1 00:00:02,480 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:18,040 --> 00:00:21,200 Speaker 2: Hello and welcome to another episode of the Ad Thoughts podcast. 3 00:00:21,360 --> 00:00:22,720 Speaker 2: I'm Tracy Alloway. 4 00:00:22,400 --> 00:00:23,560 Speaker 1: And I'm Joe Wisenthal. 5 00:00:24,040 --> 00:00:27,240 Speaker 2: Joe, when you hear mar A Lago, what do you 6 00:00:27,280 --> 00:00:27,639 Speaker 2: think of? 7 00:00:28,840 --> 00:00:30,800 Speaker 1: You know what's funny? I don't know Marno Lago is 8 00:00:30,840 --> 00:00:33,320 Speaker 1: Actually I've been meaning to look it up. Is it 9 00:00:33,320 --> 00:00:33,720 Speaker 1: a house? 10 00:00:34,040 --> 00:00:35,560 Speaker 2: I thought you were going to say, I've been meaning 11 00:00:35,640 --> 00:00:36,200 Speaker 2: to go there. 12 00:00:36,840 --> 00:00:39,840 Speaker 1: I'd like to go there too, But is it a house? 13 00:00:39,960 --> 00:00:42,200 Speaker 1: Is it a country club? Is it a place where 14 00:00:42,240 --> 00:00:44,200 Speaker 1: someone can just book a room? Like I actually don't 15 00:00:44,760 --> 00:00:47,720 Speaker 1: have a great conception of it, except I'm sure it's 16 00:00:47,920 --> 00:00:49,879 Speaker 1: very eighties. 17 00:00:49,960 --> 00:00:54,480 Speaker 2: Is then here's what I know. There's Trump, Yes, there's golf, 18 00:00:54,720 --> 00:00:56,160 Speaker 2: heard of it, and that's about it. 19 00:00:56,280 --> 00:00:56,560 Speaker 1: Yeah. 20 00:00:56,640 --> 00:00:59,360 Speaker 2: I think the last thing anyone thinks of when you 21 00:00:59,440 --> 00:01:02,320 Speaker 2: hear the words mar A Lago is the potential for 22 00:01:02,360 --> 00:01:06,680 Speaker 2: another international monetary accord. Like, no one really thinks that, right. 23 00:01:06,600 --> 00:01:08,520 Speaker 1: Did she shouldn't ping go to mar A Lago during 24 00:01:08,560 --> 00:01:10,440 Speaker 1: the first Trump administration? I think he did. 25 00:01:10,680 --> 00:01:14,679 Speaker 2: He might, right, Okay, but there was no new monetary agreement. 26 00:01:14,560 --> 00:01:17,600 Speaker 1: Right, nothing like really that big came of it. We 27 00:01:17,680 --> 00:01:20,480 Speaker 1: know Trump loves it is a Trump aesthetics and I'm 28 00:01:20,520 --> 00:01:23,319 Speaker 1: sure he'd loved to like host world leaders at his club, 29 00:01:23,319 --> 00:01:24,720 Speaker 1: at his house, at his golf course. 30 00:01:24,800 --> 00:01:27,280 Speaker 2: Well, you know, the funny thing is, if there was 31 00:01:27,440 --> 00:01:29,640 Speaker 2: going to be a mar A Lago Accord, like say 32 00:01:29,640 --> 00:01:33,440 Speaker 2: it actually happened, then I think it would be the 33 00:01:33,480 --> 00:01:38,560 Speaker 2: second major monetary agreement that happened in a hotel or 34 00:01:38,600 --> 00:01:41,399 Speaker 2: a building owned by Trump, because the first one was 35 00:01:41,480 --> 00:01:43,160 Speaker 2: the nineteen eighty five Plaza Accords. 36 00:01:43,200 --> 00:01:44,600 Speaker 1: And did he own it at the time. 37 00:01:44,640 --> 00:01:45,080 Speaker 2: I think so. 38 00:01:45,240 --> 00:01:47,319 Speaker 1: Yeah, Well it's got to happen then. 39 00:01:47,440 --> 00:01:50,680 Speaker 2: Yeah, Okay, for those who don't know what we're talking about, 40 00:01:51,160 --> 00:01:55,240 Speaker 2: Wall Street analysts investors are all a buzz over the 41 00:01:55,240 --> 00:01:59,400 Speaker 2: potential for a Mara a Lago accord, the idea being 42 00:01:59,480 --> 00:02:03,520 Speaker 2: that the US kind of sets out this new monetary 43 00:02:03,640 --> 00:02:06,480 Speaker 2: system in a similar way to the nineteen eighty five 44 00:02:06,560 --> 00:02:11,280 Speaker 2: Plaza Accord or the original Bretton Woods agreement. And I 45 00:02:11,320 --> 00:02:15,840 Speaker 2: got to say, this is just interesting from a theoretical perspective. Yeah, 46 00:02:15,880 --> 00:02:18,160 Speaker 2: and I think it also points to a lot of 47 00:02:18,200 --> 00:02:21,360 Speaker 2: important stuff about the way the Trump administration is thinking 48 00:02:21,400 --> 00:02:24,280 Speaker 2: about not just the economy, but the financial system and 49 00:02:24,320 --> 00:02:27,400 Speaker 2: I guess the global order itself, so we should talk 50 00:02:27,440 --> 00:02:27,840 Speaker 2: about it. 51 00:02:28,040 --> 00:02:30,120 Speaker 1: No, it really does speak to it. We should absolutely 52 00:02:30,160 --> 00:02:34,760 Speaker 1: talk about it because there are core tensions within trump 53 00:02:34,880 --> 00:02:37,080 Speaker 1: Ism that this gets to, and one of the big 54 00:02:37,080 --> 00:02:40,840 Speaker 1: ones is I would say there's two specifically, One is 55 00:02:40,880 --> 00:02:43,160 Speaker 1: the sort of desire to turn the US into a 56 00:02:43,160 --> 00:02:47,600 Speaker 1: manufacturing powerhouse, and theoretically one aid for that would be 57 00:02:47,639 --> 00:02:50,680 Speaker 1: a weaker US dollar. And so this idea of the 58 00:02:50,760 --> 00:02:54,360 Speaker 1: dollars too expensive and maybe you know, maybe there's some 59 00:02:54,440 --> 00:02:57,799 Speaker 1: agreement to weaken it could help US manufacturing. And then 60 00:02:57,800 --> 00:03:02,160 Speaker 1: there's question of how inflame lential globally does the US 61 00:03:02,240 --> 00:03:06,600 Speaker 1: want to be period across anything, whether it's military, whether 62 00:03:06,680 --> 00:03:09,720 Speaker 1: it's finance, whether it's currency, et cetera. And you know, 63 00:03:09,840 --> 00:03:13,480 Speaker 1: one of the ideas of like pulling inward tariffs, et cetera, 64 00:03:13,960 --> 00:03:17,960 Speaker 1: changing some questions about the international security relationship. Is this 65 00:03:18,160 --> 00:03:20,919 Speaker 1: idea of like an inward turn and maybe the US 66 00:03:20,960 --> 00:03:24,000 Speaker 1: doesn't want to be as prominent globally on the stage. 67 00:03:24,040 --> 00:03:26,080 Speaker 1: It's all kind of wrapped up in the same question. 