WEBVTT - US Consumer Sentiment Drops , Gold Breaks Through $3,000 0:00:00.280 --> 0:00:10.560 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.600 --> 0:00:17.840 Eastern on Apple Coarclay, and Android Auto with the Bloomberg 0:00:17.880 --> 0:00:21.040 Business App. Listen on demand wherever you get your podcasts, 0:00:21.320 --> 0:00:23.240 or watch us live on YouTube. 0:00:23.880 --> 0:00:26.000 Alex Steal here alongside Paul sw We need this Bloomberg 0:00:26.040 --> 0:00:29.120 Intelligence Radio and everybody. We made it to Friday, but 0:00:29.160 --> 0:00:32.080 not to disappoint the headlines keep coming that you mish 0:00:32.159 --> 0:00:34.560 data coming out as paulishes talking about long term inflation 0:00:34.640 --> 0:00:37.400 expectations hitting a thirty two year high. 0:00:37.479 --> 0:00:38.240 You're looking at one. 0:00:38.200 --> 0:00:41.640 Year inflation expectations jumping a four point nine percent. Joining 0:00:41.680 --> 0:00:45.120 us now as Joanshue, University of Michigan Surveys of Consumers Director, 0:00:45.240 --> 0:00:50.360 joining us, Joanne, what is behind the rise in inflation expectations? 0:00:50.479 --> 0:00:53.640 Very clear? Consumers are really worried about the impact of 0:00:53.800 --> 0:00:57.520 these policy changes, particularly these tariffs that are changing on 0:00:57.560 --> 0:01:01.200 a daily basis, kind of policy going in circles. Consumers 0:01:01.240 --> 0:01:02.880 are really worried this is going to pass through to 0:01:02.920 --> 0:01:06.280 the prices that they see, and they're concern this is 0:01:06.319 --> 0:01:08.440 going to be something that's going to affect not just 0:01:08.440 --> 0:01:10.480 the short term, but the long run as well. 0:01:10.680 --> 0:01:13.480 So, Juane, give us a CeNSE here, I mean the 0:01:13.640 --> 0:01:15.680 University of Michigan sentiment. The headline number came in at 0:01:15.680 --> 0:01:19.399 fifty seven point nine, consensus was sixty three. Prior period 0:01:19.480 --> 0:01:22.200 was sixty four point seven. Give us a sense of 0:01:22.240 --> 0:01:27.320 how rare is a rate of change like we're seeing 0:01:27.400 --> 0:01:29.360 here this month. How rare or how common is that? 0:01:31.360 --> 0:01:34.319 So what we saw this month was an eleven percent 0:01:34.400 --> 0:01:37.440 drop that in itself may not be notable, but what 0:01:37.720 --> 0:01:41.400 is criticals that it follows two other months, two previous 0:01:41.400 --> 0:01:44.120 months of pretty strong declines. We're now down twenty two 0:01:44.160 --> 0:01:46.880 percent from the very beginning of the year. That is 0:01:46.920 --> 0:01:50.320 a pretty long sustained drop and it reverses six months 0:01:50.360 --> 0:01:52.160 of increases that we were seeing at the end of 0:01:52.200 --> 0:01:55.360 twenty twenty four. So consumers are really concerned that we 0:01:55.600 --> 0:02:00.120 are headed for a downturn. We saw deteriorating views of 0:02:00.160 --> 0:02:03.320 about unemployment, about stock markets, about personal finances. 0:02:03.360 --> 0:02:04.279 Across the board. 0:02:04.840 --> 0:02:07.600 Consumers are seeing a lot of downside of risks in 0:02:07.680 --> 0:02:08.760 the years ahead. 0:02:08.720 --> 0:02:10.920 Joanne, Before we let you go, how split is it 0:02:11.000 --> 0:02:12.040 among party lines? 0:02:13.520 --> 0:02:17.160 What we saw was a decline and sentiment across Republicans, Independence, 0:02:17.200 --> 0:02:19.720 and Democrats. This is not something that's being driven only 0:02:19.760 --> 0:02:23.960 by people who are not fans of Trump. Across all 0:02:24.000 --> 0:02:26.720 three political groups. We saw declines and sentiment. 0:02:27.480 --> 0:02:28.440 All right, Jient, Thanks Lott. 0:02:28.480 --> 0:02:31.240 We really appreciate Joannshoue, University of Michigan Surveys of Consumers. 0:02:31.320 --> 0:02:34.520 Director love getting you on on This is so so important. 