1 00:00:00,120 --> 00:00:02,560 Speaker 1: Let's say good morning to our guest, Kamal Street Kumar, 2 00:00:02,720 --> 00:00:06,280 Speaker 1: President at three Kumar Global Strategies. So I know you've 3 00:00:06,280 --> 00:00:08,399 Speaker 1: got the furrowed brow going. I can see it right 4 00:00:08,440 --> 00:00:11,959 Speaker 1: through the radio waves. Here. Three, I want to put 5 00:00:12,000 --> 00:00:14,720 Speaker 1: this kind of interesting, different sort of point, because we've 6 00:00:14,760 --> 00:00:17,200 Speaker 1: talked about this every day. You know, the bond yild 7 00:00:17,239 --> 00:00:21,080 Speaker 1: shooting up, the dollars strong, and equities falling. It's three 8 00:00:21,120 --> 00:00:26,279 Speaker 1: men that seemingly hold the entire global economy, and all 9 00:00:26,400 --> 00:00:29,600 Speaker 1: asset classes fate in the palm of their hand in 10 00:00:29,640 --> 00:00:32,760 Speaker 1: this order. See if you agree, Jerome pal Vladimir Putin 11 00:00:33,159 --> 00:00:36,199 Speaker 1: and Shi Jinping. I'm not sure we've ever seen a 12 00:00:36,240 --> 00:00:40,760 Speaker 1: time when the macro dominates as much as now. Brian, 13 00:00:40,840 --> 00:00:43,240 Speaker 1: I think you're spot on, and I think I agree 14 00:00:43,280 --> 00:00:45,960 Speaker 1: with you in terms of not only the global dominance 15 00:00:46,000 --> 00:00:49,839 Speaker 1: of macro, but also agree with the three people that 16 00:00:49,880 --> 00:00:54,320 Speaker 1: you chose to lead it. And here is a puzzle 17 00:00:54,440 --> 00:00:57,120 Speaker 1: which is common to all three individuals, even though they 18 00:00:57,160 --> 00:01:01,760 Speaker 1: come from very different countries, they share this trait. We 19 00:01:01,840 --> 00:01:04,639 Speaker 1: simply do not know what they're going to do next. 20 00:01:05,360 --> 00:01:08,080 Speaker 1: And that is a common characteristic of all of those 21 00:01:08,120 --> 00:01:12,880 Speaker 1: three leaders. And that is adding to global market volatility, 22 00:01:13,000 --> 00:01:16,960 Speaker 1: and would you would you agree that one decision by 23 00:01:17,000 --> 00:01:19,880 Speaker 1: any of these three could change the picture to a 24 00:01:19,959 --> 00:01:24,160 Speaker 1: huge degree. Imagine that Putin says I've had enough, the 25 00:01:24,280 --> 00:01:27,360 Speaker 1: Ukraine War is over, or if she Jumping says I've 26 00:01:27,360 --> 00:01:30,480 Speaker 1: had enough, We're reopening the Chinese economy, or if j 27 00:01:30,600 --> 00:01:36,480 Speaker 1: Pali says we've done enough, exactly all of them would 28 00:01:36,520 --> 00:01:41,959 Speaker 1: completely change the picture. I do not expect to go 29 00:01:42,040 --> 00:01:45,120 Speaker 1: in the order in which you mentioned. I don't expect 30 00:01:45,160 --> 00:01:47,960 Speaker 1: Putin to end the war right away because I think 31 00:01:48,120 --> 00:01:50,880 Speaker 1: that would be very negative for him in terms of 32 00:01:50,880 --> 00:01:55,920 Speaker 1: perception within his own country and for his longevity in office. 33 00:01:56,920 --> 00:01:59,480 Speaker 1: Hi Jin Ping again, I don't know that he's going 34 00:01:59,600 --> 00:02:02,320 Speaker 1: to shot pre change. There was a big change today 35 00:02:02,360 --> 00:02:06,760 Speaker 1: that he reappeared in public today after a mysterious absence 36 00:02:06,800 --> 00:02:09,200 Speaker 1: for a couple of weeks. But he seems to be 37 00:02:09,240 --> 00:02:13,040 Speaker 1: out and doing so. I think until his coronation happens 38 00:02:13,120 --> 00:02:16,960 Speaker 1: in the middle of October, probably not much of a surprise. 