WEBVTT - Commodity and Market Prices 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.800 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.960 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.320 --> 0:00:25.640 Listen on demand wherever you get your podcasts, or watch 0:00:25.720 --> 0:00:27.160 us live on YouTube. 0:00:27.560 --> 0:00:29.760 Right now, we want to turn our attention and we've 0:00:29.800 --> 0:00:33.360 decided we had to go to Japan. Shushrukiyamada drives the 0:00:33.440 --> 0:00:37.800 yen for Bank of America with wonderful academics out of 0:00:37.800 --> 0:00:41.959 the Massachusetts Institute of Technology and Stanford and joins us 0:00:42.120 --> 0:00:45.640 right now. She's Oki, are you surprised that we don't 0:00:45.680 --> 0:00:49.680 have a stronger yen moving from one sixty two stronger 0:00:50.000 --> 0:00:53.360 to one fifty eight and your key breakpoint of one 0:00:53.479 --> 0:00:54.160 fifty five? 0:00:56.440 --> 0:01:01.680 Well, thanks for inviting me here. Well, I think the 0:01:01.760 --> 0:01:04.920 authorities are determined to break one hundred fifty five this 0:01:05.000 --> 0:01:08.120 time around. I think right now they're probably waiting for 0:01:08.880 --> 0:01:14.240 events such as the Enerfy prints tomorrow. But this time around, 0:01:14.600 --> 0:01:17.479 I think the cost of failure is too high because 0:01:17.520 --> 0:01:20.640 they couldn't break hundred fifty five. If they can't break 0:01:20.680 --> 0:01:24.160 this time, I think the market will basically assume the 0:01:24.240 --> 0:01:27.200 authorities have run out of options to defend the end. 0:01:27.440 --> 0:01:30.759 The romance of this is George Soros and a guy 0:01:30.800 --> 0:01:33.920 named Druck and Miller a few years ago, where basically 0:01:33.959 --> 0:01:38.640 the market vigilanties tell the authorities what's going to happen. 0:01:39.120 --> 0:01:43.080 Is that an ancient idea or is the market telling 0:01:43.560 --> 0:01:46.600 the authorities in Japan and for that matter, the Secretary 0:01:46.600 --> 0:01:48.280 of Treasury what to do? 0:01:50.080 --> 0:01:57.279 Yeah, well, I think the Taka administration has potentially underestimated, 0:01:58.240 --> 0:02:02.680 you know, the market force, you know, up until now. 0:02:03.120 --> 0:02:06.440 But I do think, you know, the coordination with the 0:02:06.560 --> 0:02:12.200 US basically means Japan cannot, you know, indefinitely rely on 0:02:12.440 --> 0:02:15.880 intervention because you know, you ask someone to join your project, 0:02:16.320 --> 0:02:18.560 you have to have a goal and that goal cannot 0:02:18.600 --> 0:02:20.720 be just to buy time for yourself. 0:02:20.800 --> 0:02:20.960 Right. 0:02:21.440 --> 0:02:25.320 So I think this time around, this coordination appears to 0:02:25.520 --> 0:02:29.520 have been a well prepared in advance. I think that 0:02:29.639 --> 0:02:34.680 implies the Japanese government is this time prepared to respond 0:02:35.080 --> 0:02:39.440 with a comprehensive package, including faster bogy hikes. 0:02:40.040 --> 0:02:44.320 Sessh K. How important is it that the US worked 0:02:44.360 --> 0:02:47.680 in coordination with the Bank of Japan in this particular. 0:02:47.240 --> 0:02:53.680 Case, Well, I think it is quite important from two perspectives. 0:02:54.320 --> 0:02:59.640 One is that unilateral intervention obviously have a limit, which 0:02:59.680 --> 0:03:04.280 is the balance of FCS reserves Japan hold. But you know, 0:03:04.440 --> 0:03:09.000 as the US joins, ultimately the US can sell the 0:03:09.120 --> 0:03:12.800 U S dollar you know, it issues. So I think 0:03:12.840 --> 0:03:17.040 it removes a hard limit on the intervention. And secondly, 0:03:17.919 --> 0:03:21.080 I think, uh, you know, US coordination is key because 0:03:21.639 --> 0:03:26.160 without coordination on a broader community, I don't think that 0:03:26.240 --> 0:03:31.600 Japan has you know, Japan can determine to uh you know, 0:03:31.960 --> 0:03:35.320 uh respond with a comprehensive package because you know, Krent 0:03:35.480 --> 0:03:41.000 administration really you know, uh historically believes in easy monetary 0:03:41.000 --> 0:03:44.080 policy and uh uh you know, lose physical policy. 