68 00:03:26,240 --> 00:03:29,200 Speaker 2: Yeah, absolutely, So again we should talk about it. And 69 00:03:29,280 --> 00:03:31,840 Speaker 2: I'm very pleased to say we have the perfect guest. 70 00:03:32,120 --> 00:03:33,920 Speaker 2: I can't believe he hasn't been on the show I 71 00:03:33,960 --> 00:03:36,560 Speaker 2: know before, But we're going to be speaking with Jim Bianco. 72 00:03:36,680 --> 00:03:40,600 Speaker 2: He is, of course, the president and founder of Bianco Research. 73 00:03:40,880 --> 00:03:44,240 Speaker 2: He recently held a presentation for his clients all about 74 00:03:44,280 --> 00:03:47,280 Speaker 2: the mar A Lago accord, the potential mar Alago, the. 75 00:03:47,240 --> 00:03:48,800 Speaker 1: Mar A Lago accord that doesn't exist, that. 76 00:03:48,800 --> 00:03:53,680 Speaker 2: Doesn't exist yet, the hypothetical that we should nevertheless talk about. So, Jim, 77 00:03:53,880 --> 00:03:55,160 Speaker 2: thank you so much for coming on. 78 00:03:55,200 --> 00:03:58,360 Speaker 3: All thoughts, Ah, thanks for having me and Tracy to 79 00:03:58,360 --> 00:04:03,000 Speaker 3: correct you. Trump bought in nineteen eighty eight and five. 80 00:04:03,120 --> 00:04:05,960 Speaker 2: Gosh darn it. Okay, well, Jim. 81 00:04:05,920 --> 00:04:09,240 Speaker 1: Two hotels that he theoretically at some point was connected to. 82 00:04:10,040 --> 00:04:12,839 Speaker 2: Jim, why don't we start with the client meeting? What 83 00:04:13,080 --> 00:04:17,479 Speaker 2: sort of inspired you to have something specifically dedicated to, 84 00:04:17,880 --> 00:04:20,080 Speaker 2: you know, a hypothetical that hasn't happened yet. 85 00:04:20,839 --> 00:04:24,640 Speaker 3: So Trump becomes president and we've been talking about a 86 00:04:24,720 --> 00:04:28,520 Speaker 3: fire hose of executive orders and new ideas, and we're 87 00:04:28,520 --> 00:04:34,479 Speaker 3: all straining to keep up with everything. And my clients, 88 00:04:34,560 --> 00:04:36,760 Speaker 3: you know, started asking me a lot about what he 89 00:04:36,880 --> 00:04:39,360 Speaker 3: was doing, but they were doing it in isolation. Oh, 90 00:04:39,400 --> 00:04:42,279 Speaker 3: what does tariffs mean? Over here, and what do you 91 00:04:42,320 --> 00:04:44,560 Speaker 3: think they're going to do with the Sovereign Wealth Fund 92 00:04:44,680 --> 00:04:49,240 Speaker 3: over there? And they were tended taking the attitude that 93 00:04:49,480 --> 00:04:52,400 Speaker 3: we're just kind of pruning and nipping around the edges, 94 00:04:53,160 --> 00:04:56,320 Speaker 3: and I said, no, I think there's a bigger plan 95 00:04:56,920 --> 00:05:00,680 Speaker 3: in place here. And it was laid out by Stephn 96 00:05:00,760 --> 00:05:04,960 Speaker 3: Miran when he was with Hudson Bay Capital and now 97 00:05:05,000 --> 00:05:09,000 Speaker 3: he's the Council of Economic Advisor's chairman for President Trump. 98 00:05:09,040 --> 00:05:11,920 Speaker 3: And in Trump one point zero, he worked under Steve 99 00:05:12,000 --> 00:05:15,159 Speaker 3: Mnuchin at the Treasury Secretary in a report he put 100 00:05:15,200 --> 00:05:20,200 Speaker 3: out right after the election about re ordering the monetary system, 101 00:05:20,880 --> 00:05:23,520 Speaker 3: and I said, I think that they're really starting to 102 00:05:23,560 --> 00:05:28,600 Speaker 3: think bigger picture. And within that report was the concept 103 00:05:28,680 --> 00:05:32,240 Speaker 3: of a mar A Lago accord. And what I try 104 00:05:32,279 --> 00:05:37,039 Speaker 3: to emphasize was this is not a roadmap per se 105 00:05:37,240 --> 00:05:40,560 Speaker 3: that we're going to do ABC DNE, but look at 106 00:05:40,600 --> 00:05:44,560 Speaker 3: this as there's bigger things going on here and we 107 00:05:44,640 --> 00:05:48,560 Speaker 3: need to understand what their objectives are, how much of 108 00:05:48,600 --> 00:05:52,360 Speaker 3: it has been implemented, and I would argue to a 109 00:05:52,400 --> 00:05:56,279 Speaker 3: lot has been implemented of it so far, and where 110 00:05:56,320 --> 00:05:58,720 Speaker 3: we're going to go with it. So that was the 111 00:05:59,279 --> 00:06:02,120 Speaker 3: catalyst for why I thought it was important enough for 112 00:06:02,480 --> 00:06:03,840 Speaker 3: its own presentation. 113 00:06:04,560 --> 00:06:06,719 Speaker 1: I guess I have a sort of two part question. 114 00:06:06,880 --> 00:06:10,360 Speaker 1: Is one is is the Marol Lago Accord an event 115 00:06:10,800 --> 00:06:13,680 Speaker 1: that you see happening or potentially happening where a bunch 116 00:06:13,680 --> 00:06:15,600 Speaker 1: of people come to mar A Lago or is it 117 00:06:15,640 --> 00:06:19,080 Speaker 1: like a metonym for a sort of destination, a new 118 00:06:19,160 --> 00:06:21,760 Speaker 1: position for the world in the US if there's some 119 00:06:21,880 --> 00:06:24,120 Speaker 1: number of years and if it's the latter, like we 120 00:06:24,240 --> 00:06:26,559 Speaker 1: no one can really know the ABC, D and E. 121 00:06:27,000 --> 00:06:29,479 Speaker 1: But what does that sort of you know, we're here 122 00:06:29,560 --> 00:06:32,800 Speaker 1: now we get to this destination. What is this sort 123 00:06:32,839 --> 00:06:34,680 Speaker 1: of new role for the US and that destination? 124 00:06:35,960 --> 00:06:38,040 Speaker 3: Yeah, I think it's the latter. It's more of a destination. 