1 00:00:05,960 --> 00:00:10,200 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:10,240 --> 00:00:14,320 Speaker 1: I'm Joe Wasn't and I'm Tracy Alloway. One of the questions, 3 00:00:14,480 --> 00:00:16,640 Speaker 1: and of course that I would say, in part due 4 00:00:16,680 --> 00:00:19,599 Speaker 1: to one of our recent episodes, that people are debating, 5 00:00:19,840 --> 00:00:23,040 Speaker 1: is the role the future of the dollar, And of 6 00:00:23,079 --> 00:00:25,920 Speaker 1: course people love to debate this for our entire live people, 7 00:00:26,239 --> 00:00:28,040 Speaker 1: this is the dollar doomed. Just do you an going 8 00:00:28,080 --> 00:00:30,360 Speaker 1: to replace it? It's going to be replaced by golder, 9 00:00:30,400 --> 00:00:34,199 Speaker 1: big Klin or something. But with the sanctions, with Russia's 10 00:00:34,280 --> 00:00:37,080 Speaker 1: loss of it loss of its FX reserves, I feel 11 00:00:37,120 --> 00:00:39,640 Speaker 1: like this is a This debate has gotten new energy. 12 00:00:40,159 --> 00:00:43,560 Speaker 1: I distinctly remember my dad sending me articles about Iraq 13 00:00:43,680 --> 00:00:47,720 Speaker 1: switching to Euros for oil payments from many, many years ago. 14 00:00:47,840 --> 00:00:51,000 Speaker 1: So yes, this is an ongoing debate, but you're entirely right, 15 00:00:51,440 --> 00:00:54,600 Speaker 1: new life has been breathed into it. And you know, 16 00:00:54,680 --> 00:00:59,520 Speaker 1: most recently we're recording this on March and just yesterday 17 00:00:59,560 --> 00:01:01,480 Speaker 1: we Sawrussia is saying that it was going to start 18 00:01:01,520 --> 00:01:05,600 Speaker 1: to demand gas payments in rubles. So there is there 19 00:01:05,640 --> 00:01:09,040 Speaker 1: are things happening on this front. But even something like that, 20 00:01:09,560 --> 00:01:12,000 Speaker 1: you see people portray it in two different ways. So 21 00:01:12,080 --> 00:01:14,200 Speaker 1: on the one hand, there are people out there saying, oh, 22 00:01:14,240 --> 00:01:16,480 Speaker 1: look this is the end of the petro dollar. Russia 23 00:01:16,520 --> 00:01:19,440 Speaker 1: has kicked off this entire process. And then other people 24 00:01:19,440 --> 00:01:21,680 Speaker 1: are saying, well, no, that's not what it is at all. 25 00:01:21,920 --> 00:01:24,480 Speaker 1: In fact, this is a sign of you know, Russian weakness. 26 00:01:24,560 --> 00:01:26,920 Speaker 1: Basically they can't get foreign currency at the moment, so 27 00:01:26,959 --> 00:01:29,440 Speaker 1: they have to do this. So there's so much debate 28 00:01:29,560 --> 00:01:32,560 Speaker 1: on this particular topic. Yeah, it's like a big I 29 00:01:32,560 --> 00:01:36,319 Speaker 1: would say, it's also just a big ideas moment. Earlier 30 00:01:36,319 --> 00:01:39,600 Speaker 1: in the week, we recorded that interview with Victor's Fantis 31 00:01:39,600 --> 00:01:42,640 Speaker 1: talking about the world dividing into two. So it's kind 32 00:01:42,680 --> 00:01:47,840 Speaker 1: of a moment for big picture sort of reassessments of everything. 