0:03:44.960 --> 0:03:49.040 So we understand that the US Fed sold euros to 0:03:49.120 --> 0:03:52.400 buy then as opposed to dollars, does that suggest maybe 0:03:52.400 --> 0:03:55.040 their commitment isn't as great as possibly could be. 0:03:57.480 --> 0:04:00.440 Yeah, I mean I think there are two aspects. I mean, 0:04:01.320 --> 0:04:04.680 first of all, they didn't sell US dollar the currency, 0:04:04.800 --> 0:04:10.000 so you know, obviously that could imply somewhat soft commitment 0:04:10.160 --> 0:04:14.920 at the moment. But I think there's an alternative aspect 0:04:15.040 --> 0:04:19.640 that is, because they sold europe there is a possibility 0:04:19.640 --> 0:04:23.480 that European policy makers may have been given an artist, 0:04:23.880 --> 0:04:27.159 So you know, this coordination could be you know, on 0:04:27.200 --> 0:04:31.160 a broader scale, let's say in the G seven community. 0:04:31.680 --> 0:04:36.599 We have to see, but I think the commitment could 0:04:36.640 --> 0:04:37.680 be that strong. 0:04:38.080 --> 0:04:40.240 I want to get this question because I think culturally 0:04:40.279 --> 0:04:44.400 it's just so so important our perception sisqu is the 0:04:44.520 --> 0:04:48.839 large multinationals drive the bus this time around, in this 0:04:49.040 --> 0:04:54.120 modern age, the domestic Japanese, the small business, the people 0:04:54.720 --> 0:04:59.159 politically and even financially. Do they have more power now 0:04:59.320 --> 0:05:04.680 where they're harmed by week yain, they're harmed by higher yields. 0:05:04.880 --> 0:05:08.480 Do they have more power than twenty or forty years ago. 0:05:09.920 --> 0:05:12.280 Well that's a tough question, but I have to say 0:05:12.320 --> 0:05:16.880 that this time it's not all bad, you know, when 0:05:16.880 --> 0:05:20.160 it comes to what's happening in Japan. I mean, here's 0:05:20.160 --> 0:05:24.240 the fact about Japan. Right since last spring, so that's 0:05:24.279 --> 0:05:27.680 when you know, the yen started to weaken again, Japanese 0:05:27.760 --> 0:05:31.159 equity has been the best performer in the market, right, 0:05:31.720 --> 0:05:36.440 and we've seen the biggest balance of payment surplus in 0:05:36.520 --> 0:05:41.440 Japan among the developed nations. Right, So I think economically 0:05:41.560 --> 0:05:44.080 or in the equity market, things are great. Japanese bank 0:05:44.080 --> 0:05:48.760 stocks have performed US bank stocks, so I think, you know, 0:05:50.600 --> 0:05:53.440 we're not in a recession, we're not in a dead crisis. 0:05:54.520 --> 0:05:59.880 The weekend hurts, but I think so. I think from 0:06:00.080 --> 0:06:04.440 the public, maybe the pressure is not as strong as 0:06:04.720 --> 0:06:08.279 you know people think outside of Japan. And obviously, you know, 0:06:08.760 --> 0:06:11.080 the question is why the end has been so weak 0:06:11.400 --> 0:06:14.839 despite you know, good things like you know, strong equity 0:06:15.240 --> 0:06:18.880 and you know policy risk is one. But you know, 0:06:18.920 --> 0:06:22.360 I think there is an alternative hypothesis, which is that 0:06:22.480 --> 0:06:27.000 the equity has been too strong, meaning you know, outperformance 0:06:27.120 --> 0:06:32.320 of Japanese equities has basically led to access end selling 0:06:32.400 --> 0:06:33.479 from foreign investors. 0:06:33.720 --> 0:06:36.880 Shizuki, Thank you so much, Shazuki Yamada with the Bank 0:06:37.040 --> 0:06:41.960 of America ahead of Japan FX rates. Stay with us 0:06:42.000 --> 0:06:45.240 more from Bloomberg Surveillance coming up after this. 0:06:52.480 --> 0:06:56.080 You're listening to the Bloomberg Surveillance podcast. Catch US live 0:06:56.120 --> 0:06:59.600 weekday afternoons from seven to ten am Eastern Listen on aval, 0:06:59.640 --> 0:07:03.039 Karpe and Android Auto with the Bloomberg Business app, or 0:07:03.200 --> 0:07:04.680 watch US live on YouTube. 