39 00:02:17,560 --> 00:02:19,600 Speaker 1: But we don't know what he's going to do next. 40 00:02:20,160 --> 00:02:22,520 Speaker 1: In the case of Jerome powers that you referred to, 41 00:02:23,560 --> 00:02:29,480 Speaker 1: with many of his fellow our governors talking about increasing 42 00:02:29,520 --> 00:02:33,320 Speaker 1: interest rates. Further, we are reaching a stage when the 43 00:02:33,400 --> 00:02:36,919 Speaker 1: dollar is very very strong, Brian, and it is going 44 00:02:36,960 --> 00:02:39,799 Speaker 1: to have a negative impact both on the United States 45 00:02:39,800 --> 00:02:42,440 Speaker 1: and the rest of the world. Would you say, sorry 46 00:02:42,480 --> 00:02:45,800 Speaker 1: that we are now at peak hawkishness And if we 47 00:02:45,840 --> 00:02:48,480 Speaker 1: are at peak haucishness, does that mean we're at the 48 00:02:48,560 --> 00:02:52,480 Speaker 1: peak for the dollar. Um. I would agree with you 49 00:02:52,639 --> 00:02:56,880 Speaker 1: on both that we are at peak hawkishness, Rish and 50 00:02:56,960 --> 00:03:00,200 Speaker 1: also that the dollar, the Dollar Index has it a 51 00:03:00,360 --> 00:03:03,480 Speaker 1: high that we haven't seen in some twenty twenty one years, 52 00:03:04,320 --> 00:03:07,040 Speaker 1: which also suggests that we may be close to the peak. 53 00:03:07,560 --> 00:03:10,800 Speaker 1: But here is what could go wrong. If you have 54 00:03:11,000 --> 00:03:14,600 Speaker 1: another false move coming from the UK as they did 55 00:03:14,880 --> 00:03:21,080 Speaker 1: Friday and yesterday in terms of counterwaeiling the movements that 56 00:03:21,160 --> 00:03:24,320 Speaker 1: were made by the Bank of England, or if the 57 00:03:24,360 --> 00:03:28,360 Speaker 1: British government were to take steps to criticize the Bank 58 00:03:28,400 --> 00:03:31,200 Speaker 1: of England, that is going to cost more money to 59 00:03:31,240 --> 00:03:33,960 Speaker 1: come to the United States and strengthen the dollar further. 60 00:03:34,680 --> 00:03:37,760 Speaker 1: So the dollar, I think is fine in terms of 61 00:03:37,760 --> 00:03:40,760 Speaker 1: where it is reached its peak, but it don't It 62 00:03:40,880 --> 00:03:43,600 Speaker 1: is an exchange rate, we like to say, is like 63 00:03:43,640 --> 00:03:46,240 Speaker 1: a to two sided game. It takes two to tango, 64 00:03:46,880 --> 00:03:49,600 Speaker 1: and if you have the other side weakening, then the 65 00:03:49,640 --> 00:03:52,000 Speaker 1: dollar is going to strengthen. But from the U S side, 66 00:03:52,040 --> 00:03:55,400 Speaker 1: I think the game is done. Three. If you were 67 00:03:55,440 --> 00:03:58,280 Speaker 1: sitting on the board at the said um, would you 68 00:03:58,400 --> 00:04:01,000 Speaker 1: be urging a little more new wants and trying to 69 00:04:01,040 --> 00:04:03,840 Speaker 1: thread the needle here or would you continue to pound 70 00:04:03,880 --> 00:04:08,320 Speaker 1: the table as they're doing. I would not pound the table. 71 00:04:08,520 --> 00:04:11,280 Speaker 1: I would act. And I think the problem with this 72 00:04:11,400 --> 00:04:14,880 Speaker 1: FED is that they talked too much and not too 73 00:04:14,960 --> 00:04:18,400 Speaker 1: much gets done. I would have increased interest rates, as Brian, 74 00:04:18,520 --> 00:04:21,000 Speaker 1: you and I have talked on this program in the past. 75 00:04:21,480 --> 00:04:23,760 Speaker 1: I would have increased interest rates in the middle of 76 00:04:23,800 --> 00:04:27,520 Speaker 1: twenty twenty one. I wouldn't have said anything about transitory. 77 00:04:27,560 --> 00:04:31,360 Speaker 1: But if I did make that mistake, then I would 78 00:04:31,480 --> 00:04:34,880 Speaker 1: increase substantially. I had asked for a one and a 79 00:04:35,040 --> 00:04:39,120 Speaker 1: quarter percentage point move in the last meeting so that 80 00:04:39,160 --> 00:04:43,200 Speaker 1: the FED can stay ahead of the curve. Instead, they 81 00:04:43,320 --> 00:04:47,640 Speaker 1: keep making smaller and smaller moves relative to what is needed, 82 00:04:48,160 --> 00:04:52,080 Speaker 1: and that means there is no end in sight. Sure. 83 00:04:52,200 --> 00:04:55,000 Speaker 1: I mean