33 00:01:47,840 --> 00:01:50,400 Speaker 1: And the dollar is sort of the key icon of 34 00:01:50,440 --> 00:01:54,160 Speaker 1: the existing world, the reserve currency, but all kinds of 35 00:01:54,200 --> 00:01:57,000 Speaker 1: like it's a moment to sort of step back and 36 00:01:58,280 --> 00:02:00,680 Speaker 1: think about sort of things that we take for granted 37 00:02:00,760 --> 00:02:03,440 Speaker 1: and what could change. Yeah, and also I think whenever 38 00:02:03,480 --> 00:02:06,360 Speaker 1: you get this level of uncertainty, people try to fit 39 00:02:06,400 --> 00:02:09,200 Speaker 1: their own narratives onto it, and so things that they've 40 00:02:09,240 --> 00:02:11,480 Speaker 1: been talking about for many, many years suddenly this is 41 00:02:11,520 --> 00:02:14,600 Speaker 1: the thing that is going to propel those into existence 42 00:02:14,680 --> 00:02:18,120 Speaker 1: or into life. But yes, big picture, big moments. So 43 00:02:18,200 --> 00:02:21,040 Speaker 1: I'm very excited about our guest today, someone who has 44 00:02:21,160 --> 00:02:24,800 Speaker 1: always had a very provocative ideas in the world of 45 00:02:25,120 --> 00:02:31,320 Speaker 1: global macro all kinds of things, things related to currencies, China, gold, etcetera. 46 00:02:31,400 --> 00:02:33,840 Speaker 1: One of the most interesting people in the space for 47 00:02:33,840 --> 00:02:36,720 Speaker 1: a long time. We're gonna be speaking with Hugh Hendry. 48 00:02:36,800 --> 00:02:41,040 Speaker 1: He was the founder of Eclectic Asset Management and now 49 00:02:41,080 --> 00:02:44,160 Speaker 1: he is a luxury hotelier on the island of St. 50 00:02:44,160 --> 00:02:46,720 Speaker 1: Barts and he seems to be living a life that's 51 00:02:46,840 --> 00:02:50,240 Speaker 1: much better and more interesting than ours. His website, Uh, 52 00:02:50,280 --> 00:02:52,640 Speaker 1: you know, go check it out. Hugh, Thank you so 53 00:02:52,720 --> 00:02:54,960 Speaker 1: much for coming out. What have you been up to? 54 00:02:55,080 --> 00:02:58,360 Speaker 1: Because I first became aware of you, you know, probably 55 00:02:58,600 --> 00:03:01,160 Speaker 1: over a decade ago watching years you made on YouTube 56 00:03:01,160 --> 00:03:03,520 Speaker 1: about Chinese ghost cities. But what do you what have 57 00:03:03,560 --> 00:03:06,359 Speaker 1: you been up to? Hey, hey guys, to be on 58 00:03:06,639 --> 00:03:10,280 Speaker 1: Thank you. I have been I've been recovering. I've been 59 00:03:10,400 --> 00:03:16,000 Speaker 1: rehabilitating my my weary mind. You know, I had had 60 00:03:16,120 --> 00:03:21,680 Speaker 1: many years of active intellectual combat. The Eclectic Macro Fund 61 00:03:22,120 --> 00:03:26,799 Speaker 1: ran for fifteen years en yere that I achieved. It's 62 00:03:26,840 --> 00:03:29,200 Speaker 1: not the tenure you get as a professor at some 63 00:03:29,240 --> 00:03:33,480 Speaker 1: of these Bologna economic universities where you can you can 64 00:03:33,480 --> 00:03:37,680 Speaker 1: proclaim whatever and never be called for it. But fifteen years. 65 00:03:37,720 --> 00:03:41,360 Speaker 1: But at the end, and the end was I was exhausted. 66 00:03:42,000 --> 00:03:43,600 Speaker 1: I mean, the thing you have to remember is we 67 00:03:43,680 --> 00:03:49,080 Speaker 1: have this amazing organ inside our head, this brain, um. 68 00:03:49,120 --> 00:03:53,120 Speaker 1: But the thing is it lives in a dark chamber. 