125 00:06:38,279 --> 00:06:40,760 Speaker 3: By the way, the name mar A Lago Accord. As 126 00:06:40,800 --> 00:06:44,000 Speaker 3: you pointed out, you know, there's been two big you know, 127 00:06:44,600 --> 00:06:49,160 Speaker 3: monetary realignments, currency agreements in the last fifty years, Bretton 128 00:06:49,200 --> 00:06:52,240 Speaker 3: Woods and the Plaza, which we talked about a second ago. 129 00:06:52,320 --> 00:06:56,400 Speaker 3: Bretton Woods is a resort in New Hampshire, and Plaza 130 00:06:56,520 --> 00:06:59,080 Speaker 3: is obviously a hotel in New York. So these things 131 00:06:59,160 --> 00:07:02,719 Speaker 3: tend to get named after the places that they're constructed, 132 00:07:03,120 --> 00:07:07,520 Speaker 3: So that was the concept behind the name. Marlago Accord 133 00:07:08,080 --> 00:07:11,240 Speaker 3: is just kind of fitting with that genre. Now, where 134 00:07:11,280 --> 00:07:14,840 Speaker 3: are we going. The goal here is to make the 135 00:07:14,960 --> 00:07:18,400 Speaker 3: US more competitive. In the US, to be more competitive, 136 00:07:18,440 --> 00:07:21,679 Speaker 3: I think needs a couple of things that one needs 137 00:07:21,720 --> 00:07:25,520 Speaker 3: to see the dollar go lower, but a specific kind 138 00:07:25,560 --> 00:07:27,760 Speaker 3: of dollar to go lower. Let's call it the trade 139 00:07:27,800 --> 00:07:30,520 Speaker 3: weighted dollar. And the reason I say that is the 140 00:07:30,560 --> 00:07:34,280 Speaker 3: Federal Reserve has this thing called the trade weighted dollar, 141 00:07:34,800 --> 00:07:37,320 Speaker 3: and if you look at it over the last forty years, 142 00:07:37,560 --> 00:07:40,280 Speaker 3: it's up two hundred and eighteen percent. So the dollar 143 00:07:40,320 --> 00:07:43,720 Speaker 3: has been extraordinarily strong. Now you and I might be 144 00:07:43,840 --> 00:07:48,720 Speaker 3: more comfortable looking at the DXY Dollar Index that's down 145 00:07:48,880 --> 00:07:52,040 Speaker 3: five percent over the last forty years. Now, what's the 146 00:07:52,080 --> 00:07:55,520 Speaker 3: difference between the two. The trade weighted dollar is twenty 147 00:07:55,520 --> 00:07:58,320 Speaker 3: six currencies weighted by the amount of trade that we 148 00:07:58,360 --> 00:08:01,640 Speaker 3: do with these countries. The big two dominant players are 149 00:08:01,720 --> 00:08:06,200 Speaker 3: Canada and Mexico. The dollar index to six currencies weighted 150 00:08:06,520 --> 00:08:10,720 Speaker 3: by more financial flows. Fifty seven percent of that is 151 00:08:10,760 --> 00:08:14,000 Speaker 3: the Euro. So when we talk about that, the dollar 152 00:08:14,280 --> 00:08:18,240 Speaker 3: has been holding back manufacturing in the US. Trade in 153 00:08:18,280 --> 00:08:21,840 Speaker 3: the US, it's been this trade weighted dollar that has 154 00:08:21,960 --> 00:08:25,520 Speaker 3: just been getting stronger and stronger and stronger, and we 155 00:08:25,680 --> 00:08:28,520 Speaker 3: keep looking at the Euro going no, it's not, no, 156 00:08:28,600 --> 00:08:32,400 Speaker 3: it's not. But we don't trade with the Eurozone as 157 00:08:32,480 --> 00:08:35,600 Speaker 3: much as we trade with Canada and Mexico, and then 158 00:08:35,640 --> 00:08:37,800 Speaker 3: if you want to even throw in their China as well. 159 00:08:38,160 --> 00:08:41,240 Speaker 3: So that's where I think to bring down the dollar. Now, 160 00:08:41,520 --> 00:08:43,960 Speaker 3: how do you bring down the dollar by reorienting the 161 00:08:43,960 --> 00:08:47,439 Speaker 3: financial system. You have to deal with the debt situation, 162 00:08:48,120 --> 00:08:52,760 Speaker 3: the deficit interest rates in the United States. And that's 163 00:08:52,880 --> 00:08:55,360 Speaker 3: really what the crux of the problem is. Or let 164 00:08:55,360 --> 00:08:57,040 Speaker 3: me put it to you this way. If you want 165 00:08:57,080 --> 00:09:00,000 Speaker 3: to talk about bringing the dollar down, dealing with the deficie, 166 00:09:00,520 --> 00:09:03,360 Speaker 3: dealing with the amount of debt in the United States, 167 00:09:03,400 --> 00:09:06,160 Speaker 3: they're all interrelated. If you fix one, you fix the others. 168 00:09:06,480 --> 00:09:08,760 Speaker 3: If you can't fix one, you can't fix the others. 169 00:09:09,160 --> 00:09:12,400 Speaker 3: And so they all are all part of a larger hole. 170 00:09:12,520 --> 00:09:16,239 Speaker 3: And that's what I think the idea of the Marlago 171 00:09:16,320 --> 00:09:22,880 Speaker 3: Accord is now at its base. It's basically the idea 172 00:09:23,000 --> 00:09:26,559 Speaker 3: behind it is we have thirty six trillion dollars of debt. 173 00:09:26,800 --> 00:09:29,480 Speaker 3: Where did most of that debt come from? It came 174 00:09:29,520 --> 00:09:33,360 Speaker 3: from the military and security arrangements for the post World 175 00:09:33,360 --> 00:09:37,360 Speaker 3: War two era, and during the post World War II era, 176 00:09:38,120 --> 00:09:43,079 Speaker 3: the countries that we protected on our side didn't really 177 00:09:43,160 --> 00:09:46,560 Speaker 3: pay for it. In particular, if you look at the 178 00:09:46,600 --> 00:09:50,400 Speaker 3: European countries, they've paid up until Trump one point zho 179 00:09:50,520 --> 00:09:54,160 Speaker 3: less than one percent of their GDP in defense, where 180 00:09:54,200 --> 00:09:56,080 Speaker 3: in the eighties and nineties the US was paying eight 181 00:09:56,160 --> 00:09:58,280 Speaker 3: or nine percent of its GDP in defense, and it's 182 00:09:58,280 --> 00:10:02,080 Speaker 3: still paying five or six percent of its GDP in defense, 183 00:10:02,840 --> 00:10:06,040 Speaker 3: and so they have had quote unquote a free ride 184 00:10:06,640 --> 00:10:11,040 Speaker 3: for decades on this is the back of American security. 185 00:10:11,679 --> 00:10:14,720 Speaker 3: Trump one point zero came in and said, this is unfair. 