the thing is, there's a large body of 84 00:04:55,040 --> 00:04:57,599 Speaker 1: thought out there saying that they are so far behind 85 00:04:57,600 --> 00:05:00,760 Speaker 1: the curve that actually inflations already turned to the downside 86 00:05:00,800 --> 00:05:07,039 Speaker 1: given some of the readings of price increases that we've had. Yes, 87 00:05:07,200 --> 00:05:10,120 Speaker 1: there's some of the price indexes are coming down. The 88 00:05:10,200 --> 00:05:14,120 Speaker 1: home prices are dropping for the first time in a 89 00:05:14,200 --> 00:05:18,560 Speaker 1: cup in since two thousand eight. That is clearly an 90 00:05:18,560 --> 00:05:22,520 Speaker 1: indication which is which is positive. In some cases, rent 91 00:05:22,800 --> 00:05:27,039 Speaker 1: month on month is also declining, so rich I don't 92 00:05:27,120 --> 00:05:29,040 Speaker 1: doubt the fact that we are not going to be 93 00:05:29,080 --> 00:05:32,719 Speaker 1: at eight point three p CPI inflation rate that you 94 00:05:32,800 --> 00:05:34,960 Speaker 1: can come to six or six and a half percent. 95 00:05:35,600 --> 00:05:38,560 Speaker 1: The real question is that is not acceptable. What do 96 00:05:38,640 --> 00:05:42,279 Speaker 1: they do further? And that's where I think the FED 97 00:05:42,400 --> 00:05:45,039 Speaker 1: is going to face a problem. It's the quality of 98 00:05:45,080 --> 00:05:49,279 Speaker 1: policy making that is really in question, I think, And 99 00:05:49,800 --> 00:05:52,840 Speaker 1: you know some people would say that, you know, they 100 00:05:52,839 --> 00:05:54,760 Speaker 1: made a mistake last year, you're one of them, that 101 00:05:54,800 --> 00:05:57,560 Speaker 1: they should have acted and now that they're going too far, 102 00:05:58,240 --> 00:06:02,000 Speaker 1: we see China now starting the apple with deflation, and 103 00:06:02,160 --> 00:06:04,880 Speaker 1: is there a possibility that these aggressive rate hikes like 104 00:06:04,960 --> 00:06:08,520 Speaker 1: this three in a row and looks like another could 105 00:06:08,640 --> 00:06:12,200 Speaker 1: push could push rates down at an alarming rate where 106 00:06:12,240 --> 00:06:15,120 Speaker 1: it's tough to stop them at two percent And now 107 00:06:15,120 --> 00:06:18,800 Speaker 1: you've got deflation to worry about. Uh that those are 108 00:06:18,839 --> 00:06:21,840 Speaker 1: great questions, Brian. I don't think we're going to go 109 00:06:21,920 --> 00:06:26,440 Speaker 1: into deflation on a global basis. Um. I think that 110 00:06:26,600 --> 00:06:29,520 Speaker 1: it would push the economy into a recession. That I 111 00:06:29,560 --> 00:06:33,120 Speaker 1: would go with you. Both Western Europe and the United 112 00:06:33,200 --> 00:06:36,680 Speaker 1: States appear to be headed toward a recession. The US 113 00:06:36,800 --> 00:06:40,720 Speaker 1: is better off compared with Western Europe. But on the 114 00:06:40,720 --> 00:06:43,680 Speaker 1: other hand, I don't look for the inflation target to 115 00:06:43,760 --> 00:06:46,800 Speaker 1: be reached two percent and for it to be even 116 00:06:46,880 --> 00:06:50,680 Speaker 1: lower on negative inflation rate during the years to come, 117 00:06:51,320 --> 00:06:55,520 Speaker 1: simply because there is so much of excess liquidity and 118 00:06:55,640 --> 00:06:59,599 Speaker 1: so much of excess government spending that is still in 119 00:06:59,640 --> 00:07:03,120 Speaker 1: the pipe plane. Until all of that disappears, which may 120 00:07:03,160 --> 00:07:07,000 Speaker 1: happen in a few years, and no further excesses take place, 121 00:07:07,360 --> 00:07:11,560 Speaker 1: I wouldn't be worried about the deflation. Coamale always a 122 00:07:11,600 --> 00:07:14,640 Speaker 1: pleasure having on the program Kamal Shriek Command there a 123 00:07:14,720 --> 00:07:18,240 Speaker 1: Shriek command Global Strategy is getting his taker on the market.