0:07:04.880 --> 0:07:08.000 Joining us now, an energy fellow at the University of 0:07:08.000 --> 0:07:12.640 Houston barely describes editor's just definitive global ability, folks. They 0:07:12.640 --> 0:07:15.200 have Paul sank with us, and that edit hers is 0:07:15.240 --> 0:07:17.200 what it's about. Down at the bottom of your note. 0:07:17.240 --> 0:07:21.520 I've been emphasizing this. The refinery world is turned upside down. 0:07:22.080 --> 0:07:27.600 Explain to mere mortals why the refinery world is in 0:07:27.920 --> 0:07:30.880 real issue, like diesel at one hundred and sixty dollars 0:07:30.880 --> 0:07:35.600 a barrel equivalent, and how we're going to extricate ourselves 0:07:35.600 --> 0:07:36.360 from that mess. 0:07:36.600 --> 0:07:39.280 I think I saw one hundred and seventy five. So 0:07:39.840 --> 0:07:42.560 the reason is there's a shortage of refined products across 0:07:42.640 --> 0:07:45.760 the globe, and here in the US we've been exporting 0:07:45.800 --> 0:07:51.360 refined products now for about ten years. We bring in more, 0:07:51.560 --> 0:07:54.880 we export what we don't use, and the US we've 0:07:54.920 --> 0:07:59.840 been doing wonderfully well to reduce our reliance upon refined products. 0:08:00.120 --> 0:08:05.400 We're seeing growth, not necessarily altogether in evs, but the hybrids, 0:08:05.440 --> 0:08:09.440 which get double the mileage of a normal automobile, and 0:08:09.520 --> 0:08:12.920 so the refineries have the ability the capacity to send 0:08:13.000 --> 0:08:16.400 product overseas. You know, as the war kicked offf Xon 0:08:16.480 --> 0:08:19.760 Mobile chartered a couple of tankers to start sending gasoline 0:08:19.760 --> 0:08:23.239 and diesel to the Asian markets. It is a great 0:08:23.280 --> 0:08:25.600 time to be a refiner, you know, once every twenty 0:08:25.600 --> 0:08:27.760 five years. It's a good time to be a refiner. 0:08:28.720 --> 0:08:30.800 I'm actually surprised, or maybe I put it this way. 0:08:30.840 --> 0:08:34.560 Should I be surprised that oil prices BNT are not 0:08:34.840 --> 0:08:36.920 higher than the army? We've got this war in the 0:08:36.920 --> 0:08:40.440 Middle East, we've got rush of sanctions, plus they're in 0:08:40.480 --> 0:08:43.599 a war. Why isn't oil rent like one hundred and 0:08:43.600 --> 0:08:44.080 fifty bucks? 0:08:44.080 --> 0:08:47.720 I don't understand, you know, I look at WTI because 0:08:47.760 --> 0:08:51.240 of course that's what we have to buy, and Brent 0:08:51.360 --> 0:08:54.720 should be whatever the transport cost is from from the 0:08:54.760 --> 0:08:56.120 Gulf of Mexico up to Brent. 0:08:56.160 --> 0:08:56.319 Brent. 0:08:56.960 --> 0:08:59.400 The amount of Brent crew that's produced today is less 0:08:59.400 --> 0:09:02.080 than a thousand barrels a day. And so the Brent 0:09:02.200 --> 0:09:06.439 benchmark is a fiction. It's a fiction. It's a fiction. 0:09:06.559 --> 0:09:10.840 It's in fact Brent includes a portion WTI includes a 0:09:10.880 --> 0:09:14.960 portion of riata, whatever the price is. Why aren't we 0:09:15.080 --> 0:09:17.880 there at one hundred and six million dollar one hundred 0:09:17.920 --> 0:09:22.440 and six million barrels a day pre war, with ten 0:09:22.520 --> 0:09:25.240 millions supposedly off the market, we should have seen a 0:09:25.280 --> 0:09:28.640 price of oil hit about two hundred dollars a barrel. 0:09:29.000 --> 0:09:32.280 Why we haven't, Well, China has cut its imports now 0:09:32.320 --> 0:09:36.440 by five million barrels a day. We've got increased production, 0:09:37.160 --> 0:09:41.000 or rather increased oil coming to market because the Venezuelan 0:09:41.080 --> 0:09:45.600 sanctions have been released. UAE has kicked up production significantly. 