186 00:10:15,520 --> 00:10:18,520 Speaker 3: You have to pay more. They agreed to up that 187 00:10:18,800 --> 00:10:24,160 Speaker 3: to two percent. Trump two point zero January twenty third, 188 00:10:24,800 --> 00:10:28,960 Speaker 3: he came and gave a presentation to Davos, the World 189 00:10:29,040 --> 00:10:32,760 Speaker 3: Economic Forum, virtually and he said he's going to demand 190 00:10:32,760 --> 00:10:36,640 Speaker 3: that they pay five percent of their GDP in terms 191 00:10:36,640 --> 00:10:41,400 Speaker 3: of defense. And you've seen since then the European leaders 192 00:10:41,440 --> 00:10:44,120 Speaker 3: have been coming around to this idea that maybe we 193 00:10:44,200 --> 00:10:46,280 Speaker 3: need to pay more for defense, maybe we need to 194 00:10:46,320 --> 00:10:49,160 Speaker 3: suspend the Master's Agreement, which is part of the Euro 195 00:10:49,200 --> 00:10:51,440 Speaker 3: agreement that says that they can't run a deficit more 196 00:10:51,480 --> 00:10:55,160 Speaker 3: than two percent, So they could spend three trillion dollars 197 00:10:55,160 --> 00:10:59,000 Speaker 3: over the next decade on defense, and that's got the 198 00:10:59,520 --> 00:11:03,160 Speaker 3: the years on defense docks going vertical, and this whole 199 00:11:03,640 --> 00:11:06,679 Speaker 3: argument that is coming that maybe they need to do it, 200 00:11:07,320 --> 00:11:10,400 Speaker 3: and that is, you know, maybe coming back to the 201 00:11:10,559 --> 00:11:13,960 Speaker 3: US and the idea, well, if they're going to spend trillions, 202 00:11:14,320 --> 00:11:18,040 Speaker 3: then we could spend a lot less on defense, and 203 00:11:18,080 --> 00:11:23,320 Speaker 3: that that helps our financial position, hopefully relieving us of 204 00:11:23,360 --> 00:11:27,360 Speaker 3: the debt, bringing the deficit down, lowering interest rates, and 205 00:11:27,480 --> 00:11:31,280 Speaker 3: lowering the dollar. That is basically what we're trying to 206 00:11:31,320 --> 00:11:34,160 Speaker 3: come at was that we've got a lot of debt, 207 00:11:34,400 --> 00:11:37,400 Speaker 3: we've got a big deficit. Who should pay for it? 208 00:11:37,559 --> 00:11:40,319 Speaker 3: And the typical answers you've always gotten was while we 209 00:11:40,400 --> 00:11:43,240 Speaker 3: got to raise taxes, we got to cut spending, and 210 00:11:43,320 --> 00:11:47,200 Speaker 3: Trump under his America First policy saying how about those 211 00:11:47,280 --> 00:11:49,960 Speaker 3: guys over there in the NATO countries that haven't paid anything, 212 00:11:50,440 --> 00:11:53,319 Speaker 3: maybe they should start paying more. So the reason I 213 00:11:53,360 --> 00:11:55,600 Speaker 3: thought the mar Alago cord was important to talk about 214 00:11:55,679 --> 00:11:59,719 Speaker 3: now is it's kind of happening in some forms or 215 00:12:00,280 --> 00:12:02,640 Speaker 3: we should start getting our head around it. And part 216 00:12:02,640 --> 00:12:05,680 Speaker 3: of that which I have brought up is tariffs. Tariffs 217 00:12:05,679 --> 00:12:08,200 Speaker 3: are part of this bigger hole. We could talk about 218 00:12:08,200 --> 00:12:08,760 Speaker 3: that as we. 219 00:12:09,040 --> 00:12:28,360 Speaker 1: Hold two things Tracy real quickly. One is I am 220 00:12:28,400 --> 00:12:30,880 Speaker 1: embarrassed to say I did not realize that the long 221 00:12:30,960 --> 00:12:33,439 Speaker 1: term trajectory of the dollar index and the trade weighted 222 00:12:33,480 --> 00:12:35,720 Speaker 1: dollar looks so different. You know, they move pretty similar 223 00:12:35,720 --> 00:12:37,400 Speaker 1: to day to day. But look, it is a really 224 00:12:37,440 --> 00:12:41,600 Speaker 1: striking forty year chart. And also to this point, we're 225 00:12:41,640 --> 00:12:45,240 Speaker 1: recording this on Monday the twenty fourth. Yesterday Germany held 226 00:12:45,240 --> 00:12:47,360 Speaker 1: their elections and it looks like Friedrich Murtz is going 227 00:12:47,440 --> 00:12:53,800 Speaker 1: to be the new und chancellorndes counselate. You can correct me, 228 00:12:53,880 --> 00:12:56,480 Speaker 1: but he talked about it. He's talked about this directly, 229 00:12:56,600 --> 00:12:59,400 Speaker 1: that there's going to have to be some relationship. And 230 00:12:59,440 --> 00:13:01,920 Speaker 1: you can look at stock of a German defense company 231 00:13:02,000 --> 00:13:03,760 Speaker 1: like Rhine Mettal. 232 00:13:03,960 --> 00:13:05,600 Speaker 2: And that's a very good role. 233 00:13:06,360 --> 00:13:08,280 Speaker 1: And it is straight up anyway too. 234 00:13:08,760 --> 00:13:11,880 Speaker 2: Yeah, Okay, So we touched on the dollar and the 235 00:13:11,960 --> 00:13:15,079 Speaker 2: desire to weaken the dollar in order to I guess 236 00:13:15,240 --> 00:13:19,600 Speaker 2: fulfill the Trump mandate to reshot manufacturing. We talked about 237 00:13:19,640 --> 00:13:22,679 Speaker 2: the security element. One thing I do want to talk 238 00:13:22,720 --> 00:13:27,320 Speaker 2: about is interest rates, because when you think about the 239 00:13:27,559 --> 00:13:31,720 Speaker 2: US's role in the global economy, I mean, the US's 240 00:13:31,840 --> 00:13:36,120 Speaker 2: main export is basically debt, right, it's US treasuries, and 241 00:13:36,160 --> 00:13:39,280 Speaker 2: there's been this discussion for a very long time about 242 00:13:39,360 --> 00:13:42,080 Speaker 2: whether that is net net a good thing for the 243 00:13:42,160 --> 00:13:44,439 Speaker 2: US or a bad thing for the US. Jim, can 244 00:13:44,480 --> 00:13:46,480 Speaker 2: you talk about that side of things for a bit. 245 00:13:47,840 --> 00:13:50,760 Speaker 3: Yeah, you're right that. You know, the conveyor belt has 246 00:13:50,920 --> 00:13:55,360 Speaker 3: always been that we import a lot of things, so 247 00:13:55,440 --> 00:13:58,320 Speaker 3: we and we pay for them with dollars. So we 248 00:13:58,480 --> 00:14:03,280 Speaker 3: export all of these dollars to China, to Canada, to Mexico, 249 00:14:03,920 --> 00:14:07,400 Speaker 3: you know, wherever else, you know, to the Petro to 250 00:14:07,440 --> 00:14:10,559 Speaker 3: the petro dollar states or the Gulf states that produce oil. 251 00:14:10,920 --> 00:14:13,040 Speaker 3: And what do they do with all those dollars once 252 00:14:13,080 --> 00:14:15,480 Speaker 3: they get them? They reinvest them back into the United 253 00:14:15,480 --> 00:14:19,840 Speaker 3: States in the treasuries. So when people look at the 254 00:14:19,880 --> 00:14:24,240 Speaker 3: idea that something like half of all treasuries are owned 255 00:14:24,360 --> 00:14:27,560 Speaker 3: outside of the United States, well that's going to be 256 00:14:27,640 --> 00:14:31,800 Speaker 3: the case. When you're running a gigantically large merchandise trade deficit. 