69 00:03:53,200 --> 00:03:56,400 Speaker 1: There ain't no light getting into that brain, and it 70 00:03:56,520 --> 00:04:00,240 Speaker 1: relies on the idiot on the on the outside to 71 00:04:00,360 --> 00:04:04,120 Speaker 1: tell what's going on. And I spent I swear I 72 00:04:04,160 --> 00:04:09,000 Speaker 1: spent fifteen years thinking I was gonna die. Not every day, 73 00:04:09,160 --> 00:04:13,040 Speaker 1: not every day, but there are moments in investment campaigns 74 00:04:13,440 --> 00:04:16,400 Speaker 1: and you think, oh my god, you remember I was 75 00:04:16,720 --> 00:04:20,440 Speaker 1: I see things, um. And it's a curse because I 76 00:04:20,520 --> 00:04:23,960 Speaker 1: normally see things before other people. I've got to deal 77 00:04:23,960 --> 00:04:27,960 Speaker 1: with other people catching up. Um. And as a consequence, 78 00:04:28,720 --> 00:04:31,560 Speaker 1: there are days when you're out of sync with the 79 00:04:31,600 --> 00:04:34,880 Speaker 1: world and your P and l B leads and you 80 00:04:35,000 --> 00:04:39,360 Speaker 1: can since your brain brain doesn't know, and your brains like, 81 00:04:39,360 --> 00:04:41,200 Speaker 1: oh my god, we're like you know, this is a 82 00:04:41,200 --> 00:04:44,799 Speaker 1: flight moment, and you get flooded with all this toxic 83 00:04:45,040 --> 00:04:48,679 Speaker 1: chemistry to get you out of the hole. So fifteen 84 00:04:48,760 --> 00:04:53,200 Speaker 1: years of all that nasty chemical reaction I needed. I 85 00:04:53,240 --> 00:04:57,039 Speaker 1: needed five years to or yeah, five years to recuperate. 86 00:04:57,360 --> 00:04:59,560 Speaker 1: And what a what a better place I can't think 87 00:04:59,560 --> 00:05:02,799 Speaker 1: of any are than this beautiful island in the middle 88 00:05:02,839 --> 00:05:06,320 Speaker 1: of nowhere, this tiny little volcanic rock where it's a 89 00:05:06,360 --> 00:05:09,880 Speaker 1: bit like golf clutches where all the successful people come in. 90 00:05:09,920 --> 00:05:12,360 Speaker 1: They're like peacocks, Like, look at the size of my 91 00:05:12,440 --> 00:05:16,559 Speaker 1: super yacht. You know, Yeah, I'm making hay And I said, 92 00:05:16,600 --> 00:05:22,039 Speaker 1: I watch it. I accommodate it. I built beautiful, beautiful 93 00:05:22,120 --> 00:05:25,880 Speaker 1: villas for for rental under the brand Long Blue. And 94 00:05:25,880 --> 00:05:30,479 Speaker 1: then since the body snatching alien invasion, the v in 95 00:05:31,800 --> 00:05:35,120 Speaker 1: and I don't have access to the dear old beloved 96 00:05:35,240 --> 00:05:38,760 Speaker 1: Bloomberg terminal, but I tell you it's in the air 97 00:05:38,760 --> 00:05:43,719 Speaker 1: waves or somewhere because I'm drawing down stuff. And I'm 98 00:05:43,760 --> 00:05:48,600 Speaker 1: glad to say that. Invigorated, I began shading again. And 99 00:05:48,640 --> 00:05:53,919 Speaker 1: so I have podcasts. I'm on Instagram in my swimsuit. Um, 100 00:05:54,120 --> 00:05:57,800 Speaker 1: and what am I doing? Yeah, and doing podcasts, etcetera. 101 00:05:57,880 --> 00:06:01,839 Speaker 1: So I'm telling like it is, well, I mean, I 102 00:06:01,839 --> 00:06:04,920 Speaker 1: gotta say, it's it's raining and cold here in New York, 103 00:06:05,080 --> 00:06:09,080 Speaker 1: so hearing about um, your very glamorous life in St. 104 00:06:09,080 --> 00:06:12,159 Speaker 1: Barts UM isn't helping this morning. But I'm glad you've 105 00:06:12,160 --> 00:06:17,160 Speaker 1: recuperated in terms of what you're seeing right now. I mean, 106 00:06:17,200 --> 00:06:20,880 Speaker 1: you are still very much paying attention to what's going 107 00:06:20,920 --> 00:06:23,920 Speaker 1: on in markets and the world more broadly. It seems 108 00:06:23,920 --> 