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Speaker 1: Who want to take you out of Granet's Economic forum

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Speaker 1: that kicked off today Bloomers Wall Street Week anchored David

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Speaker 1: Wesson is now in a conversation with Ray Dalio, Bridgewater

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Speaker 1: Associates founder and CIO mentor.

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Speaker 2: So, if you look at everything that is happening, it

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Speaker 2: falls into one of those five categories. Whatever we'll talk

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Speaker 2: about and whatever others will talk about will fall into

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Speaker 2: those categories. And then it's the interactions of those categories

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Speaker 2: that creates the dynamics. So, for example, if you have

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Speaker 2: a debt situation that's problematic, and you have the sort

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Speaker 2: of irreconcilable gaps that exist between let's say the left

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Speaker 2: and the right, who doesn't follow things, may not follow

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Speaker 2: the rules, you have a dynamic that is a lot

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Speaker 2: of tension that produces those conflicts. So that's why those

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Speaker 2: five So I want to keep that in mind. They

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Speaker 2: are those five, there's the interactions between those and that's.

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Speaker 3: What we're going to talk about.

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Speaker 1: And it's very helpful and it also accunts for almost

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Speaker 1: everything in the news. Everything we're covered, with the possible

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Speaker 1: exception of Taylor Swift. I'm not sure you covered Taylor

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Speaker 1: Swift in note, but let's start with the first one.

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Speaker 1: There the debt and particularly sovereign debt, and Barron Somn

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Speaker 1: dead right now today, one of the big issues in

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Speaker 1: the news is the.

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Speaker 3: Yield and the tenure.

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Speaker 1: We're up at four point seven, something we haven't seen

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Speaker 1: since two thousand and seven or so because of in

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Speaker 1: Part I suspect a lot of borrowing and more to

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Speaker 1: come from the from the federal government. So where are

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Speaker 1: we in the cycle right now?

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Speaker 3: Where are we? Where does the ten year yield want

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Speaker 3: to be? Given? Where we are? Okay?

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Speaker 2: So there are two things, a few things that determine

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Speaker 2: where the ten year yield is going to be. The

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Speaker 2: first is the basic inflation rate. Then there's the real

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Speaker 2: interest rate on top of the inflation rate. Because the challenge,

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Speaker 2: and I'm just dealing with my Chay annex here, I'm

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Speaker 2: trying to explain the mechanics. You have to have an

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Speaker 2: interest rate that is high enough that it is good

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Speaker 2: for the lender, for the creditor, but not so high

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Speaker 2: that it is detrimental or unacceptably detrimental for the debtor.

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Speaker 3: So you see the real interest rate move around.

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Speaker 2: Okay, when you have the real interest rate very low,

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Speaker 2: like we had when nominal interest rates, nominal bond yield

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Speaker 2: was less than one percent, and real bond yields were

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Speaker 2: one and a half one in three quarters negative. That's

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Speaker 2: free money. And what that free money does is everybody

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Speaker 2: goes in and they borrow and buy things, and you

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Speaker 2: create a tilt that's unhealthy.

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Speaker 3: So what you've seen now is a shift. So let's

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Speaker 3: put that in perspective.

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Speaker 2: Well, before I put it in perspective, I want to

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Speaker 2: get to the other fact that I mentioned related to

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Speaker 2: that is the supply and the demand for bonds. In

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Speaker 2: other words, we have to sell a certain amount of

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Speaker 2: government bonds and then there are buyers of those bonds,

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Speaker 2: and the buyers of those bonds look at how attractive

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Speaker 2: they have been.

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Speaker 3: So let's look at that picture now. So if you

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Speaker 3: take let's.

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Speaker 2: Say the inflation rate, and what do you think is

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Speaker 2: a sustainable inflation rate, which is somewhat debatable. I think

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Speaker 2: that something in the vicinity of a three and a

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Speaker 2: half percent inflation rate could be higher than that, not

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Speaker 2: much chance of much lower than that.

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Speaker 1: Let's use that as an example. So that's not two percent.

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Speaker 1: That's not two percent, But that suggests the FED is

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Speaker 1: not going to for a variety of for a variety

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Speaker 1: of reasons.

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Speaker 2: We can get into why that dynamic has to do

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Speaker 2: partially it's because of the supply demand issue anyway, So

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Speaker 2: we'll get into that in a second. But you take that,

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Speaker 2: let's say that three and a half percent, but there's

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Speaker 2: always wiggle room. Maybe it's three percent. It doesn't look

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Speaker 2: like two to percent to me without a lot of pain.

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Speaker 2: I mean, that's also why the Fed is having its

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Speaker 2: interest rates where it is like when you get in

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Speaker 2: the neighbor of two percent, we can talk about two percent.