0:02:36.240 --> 0:02:39.960 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:02:40.040 --> 0:02:43.400 weekdays at ten am Eastern on Applecarclay and Android Otto 0:02:43.520 --> 0:02:46.600 with the Bloomberg Business App. Listen on demand wherever you 0:02:46.639 --> 0:02:49.600 get your podcasts, or watch us live on YouTube. 0:02:50.200 --> 0:02:52.080 Alex Deal and Paul Sweeney we are live with you 0:02:52.160 --> 0:02:55.320 here Bloomberg Interactive Brokers Studio in New York City. We're 0:02:55.320 --> 0:02:59.000 also streaming live on youtubeesetever, YouTube dot com and search 0:02:59.000 --> 0:03:01.120 Bloomberg Podcast Live and that's where you'll find it. 0:03:01.080 --> 0:03:02.320 Is the PGA Tour. 0:03:02.520 --> 0:03:05.960 Is it Punt de Vidra Beach, Florida for the Players 0:03:06.040 --> 0:03:08.200 Championship this week? A lot of folks call it the 0:03:08.240 --> 0:03:11.840 fifth Major. I believe our next guest may also be 0:03:11.880 --> 0:03:13.640 in Punt de Vidra and I'm going to put the 0:03:13.639 --> 0:03:16.280 two together and assume there's a Morgan Stanley event down there. 0:03:16.320 --> 0:03:20.040 Kathy and TWISLM, Managing Director, Morgan Stanley Private Wealth Management 0:03:20.040 --> 0:03:22.960 and joints us here. Kathy, what are the conversations you're 0:03:22.960 --> 0:03:25.280 having with your clients over the last couple of months. 0:03:25.320 --> 0:03:27.800 I mean two months ago, socker market was all time high. 0:03:27.800 --> 0:03:30.919 Everybody's feeling good. A little bit different here today. 0:03:32.040 --> 0:03:36.360 Absolutely, the conversations have definitely been more challenging. There's a 0:03:36.440 --> 0:03:40.080 lot of anxiety and fear about the markets. But part 0:03:40.120 --> 0:03:42.360 of our job is to walk them through it and 0:03:42.400 --> 0:03:45.640 talk them through it and also talk about positioning and 0:03:45.680 --> 0:03:48.240 maybe taking advantage of some of the market volatility to 0:03:48.400 --> 0:03:51.440 reposition what we have in order to get on board 0:03:51.440 --> 0:03:53.040 for the next phase of the market. 0:03:53.480 --> 0:03:55.000 What is the next phase of the market? 0:03:55.920 --> 0:03:56.520 Yeah, well, the. 0:03:56.480 --> 0:03:59.400 Next phase of the market is basically trying to think 0:03:59.400 --> 0:04:01.920 about who the new winners are, where the new opportunities 0:04:01.920 --> 0:04:04.960 will be going forward. Also what type of you know, 0:04:04.960 --> 0:04:08.160 whether it's on the equity side, you know, corporations, companies 0:04:08.200 --> 0:04:12.560 that we're investing in different cap sizes, you know, large companies, 0:04:12.600 --> 0:04:14.880 small companies, and mid companies if they're value or growth. 0:04:15.240 --> 0:04:18.840 We like the mid growth area of the market. We 0:04:18.920 --> 0:04:21.120 like the large value area of the market. We like 0:04:22.080 --> 0:04:24.440 what we call it que GARB, which is quality growth 0:04:24.440 --> 0:04:27.760 at a reasonable price. And we also like we're going 0:04:27.839 --> 0:04:29.719 to start bringing in some of the duration a little 0:04:29.720 --> 0:04:31.880 bit more based on where we are with the rates. 0:04:33.160 --> 0:04:35.680 Kathy's I mean, we've just got that University of Michigan 0:04:35.880 --> 0:04:38.560 data came out today and obviously the sentiment much lower 0:04:38.600 --> 0:04:45.320 than forecast, inflation expectations much higher than consensus forecasts. Do 0:04:45.360 --> 0:04:47.760 you get that sense when you talk to your Morgan 0:04:47.760 --> 0:04:49.000 Stanley private wealth clients. 0:04:50.000 --> 0:04:52.039 Yeah, I think this is not going to be an 0:04:52.080 --> 0:04:54.520 easy year ahead. I think there'll be a lot of 0:04:54.520 --> 0:04:58.080 bumps and volatility and a lot of sideways trading. So 0:04:58.360 --> 0:05:02.040 it's more about understanding where are managing expectations and looking 0:05:02.160 --> 0:05:05.800 just for the opportunities to make those shifts. Clients are 0:05:05.800 --> 0:05:09.920 definitely more worried, you know, this year, especially in the 0:05:10.000 --> 0:05:11.880 last couple of weeks. I've gotten a lot of phone calls. 