0:09:46.679 --> 0:09:49.439 We've been running down the spr at about two and 0:09:49.520 --> 0:09:51.840 a half million barrels a day. So the net effect 0:09:52.360 --> 0:09:55.960 that is about two million barrels a day off market. 0:09:56.200 --> 0:09:59.360 So that leads to a fifty percent price increase off 0:09:59.400 --> 0:10:02.480 the of the pre war price of fifty six dollars 0:10:02.520 --> 0:10:05.559 a barrel, which is what it was in January before 0:10:05.600 --> 0:10:07.160 the market priced in the war. 0:10:08.240 --> 0:10:11.199 As an energy person, do you just assume that the 0:10:11.200 --> 0:10:15.439 Middle East source of oil is going to be compromised 0:10:15.520 --> 0:10:17.960 for as long as we can see because the straight 0:10:18.000 --> 0:10:21.640 up Horn News arguably will never be open open. 0:10:23.040 --> 0:10:23.880 It's hard to say. 0:10:24.000 --> 0:10:26.520 I mean, you know, the Middle East has to sell 0:10:26.520 --> 0:10:28.920 that oil to somebody in order to make a living. 0:10:29.400 --> 0:10:34.120 In nineteen fifty six, with the Suez crisis, Eisenhower was 0:10:34.160 --> 0:10:38.800 approached by the UK, by France, by Israel to join 0:10:38.880 --> 0:10:41.800 in in retaking the Suez Canal because it was the 0:10:41.800 --> 0:10:45.680 bottleneck for oil going to Europe. And Eisenhower said, why 0:10:45.960 --> 0:10:48.079 you can just send it around. He didn't want to 0:10:48.080 --> 0:10:50.200 get involved with that. He knew that no matter who 0:10:50.240 --> 0:10:52.360 owned the oil in the Middle East, the only way 0:10:52.360 --> 0:10:54.680 it had value was for it to be sold. And 0:10:54.760 --> 0:10:58.600 eventually they'll all come to some sort of agreement or 0:10:59.720 --> 0:11:02.160 there will be demand destruction as they fight it out 0:11:02.160 --> 0:11:02.920 amongst themselves. 0:11:03.040 --> 0:11:04.640 And we got to run. But I gotta get this in. 0:11:04.880 --> 0:11:09.599 When a professor comes in of his acclaim editors a 0:11:09.760 --> 0:11:12.760 claim at u age and he writes a separate paragraph, Hey, 0:11:12.840 --> 0:11:20.240 Tom's stupid Blackstone enervis ask me so private equity Blackstone 0:11:20.800 --> 0:11:24.240 wants to take AI and bring it into the oil business, 0:11:24.640 --> 0:11:26.240 and your apoplectic about it. 0:11:26.280 --> 0:11:32.040 Discuss So Intervius is compiling data on every user or 0:11:32.120 --> 0:11:36.120 every royalty owner and actually every oil producer. They have 0:11:36.320 --> 0:11:43.199 data down to the graneur level on wells, on property holdings. 0:11:43.920 --> 0:11:49.480 This is information that for example, exonmobile eog Chevron. Ordinarily 0:11:49.520 --> 0:11:52.440 they fight hammertong, tooth and nail not to let that out. 0:11:52.800 --> 0:11:57.120 But now Blackstone is putting itself in a position of 0:11:57.200 --> 0:12:01.199 grabbing all of this data across private companies. And of course, 0:12:01.240 --> 0:12:04.120 if you're a royalty owner, they know your bank account, 0:12:04.400 --> 0:12:07.760 they know your social security number. They know what your 0:12:07.880 --> 0:12:10.800 interest is in this well over here, the one in 0:12:10.840 --> 0:12:13.760 West Texas, the one in Colorado, the one in West Virginia. 0:12:13.880 --> 0:12:15.720 They have a plectic on landman. 0:12:16.040 --> 0:12:20.160 Well just imagine, just imagine Bloomberg having all of the 0:12:20.160 --> 0:12:24.600 private data here and then now they've gone into a 0:12:24.840 --> 0:12:27.280 banking mode. They will make you a payday loan on 0:12:27.360 --> 0:12:30.320 your royalties for the next three or four months. And 0:12:30.400 --> 0:12:33.800 you know, in Houston some of the wealthiest oil guys 0:12:33.840 --> 0:12:36.800 are actually the estate attorneys who've been making a market 0:12:36.960 --> 0:12:39.400 in the little fragments so that they taking. 