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Speaker 2: It's okay, let's take that three and a half okay.

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Speaker 2: Now you have to have, in my opinion, something like

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Speaker 2: a normal policy a one and a half percent real rate.

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Speaker 3: Okay, So now.

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Speaker 2: That gets you up to a five ish number, okay

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Speaker 2: for the bond. That is maybe something like equilibrium if

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Speaker 2: you don't have if you have a normal supply demand situation.

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Speaker 2: We have an abnormal amount of supply demand situation in

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Speaker 2: that the quantity of debt that we have to sell,

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Speaker 2: the government has to sell is a lot, it remains

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Speaker 2: a lot, and the buyers are less inclined buy the

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Speaker 2: debt for a variety of reasons. First of all, all

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Speaker 2: the buyers of bonds have gotten whacked. Okay, so if

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Speaker 2: you look around the world, who are those buyers of bonds,

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Speaker 2: how much bonds did they have, and how whacked did

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Speaker 2: they get? They are banks, that's what you should bank.

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Speaker 2: They are central banks. Central banks have lost a lot

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Speaker 2: of money. So there's a certain dynamic there that maybe

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Speaker 2: I should explain what happens is when you lose money

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Speaker 2: and you have a negative net worth in the central bank,

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Speaker 2: do you capitalize the central bank? Or do you not

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Speaker 2: capitalize the central bank? Which is a conversation, But there's that.

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Speaker 2: And then there are a lot of farm buyers, the

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Speaker 2: Japanese and so on have bought a lot and so

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Speaker 2: that there is lots of losses. And then there are concerns,

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Speaker 2: deep concerns about the finance is that we're looking at.

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Speaker 2: And then beyond that, also this geopolitical war has caused

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Speaker 2: some of the countries that bought that to bought by

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Speaker 2: the bonds and the big holders of the bonds to

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Speaker 2: feel that they might get sanctioned by holding those bonds.

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Speaker 2: So we sit at a moment in those bonds that

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Speaker 2: it would seem that something like a five percent ray

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Speaker 2: and there's nothing precise about that, but in that neighborhood,

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Speaker 2: you know, would be maybe about ride risks with the

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Speaker 2: risk higher, okay, with the risk higher. Meaning because this

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Speaker 2: supplied demand picture, we have to watch this closely. When

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Speaker 2: I put together the supply which we know, and then

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Speaker 2: you take the demand, I find an imbalance, and with

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Speaker 2: that imbalance, then you're talking about other numbers. And the

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Speaker 2: nature of the problem is also sort of a self

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Speaker 2: reinforced problem because when you have losses, how do you

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Speaker 2: deal with the losses? Right now, the world is over long.

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Speaker 2: Portfolios are over long. Sovereign wealth, runds, reserves and so on,

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Speaker 2: are over long. Bonds generally there's a lot of them.

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Speaker 2: That's somebody's asset. And at the same time, the US

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Speaker 2: bonds are a larger percentage of everybody's portfolio because the

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Speaker 2: dollar is the world's reserve currency. So when you choose

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Speaker 2: to save in dollars, when we say a reserve currency,

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Speaker 2: that means you own that debt. And when you're owning

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Speaker 2: so much debt, that creates also a supply demand vulnerability.

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Speaker 2: I'm sorry for the long winded explanation of the mechanics,

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Speaker 2: but what My goal is to sort of pass along

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Speaker 2: the calculations and the mechanics so other people can think

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Speaker 2: about it that way, rather than me just say that

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Speaker 2: I think the field is going to be.

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Speaker 1: I remember once at a Virtuire Hathaway meeting, I went

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Speaker 1: to a warbo who was asked, if you need to

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Speaker 1: know one thing ten years now, would you want to know?

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Speaker 1: If you said they you yield on the tenure. That's

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Speaker 1: that's the one thing I want to know. So it's

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Speaker 1: something we need to understand. But what does that mean

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Speaker 1: for the growth in the economy. Well, assume your assumptions

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Speaker 1: are all right, that we are there. What does that mean?

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Speaker 3: Can we have high rates and you still have high growth? Yes,

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Speaker 3: I'm going to answer that.

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Speaker 2: I'm going to also throw in then when you're looking

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Speaker 2: at other asset classes. The reason Warren said that is

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Speaker 2: because that becomes the return, that is the risk free

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Speaker 2: return from which the expected returns of other asset classes

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Speaker 2: are compared. And so when we look at equities, what

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Speaker 2: we say is what's the expected return of equity?

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Speaker 3: So we look at it's yield.

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Speaker 2: Okay, just to cut through it quickly, it has about

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Speaker 2: a five percent, five or six percent expected return and

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Speaker 2: because of that, that bond yield is a challenge for

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Speaker 2: the equity markets, right, okay, So then we've covered that

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Speaker 2: and then we can get into credit spreads and other things.