257 00:14:32,280 --> 00:14:34,920 Speaker 3: You're paying for that stuff with your currency and dollars 258 00:14:34,920 --> 00:14:37,480 Speaker 3: are not very good in Beijing or in Riad. You 259 00:14:37,520 --> 00:14:40,000 Speaker 3: have to do something with them, and you just reinvest 260 00:14:40,040 --> 00:14:44,280 Speaker 3: them back into dollar based assets like US treasuries. And 261 00:14:44,320 --> 00:14:47,160 Speaker 3: so we've had that whole conveyor belt going. But the 262 00:14:47,320 --> 00:14:50,280 Speaker 3: problem with that conveyor belt is is that it keeps 263 00:14:50,480 --> 00:14:54,880 Speaker 3: the cycle going where that trade weighted dollar keeps going 264 00:14:55,000 --> 00:14:58,480 Speaker 3: up and up and up, and it makes us, being 265 00:14:58,520 --> 00:15:03,880 Speaker 3: an export country mainly manufacturing, more and more uncompetitive. So 266 00:15:04,240 --> 00:15:09,040 Speaker 3: the idea behind the trying to reverse that is by 267 00:15:09,080 --> 00:15:14,480 Speaker 3: maybe ending this relationship with so much debt, bring that down, 268 00:15:15,160 --> 00:15:18,840 Speaker 3: bring down the deficit as well, and hopefully bring down 269 00:15:18,880 --> 00:15:22,960 Speaker 3: interest rates that would lower the value of the dollar 270 00:15:23,200 --> 00:15:25,760 Speaker 3: and make us more competitive. Like I said, you can't 271 00:15:25,800 --> 00:15:28,160 Speaker 3: think of these things as three separate things like the 272 00:15:28,280 --> 00:15:30,760 Speaker 3: level of debt, the deficit, and the level of the 273 00:15:30,840 --> 00:15:33,720 Speaker 3: tradewaight to dollar. They're all somewhat related to each other, 274 00:15:33,760 --> 00:15:37,000 Speaker 3: if not directly related to each other. Dealing with one 275 00:15:37,080 --> 00:15:38,240 Speaker 3: is dealing with the other two. 276 00:15:39,400 --> 00:15:41,840 Speaker 1: You know, a question that I find that I have 277 00:15:42,160 --> 00:15:45,520 Speaker 1: asked in the past is, in the modern economy in 278 00:15:45,600 --> 00:15:50,080 Speaker 1: twenty twenty five, do you still have confidence that currency 279 00:15:50,160 --> 00:15:55,520 Speaker 1: weakness or currency strength are important dimensions of export or 280 00:15:55,760 --> 00:15:59,520 Speaker 1: manufactured competitiveness because I can imagine you know, when you're 281 00:15:59,640 --> 00:16:05,120 Speaker 1: making commodity or something simple, right, your your base is cheaper, Okay, 282 00:16:05,280 --> 00:16:08,640 Speaker 1: you sell more. But now we have these incredibly advanced 283 00:16:09,000 --> 00:16:12,040 Speaker 1: supply chains, there's good reason to believe that in many 284 00:16:12,160 --> 00:16:14,440 Speaker 1: areas that are important to the US, that the US 285 00:16:14,520 --> 00:16:17,400 Speaker 1: is no longer at the leading edge of technology, particularly 286 00:16:17,400 --> 00:16:20,920 Speaker 1: when it comes to automobiles and certain other high tech 287 00:16:21,040 --> 00:16:24,120 Speaker 1: things like that. To a degree in twenty twenty five, 288 00:16:24,200 --> 00:16:28,000 Speaker 1: do you believe that the value of your currency is 289 00:16:28,000 --> 00:16:30,560 Speaker 1: an important dial for your export competitiveness. 290 00:16:31,840 --> 00:16:34,240 Speaker 3: Well, that's a good question, and it depends on what 291 00:16:34,320 --> 00:16:38,000 Speaker 3: you're trying to export. So what the US currently exports 292 00:16:38,720 --> 00:16:42,400 Speaker 3: is more services, and services do tie into a lot 293 00:16:42,400 --> 00:16:45,880 Speaker 3: of intellectual property. And you're right, if we're going to 294 00:16:46,000 --> 00:16:52,040 Speaker 3: be exporting you know, legal services or technology, those services 295 00:16:52,080 --> 00:16:54,720 Speaker 3: are somewhat unique to the US. There are some are 296 00:16:54,760 --> 00:16:58,600 Speaker 3: the US companies that export thos and the level of 297 00:16:58,640 --> 00:17:01,480 Speaker 3: the dollar doesn't really matter. But if you're talking about 298 00:17:01,520 --> 00:17:05,160 Speaker 3: returning a manufacturing base to the US, now you're getting 299 00:17:05,200 --> 00:17:08,639 Speaker 3: more towards a commodity type product. Anybody could produce it 300 00:17:09,080 --> 00:17:12,720 Speaker 3: you know, other countries could produce a manufactured product, whether 301 00:17:12,760 --> 00:17:17,320 Speaker 3: it's steel or even cars, and they could be relatively 302 00:17:17,880 --> 00:17:21,439 Speaker 3: the same as ours, So you compete on price. And 303 00:17:21,480 --> 00:17:24,480 Speaker 3: when you compete on price, then the level of the dollar, 304 00:17:24,560 --> 00:17:28,040 Speaker 3: the level of exchange rates, especially trade weighted exchange rates, 305 00:17:28,280 --> 00:17:31,359 Speaker 3: does matter for the success of those products, and it 306 00:17:31,400 --> 00:17:34,600 Speaker 3: matters quite a bit. So if you're trying to return 307 00:17:34,640 --> 00:17:37,320 Speaker 3: a manufacturing base to the US, the level of the 308 00:17:37,359 --> 00:17:38,720 Speaker 3: trade weighted dollar does matter. 309 00:17:39,400 --> 00:17:42,119 Speaker 2: I wanted to go back to the sovereign wealth fund 310 00:17:42,200 --> 00:17:44,880 Speaker 2: idea as well, because I think when most people here 311 00:17:45,280 --> 00:17:50,600 Speaker 2: you know SWF, they kind of think of commodity exporting countries, 312 00:17:50,880 --> 00:17:54,040 Speaker 2: you know, countries in the Middle East perhaps that export 313 00:17:54,080 --> 00:17:57,240 Speaker 2: things like oil and gas, maybe Norway, And obviously the 314 00:17:57,359 --> 00:18:01,000 Speaker 2: US has become a net exporter of oil in recent years. 