0:05:11.880 --> 0:05:15.279 We've had a lot of conversations, and we are just 0:05:15.839 --> 0:05:18.640 for my clients personally. We're walking them through the process 0:05:18.680 --> 0:05:20.960 and the markets and reminding them of all the times 0:05:21.360 --> 0:05:24.239 we've had these kind of downturns and that they're very normal. 0:05:24.720 --> 0:05:26.839 It's very normal to have a ten percent you know, 0:05:26.960 --> 0:05:29.400 drop in the market every twelve. 0:05:29.080 --> 0:05:31.799 Months, but the whippy headlines are not normal. 0:05:32.160 --> 0:05:37.520 So how do you then filter the noise from the reality. 0:05:37.600 --> 0:05:40.720 Yeah, again, it's it's looking at the metrics and the numbers. 0:05:40.880 --> 0:05:43.159 You know, there's two different sides to the equation. There's 0:05:43.200 --> 0:05:48.360 the pure quantitative side, the numbers and statistics and our 0:05:48.480 --> 0:05:50.120 history and what we can think, you know, sort of 0:05:50.120 --> 0:05:53.240 look forward to with knowing those numbers. And then there's 0:05:53.279 --> 0:05:57.000 the qualitative side, the emotions and the challenges. So part 0:05:57.040 --> 0:05:58.760 of our job is to take the qualitative side out 0:05:58.760 --> 0:06:00.720 of it, take the emotions out of this and look 0:06:00.760 --> 0:06:04.080 at it purely from where are the opportunities and how 0:06:04.120 --> 0:06:06.520 can we keep our clients invested in the markets, Because 0:06:06.520 --> 0:06:09.400 if you take your money out, you have the potential 0:06:09.400 --> 0:06:12.160 to pay cap gain taxes. You also have the potential 0:06:12.200 --> 0:06:14.920 to not know when the right time is to get 0:06:14.960 --> 0:06:17.760 back in. So if you're positioned well and you're invested 0:06:17.760 --> 0:06:20.919 in the right companies, that will turn around eventually. And 0:06:20.960 --> 0:06:22.040 it's a patience game. 0:06:23.279 --> 0:06:27.480 How does fixed income fixing fit into the discussions these days? 0:06:27.480 --> 0:06:29.720 You're having kathy with your clients because they could sid 0:06:29.760 --> 0:06:31.920 it a to your treasure. You can get about four 0:06:31.960 --> 0:06:33.520 percent if you want to take creditists, they can get 0:06:33.560 --> 0:06:36.040 a little bit more than that, and maybe in an 0:06:36.080 --> 0:06:38.080 inviolable market that's not the worst thing. So how do 0:06:38.120 --> 0:06:39.599 you talk about fixed income? 0:06:40.680 --> 0:06:41.000 Yeah? 0:06:41.080 --> 0:06:43.839 Absolutely, So what we do is when we're talking about 0:06:43.920 --> 0:06:47.279 fixed income, I've got an allocation for most of my 0:06:47.320 --> 0:06:51.200 clients in municipal bonds in their taxable accounts and corporate 0:06:51.200 --> 0:06:55.520 bonds in their retirement accounts. And they know that it's 0:06:55.560 --> 0:06:58.640 an asset class that is typically non correlated to the 0:06:58.680 --> 0:07:01.560 equity market. When we have volatility in the market, this 0:07:01.600 --> 0:07:02.880 will be what keeps them up. 0:07:03.080 --> 0:07:03.279 You know. 0:07:03.320 --> 0:07:06.440 It's like their portfolio up and buffered and a little 0:07:06.440 --> 0:07:10.120 bit more on the conservative or safer side. And they're 0:07:10.160 --> 0:07:12.320 getting in the same time, tax free income. And if 0:07:12.320 --> 0:07:15.320 you're getting yields that are tax free, the taxicquipment meals 0:07:15.440 --> 0:07:17.360 are higher than the four percent that you're talking about 0:07:17.360 --> 0:07:18.120 with the treasuries. 