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Speaker 3: But that's why the ten year is important.

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Speaker 1: What was your question to you? My question is what

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Speaker 1: does this mean for growth? Economic growth? For growth, okay,

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Speaker 1: another way for growth?

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Speaker 2: Are we about to break it? Are we about to

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Speaker 2: trap economy? What's happened is that the government got into

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Speaker 2: debt so the private sector would be relieved of debt.

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Speaker 3: And that's the essence of what's going on.

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Speaker 2: So in other words, what they did in COVID and

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Speaker 2: beyond is to send out a lot more checks then

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Speaker 2: there were losses in income from businesses and so on,

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Speaker 2: to have a lot more money.

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Speaker 3: And as a.

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Speaker 2: Result of that, the private sector is doing a lot

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Speaker 2: better and the government sector is the problem in of

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Speaker 2: taking that on in terms of balancing that. That's just

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Speaker 2: the mechanics of what's going on. What happens is as

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Speaker 2: you raise the interest rate, then of course you have

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Speaker 2: to ration credit. Okay, that's you know, one way or

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Speaker 2: another of interest rates go up, and that rationing of

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Speaker 2: credit means that it slows the demand. So we're having

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Speaker 2: this slow down happening in a relative and relatively orderly

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Speaker 2: way because let's take the household sector. The household sector's

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Speaker 2: balance sheet has been better, improved, much better than it

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Speaker 2: was before, and then incomes with low unemployment rate and

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Speaker 2: relatively high compensation increase have done very well. Plus, there

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Speaker 2: was this inventory of money that was large and it

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Speaker 2: is and is going down. So what we see is

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Speaker 2: a natural slowing that there should be a significant slowing

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Speaker 2: in the demands as that interest rate then passes through,

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Speaker 2: and that's what we see.

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Speaker 3: That's what we see in the economy.

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Speaker 1: It's a natural slowing, but it was given more than

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Speaker 1: a little shoved by the Fed. It's a raised Interestate's

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Speaker 1: quite a bit if is it a false choice between

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Speaker 1: on the one hand, purtailing inflation and getting robust growth,

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Speaker 1: because it looks right now if the Fed isn't consciousness

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Speaker 1: saying we need to slow things down to deal with inflation,

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Speaker 1: but it really is going to hurt growth.

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Speaker 2: Well, it also is this supply demand government debt problem. Okay,

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Speaker 2: let's be clear that we have a government debt problem.

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Speaker 2: We have a major government deplock. So if you just

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Speaker 2: continue adding and what, and the.

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Speaker 3: Debt continues to rise.

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Speaker 2: What happens in this classic cycle is that the debt

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Speaker 2: service squeezes out consumption more and more. We can see

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Speaker 2: that beginning to happen in the government because the debt

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Speaker 2: service as it rises then starts to squeeze out other areas,

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Speaker 2: and there are not many discretionary areas.

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Speaker 3: So you extrapolate that, and then.

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Speaker 2: There's the big issue that could exist and there's a

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Speaker 2: big risk of it, which says there's a selling. If

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Speaker 2: we have the selling of those bonds, then the whole supply,

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Speaker 2: it's not the new amount that matters, it's the whole

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Speaker 2: amount that matters.

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Speaker 1: So given all of that analysis and understanding, we now

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Speaker 1: have how do we make some money? You're an investor,

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Speaker 1: so where do you put your money in that world?

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Speaker 2: Well, I want to say I'm going to answer in

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Speaker 2: two ways. I'm going to say that First, there's a

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Speaker 2: saying in the markets, he who lives by the crystal balls,

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Speaker 2: He who lives by crystal ball is destined to a ground.

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Speaker 3: Last, okay, what I mean is.

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Speaker 2: What you don't know is very important to what you

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Speaker 2: do know, and for that reason, understanding how to properly

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Speaker 2: balance and diversify a portfolio, and that diversification should be

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Speaker 2: of country's currencies and asset classes. Is something that's important

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Speaker 2: for most investors to make tactical decisions. Is not going

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Speaker 2: to be the best thing they can do. They're going

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Speaker 2: to they'll do that badly. And when you come to

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Speaker 2: conferences like this, you will get different points of view.

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Speaker 2: But unless you actually have a system and your machanize

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Speaker 2: and we put hundreds of millions of dollars, lots of money,

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Speaker 2: maybe a billion dollars, I don't know into doing it

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Speaker 2: technology and so what to try to get an edge?

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Speaker 2: So number one is respect what you don't know and

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Speaker 2: know how to diversify well, because diversifying allows you to

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Speaker 2: reduce your risk by up to eighty percent without reducing

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Speaker 2: your income without your expective return. If you know how

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Speaker 2: to do that, well, okay, then I think then what

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Speaker 2: you have to do is you have to look at

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Speaker 2: the relative appeal.