0:12:39.200 --> 0:12:42.880 Out of this. For people scared of a they shouldn't. 0:12:42.440 --> 0:12:46.160 Be terrified, because what this system is doing is it's 0:12:46.240 --> 0:12:50.559 overseeing all of the data. It's filling and plugging numbers. 0:12:51.120 --> 0:12:54.840 You wind up as a user getting money taken out 0:12:54.840 --> 0:12:58.880 of your account. Interest numbers change, there can be different 0:12:58.920 --> 0:13:04.480 owner numbers, and plus they use open servers across the globe, 0:13:05.000 --> 0:13:08.600 and so any bad actor can just go right into it. 0:13:08.679 --> 0:13:10.600 We got to go, but editors, you got to come 0:13:10.640 --> 0:13:13.240 back and continue this discussion because this touches folks on 0:13:13.280 --> 0:13:15.240 the fears that so many people here. 0:13:16.120 --> 0:13:18.720 They're acting like a bank and they're not regulated like 0:13:18.760 --> 0:13:19.120 a bank. 0:13:19.840 --> 0:13:22.440 That's the point. The regulation's not there, Professor Hurst, thank 0:13:22.480 --> 0:13:27.760 you so much. Always with the University of Houston. Stay 0:13:27.760 --> 0:13:31.680 with us. More from Bloomberg Surveillance coming up after this. 0:13:38.920 --> 0:13:42.480 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:13:42.559 --> 0:13:45.680 weekday afternoons from seven to ten am Eastern Listen on 0:13:45.800 --> 0:13:49.199 Apple Karplay and Android Otto with the Bloomberg Business app, 0:13:49.360 --> 0:13:51.240 or watch us Live on YouTube. 0:13:51.520 --> 0:13:54.320 And we made a commercial. Steve len Zone made a 0:13:54.400 --> 0:13:58.599 special commercial about the Standard Charter Bank. Yeah okay, and 0:13:58.679 --> 0:14:02.680 Steve Englander's brilliant foreign exchange. Suki Cooper has a privilege, 0:14:02.720 --> 0:14:06.319 is sitting with him global added commodities at a Standard 0:14:06.400 --> 0:14:09.400 Charter Bank with their whole Pacific room. How's a Pacific 0:14:09.520 --> 0:14:14.079 rim doing with the war in the Eastern Mediterranean is 0:14:14.120 --> 0:14:15.200 a general statement. 0:14:16.400 --> 0:14:18.480 I think there's so much market focus there, but we 0:14:18.559 --> 0:14:21.280 have to remember that the geopolitics, while it's been set 0:14:21.400 --> 0:14:24.280 in the tempo for much of the commodities, some of 0:14:24.320 --> 0:14:26.640 the base that's been set up by some of the 0:14:26.680 --> 0:14:30.040 structural drivers. We've seen this morning in terms of copper 0:14:30.040 --> 0:14:32.560 surprise still being one of the potentially one of the 0:14:32.600 --> 0:14:35.680 most underappreciated risks there. But for the gold market, we 0:14:35.720 --> 0:14:38.600 still see that structural demand is still wanting to lean 0:14:38.640 --> 0:14:41.280 in and an allocate once there's a little bit more 0:14:41.280 --> 0:14:43.680 clarity on uncertainty there. 0:14:44.320 --> 0:14:47.440 So we saw gold at five thousand dollars an ounce. 0:14:48.040 --> 0:14:51.880 You know, experts are tell me, boy, that's that's really 0:14:51.960 --> 0:14:54.320 really toppy here. But then we pull back the four thousand, 0:14:54.520 --> 0:14:57.840 a big move down. What's the fundamental. 0:14:57.240 --> 0:14:59.280 Call on gold today? 0:14:59.360 --> 0:15:01.000 Is it feel attractive or not? 0:15:01.840 --> 0:15:05.600 I'd say if we're looking on a longer term basis, 0:15:05.600 --> 0:15:07.800 it might look relatively expensive, but if we're looking at 0:15:07.800 --> 0:15:11.680 the macro risks right now, then it still looks underappreciated. 0:15:12.280 --> 0:15:15.360 So the base, we think has formed quite well, especially 0:15:15.360 --> 0:15:17.160 as we're in the middle of a seasonal week period 0:15:17.160 --> 0:15:19.200 for consumption. And on top of that, we have a 0:15:19.240 --> 0:15:22.120 lot of macro headwinds that have been priced in, especially 0:15:22.120 --> 0:15:25.200 with the market swinging so sharply to expecting great hikes 0:15:25.480 --> 0:15:27.760 and in the US. So we think that prices have 0:15:27.800 --> 0:15:30.320 held up very well at these sort of levels. And 0:15:30.480 --> 0:15:32.840 now I think if we're starting to see an unwinding 0:15:32.920 --> 0:15:35.440 of some of that positioning that was very in that 0:15:35.520 --> 0:15:38.920 hawkish stance, we'll see gold starting to gain more traction. 