00:06:26,520 Speaker 1: like just looking at your Twitter feed and your videos 109 00:06:26,720 --> 00:06:29,640 Speaker 1: and things like that, what are you seeing right now? 110 00:06:29,800 --> 00:06:31,520 Speaker 1: You know, lots of people are talking about this as 111 00:06:31,680 --> 00:06:35,240 Speaker 1: a turning point in world history and possibly in the 112 00:06:35,279 --> 00:06:38,200 Speaker 1: economic order. As Joe and I were discussing in the intro, 113 00:06:38,600 --> 00:06:41,320 Speaker 1: what do you see? Oh my goodness, how long do 114 00:06:41,400 --> 00:06:47,680 Speaker 1: you have speed? Wait? I see confusion. I see talking 115 00:06:47,680 --> 00:06:51,400 Speaker 1: about what they would like UM and kind of failing 116 00:06:51,440 --> 00:06:55,360 Speaker 1: to understand um. And that sounds very pompous. And let 117 00:06:55,360 --> 00:07:00,640 Speaker 1: me be more even more pompous. Very few people I 118 00:07:00,680 --> 00:07:03,440 Speaker 1: mean and encourage, I want to say, But like with 119 00:07:03,560 --> 00:07:06,920 Speaker 1: one hand, I I start to struggle to use digits 120 00:07:07,000 --> 00:07:10,680 Speaker 1: once I reached the fifth digit. When I nominate the 121 00:07:10,840 --> 00:07:16,680 Speaker 1: people that actually understand money right, and that includes economists, 122 00:07:16,680 --> 00:07:20,720 Speaker 1: that includes the biggest hedge fund managers, the bankers, and 123 00:07:21,240 --> 00:07:26,720 Speaker 1: it's bluff includes the Federal Reserve. So few people understand 124 00:07:27,000 --> 00:07:30,080 Speaker 1: the concept of money. And and so when we get 125 00:07:30,520 --> 00:07:34,680 Speaker 1: these dreadful political moments that we're seeing with the invasion 126 00:07:35,040 --> 00:07:39,600 Speaker 1: in Ukraine and of course the greatest tragedy, the loss 127 00:07:39,640 --> 00:07:43,040 Speaker 1: of life, the change of dramatic change and lifestyles being 128 00:07:43,120 --> 00:07:47,080 Speaker 1: dragged eighty years back into the past. It's horrible, but 129 00:07:47,320 --> 00:07:50,560 Speaker 1: it's it creates this energy where people kind of dust 130 00:07:50,600 --> 00:07:54,080 Speaker 1: off prejudice. And so I'm there on Twitter, as you say, 131 00:07:54,080 --> 00:07:56,400 Speaker 1: and I'm kind of just trying to bay but a 132 00:07:56,480 --> 00:08:00,560 Speaker 1: straight ball and just like keep it logical and and take, um, 133 00:08:00,840 --> 00:08:03,840 Speaker 1: take the narrative kind of closer to I can't say 134 00:08:03,880 --> 00:08:06,000 Speaker 1: the truth, but just try and kind of educate people. 135 00:08:06,240 --> 00:08:08,760 Speaker 1: Like this thing about money. So dollar dollar, dollar, dollar 136 00:08:08,880 --> 00:08:15,040 Speaker 1: doll change, and I think we're within the proximity of change. 137 00:08:15,600 --> 00:08:18,640 Speaker 1: Changes is sweeping. You know, the kind of description that 138 00:08:18,680 --> 00:08:22,640 Speaker 1: you gave it, this pivot in history. Um, it ain't 139 00:08:22,720 --> 00:08:26,680 Speaker 1: gonna come in a linear manner, and it ain't going 140 00:08:26,720 --> 00:08:30,600 Speaker 1: to be forecast by the street. Okay, It's gonna come 141 00:08:30,720 --> 00:08:34,480 Speaker 1: at you from weird angles and it's going to confuse 142 00:08:34,520 --> 00:08:37,000 Speaker 1: you okay, and I want to put it. If there 143 00:08:37,080 --> 00:08:39,240 Speaker 1: is going to be changed, we have to put it 144 00:08:39,720 --> 00:08:45,199 Speaker 1: in historical context. And there have been three previous changes. 