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Speaker 3: Of asset classes.

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Speaker 2: So when I go through that calculation, the relative cash

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Speaker 2: now has a relatively attractive appeal. You know sort of

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Speaker 2: people when I said cash is trash and that got

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Speaker 2: a lot of.

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Speaker 3: Attention, But that's when cash was nil.

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Speaker 2: Okay, Now, when you look at the expected returns for

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Speaker 2: this moment, cash is a relatively attractive asset class at

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Speaker 2: this moment. It's not just attractive because it has a

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Speaker 2: relatively decent decent, not great, but decent expectant.

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Speaker 3: In other words, it has something like.

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Speaker 2: A one and a half percent real return okay, not

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Speaker 2: bad and not bad in comparison to the other things.

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Speaker 2: And it doesn't have price risk. So it looks relatively attractive.

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Speaker 2: But let me follow, let me complete the answer before you,

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Speaker 2: because I say you're pulling at the bed. But then

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Speaker 2: also I think in this environment and given the whole

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Speaker 2: picture of all the things at work, there are three

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Speaker 2: things that I look at as to.

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Speaker 3: Where where to invest.

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Speaker 2: I want sound finances, so I look at income statements

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Speaker 2: and balance sheets of countries. I want to invest in

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Speaker 2: countries that where they earn more than they spend and

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Speaker 2: they have good more assets and liabilities.

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Speaker 3: Okay.

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Speaker 2: Second, I don't want to have where there's a lot

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Speaker 2: of internal conflict, because the internal conflict is very dangerous.

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Speaker 3: We haven't gotten to the political We're still in the

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Speaker 3: bond market. It's coming, okay, But when we.

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Speaker 2: Take a look at that element, that's a dangerous element.

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Speaker 3: Okay.

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Speaker 2: And number three, I don't want to be in a

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Speaker 2: place where there's going to be an international warn't because

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Speaker 2: that's detrimental. In history, when there were these types of

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Speaker 2: conft flex, the neutral places actually did better than the

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Speaker 2: winners in the conflict. What I was going to ask

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Speaker 2: about this price risk in particularly respect to bonds, because

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Speaker 2: right now you can get some of bonds, some investment

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Speaker 2: grade bonds otherwise that are a pretty high rate on them,

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Speaker 2: but instead of that, you'd rather be a cash And

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Speaker 2: is that because of price risk?

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Speaker 3: Pieuse you think what the future holds?

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Speaker 2: Well, I think what you think is a high rate

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Speaker 2: is only biased by the terrible rate that you got

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Speaker 2: used in.

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Speaker 3: Okay, So if you take let's say the.

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Speaker 1: Real rate right now you're looking at now close to

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Speaker 1: a two percent, roughly about a two percent, which isn't bad,

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Speaker 1: but it is in an historical sentence, it isn't grade

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Speaker 1: either great is of like a four percent, but it's

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Speaker 1: not bad. And so I just want to be clear.

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Speaker 1: And then you have the pricers, So let me ask

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Speaker 1: what equities. Whatever you said, it doesn't sound like risk

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Speaker 1: assets are really attractive but let me draw from your

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Speaker 1: fifth force, and that is innovation AI. Is there an

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Speaker 1: exception right now in the marginal allocation of equities when

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Speaker 1: it comes to big tech for AI.

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Speaker 2: This in my opinion, is going to be a super

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Speaker 2: huge impact general DA AI and so on. I won't

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Speaker 2: get into all the reasons why, but I think it's going.

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Speaker 3: To be an impact.

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Speaker 2: Then there are those who are doing it, and then

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Speaker 2: there are those who are going to use it. I

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Speaker 2: think a lot of those who are doing it and

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Speaker 2: inventing are in a bubble.

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Speaker 3: I mean, they're they're very.

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Speaker 2: Expensive, and they themselves will be disrupted by others.

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Speaker 3: It's a nature of that beast.

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Speaker 2: So it's very very difficult at these prices, and so

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Speaker 2: to do that that those companies that are really knowing

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Speaker 2: how to use it and to gain competitive advantage will

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Speaker 2: will do well.

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Speaker 1: Generally AI overall for the economy, is there a chance

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Speaker 1: of letting it help us grow of the government debt

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Speaker 1: problem you had, because if we really increase productivity substantially,

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Speaker 1: that must help us on the government debt.