0:15:39.800 --> 0:15:42.320 Silver I see down fourteen percent this year. I mean, 0:15:42.360 --> 0:15:44.160 I don't know anything about the commodity space, but I 0:15:44.200 --> 0:15:46.240 always feel like gold and silver kind of trade in 0:15:46.240 --> 0:15:49.800 tender but not really. Here's what's the feeling on gold here? 0:15:50.440 --> 0:15:51.560 I mean, I'm sorry, silvers par. 0:15:52.320 --> 0:15:55.080 If gold is our barometer for uncertainty, silver is our 0:15:55.160 --> 0:15:58.960 kicker on uncertainty plus the outlook for the industrial picture. Okay, 0:15:59.080 --> 0:16:02.560 and the silt, on the one hand, did incredibly well 0:16:02.560 --> 0:16:05.080 when we saw so much retail demands at the start 0:16:05.120 --> 0:16:07.040 of the year, but now we're starting to see some 0:16:07.080 --> 0:16:10.280 of these risks lurking in the background, rind substitution risk, 0:16:10.400 --> 0:16:12.760 especially for the solar industry. So on the one hand, 0:16:12.760 --> 0:16:16.120 you've got that AI demand boost that's growing, but the 0:16:16.280 --> 0:16:18.800 substitution risk on the solar side could be quite sharp. 0:16:18.920 --> 0:16:20.960 Okay, let's let's go let me. I happen to be 0:16:21.000 --> 0:16:23.600 in a small store on fifty seven Street, Tiffany the 0:16:23.640 --> 0:16:26.560 other day and the elevator randomly got me off with 0:16:26.640 --> 0:16:31.000 the silver floor. It was just packed packed. Is silver 0:16:31.080 --> 0:16:33.720 a big part of jewelry or is it really driven 0:16:33.760 --> 0:16:36.280 by solar panels? 0:16:36.360 --> 0:16:38.640 It's a significant part, but it's not the main part 0:16:38.760 --> 0:16:42.960 of jewelry consumption. It's at the moment we're seeing much more. 0:16:43.120 --> 0:16:45.440 Even though we're seeing the solar demand starting to shrink, 0:16:45.800 --> 0:16:49.680 it's still much larger. The industrial silver industrial usages are 0:16:49.800 --> 0:16:53.280 much larger. It's more than half of the consumption that is. 0:16:53.240 --> 0:16:58.160 There like a shortage of silver like mines versus gold. 0:16:58.280 --> 0:17:00.560 This is a really fascinating development because if we go 0:17:00.640 --> 0:17:03.360 back five years, I would have been satire saying silver's 0:17:03.440 --> 0:17:06.119 very well supply. There's plenty of above grind stock. But 0:17:06.200 --> 0:17:09.520 we've had five successive years of undersupplied market, so that 0:17:09.600 --> 0:17:12.760 readily available stock is no longer there, and that's one 0:17:12.760 --> 0:17:14.640 of the reasons we're seeing these shop moves. 0:17:15.160 --> 0:17:18.320 I'm ignorant on this. I feel like, right now I'm 0:17:18.320 --> 0:17:21.800 going to go read everything Sukie's written, plus three books 0:17:21.840 --> 0:17:26.159 on silver. You know, I just I'm just not up 0:17:26.160 --> 0:17:29.280 to speed. Why am I so dumb on silver? Why 0:17:29.320 --> 0:17:31.879 do we not look at silver like we look at 0:17:31.960 --> 0:17:32.680 gold or oil. 0:17:33.200 --> 0:17:36.080 Silver is fascinating in that it's used in so many 0:17:36.160 --> 0:17:40.800 different facets, like from water purification to wood preservation, and 0:17:40.840 --> 0:17:42.919 we don't realize how many parts of our lives. It 0:17:42.960 --> 0:17:45.280 touches and any got the ev demand aspect too, But 0:17:45.359 --> 0:17:47.040 I think it tends to be looked at more so 0:17:47.080 --> 0:17:49.720 as a precious metal rather than its industrial components. 