145 00:08:45,600 --> 00:08:47,720 Speaker 1: And and as I say, I think we're close to 146 00:08:47,880 --> 00:08:52,560 Speaker 1: a force the changes. And what I'm talking about really 147 00:08:52,720 --> 00:08:59,079 Speaker 1: how sovereign nations choose to regulate their external affairs, their 148 00:08:59,160 --> 00:09:04,040 Speaker 1: commerce with each other, you know. And up until the 149 00:09:04,120 --> 00:09:09,280 Speaker 1: late nineteen twenties, those the affairs of major sovereigns were 150 00:09:09,320 --> 00:09:13,840 Speaker 1: regulated by the transfer of gold. And then gold acted 151 00:09:13,840 --> 00:09:18,000 Speaker 1: as high powered money and it allowed for it facilitated 152 00:09:18,080 --> 00:09:22,079 Speaker 1: the private banking sector to create money or to take 153 00:09:22,120 --> 00:09:26,319 Speaker 1: money away. Okay. And no system is perfect, and the 154 00:09:26,360 --> 00:09:32,400 Speaker 1: flaw of the gold system was exposed, the frailties were exposed. 155 00:09:32,480 --> 00:09:36,240 Speaker 1: Its lack of kind of flexibility and response function to 156 00:09:36,360 --> 00:09:38,600 Speaker 1: the near bo to the bankruptcy of the US banking 157 00:09:38,640 --> 00:09:42,640 Speaker 1: system in the in the nineteen thirties, meant that it 158 00:09:42,760 --> 00:09:45,760 Speaker 1: ceased to exist. It wasn't a solution, you know, It 159 00:09:45,880 --> 00:09:51,280 Speaker 1: had created um a depression, and therefore it was rejected 160 00:09:51,480 --> 00:09:53,920 Speaker 1: by the many. It was then, and it takes a 161 00:09:53,920 --> 00:09:56,760 Speaker 1: long time to replace the system, and the system was 162 00:09:56,960 --> 00:09:59,920 Speaker 1: ultimately replaced about fifteen years later, with bread and wood, 163 00:10:00,400 --> 00:10:04,040 Speaker 1: which was essentially a kind of Ledger reconciliation of the 164 00:10:04,160 --> 00:10:07,720 Speaker 1: Second World War. But and of course it was still 165 00:10:08,160 --> 00:10:11,199 Speaker 1: it still had gold in its in its lexus and 166 00:10:11,600 --> 00:10:13,880 Speaker 1: it and it used the dollar as a kind of 167 00:10:14,400 --> 00:10:21,679 Speaker 1: as the mechanism around gold and then unheralded and unnoticed 168 00:10:21,679 --> 00:10:26,559 Speaker 1: by the many, but around the Laate the mid nineteen sixties, 169 00:10:27,120 --> 00:10:31,160 Speaker 1: the bread and woods system came to pass, and it 170 00:10:31,240 --> 00:10:34,800 Speaker 1: came to be replaced by the euro dollar system. You know, 171 00:10:34,960 --> 00:10:40,960 Speaker 1: in the run about British banks began to allow customers 172 00:10:41,000 --> 00:10:43,679 Speaker 1: to borrow in dollars. When you get a loan from 173 00:10:43,720 --> 00:10:47,080 Speaker 1: a bank, a bank is creating money. And for the 174 00:10:47,120 --> 00:10:51,320 Speaker 1: first time run about that date, banks outside the regulation 175 00:10:51,400 --> 00:10:54,400 Speaker 1: and the domand of the Federal Reserve of America began 176 00:10:54,480 --> 00:10:58,199 Speaker 1: to create U s dollars um And then that really 177 00:10:58,240 --> 00:11:03,199 Speaker 1: exploded when we had the petrol crisis, the petrol currency crisis, 178 00:11:03,240 --> 00:11:07,960 Speaker 1: because effectively that created a huge amount of deposits which 179 00:11:07,960 --> 00:11:11,480 Speaker 1: were put on the accounts of these overseas banks, and 180 00:11:11,559 --> 00:11:14,640 Speaker 1: deposits a reliability and those banks needed an asset, which 181 00:11:14,679 --> 00:11:16,800 Speaker 1: is a loan, and so they really took off in 182 00:11:16,960 --> 00:11:22,000 Speaker 1: terms of dollar printing, making loans in US dollars, and 183 00:11:22,280 --> 00:11:27,640 Speaker 1: that system has prevailed and it reached its apex in 184 00:11:27,679 --> 00:11:31,280 Speaker 1: the years two thousand and four to two thousand and six, 185 00:11:31,320 --> 00:11:34,840 Speaker 1: two thousand and seven, but it was mortally wounded with 186 00:11:35,000 --> 00:11:38,800 Speaker 1: the housing crash in the United States in two thousand 187 00:11:38,880 --> 00:11:41,280 Speaker 1: and eight. I want to say it died. And we've 188 00:11:41,280 --> 00:11:45,920 Speaker 1: been operating ever since without a proper and and certainly 189 00:11:45,920 --> 00:11:50,520 Speaker 1: a well understood means of regulating the affairs of sovereigns, 190 00:11:50,520 --> 00:11:54,800 Speaker 1: and because we've not had a properly functioning means of 191 00:11:54,880 --> 00:11:58,720 Speaker 1: exchange ever since two thousand and eight, the global economy 192 00:11:58,760 --> 00:12:02,680 Speaker 1: has been subject and in operating under the confines of 193 00:12:02,760 --> 00:12:06,480 Speaker 1: a depression. Not a great depression, it's called it a 194 00:12:06,520 --> 00:12:10,600 Speaker 1: mild depression, but a depression. It's remarkable how we do 195 00:12:10,720 --> 00:12:14,720 Speaker 1: not see that word in print. Now. What is the depression? 196 00:12:15,120 --> 00:12:19,760 Speaker 1: My definition of a depression is when the recovery in 197 00:12:19,880 --> 00:12:24,559 Speaker 1: g d P failed to take out the previous trend 198 00:12:24,600 --> 00:12:28,679 Speaker 1: line in GDP growth. We have failed in a spectacular 199 00:12:28,760 --> 00:12:31,280 Speaker 1: manner across the world, and I want to say the 200 00:12:31,280 --> 00:12:35,240 Speaker 1: world is missing, very true and all it's worth of value, 201 00:12:35,440 --> 00:12:38,600 Speaker 1: if you will, which is why we're creating this animosity. 202 00:12:38,880 --> 00:12:41,160 Speaker 1: You know, one section of society is fighting the other. 203 00:12:41,280 --> 00:12:43,479 Speaker 1: The gains are on the even they're not being distributed 204 00:12:43,520 --> 00:12:45,960 Speaker 1: as we would hope. The pie is not as big 205 00:12:45,960 --> 00:12:48,960 Speaker 1: as it should be. And that's because we've not been 206 00:12:48,960 --> 00:12:52,959 Speaker 1: creating money. And into that, into that theater comes the 207 00:12:53,040 --> 00:12:56,800 Speaker 1: absurd comes that you know, comes the Wizard of Oz, 208 00:12:57,280 --> 00:13:02,640 Speaker 1: the Federal Reserve, and it's bombascity. They're like, hey, we're 209 00:13:03,080 --> 00:13:06,440 Speaker 1: creating money. Hey over yere, Hey you want dollars, We're 210 00:13:06,480 --> 00:13:09,360 Speaker 1: create Hey seven two we and dollars, No problem. You know, 211 00:13:09,720 --> 00:13:13,640 Speaker 1: Bank of Japan, same thing, ECB, same thing. Okay, they're 212 00:13:13,679 --> 00:13:17,920 Speaker 1: creating laundry, matt tokens. They're not creating money, right the 