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Speaker 2: Certainly, it's it has it can have an enormously beneficial

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Speaker 2: productivity impact. For example, you're but it has a big impact. So,

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Speaker 2: for example, combining AI and robotics, which is a new thing,

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Speaker 2: is essentially making people and that okay, so those people

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Speaker 2: don't have to work, but then you still have to

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Speaker 2: deal with Okay, what does that mean? We have a situation,

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Speaker 2: a basic dynamic here in which some people benefit hugely,

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Speaker 2: you know, and then some people it's absolutely terrible for me.

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Speaker 2: And it's not just the middle class. So give you

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Speaker 2: an idea. There are thirty one hundred counties in the

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Speaker 2: United States. Counties is the smallest economic unit a county.

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Speaker 2: Eighty five percent of those accounties voted for Republicans and

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Speaker 2: want to go back to, in a sense, more conservative roots.

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Speaker 2: And then you have you know, you could see how

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Speaker 2: the red and blue lights up. And so the issue is,

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Speaker 2: as we're dealing with this, if we have the good

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Speaker 2: outcome of it, how are we going to do with it?

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Speaker 2: We need a real restructuring. So I think on the

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Speaker 2: politics when I think, I just want to say the following.

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Speaker 2: We are at risk of a civil war of sorts, right,

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Speaker 2: We are at risk of In other words, what I

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Speaker 2: mean is that there are irreconcilable differences not only in

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Speaker 2: the issue of wealth, but the issue of values. Okay,

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Speaker 2: gender issues and so on and so forth. Okay, irreconcilable.

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Speaker 2: Not And there's a questioning of whether the system is fair.

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Speaker 3: And will work well.

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Speaker 2: When you in any game, any sport, when you don't

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Speaker 2: trust the rules or don't follow the referees, it's a

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Speaker 2: very dangerous situation. And so that particular conflict as we

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Speaker 2: deal with this, there's only, in my opinion, there's only

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Speaker 2: one way politically to do that, and that is that

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Speaker 2: you have to have a very strong middle. Okay, the

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Speaker 2: political middle in a sense, a bipartisan middle that brings

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Speaker 2: the center mostly which still constitutes the majority of the population,

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Speaker 2: brings it together and then is going to have to

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Speaker 2: make major reforms. Reforms you're touching on some things like, okay,

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Speaker 2: what do you do should you have the benefit of

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Speaker 2: that productivity miracle? How do you change? Who benefits the

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Speaker 2: system as it now works is those who come up

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Speaker 2: with the idea, No, they become multi billionaires and the

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Speaker 2: others lose jobs. Okay, So how are you going to

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Speaker 2: actually deal with that? I'm not saying I know, I

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Speaker 2: would say, you know, I know I would know that

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Speaker 2: if like virus president, who should be president. And I'm

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Speaker 2: not talking about me being president, but I'm saying if

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Speaker 2: there was president, I think they should have a bipartisan cabinet.

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Speaker 2: You need a center, you have to bipartisan, and then

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Speaker 2: they should have something like another constitutional convention in a

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Speaker 2: sense of those to deal with reforms.

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Speaker 3: And there are lots of reforms that.

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Speaker 2: Need to be made in order to deal with questions

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Speaker 2: like that. And of course there's both sides of that,

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Speaker 2: and many will tell you there are what the productivity

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Speaker 2: maybe can do it, but then there's also the risks

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Speaker 2: of it which exist in any way, like particularly for

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Speaker 2: having war with each other and such things. These five

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Speaker 2: factors are going to be changing at a very very

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Speaker 2: fast rate. I think over the next five years you

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Speaker 2: would to see very rapid changes in all those and

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Speaker 2: almost like going through a time war. And when you

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Speaker 2: get to the other side, they think about the political

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Speaker 2: questions that we're dealing with right now, the debt issues

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Speaker 2: that we're dealing with right now, the Chinese US relations,

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Speaker 2: and the technological impact these over the next five years

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Speaker 2: are going to be dramatic.

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Speaker 1: Is just right to China, because we haven't dealt with

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Speaker 1: external conflict. We're we're talking about internal content external. You've

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Speaker 1: been going to China. I think it's nineteen eighty four

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Speaker 1: something like that. You know China terribly well, give us

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Speaker 1: your assessment of where we are with China US China

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Speaker 1: relations and where China itself is.

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Speaker 2: Right now, Okay, the US China relationship relations are in

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Speaker 2: a number of areas.

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Speaker 3: On the brink of red lines.

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Speaker 2: So in other words, these irreconcilable differences, they're right on

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Speaker 2: the brig So if I was to take let's say

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Speaker 2: the Taiwan issue, it's an irreconcilable issue and so on.

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Speaker 3: It's right at the line.

