,
Speaker 1: policy can work the same way the markets expecting us
Speaker 1: to go to negative rates, and that alone is influencing
Speaker 1: the markets. Um uh, so that we don't have to
Speaker 1: actually go there. So a famous goal, albeit a very
Speaker 1: bittersweet defeat for England. Now how do we get this
Speaker 1: to the craziest thing? The jersey Baradonna wore for that
Speaker 1: game is up for auction at South of Eyes. Um
Speaker 1: and let me, I'd like to keep us a poker
Speaker 1: face when I tell you about these things. Um So,
Speaker 1: I'm not going to sort of hint at what the
Speaker 1: uh what the value of this is, but I will
Speaker 1: read one quote from the auction house and they call
Speaker 1: this the moment is iconic in the history of sports.
Speaker 1: They're going to say this shart is on a small
Speaker 1: list of the most important sports memorabilia items in the world.
Speaker 1: So Maradonna's shirt where he were the hand of God,
Speaker 1: he were during the hand of God, gold and what's
Speaker 1: called the goal of century, the second goal he scores
Speaker 1: up for auction, Bildana, what do you think SOBS is
Speaker 1: expecting for this jersey? I'm going with a hundred twenty
Speaker 1: thousand dollars? Hundred twenty dollars? What do you think, Adam?
Speaker 1: If this were prices right? Uh? What you what would
Speaker 1: you bid for the Maradonna jersey? Thunder fifty million rubles?
Speaker 1: I got to break out the currency translator to figure
Speaker 1: out how much that is worth. I think you're probably
Speaker 1: closer though. Four million dollars five points too. I'm sorry,
Speaker 1: four million pounds five points two million US dollars they
Speaker 1: expect for this, and let's study. English soccer fans get
Speaker 1: outraged to me for even bringing up this episode. I
Speaker 1: want to point out that this may have been the
Speaker 1: goal of the century, but that shirt is the trade
Speaker 1: of the century because at the end of the game,
Speaker 1: Maradonna swaps jerseys with the English midfielder Steve Hodge, and
Speaker 1: he's kept that jersey this whole time. And now is
Speaker 1: this deciding to deciding to put it off. So I'm
Speaker 1: shocked by this. Baradonna had the goal of the century.
Speaker 1: I think Steve Hodge has the trade of the century.
Speaker 1: Uh so, I'm quite sure the shirt he gave he
Speaker 1: gave a Manadonna is not having that resale. It's probably
Speaker 1: not having that resell. I would agree. I would agree.
Speaker 1: But my prediction is some some London bloke is going
Speaker 1: to buy this thing and set fire to it in
Speaker 1: the middle of London. It's a prediction actually, and turn
Speaker 1: it into an n f T. If you set it
Speaker 1: on fire, you have to turn it into an n
Speaker 1: f T. It did you get you two bites at
Speaker 1: the Apple, Adam posing It was a real treat to
Speaker 1: hear your thoughts. Um, just absolutely perfect timing to have
Speaker 1: a guy like you on and share their insight with us.
Speaker 1: We really appreciate it, and hopefully we can bring you
Speaker 1: back some day in the future. That'd be great. Thank
Speaker 1: you so much for having me. I enjoy your podcast
Speaker 1: and I appreciate getting partaking the fun. Thanks, thank you, Adam.
Speaker 1: What goes up? We'll be back next week. Until then,
Speaker 1: you can find us on the Bloomberg terminal, website and
Speaker 1: app wherever you get your podcasts, and you can find
Speaker 1: us on Twitter, follow me at Ring Anonymous, Balbata Hirich
Speaker 1: is at Bobana Hirich. You can also follow Bloomberg Podcasts
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Speaker 1: to rate and review the show on Apple Podcasts so
Speaker 1: more listeners can find us. What Goes Up is produced
Speaker 1: by Magnus Hendrickson and Stacy Wong. The head of Bloomberg
Speaker 1: Podcast is Francesco Leavy. Thanks for listening, See you next
Speaker 1: time than before.