0:07:18.480 --> 0:07:21.240 What about in the corporate credit market. So there's a 0:07:21.280 --> 0:07:25.400 lot been made about how equities are reflecting that recession sentiment, 0:07:25.480 --> 0:07:28.400 but the high yield market has not been, but we 0:07:28.640 --> 0:07:30.760 just started to see kind of spreads widening a little bit. 0:07:30.800 --> 0:07:32.840 But investment grade still seems a little protected. 0:07:33.080 --> 0:07:37.080 What do you think, Yeah, I've been giving my clients 0:07:37.120 --> 0:07:40.040 an investment grade. I think it's just smarter. At this point, 0:07:40.080 --> 0:07:42.840 you're not really getting paid the difference that you would 0:07:42.880 --> 0:07:44.840 need to get paid to go for the high yields. 0:07:45.280 --> 0:07:47.600 And I come from a time when we had a 0:07:47.640 --> 0:07:50.960 lot of corporate de folds back in the eighties, so 0:07:51.200 --> 0:07:53.280 I am very reminiscent of that, and I want to 0:07:53.280 --> 0:07:55.960 stay away from any risk in my client's portfolios. They've 0:07:56.000 --> 0:07:58.520 won the game. There's no need to take more risk 0:07:58.600 --> 0:08:01.600 in something that's supposed to be a little bit more safer. Conservative. 0:08:02.640 --> 0:08:05.880 That said, though, I hear a lot of registered investment advisors, 0:08:06.000 --> 0:08:09.760 Kathy that talk about alternative investments as something their clients 0:08:09.800 --> 0:08:12.040 really want allocation to it, and it's not just five 0:08:12.120 --> 0:08:14.720 or ten percent, it can be twenty thirty percent. What 0:08:14.840 --> 0:08:16.920 kind of the discussions you have with your clients about 0:08:16.920 --> 0:08:18.160 alternative investments. 0:08:18.800 --> 0:08:22.360 Yeah, we've been using alternative investment investments in our client's 0:08:22.400 --> 0:08:24.720 portfolios as long as it's appropriate for them and they 0:08:24.760 --> 0:08:28.440 qualify for it. But it's very interesting because that again 0:08:28.600 --> 0:08:31.800 is non correlated. We do expect, for example, on the 0:08:31.840 --> 0:08:35.120 credit side, you're talking about fixed income. On the credit side, 0:08:35.160 --> 0:08:39.120 in alternatives, you can get higher yields, and some of 0:08:39.160 --> 0:08:41.360 those can have some tax advantages to them if they 0:08:41.400 --> 0:08:44.200 are involved in sort of you know, read or something 0:08:44.200 --> 0:08:46.920 along those lines. So al terms, that are a great 0:08:46.920 --> 0:08:50.840 way to get the diversification. Typically, I am looking to 0:08:50.880 --> 0:08:55.600 get my clients invested twenty percent on average in alts, 0:08:55.640 --> 0:08:58.480 depending on the size of their personal portfolios. And also 0:08:58.679 --> 0:09:00.720 we're doing it over time. We're not doing all usually 0:09:00.720 --> 0:09:04.120 in like one fell swoop, although now Evergreens, I'm sure 0:09:04.120 --> 0:09:06.720 you guys are familiar with the evergreens, where if they 0:09:06.720 --> 0:09:10.000 have more liquidity, they're more aligned with an investor's time 0:09:10.080 --> 0:09:14.559 frame and goals, and so you can get more invested 0:09:14.600 --> 0:09:17.080 without capital calls that way, which is really a nice 0:09:17.080 --> 0:09:19.160 way to get clients invested in this part of the market. 0:09:19.320 --> 0:09:21.160 All right, Kathy, thanks a lot. We really appreciated. 0:09:21.200 --> 0:09:24.240 Kathy and Whistle, Managing director at Morgan Stanley Private Wealth Management. 0:09:24.679 --> 0:09:26.840 Enjoy that weather in Florida. 0:09:28.120 --> 0:09:31.839 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:09:31.920 --> 0:09:34.960 weekdays at ten am Eastern on Apple, Cocklay and Android 0:09:35.000 --> 0:09:38.319 Auto with the Bloomberg Business app, Listen on demand wherever 0:09:38.360 --> 0:09:41.480 you get your podcasts, or watch us live on YouTube. 0:09:42.040 --> 0:09:45.239 Okay, let's go back up to the colder weather in Canada. 