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Speaker 2: The breaking point is if the United States said we

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Speaker 2: are in favor of the independence of Taiwan, that's the

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Speaker 2: equivalent of the declaration of war. And because of our

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Speaker 2: political issues that are now internally, you're going to be

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Speaker 2: likely to push that, because of the fact that many

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Speaker 2: in Congress and so on would say, we will defend

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Speaker 2: Taiwan and world cost and we will give them this,

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Speaker 2: and you could even cross that line. My point is

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Speaker 2: it's right at the edge. That's that we have a

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Speaker 2: chips issue, and we have a technology and sanctions issue.

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Speaker 2: The reason in World War two war with Japan, you

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Speaker 2: had the cutting off of the oil and then the

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Speaker 2: sanctioning them taking their payments, So you have a somewhat

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Speaker 2: similar situation. Chips is like oil back then, and it's

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Speaker 2: a very very very delicate issue. You have the geopolitical

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Speaker 2: issue which also is manifest in each of them and

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Speaker 2: so on, supporting the supporting Ukraine, and other geopolitical issues

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Speaker 2: which are also right at the edge.

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Speaker 3: Neither country wants to go to war.

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Speaker 2: Everybody's afraid of what that war would be like because

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Speaker 2: it would be devastating economically and politically.

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Speaker 3: So you will see sort of the postponing.

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Speaker 2: These issues will remain and probably intensify over the next

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Speaker 2: five to ten years.

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Speaker 3: But they will be at that edge.

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Speaker 2: So you're going to see in November there will be

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Speaker 2: in San Francisco the APAC Conference and you will see

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Speaker 2: presidentcy get together with President Biden. But we have a

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Speaker 2: political situation and so on.

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Speaker 3: That's it.

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Speaker 2: In China, they are also dealing with a number of

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Speaker 2: big problems. As we're dealing with our problems, they're dealing

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Speaker 2: with their problems. Those problems are first the debt problem

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Speaker 2: that has now been allowed to pass through the into

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Speaker 2: the system, meaning you have real estate, and real estate

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Speaker 2: counts for about seventy percent of savings, and people put

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Speaker 2: their money in real estate and about twenty percent of

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Speaker 2: their economy. And there was a bubble, and then that's

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Speaker 2: passing through and that goes down to local governments that

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Speaker 2: we're living on debt and also land sales for real

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Speaker 2: estate purchases.

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Speaker 3: So that's a structural issue.

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Speaker 2: They need to do a debt restructuring, and debt restructuring

435
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Speaker 2: is a very difficult thing to do. They can do it,

436
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Speaker 2: but it's also very politically impactful because those who are

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Speaker 2: you determine whoever's making these decisions, determines whose wealth and

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Speaker 2: how they divide the pie. So you have that going on,

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Speaker 2: you have a move to what president she calls the

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Speaker 2: one hundred year storm on the horizon. In other words,

441
00:25:50,640 --> 00:25:53,080
Speaker 2: he believes there's one hundred year storm on the horizon.

442
00:25:53,840 --> 00:25:56,280
Speaker 2: That's the sort of things that we're now talking about.

443
00:25:56,480 --> 00:25:59,119
Speaker 2: And with that hundred year storm on the horizon, you

444
00:25:59,240 --> 00:26:06,720
Speaker 2: have a very autocratic in other words, if you don't

445
00:26:06,760 --> 00:26:10,840
Speaker 2: behave well, you'll lose your head and so on. And

446
00:26:10,880 --> 00:26:13,600
Speaker 2: that kind of environment, which by the way, in war

447
00:26:13,720 --> 00:26:16,800
Speaker 2: periods and so on, has been what most countries have

448
00:26:16,880 --> 00:26:20,240
Speaker 2: moved toward or something, and so that's having an effect

449
00:26:20,280 --> 00:26:24,600
Speaker 2: on the economy. We have the US China conflict itself,

450
00:26:24,640 --> 00:26:28,760
Speaker 2: which is affecting country what companies do Do I want

451
00:26:28,800 --> 00:26:30,600
Speaker 2: to be in China or do I want to be

452
00:26:30,640 --> 00:26:34,200
Speaker 2: in Vietnam. That's one of the things that's benefiting neutral countries.

453
00:26:34,600 --> 00:26:37,840
Speaker 2: So they think, okay, if the Acion countries, India and

454
00:26:37,880 --> 00:26:41,000
Speaker 2: other places can be a beneficiary of that, where do

455
00:26:41,080 --> 00:26:41,600
Speaker 2: I want to be?

456
00:26:42,080 --> 00:26:44,600
Speaker 3: But that's also hurting them.

457
00:26:44,760 --> 00:26:48,600
Speaker 2: And then of course that we have a world economy

458
00:26:48,640 --> 00:26:52,800
Speaker 2: which is relatively slow moving. That affects their exports. So

459
00:26:52,880 --> 00:26:55,840
Speaker 2: they're going through a very difficult period.