315 00:18:01,119 --> 00:18:04,080 Speaker 2: But the one thing we don't have that a lot 316 00:18:04,080 --> 00:18:07,320 Speaker 2: of countries with sovereign wealth funds actually do is a 317 00:18:07,359 --> 00:18:11,560 Speaker 2: current account surplus. Right, So how would a sovereign wealth 318 00:18:11,560 --> 00:18:15,520 Speaker 2: fund actually work in the US given that at the 319 00:18:15,560 --> 00:18:18,920 Speaker 2: moment we don't really have a pool of money to invest. 320 00:18:19,720 --> 00:18:21,520 Speaker 3: Are you sure about that? I thought most people think 321 00:18:21,600 --> 00:18:23,199 Speaker 3: s w F men single white female. 322 00:18:23,200 --> 00:18:29,040 Speaker 1: I was gonna make that joke, not on but yes. 323 00:18:29,160 --> 00:18:31,480 Speaker 3: But as far as the sovereign wealth fund, you're you're right. 324 00:18:31,520 --> 00:18:34,600 Speaker 3: There's lots of sovereign wealth funds around the world and 325 00:18:34,680 --> 00:18:38,200 Speaker 3: they all have one thing in common. They're creditor countries, right, 326 00:18:38,359 --> 00:18:41,760 Speaker 3: they have something that generates cash for them. In fact, 327 00:18:41,920 --> 00:18:44,280 Speaker 3: there's actually one sovereign wealth fund in the United States. 328 00:18:44,320 --> 00:18:48,040 Speaker 3: It's the Alaska Permanent Fund, and that's the royalties that 329 00:18:48,040 --> 00:18:51,239 Speaker 3: it gets. Yeah, that's because of the royalties that it 330 00:18:51,280 --> 00:18:55,960 Speaker 3: gets off of oil. So sovereign wealth funds in that respect, 331 00:18:55,960 --> 00:18:59,879 Speaker 3: whether it's Norway, Alaska, the Golf States, that makes sense 332 00:19:00,119 --> 00:19:03,119 Speaker 3: because they're generating money. They have to do something with 333 00:19:03,280 --> 00:19:07,320 Speaker 3: the money, and they invest it. But we're detonation, as 334 00:19:07,359 --> 00:19:10,880 Speaker 3: you said, there's no cash flow that's sitting around, going 335 00:19:10,920 --> 00:19:12,960 Speaker 3: what are we going to do with this money? Because 336 00:19:13,000 --> 00:19:16,399 Speaker 3: we're a detonation. So at first it was kind of 337 00:19:16,440 --> 00:19:18,439 Speaker 3: a confusing idea, how are we going to create a 338 00:19:18,440 --> 00:19:22,200 Speaker 3: sovereign wealth fund when we're not generating any money? And 339 00:19:22,240 --> 00:19:26,879 Speaker 3: then that was February third, when Trump signed the executive 340 00:19:27,000 --> 00:19:31,280 Speaker 3: order and then Treasury Secretary Besson said we're going to 341 00:19:31,359 --> 00:19:34,119 Speaker 3: monetize the assets of the United States balance sheet and 342 00:19:34,160 --> 00:19:38,000 Speaker 3: put them to work. Okay, what does that mean? No 343 00:19:38,040 --> 00:19:42,920 Speaker 3: one knows for sure, And to be particular, the Treasury said, 344 00:19:43,040 --> 00:19:45,200 Speaker 3: we'll get back to later this year with a paper 345 00:19:45,240 --> 00:19:48,800 Speaker 3: on how this is going to work. But we initially surmised, oh, 346 00:19:48,880 --> 00:19:52,200 Speaker 3: they're going to take some assets that we own, maybe 347 00:19:52,600 --> 00:19:56,160 Speaker 3: realize them at market value, and then put those into 348 00:19:56,160 --> 00:19:58,439 Speaker 3: the Sovereign Wealth Fund. And the two that kind of 349 00:19:58,520 --> 00:20:02,679 Speaker 3: jumped out at first was gold. There's eighty one hundred 350 00:20:02,720 --> 00:20:06,919 Speaker 3: tons of gold that the US owns, subject to Elon Muskin, 351 00:20:07,480 --> 00:20:09,920 Speaker 3: President Trump visiting Fort Knox to make sure that it's 352 00:20:09,960 --> 00:20:13,399 Speaker 3: still there. But assuming that it is, it's valued and 353 00:20:13,480 --> 00:20:16,240 Speaker 3: has been valued at its book value forty two dollars 354 00:20:16,280 --> 00:20:19,400 Speaker 3: and twenty two cents since nineteen seventy three. The market 355 00:20:19,480 --> 00:20:22,879 Speaker 3: values twenty nine hundred dollars. So if you just said, okay, 356 00:20:22,880 --> 00:20:24,679 Speaker 3: we're going to take that eighty one hundred dollars of 357 00:20:24,880 --> 00:20:27,239 Speaker 3: gold and we're going to revalue it to twenty nine 358 00:20:27,320 --> 00:20:29,920 Speaker 3: hundred dollars, there's eight or nine hundred billion dollars right there. 359 00:20:30,800 --> 00:20:34,040 Speaker 3: The other one is bitcoin. The Justice Department, through criminal 360 00:20:34,080 --> 00:20:37,479 Speaker 3: and fraud investigations, has acquired two hundred and seven thousand 361 00:20:37,560 --> 00:20:40,480 Speaker 3: bitcoin that they have not been able to figure out 362 00:20:40,480 --> 00:20:43,440 Speaker 3: who the owners are. It's about eleven billion dollars or so, 363 00:20:44,040 --> 00:20:47,080 Speaker 3: and it's literally sitting on a thumb drive at the 364 00:20:47,160 --> 00:20:49,600 Speaker 3: Justice Department. Maybe we can move that into the Sovereign 365 00:20:49,680 --> 00:20:52,479 Speaker 3: Wealth Fund too, and then those are some of the 366 00:20:52,600 --> 00:20:55,360 Speaker 3: assets it has. Now other assets you could argue could 367 00:20:55,400 --> 00:20:58,920 Speaker 3: be the federal government is the largest real estate owner 368 00:20:58,960 --> 00:21:02,280 Speaker 3: in the United States. It owns parks, it owns other 369 00:21:02,359 --> 00:21:05,440 Speaker 3: types of assets. That it could manage those assets within 370 00:21:05,480 --> 00:21:08,320 Speaker 3: the South of Wealth Fund, and then it could start 371 00:21:08,320 --> 00:21:11,919 Speaker 3: off with trillions of dollars of these assets and borrow 372 00:21:11,960 --> 00:21:15,840 Speaker 3: against that to then buy other assets like TikTok, which 373 00:21:16,119 --> 00:21:19,280 Speaker 3: President Trump has been floating the idea that the US 374 00:21:19,359 --> 00:21:21,960 Speaker 3: should own TikTok. Now, why would they do this. I 375 00:21:21,960 --> 00:21:24,800 Speaker 3: think they would do this for one or two reasons. 