0:17:49.760 --> 0:17:53.440 I mean, all I know tom about commodities is GLCL, GLCO. 0:17:53.640 --> 0:17:56.480 Go on the Bloomberg Terminal Global Commodity prices, and I 0:17:56.520 --> 0:17:58.560 click on the metals and it gives me the base metals. 0:17:58.840 --> 0:18:02.040 They're all up double digit this year. Fairest metals down. 0:18:02.080 --> 0:18:03.640 I don't know, it's iron ore and all that stuff. 0:18:03.680 --> 0:18:05.960 But then I got to precious metals, and the precious 0:18:06.000 --> 0:18:08.720 medals are down kind of fifteen percent across the board 0:18:08.720 --> 0:18:13.520 here really platinum palladium talking about about those, because what's 0:18:13.600 --> 0:18:15.080 driving this story there. 0:18:15.640 --> 0:18:19.720 The picture for the PGMs of platinum pladium has become 0:18:19.840 --> 0:18:23.560 much more micro in comparison to macro. So last year 0:18:23.800 --> 0:18:26.119 maybe you could have said that platinum was riding on 0:18:26.160 --> 0:18:29.240 the coattails of gold. But this year we've seen some 0:18:29.280 --> 0:18:32.000 of the supply concerns maybe take a back seat and 0:18:32.080 --> 0:18:34.040 much more focus on the demand side and whether we 0:18:34.119 --> 0:18:36.800 might see auto demand being scaled back, or whether there 0:18:36.840 --> 0:18:39.439 might be some challenges around the recycling side. But we 0:18:39.520 --> 0:18:42.480 still see that the platinum market's undersupplied for this year 0:18:42.800 --> 0:18:47.040 medium tilting into a surplus. But having said that, the 0:18:47.080 --> 0:18:49.639 investment demand has turned a lot weaker, there's still that 0:18:49.760 --> 0:18:52.080 structural story that is supportive of platinum. 0:18:52.200 --> 0:18:54.320 Two things are gonna get this said. So to summarize 0:18:54.320 --> 0:18:54.920 your long. 0:18:54.840 --> 0:18:58.119 Gold here, we still see upside risk from here. We 0:18:58.160 --> 0:19:00.800 have fosand six hundred and fifty as our people are average. 0:19:00.800 --> 0:19:04.240 Okay, this is a listener emails and it's part of 0:19:04.200 --> 0:19:06.800 the ask ratio. That's how it works. This is missus 0:19:06.880 --> 0:19:11.320 keane somewhere a number of streets up. Can you ask Suki? 0:19:11.960 --> 0:19:15.320 Is the ratio of the twenty nine thousand dollars also 0:19:15.400 --> 0:19:19.879 Peretti small bone cuff in yellow gold twenty nine thousand 0:19:19.960 --> 0:19:23.880 dollars versus two thousand, one hundred dollars for the same 0:19:24.000 --> 0:19:27.320 silver cuff. Is that a proper ratio to look at 0:19:27.359 --> 0:19:30.520 gold to silver for a mere mortal out there. 0:19:31.080 --> 0:19:32.920 The gold seal. The ratio is one that people like 0:19:33.000 --> 0:19:35.200 to look at over the longer term, and it tells 0:19:35.280 --> 0:19:38.399 us whether one is overvalued or undervalued. But there isn't 0:19:38.520 --> 0:19:41.520 a fundamental basis that drives what that long term average 0:19:41.520 --> 0:19:44.760 should be. So we're starting to see that ratio normalizing 0:19:45.280 --> 0:19:49.080 at the current levels, Tiffany, at the retail level, there's 0:19:49.200 --> 0:19:52.080 many many other dynamics that out of play, the manufacturing, 0:19:52.119 --> 0:19:52.800 the cast. 0:19:55.280 --> 0:19:59.000 Really why, I mean to me, when you look at 0:19:59.040 --> 0:20:01.639 diamonds and now you get the Lapo diamonds, that puts 0:20:01.680 --> 0:20:03.000 that in totally. 0:20:03.680 --> 0:20:06.400 See Sukie's like she's got to Charter. Look on, she's 0:20:06.440 --> 0:20:08.840 not layering this morning. Now what you do as your 0:20:08.960 --> 0:20:11.280 layer and you mix your gold in your silver. I 0:20:11.359 --> 0:20:14.720 learned this and you do that. I mean, thank you 0:20:14.800 --> 0:20:18.640 so much. I folks, my ignorance of silver is just stunning. 0:20:19.160 --> 0:20:20.919 I mean, I just have to read up about it. 0:20:20.960 --> 0:20:24.359 Is there like a silver council like a gold council. 