460
00:26:55,920 --> 00:26:57,480
Speaker 1: So let's try to end this on a high note.

461
00:26:57,760 --> 00:27:01,200
Speaker 1: Middle East of all places East, as I said, you

462
00:27:01,240 --> 00:27:01,480
Speaker 1: have an.

463
00:27:01,440 --> 00:27:02,560
Speaker 3: Office now Abadavi.

464
00:27:03,080 --> 00:27:05,320
Speaker 1: There are a lot of reports about a possible deal

465
00:27:05,680 --> 00:27:08,840
Speaker 1: seems unimaginable of Saudi Arabia, Israel and the United States.

466
00:27:09,160 --> 00:27:10,920
Speaker 1: Don't know if that's going to happen, but it looks

467
00:27:10,920 --> 00:27:14,000
Speaker 1: like it might definitely be possible. If that happened, how

468
00:27:14,000 --> 00:27:16,680
Speaker 1: could that transform certainly that region.

469
00:27:16,400 --> 00:27:20,520
Speaker 3: But maybe the global economy. Well, there's a realization.

470
00:27:21,920 --> 00:27:30,320
Speaker 2: There that not fighting and prosperity is better than fighting depressions,

471
00:27:31,160 --> 00:27:38,040
Speaker 2: and so for very practical reasons, if you take mbs

472
00:27:38,200 --> 00:27:42,399
Speaker 2: NBZ in the UAE and so on, there's a desire

473
00:27:42,480 --> 00:27:45,720
Speaker 2: to move in that direction dealing with the geopolitical issues.

474
00:27:45,960 --> 00:27:49,439
Speaker 2: So geopolitical issues are to some except within the region

475
00:27:49,520 --> 00:27:52,040
Speaker 2: having to do with Palestinian and so on, and to

476
00:27:52,080 --> 00:27:59,200
Speaker 2: some extent worldwide like in a conflict. So the movement

477
00:28:00,200 --> 00:28:06,280
Speaker 2: uh uh you saw a movement uh Saudi Arabia and Iran. WHOA,

478
00:28:06,440 --> 00:28:09,880
Speaker 2: that's a big deal. And now you're seeing that line

479
00:28:09,960 --> 00:28:14,200
Speaker 2: up in that way with Israel. So they're as I say,

480
00:28:14,200 --> 00:28:17,119
Speaker 2: there are three things that I'm looking for, right, Do

481
00:28:17,160 --> 00:28:18,439
Speaker 2: you earn more than you spend?

482
00:28:18,760 --> 00:28:21,280
Speaker 3: They do?

483
00:28:21,280 --> 00:28:25,040
Speaker 2: Do you have an environment in which there's internal uh

484
00:28:25,160 --> 00:28:28,440
Speaker 2: vitality and people working together and so on, a lot

485
00:28:28,480 --> 00:28:31,400
Speaker 2: of changes have been made in these places to make

486
00:28:31,480 --> 00:28:33,760
Speaker 2: that really. I mean, it's a vibrant place. It's a

487
00:28:33,840 --> 00:28:37,760
Speaker 2: talent These places are talent magnets. They're competing for talent.

488
00:28:37,840 --> 00:28:40,960
Speaker 2: Then they're getting talent because of that environment. And are

489
00:28:41,000 --> 00:28:43,400
Speaker 2: you in risk of are you one side or another

490
00:28:43,440 --> 00:28:45,640
Speaker 2: of the war or can you stay neutral? Cause the

491
00:28:45,680 --> 00:28:48,680
Speaker 2: neutral countries do better so that's what they're benefiting on

492
00:28:48,840 --> 00:28:52,320
Speaker 2: those countries are Yeah, they're doing very well. And there

493
00:28:52,360 --> 00:28:56,400
Speaker 2: will be places in the world India, s Acon countries

494
00:28:56,440 --> 00:28:58,320
Speaker 2: and so on which will do very well.

495
00:28:58,360 --> 00:29:00,760
Speaker 3: While all this is going on, Ask question Ray what

496
00:29:00,840 --> 00:29:01,800
Speaker 3: comes next for Ray Dalia?

497
00:29:02,120 --> 00:29:05,200
Speaker 1: The speculation about going back to to Bridgewater, which you've.

498
00:29:05,080 --> 00:29:07,160
Speaker 3: Better is such happen but wrong.

499
00:29:07,400 --> 00:29:11,000
Speaker 2: But by the way, don't trust the media.

500
00:29:11,320 --> 00:29:13,120
Speaker 3: I mean, I'll gill attest to that. I've been for

501
00:29:13,240 --> 00:29:15,400
Speaker 3: a long time. Okay, I'm with that, But are you

502
00:29:15,560 --> 00:29:17,560
Speaker 3: just no, no, no, my own fund other than that.