376 00:21:24,880 --> 00:21:28,280 Speaker 3: Reason one, if you're thinking like a private sector person, right, 377 00:21:28,640 --> 00:21:31,400 Speaker 3: I got a bunch of debt here, but you want 378 00:21:31,440 --> 00:21:34,280 Speaker 3: to compare it to your total assets or your equity. 379 00:21:34,760 --> 00:21:37,720 Speaker 3: But we're not fully valuing our total assets in equity. 380 00:21:37,800 --> 00:21:41,040 Speaker 3: Let's kind of show that we have a lot more 381 00:21:41,119 --> 00:21:44,480 Speaker 3: assets and equity than we think, so that that level 382 00:21:44,520 --> 00:21:47,600 Speaker 3: of debt doesn't look as onerous as it was. And 383 00:21:47,640 --> 00:21:51,200 Speaker 3: the second one is you could borrow against those assets. 384 00:21:51,240 --> 00:21:54,800 Speaker 3: Because one of the things, you know, within the crypto community, 385 00:21:54,800 --> 00:21:56,600 Speaker 3: they're talking about the Sovereign Wealth Fund is going to 386 00:21:56,680 --> 00:22:00,040 Speaker 3: buy bitcoin, which I don't think is a very good idea, 387 00:22:00,160 --> 00:22:04,080 Speaker 3: but nevertheless, one of the big competiments to buying it 388 00:22:04,119 --> 00:22:07,879 Speaker 3: would be the idea that we're going to borrow even 389 00:22:08,000 --> 00:22:11,680 Speaker 3: more money, potentially crowd out interest rates and drive them 390 00:22:11,720 --> 00:22:14,600 Speaker 3: even higher. Because the American public is going to say, 391 00:22:14,600 --> 00:22:17,399 Speaker 3: I'm happy paying a higher mortgage rate so that we 392 00:22:17,440 --> 00:22:20,199 Speaker 3: could speculate on the price of bitcoin and maybe the 393 00:22:20,240 --> 00:22:23,119 Speaker 3: federal government will turn a profit on it. That's a 394 00:22:23,160 --> 00:22:25,480 Speaker 3: non starter. But if the idea is, well, we're going 395 00:22:25,560 --> 00:22:27,560 Speaker 3: to borrow against some of these gold holdings or some 396 00:22:27,640 --> 00:22:29,920 Speaker 3: of these other holdings and it's not really going to 397 00:22:30,160 --> 00:22:33,879 Speaker 3: affect your level of your mortgage rate, that might be 398 00:22:33,920 --> 00:22:36,920 Speaker 3: a more palatable way to do it. So that's how 399 00:22:36,960 --> 00:22:40,040 Speaker 3: I think the Sovereign Wealth Fund is going to work. 400 00:22:40,119 --> 00:22:44,399 Speaker 3: That's what everybody's surmised. Under the idea that we don't 401 00:22:44,440 --> 00:22:47,320 Speaker 3: know what monetized the assets of the United States means 402 00:22:47,480 --> 00:22:49,760 Speaker 3: we're waiting on the report and we're trying to color 403 00:22:49,760 --> 00:22:51,480 Speaker 3: in the lines until we get that. 404 00:22:52,320 --> 00:22:55,480 Speaker 2: I keep thinking about the twelve billion dollar bitcoin yeahing 405 00:22:55,640 --> 00:22:59,280 Speaker 2: drive and hoping no one loses it. Jim, thank you 406 00:22:59,359 --> 00:23:02,560 Speaker 2: so much for that explanation of you know, it is 407 00:23:02,600 --> 00:23:05,959 Speaker 2: still a hypothetical, a theoretical situation, but you walked us 408 00:23:06,000 --> 00:23:08,280 Speaker 2: through it very very well. So thanks for coming on 409 00:23:08,320 --> 00:23:08,800 Speaker 2: odd Box. 410 00:23:09,960 --> 00:23:11,320 Speaker 1: Thank you, Thanks so much, Jim. 411 00:23:11,359 --> 00:23:26,320 Speaker 2: That was great, Joe. There's so much in there, and 412 00:23:26,600 --> 00:23:29,960 Speaker 2: I guess the big question is obviously the feasibility, because 413 00:23:30,480 --> 00:23:33,240 Speaker 2: the whole mar A Lago accord idea, you're trying to 414 00:23:33,280 --> 00:23:36,880 Speaker 2: resolve these tensions, right, so the idea that you want 415 00:23:36,880 --> 00:23:40,280 Speaker 2: to reshot manufacturing, but you also want a weaker dollar, 416 00:23:40,520 --> 00:23:42,960 Speaker 2: and these things are sort of at odds with each 417 00:23:42,960 --> 00:23:46,960 Speaker 2: other sometimes, all these different moving parts. But I wonder, 418 00:23:47,280 --> 00:23:50,200 Speaker 2: I guess I wonder with the mar A Lago accord, 419 00:23:50,240 --> 00:23:54,080 Speaker 2: a potential one if you're introducing another big tension, which 420 00:23:54,160 --> 00:23:58,480 Speaker 2: is you're sort of moving into a very transactional relationship. 421 00:23:58,600 --> 00:23:58,800 Speaker 3: Yeah. 422 00:23:58,960 --> 00:24:00,919 Speaker 2: Yeah, So the idea that the US wants to be 423 00:24:01,000 --> 00:24:04,920 Speaker 2: compensated for all of the different roles it fulfills in 424 00:24:05,240 --> 00:24:08,480 Speaker 2: not just the global financial system, but in things like 425 00:24:08,640 --> 00:24:12,760 Speaker 2: international security. And at the same time as you move 426 00:24:12,800 --> 00:24:18,400 Speaker 2: into a transactional relationship, it feels like there's less trust 427 00:24:18,600 --> 00:24:23,800 Speaker 2: in these relationships, right Like would countries in Europe NATO countries, 428 00:24:23,800 --> 00:24:28,440 Speaker 2: for instance, want to exchange money for US security when 429 00:24:28,840 --> 00:24:32,480 Speaker 2: what they've been grappling with for the past two months, 430 00:24:32,560 --> 00:24:35,040 Speaker 2: I guess is the idea of the US suddenly changing 431 00:24:35,080 --> 00:24:38,760 Speaker 2: its mind or asking for new things when it comes 432 00:24:38,800 --> 00:24:40,200 Speaker 2: to security agreements. 433 00:24:40,560 --> 00:24:42,720 Speaker 1: So a few things, like Jim said, you know, a 434 00:24:42,720 --> 00:24:45,280 Speaker 1: lot of this is like, you know, it is all 435 00:24:45,320 --> 00:24:48,600 Speaker 1: like hypothetical. We don't know exactly where it's going. But 436 00:24:49,080 --> 00:24:52,080 Speaker 1: just to start, the idea that Europe is sort of 437 00:24:52,200 --> 00:24:55,000 Speaker 1: quote waking up and realizing that it has to take 438 00:24:55,040 --> 00:24:58,439 Speaker 1: care of much more of its defense seems absolutely real 439 00:24:58,600 --> 00:25:02,600 Speaker 1: and not theoretical. Now will be translated into spending, especially 440 00:25:02,640 --> 00:25:05,399 Speaker 1: given you know, the famous German debt break, et cetera. 