0:09:45.520 --> 0:09:49.600 Jessin Trudeau officially out Markcarney officially in this is a 0:09:49.679 --> 0:09:53.800 different change now for the Canadian government. Creates an opening 0:09:54.040 --> 0:09:57.079 for that government to reset its relationship with the US 0:09:57.080 --> 0:09:58.240 and President Donald Trump. 0:09:58.240 --> 0:09:58.679 But will it. 0:09:58.800 --> 0:10:03.200 Brian Platt, Bloomberg d and Government reporter joins us. Now, Brian, first, 0:10:03.240 --> 0:10:05.200 before we get to the inner workings, do we even 0:10:05.320 --> 0:10:09.680 know what a Carneie Trump relationship is before Carney took 0:10:09.720 --> 0:10:10.079 the helm. 0:10:11.720 --> 0:10:13.680 No, we have not had a chance to put this 0:10:13.800 --> 0:10:16.240 question to Carne yet. I mean, Mark Carney really has 0:10:16.280 --> 0:10:19.640 not done very much media. We're expecting a news conference 0:10:19.679 --> 0:10:21.600 this afternoon, and I suspect he will be asked that 0:10:21.760 --> 0:10:25.600 very question. So you know, whether they have any pre 0:10:25.760 --> 0:10:28.240 existing relationship at all is one of the biggest questions 0:10:28.240 --> 0:10:31.960 that I have right now. But I do think in general, 0:10:32.040 --> 0:10:36.640 Carney is approaching this as a chance to ideally reset 0:10:37.040 --> 0:10:42.640 the relationship that had become very tense and very even 0:10:42.720 --> 0:10:45.840 hostile between President Trump and Prime Minister Trudeau. 0:10:47.120 --> 0:10:49.760 Is there a sense that I mean, seeing this thing 0:10:49.800 --> 0:10:52.360 seems to go one of two ways. Either you kind 0:10:52.400 --> 0:10:57.040 of accept to a very large extent, the terms that 0:10:57.120 --> 0:11:00.760 President Trump is offering as a release to tariff's or 0:11:01.520 --> 0:11:04.240 you fight it, as it appears that Canada had been 0:11:04.280 --> 0:11:07.439 doing perhaps more aggrestively than than anybody else out there. 0:11:08.080 --> 0:11:10.120 Do we have any sense how mister Karney wants to 0:11:10.440 --> 0:11:11.200 move that forward. 0:11:12.600 --> 0:11:15.720 Well, he has said already he's not taking off Canada's 0:11:15.760 --> 0:11:19.640 retaliatory tariffs until the US fully commits to you know, 0:11:19.760 --> 0:11:23.600 a free, free and fair trade relationship. So that probably 0:11:23.640 --> 0:11:26.400 means until the US lifts all the tariffs that it 0:11:26.480 --> 0:11:28.559 is put on Canada. Because you know, I I was 0:11:28.600 --> 0:11:32.640 dealing aluminum just recently, and there were other tariffs in 0:11:32.679 --> 0:11:37.120 place from earlier March. So at the moment Carney has 0:11:37.160 --> 0:11:40.120 promised to keep Canada's retaliation in place. I will also 0:11:40.160 --> 0:11:43.520 say he's constrained by public opinion here. Canadian public opinion 0:11:43.960 --> 0:11:48.280 is demanding retaliation and in fact probably wants even harsher retaliation. 0:11:48.679 --> 0:11:51.800 So I will be very surprised if Carney softens too 0:11:51.880 --> 0:11:54.079 much on this. But you know, if you can get 0:11:54.080 --> 0:11:57.600 into a negotiation here, maybe there's room to adjust how 0:11:57.640 --> 0:11:58.679 Canada is responding. 0:11:58.800 --> 0:12:00.840 Yeah, when I was down and who's in Texas at 0:12:00.920 --> 0:12:03.600 Sarah Week, which is in a global energy conference. When 0:12:03.600 --> 0:12:05.840 I was speaking off the record, people are like Canadians 0:12:05.840 --> 0:12:10.920 are just mad, like full on mad. When we take 0:12:10.960 --> 0:12:13.520 a look at the ability of the government in and 0:12:13.600 --> 0:12:17.000 of itself to respond, there are many territories that have 0:12:17.080 --> 0:12:19.440 free They all have free reign. The provinces can do 0:12:19.480 --> 0:12:22.320 what they want. We saw that with Ontario. So what's 0:12:22.360 --> 0:12:27.640 the coordination between say Carnee and the individual regions. 