0:20:24.480 --> 0:20:25.720 There's a silver institute. 0:20:25.920 --> 0:20:28.320 Lots of institute there is, so I should go to 0:20:28.320 --> 0:20:28.840 their website. 0:20:28.960 --> 0:20:30.960 Get Yes, there's lots of great days. 0:20:31.119 --> 0:20:33.960 Just don't be a stranger. I'm smarter, Suki Cooper, Thank 0:20:34.000 --> 0:20:37.400 you so much. Global had of commodities in silver. It's 0:20:37.440 --> 0:20:42.960 the standard Charter Bank. Stay with us. More from Bloomberg 0:20:43.080 --> 0:20:45.120 Surveillance coming up after this. 0:20:52.359 --> 0:20:55.960 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:20:56.000 --> 0:20:59.520 weekday afternoons from seven to ten am Eastern Listen on Apple, 0:20:59.560 --> 0:21:02.919 Karpla and Android Otto with the Bloomberg Business Up, or 0:21:03.080 --> 0:21:05.000 watch us live on YouTube. 0:21:04.840 --> 0:21:07.200 At New York Life. She's at sweet Greens three days 0:21:07.200 --> 0:21:09.280 a week. Julia and herman joins us, do you go 0:21:09.320 --> 0:21:09.879 to sweepeas? 0:21:09.920 --> 0:21:11.360 Do you have to agree with the prices? 0:21:11.800 --> 0:21:14.159 Did you throw that a New York Life fam Is 0:21:14.200 --> 0:21:15.040 that what we're doing? 0:21:15.119 --> 0:21:15.840 That's what we will. 0:21:16.320 --> 0:21:19.400 You have a brilliant note. What do you expect out 0:21:19.400 --> 0:21:22.399 of notre day? It's like wicked conventional and I really 0:21:22.440 --> 0:21:25.919 respect that. Right now, what do you learn from a 0:21:26.040 --> 0:21:30.280 treasury curve? The vanilla difference between twos and tens? Or 0:21:30.359 --> 0:21:33.040 dare I say in a worst kind of way three 0:21:33.119 --> 0:21:34.960 months and thirty years? 0:21:35.160 --> 0:21:37.040 Well, really, what we've learned from the curve in the 0:21:37.119 --> 0:21:40.800 last few weeks is that investors are struggling with not 0:21:41.040 --> 0:21:43.400 if the Fed's going to contain inflation, but what their 0:21:43.520 --> 0:21:46.440 glide path forward is from here. And we can learn 0:21:46.440 --> 0:21:48.560 that because we can dissect what's happening in the tenure. 0:21:48.560 --> 0:21:50.960 In the thirty year, we know that inflation. 0:21:50.760 --> 0:21:54.040 Conditions are still spread tens thirties. 0:21:54.320 --> 0:21:57.000 Well, we're looking at spreads across the entirety of the curve. 0:21:57.040 --> 0:22:00.320 But if we just take the individual tenors themselves, we 0:22:00.359 --> 0:22:03.600 can break this down into inflation expectations versus real yild. 0:22:03.920 --> 0:22:05.920 It's real yield that has driven the rate move in 0:22:05.960 --> 0:22:09.120 the last few weeks. And this is almost all attributable 0:22:09.160 --> 0:22:12.639 to term premium. And we know that fiscal questions have 0:22:12.720 --> 0:22:16.159 been the huge contributing driver to that term premium increased lately. 0:22:16.600 --> 0:22:18.679 But what happened, of course, last week is now we 0:22:18.720 --> 0:22:21.800 have these increased contributions of questions of how the Fed 0:22:21.840 --> 0:22:23.080 is planning to contain inflation. 0:22:23.920 --> 0:22:26.479 But the Fed's not really telling us too much these days. 0:22:26.520 --> 0:22:29.280 Here is that frustrating for you and for the market. 0:22:29.359 --> 0:22:31.400 It seems like some certain folks in the market are saying, 0:22:31.600 --> 0:22:33.640 I don't like this new regime, this new sheriff in town. 0:22:34.080 --> 0:22:38.399 Well, you know, it's not necessarily frustrating because candidly, a 0:22:38.480 --> 0:22:40.560 lot of the curve has done a good job of 0:22:40.600 --> 0:22:43.960 tightening financial conditions even without a ton of guidance or 0:22:44.040 --> 0:22:46.240 specifically a rate move of course. 0:22:46.400 --> 0:22:47.040 By the Fed. 0:22:47.600 --> 0:22:50.960 Now, given of course, that the geopolitical situation is so 0:22:51.880 --> 0:22:55.040