441 00:25:05,560 --> 00:25:08,280 Speaker 1: We don't know, but that feels like it's going to 442 00:25:08,320 --> 00:25:10,160 Speaker 1: be a real dial mover. By the way, I think, 443 00:25:10,520 --> 00:25:13,639 Speaker 1: seriously all listeners should pull up a chart of Ryan 444 00:25:13,680 --> 00:25:17,159 Speaker 1: Mattel the tickers RHM on the German stock market, and 445 00:25:17,280 --> 00:25:19,199 Speaker 1: just look at this stock and you can see it 446 00:25:19,280 --> 00:25:22,720 Speaker 1: jumped after the Russian invasion of Ukraine and then it's 447 00:25:22,760 --> 00:25:26,200 Speaker 1: just been going absolutely bananas since then. I also recommend 448 00:25:26,200 --> 00:25:29,359 Speaker 1: there's a really good article from November by our friend 449 00:25:29,520 --> 00:25:32,480 Speaker 1: Karthik Sanker, and he really talks about how Bessen has 450 00:25:32,520 --> 00:25:35,440 Speaker 1: been on board with this idea as well, that there 451 00:25:35,480 --> 00:25:39,680 Speaker 1: really should be, in his view, this very transactional relationship 452 00:25:39,800 --> 00:25:42,360 Speaker 1: where if a country wants to be under the US 453 00:25:42,400 --> 00:25:46,400 Speaker 1: security umbrella and wants liberalized trade relations, then it has 454 00:25:46,440 --> 00:25:48,959 Speaker 1: to commit to buying long term treasuries and that that 455 00:25:49,000 --> 00:25:52,000 Speaker 1: should be a trade and so this sort of transactional 456 00:25:52,040 --> 00:25:54,399 Speaker 1: approach look or to the deal like it sort of 457 00:25:54,440 --> 00:25:57,480 Speaker 1: makes sense that this is the direction to look at 458 00:25:57,520 --> 00:25:58,840 Speaker 1: from on many different venues. 459 00:25:58,880 --> 00:26:01,120 Speaker 2: Speaking of transactional, can I recommend one. 460 00:26:01,000 --> 00:26:02,520 Speaker 1: Of my own articles please? 461 00:26:02,560 --> 00:26:02,920 Speaker 3: All Right? 462 00:26:03,000 --> 00:26:06,080 Speaker 2: So last week in the Odd Lots newsletter which everyone 463 00:26:06,119 --> 00:26:09,280 Speaker 2: should subscribe to, I talked about the sort of Chinese 464 00:26:09,440 --> 00:26:13,560 Speaker 2: nesting doll of ideas embedded in the mar A Lago accord. 465 00:26:13,640 --> 00:26:16,719 Speaker 2: So you just mentioned Scott Besson, the new Treasury secretary, 466 00:26:17,480 --> 00:26:20,080 Speaker 2: and then I guess the layer under that is Stephn 467 00:26:20,119 --> 00:26:23,600 Speaker 2: Mirran who we spoke about in that big paper, restructuring 468 00:26:23,600 --> 00:26:28,240 Speaker 2: the global trading system. And then below that is Sultan Posar. 469 00:26:28,680 --> 00:26:31,880 Speaker 2: Oh yeah, and if you read Mirn's paper, you'll see 470 00:26:31,920 --> 00:26:35,280 Speaker 2: a lot of references to Posar's thinking and the New 471 00:26:35,320 --> 00:26:38,679 Speaker 2: Breton Woods concept and the idea of maybe the global 472 00:26:38,720 --> 00:26:40,920 Speaker 2: financial order starting to change. 473 00:26:41,200 --> 00:26:44,400 Speaker 1: And then then below Posar is the Odd Lots Podcast. 474 00:26:44,640 --> 00:26:46,720 Speaker 1: It's sort of like that meme right at the very 475 00:26:46,720 --> 00:26:49,640 Speaker 1: bottom where it's really us that's holding up the entire 476 00:26:50,160 --> 00:26:52,159 Speaker 1: that's right, restructuring the entire system. 477 00:26:52,240 --> 00:26:54,320 Speaker 2: And on that note, everyone should check out some of 478 00:26:54,320 --> 00:26:57,000 Speaker 2: the old episodes we did with Posar on the New 479 00:26:57,000 --> 00:26:59,720 Speaker 2: Breton Woods because because a lot of this is stemming 480 00:26:59,800 --> 00:27:03,119 Speaker 2: from so in the meantime, shall we leave it there. 481 00:27:03,200 --> 00:27:03,920 Speaker 1: Let's leave it there. 482 00:27:04,200 --> 00:27:07,080 Speaker 2: This has been another episode of the Oudlots Podcast. I'm 483 00:27:07,119 --> 00:27:09,880 Speaker 2: Tracy Alloway. You can follow me at Tracy Alloway and. 484 00:27:09,800 --> 00:27:12,440 Speaker 1: I'm joll Wisenthal. You can follow me at the Stalwart. 485 00:27:12,640 --> 00:27:16,280 Speaker 1: Follow our guest Jim Bianco, He's at Bianco Research. Follow 486 00:27:16,320 --> 00:27:19,399 Speaker 1: our producers Carmen and Rodriguez at Carman armand dash Ol 487 00:27:19,400 --> 00:27:23,560 Speaker 1: Bennett at Dashbop and Kilbrooks at Kelbrooks more odd lootscontent 488 00:27:23,640 --> 00:27:26,080 Speaker 1: go to Bloomberg dot com slash odd lots, where we 489 00:27:26,160 --> 00:27:29,400 Speaker 1: have transcripts, blog and a newsletter and you could chat 490 00:27:29,400 --> 00:27:31,399 Speaker 1: about all of these topics twenty four to seven in 491 00:27:31,560 --> 00:27:34,879 Speaker 1: our discord discord dot gg slash od loots. 492 00:27:35,200 --> 00:27:37,480 Speaker 2: And if you enjoy odd lots, if you like it 493 00:27:37,560 --> 00:27:41,800 Speaker 2: when we talk about hypothetical changes to the international financial 494 00:27:41,880 --> 00:27:45,439 Speaker 2: monetary order, then please leave us a positive review on 495 00:27:45,480 --> 00:27:48,840 Speaker 2: your favorite podcast platform. And remember, if you are a 496 00:27:48,880 --> 00:27:52,159 Speaker 2: Bloomberg subscriber, you can listen to all of our episodes 497 00:27:52,320 --> 00:27:55,320 Speaker 2: absolutely ad free. All you need to do is find 498 00:27:55,400 --> 00:27:59,320 Speaker 2: the Bloomberg channel on Apple Podcasts and follow the instructions there. 499 00:28:00,000 --> 00:28:00,760 Speaker 2: Thanks for listening.