0:12:29.320 --> 0:12:31.840 To some extent, provinces have free rein I mean this 0:12:31.920 --> 0:12:34.840 is a you know, Canada's of federation, just like the 0:12:34.920 --> 0:12:38.760 US is where states have certain powers in general on 0:12:38.880 --> 0:12:41.720 international trade, it's the federal government and so most of 0:12:41.760 --> 0:12:44.800 the tools that you retaliate on our federal tools. The 0:12:44.840 --> 0:12:48.360 provinces have certain things that they can control. In Ontario's case, 0:12:48.400 --> 0:12:50.840 it was the electricity system. So the province of Ontario 0:12:51.320 --> 0:12:55.480 had briefly put in an export tax essentially on its 0:12:55.480 --> 0:12:59.439 electricity trade with the US. But most when you talk 0:12:59.480 --> 0:13:01.760 about count tariffs and things like that, that's all in 0:13:01.800 --> 0:13:04.760 the federal government. Jurisdiction. The provinces are just looking at 0:13:04.800 --> 0:13:06.400 some of the other things they can do. One of 0:13:06.440 --> 0:13:08.640 the biggest things we've seen is provinces control their own 0:13:08.679 --> 0:13:12.280 liquor distribution systems, and so quite a few provinces have 0:13:12.360 --> 0:13:15.720 taken all American made liquor off the shelves until the 0:13:15.800 --> 0:13:18.400 US lifts its tariff. So you do see some smaller, 0:13:18.679 --> 0:13:21.640 sort of more targeted responses like that from the provincial level. 0:13:22.480 --> 0:13:25.560 Brian, can you educate us as to when an election 0:13:25.679 --> 0:13:28.480 may happen in Canada? 0:13:28.600 --> 0:13:32.960 The most likely scenario is very soon. I think the 0:13:33.080 --> 0:13:35.680 end of next week is what I'm looking at, and 0:13:36.040 --> 0:13:38.640 that's sort of the conventional wisdom right now. So Mark 0:13:38.679 --> 0:13:41.600 Karney will be sworn in today. I believe we've reported 0:13:41.640 --> 0:13:43.440 he's about to go on a short europe trip to 0:13:43.480 --> 0:13:46.040 France in England, which I will kind of be a 0:13:46.040 --> 0:13:49.040 Monday Tuesday thing, I think, And then I suspect by 0:13:49.040 --> 0:13:51.080 the end of the week, maybe even on the weekend, 0:13:51.160 --> 0:13:53.640 he calls a staff election, and so in that case, 0:13:53.679 --> 0:13:57.319 you're looking at an election date of late April or 0:13:57.360 --> 0:13:57.960 early May. 0:13:58.120 --> 0:13:59.720 And what are the polls showing now. 0:14:00.720 --> 0:14:05.240 Well, they're changing. It's fascinating. The Conservatives in Canada under 0:14:05.280 --> 0:14:08.360 Pierre Pauliev looked like they were cruising to a majority government. 0:14:08.920 --> 0:14:11.080 They were up by twenty five points for most of 0:14:11.160 --> 0:14:14.160 last year. It's we're now entering a dead heat, I mean, 0:14:14.200 --> 0:14:17.479 and it's essentially because of Donald Trump's threats. Trudeau's resignation 0:14:17.679 --> 0:14:20.600 has led to that as well in Carney's ascent to 0:14:20.640 --> 0:14:23.560 the leadership. All right, but it's Trump's tariffs. 0:14:23.720 --> 0:14:25.880 Yep, very good, Brian, Thank you so much for reporting. 0:14:25.920 --> 0:14:29.240 We really appreciated Brian Platt, government reporter Bloomberg News. He's 0:14:29.360 --> 0:14:32.920 in Ottawa. Talk about boots on the ground, folks. Get 0:14:32.960 --> 0:14:36.600 that fantastic reporting. We'll stay on top of that election 0:14:36.760 --> 0:14:39.120 that may come as soon as a week or two. 0:14:40.320 --> 0:14:44.000 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:14:44.080 --> 0:14:47.160 weekdays at ten am Eastern on Apple Coarclay, and Android 0:14:47.200 --> 0:14:50.480 Auto with the Bloomberg Business app. Listen on demand wherever 0:14:50.560 --> 0:14:53.680 you get your podcasts, or watch us live on YouTube. 0:14:54.280 --> 0:14:56.960 One of the headlines today is that Gold broke three 0:14:57.000 --> 0:14:58.440 thousand dollars an ounce. 