503
00:29:17,520 --> 00:29:20,040
Speaker 2: No, no, no, I'm not creating my own fund, Okay,

504
00:29:20,320 --> 00:29:21,200
Speaker 2: I am.

505
00:29:21,760 --> 00:29:22,400
Speaker 3: I have.

506
00:29:24,720 --> 00:29:29,440
Speaker 2: A family office that manages family and foundation funds, okay,

507
00:29:29,440 --> 00:29:33,120
Speaker 2: and I'm doing that. And but what is what comes next?

508
00:29:33,600 --> 00:29:37,320
Speaker 2: I'm in a phase in my life where it's very natural.

509
00:29:37,320 --> 00:29:41,040
Speaker 2: I'm seventy four years old, and the most important thing

510
00:29:41,360 --> 00:29:45,880
Speaker 2: for me is to pass along everything, Okay, to pass

511
00:29:45,920 --> 00:29:48,640
Speaker 2: along some of the knowledge and principles that I've learned

512
00:29:48,680 --> 00:29:51,040
Speaker 2: over a period of time, which is why I'm doing this,

513
00:29:51,080 --> 00:29:53,360
Speaker 2: why I'm writing the books and so on, and to

514
00:29:53,520 --> 00:29:57,520
Speaker 2: pass along the wealth and to pass along other things

515
00:29:57,920 --> 00:30:01,360
Speaker 2: and pass along Bridgewater what a jewel it's been to

516
00:30:01,480 --> 00:30:04,480
Speaker 2: start it out of the stew bedroom apartment and forty

517
00:30:04,520 --> 00:30:08,560
Speaker 2: seven years later to build this extended family and these

518
00:30:08,760 --> 00:30:11,800
Speaker 2: wonderful people who are very very capable, you know them,

519
00:30:13,000 --> 00:30:17,240
Speaker 2: and to have them, this next generation flourish and.

520
00:30:17,080 --> 00:30:19,240
Speaker 3: Be a bit of a mentor to them. What a

521
00:30:19,400 --> 00:30:20,239
Speaker 3: joy that is.

522
00:30:20,840 --> 00:30:24,480
Speaker 2: And so my objective is to do that. My son

523
00:30:24,520 --> 00:30:28,000
Speaker 2: gave me a book by Joseph Campbell called Hero of

524
00:30:28,000 --> 00:30:30,440
Speaker 2: a Thousand Faces. He says, there's a life part, and

525
00:30:30,440 --> 00:30:33,360
Speaker 2: there's a part in your life journey when there are

526
00:30:33,360 --> 00:30:36,080
Speaker 2: three phases in life. There's the first phase where you're

527
00:30:36,200 --> 00:30:38,280
Speaker 2: learning and you're dependent on others.

528
00:30:38,200 --> 00:30:39,960
Speaker 3: Your kids, they go to school and so on.

529
00:30:40,560 --> 00:30:43,680
Speaker 2: Second phase of one's life is you're working and others

530
00:30:43,720 --> 00:30:46,719
Speaker 2: depend on you and you're trying to be successful. And

531
00:30:46,760 --> 00:30:49,600
Speaker 2: then there's a transition to your third phase. And in

532
00:30:49,640 --> 00:30:54,280
Speaker 2: that third transition he described it, and I instinctually feel it,

533
00:30:55,080 --> 00:30:58,800
Speaker 2: there's this what he'd called the passing of the boon. Now,

534
00:30:58,880 --> 00:31:02,000
Speaker 2: what is the boon with the boonos the boon is

535
00:31:03,280 --> 00:31:06,400
Speaker 2: what you've acquired, That are the gifts that you've acquired

536
00:31:06,400 --> 00:31:07,520
Speaker 2: over that period of time.

537
00:31:07,840 --> 00:31:10,800
Speaker 3: So I'm now in that phase, and I'm going to

538
00:31:10,840 --> 00:31:11,480
Speaker 3: put out one.

539
00:31:11,360 --> 00:31:14,360
Speaker 2: More book, Economic and Investment Principles, and then I'm going

540
00:31:14,400 --> 00:31:18,120
Speaker 2: to be done with that phase. And so that's where

541
00:31:18,160 --> 00:31:22,120
Speaker 2: I am. I'm savoring life with my family, the things

542
00:31:22,160 --> 00:31:22,640
Speaker 2: I like to.

543
00:31:22,600 --> 00:31:24,000
Speaker 3: Do, and that's where I am.

544
00:31:24,000 --> 00:31:25,840
Speaker 1: Well, thank you for sharing some of the boon with

545
00:31:25,880 --> 00:31:27,400
Speaker 1: us today. Thank you so much.

546
00:31:27,400 --> 00:31:28,720
Speaker 3: Great to be with it's right down here,