0:14:58.880 --> 0:15:02.160 I remember covering Gold when it wasn't even one thousand 0:15:02.240 --> 0:15:03.520 dollars and outs. 0:15:03.600 --> 0:15:06.240 So this is like for US gold nerds and gold bugs, 0:15:06.240 --> 0:15:08.080 this is like a moment of balloons and stuff, and 0:15:08.080 --> 0:15:10.320 that question becomes like how long can this last? Mike mcloon, 0:15:10.360 --> 0:15:13.320 Bloomberg Intelligence and your commodity strategist who was also covering 0:15:13.360 --> 0:15:16.280 gold before it was even one thousand dollars nouns. Hey, Mike, 0:15:16.520 --> 0:15:18.360 if I had told you twenty years ago gold will 0:15:18.360 --> 0:15:20.720 be at three thousand, what kind of economy would that 0:15:20.760 --> 0:15:21.520 have represented? 0:15:23.200 --> 0:15:28.640 Yeah, it'd be there's significant inflation or severe deflation. I 0:15:28.680 --> 0:15:31.280 think the key reason gold's rallying now is because it's 0:15:31.320 --> 0:15:36.920 anticipating the deflation, significant potential deflation if US risks as 0:15:37.080 --> 0:15:40.520 its most noted stock market continues to can either say 0:15:40.600 --> 0:15:42.800 go down or mean revert because it went up so 0:15:42.960 --> 0:15:44.000 much the last few years. 0:15:44.040 --> 0:15:45.280 I think that's what's happening now. 0:15:45.320 --> 0:15:49.440 The gold market's anticipating stock market going down. Okay, that 0:15:49.520 --> 0:15:52.160 was been the best place to be along with cryptos 0:15:52.240 --> 0:15:55.600 for decades now, along with high bond yields, and now 0:15:55.640 --> 0:15:58.600 gold's starting to understand that, oh that rally. 0:15:58.440 --> 0:15:59.000 Might be over. 0:15:59.240 --> 0:16:02.760 And you're seeing that flows ETFs had outflows of four 0:16:02.840 --> 0:16:04.880 years in a row, and they're really kicking in this year, 0:16:04.920 --> 0:16:06.640 they're up about four percent, which would be the most 0:16:06.680 --> 0:16:07.520 since twenty twenty. 0:16:08.120 --> 0:16:10.640 And Alice, when I first met Mike years ago, when 0:16:10.640 --> 0:16:12.440 we were first talking about him coming to Bloomberg, and 0:16:12.480 --> 0:16:15.200 he said, Hey, Mike, put your commodities call, buy gold, 0:16:15.200 --> 0:16:15.960 sell everything else. 0:16:16.680 --> 0:16:18.160 I mean he's pretty. 0:16:17.920 --> 0:16:20.400 Much always been right on that one. Already care at 0:16:20.400 --> 0:16:21.240 that point, what's that? 0:16:21.400 --> 0:16:21.480 No? 0:16:21.800 --> 0:16:23.520 Okay, so that's all maybe already? 0:16:24.000 --> 0:16:26.840 Yeah. So hey, Mike, how do you get a senseor 0:16:26.840 --> 0:16:30.560 how of gold traders? I'm not sure if people trade 0:16:30.560 --> 0:16:32.440 gold or they investing goal, but how did they feel 0:16:32.480 --> 0:16:33.080 about valuation? 0:16:33.280 --> 0:16:34.200 Like at some point people. 0:16:34.080 --> 0:16:36.080 Say, oh, this this stock. 0:16:35.880 --> 0:16:37.840 Has just gotten too far ahead of itself. Do we 0:16:37.880 --> 0:16:40.160 ever say that about a commodity like gold? 0:16:40.320 --> 0:16:42.880 Well I, Paul, I love how you go there, because 0:16:42.880 --> 0:16:45.560 we know you're an equity person in valuations in your 0:16:45.560 --> 0:16:49.040 brain in commodities. The main lesson you learn commodities is 0:16:49.080 --> 0:16:51.320 they go down because they went up. That's why Crudell's 0:16:51.360 --> 0:16:52.000 at sixty five. 0:16:51.920 --> 0:16:54.480 Dollars a barrow. It went out too much. The big 0:16:54.480 --> 0:16:56.640 difference is gold. The big difference is gold. 0:16:56.680 --> 0:16:58.440 The key thing is, oftentimes you're trying to find a 0:16:58.480 --> 0:17:02.000 cost of production is evaluation. We usually goes to what's happening. 0:17:02.080 --> 0:17:04.320 What's different with gold. It's the only commodity that really 0:17:04.359 --> 0:17:08.320 goes up over time continuously, partly because the supply can 0:17:08.320 --> 0:17:11.600 only crease on average two percent forever, and it's harder 0:17:11.600 --> 0:17:14.160 and harder to produce, and it's monetary value. 0:17:14.240 --> 0:17:16.080 So that's what's the significance of gold. 0:17:16.119 --> 0:17:19.720 Gold is up about sixty five percent since February of 0:17:19.800 --> 0:17:22.320 twenty and twenty that's when the announcement between of the 0:17:22.400 --> 0:17:25.800 unlimited French rate friendship between President and zeeing President Putin, 0:17:26.080 --> 0:17:29.119 and it's continuing now. The key thing it's looking forward 0:17:29.280 --> 0:17:32.880 is we're seeing deflationary forces in China potentially kicking over 0:17:32.880 --> 0:17:33.520 in this country. 0:17:33.560 --> 0:17:34.760 And I'm really worry now. 0:17:34.800 --> 0:17:36.919 I don't want gold to stay above three thousand, but 0:17:37.000 --> 0:17:39.960 I think it will, particularly because of the reasons I'm 0:17:39.960 --> 0:17:41.919 worried about. Is the US stock market having a bit 0:17:41.920 --> 0:17:44.800 of a normal correction now ten percents, nothing compared to 0:17:44.800 --> 0:17:47.320 what usually happens when you have a major shift, which 0:17:47.320 --> 0:17:49.919 we're having a paradigm shift. And what's happening in the US, 0:17:50.320 --> 0:17:52.400 maybe how about twenty or thirty percent in stock market 0:17:52.480 --> 0:17:55.480 That means gold continues higher. So I'm worried at these levels, 0:17:55.480 --> 0:17:58.119 but I think it's going to continue rally for reasons 0:17:58.119 --> 0:17:59.960 that are going to hurt most investors unfortunately. 0:18:00.920 --> 0:18:04.879 Is it also to do with this idea that maybe 0:18:05.320 --> 0:18:08.480 the government could mark to market their gold reserves and 0:18:08.480 --> 0:18:11.160 then confiscate gold in order to use that and sort 0:18:11.160 --> 0:18:14.119 of ramp up the federal the Fed's balance sheet. 0:18:14.440 --> 0:18:16.600 Now many individuals are going to roll their. 0:18:16.560 --> 0:18:18.440 Eyes at this and say, oh my god, Alex, seriously, 0:18:18.560 --> 0:18:22.240 but no, seriously. Could this also be driving some of 0:18:22.280 --> 0:18:23.640 the last minute buyers. 0:18:24.600 --> 0:18:26.040 I think that's part of it, Alex. 0:18:26.080 --> 0:18:28.359 What we're seeing is a major shift of gold coming 0:18:28.359 --> 0:18:31.480 to the US because the disparities and US COMEX traded 0:18:31.520 --> 0:18:34.119 gold versus what trades in London. That's usuly indicative of 0:18:34.160 --> 0:18:37.879 bull market. That whole scenario, I think is part of it. 0:18:38.000 --> 0:18:40.560 Seems kind of odd to me. Whatever you have the 0:18:40.560 --> 0:18:43.080 price on the books or not, is it's still US 0:18:43.119 --> 0:18:44.880 still has about eight thousand tons of gold. 0:18:45.000 --> 0:18:46.440 It's on it the books at forty two. 0:18:46.359 --> 0:18:48.440 Dollars an ounce. Okay, it should be marked the market. 0:18:48.520 --> 0:18:51.000 Why not market? I'm just not the accountant, so I 0:18:51.000 --> 0:18:52.879 don't really get why that's going to matter for the 0:18:52.920 --> 0:18:53.400 price of goal. 0:18:53.440 --> 0:18:55.639 It's a global commodity, and I always one thing I've 0:18:55.640 --> 0:18:56.440 always enjoyed in. 0:18:56.359 --> 0:18:59.120 The space of gold bugs is a estate it's manipulated 0:18:59.200 --> 0:18:59.720 like in the US. 0:18:59.880 --> 0:19:01.280 Like well, it's a global commodity. 0:19:01.280 --> 0:19:03.320 It's kind of hard to manimplate something you can trade 0:19:03.320 --> 0:19:06.200 around the world, and people in India and China hoard 0:19:06.240 --> 0:19:09.080 it for a good reason historically and particularly Turkey. But 0:19:10.080 --> 0:19:12.400 I look at that is gold has a good reason 0:19:12.440 --> 0:19:15.720 to keep going up. And that's particularly because what's just start. 0:19:15.760 --> 0:19:18.080 One key fact is at the end of last year 0:19:18.119 --> 0:19:20.480