213 00:13:18,800 --> 00:13:23,240 Speaker 1: Federals there, it is illegal. It cannot print money. Private 214 00:13:23,240 --> 00:13:28,640 Speaker 1: sector agents create money through creating loans. US loan growth 215 00:13:28,840 --> 00:13:32,160 Speaker 1: has been far supedia in the fifteen years or so 216 00:13:32,240 --> 00:13:36,080 Speaker 1: since two thousand and eight. But for Supedia means like 217 00:13:36,360 --> 00:13:41,040 Speaker 1: five six compound growth in Europe is like to right, 218 00:13:41,320 --> 00:13:44,520 Speaker 1: that's the missing module. So I mean, I think you know, 219 00:13:44,920 --> 00:13:47,240 Speaker 1: the point that you make about the missing money I 220 00:13:47,240 --> 00:13:50,080 Speaker 1: think is well put. And and we've seen those charts 221 00:13:50,120 --> 00:13:52,760 Speaker 1: of the pre two thousand eight trend line continuing to 222 00:13:52,760 --> 00:13:56,280 Speaker 1: shoot up in this sort of extremely anemic. In the US, 223 00:13:56,400 --> 00:13:58,000 Speaker 1: as you say, it was better off than many, but 224 00:13:58,160 --> 00:14:02,520 Speaker 1: globally there's very anemic recovery. Now we're seeing arguably the opposite, 225 00:14:02,559 --> 00:14:06,240 Speaker 1: and arguably some would say, well, having learned the lessons 226 00:14:06,360 --> 00:14:09,800 Speaker 1: of two thousand and eight two thousand nine, governments didn't 227 00:14:09,840 --> 00:14:14,120 Speaker 1: just rely on central banks this time fiscal expansion. And 228 00:14:14,200 --> 00:14:16,640 Speaker 1: now we have some trend lines that are breaking the 229 00:14:16,679 --> 00:14:20,400 Speaker 1: old trend lines, at least the pre trend lines. So 230 00:14:20,800 --> 00:14:23,880 Speaker 1: talk to us a little bit about this shift, because okay, 231 00:14:23,920 --> 00:14:26,840 Speaker 1: maybe the old system in a way, per your view, 232 00:14:27,040 --> 00:14:30,000 Speaker 1: died in two thousand seven or two thousand eight. Now 233 00:14:30,040 --> 00:14:32,760 Speaker 1: we see this other ship. What is the now? Help me? 234 00:14:32,920 --> 00:14:37,119 Speaker 1: Help me, because you know, I it's funny, I I 235 00:14:37,120 --> 00:14:41,960 Speaker 1: I've always been called a Contranian throughout my career, and 236 00:14:42,080 --> 00:14:46,240 Speaker 1: yet I'm a trend follow where I seek the legitimacy 237 00:14:46,280 --> 00:14:49,240 Speaker 1: of market prices, you know, by things going up nicely 238 00:14:49,320 --> 00:14:52,120 Speaker 1: all things going down. Okay, so trends of any important 239 00:14:52,160 --> 00:14:55,280 Speaker 1: to me. So it was rather provocative. What what trends 240 00:14:55,320 --> 00:14:58,040 Speaker 1: are changing? Well, if you just look at something like 241 00:14:59,080 --> 00:15:03,440 Speaker 1: US GDP or nominal GDP or nominal spending seemed to 242 00:15:03,440 --> 00:15:07,200 Speaker 1: be on this sort of mediocre growth but upward to 243 00:15:07,240 --> 00:15:11,600 Speaker 1: the right going up to February basically, and we got 244 00:15:11,640 --> 00:15:14,640 Speaker 1: a huge plunge. Obviously it's the world shut down. And 245 00:15:14,680 --> 00:15:17,560 Speaker 1: then this v that is now seems to at least 246 00:15:17,560 --> 00:15:20,160 Speaker 1: by some measures, gone the other way and not just 247 00:15:20,240 --> 00:15:23,320 Speaker 1: returned to trend, but shooting above it. Do you think so? 248 00:15:23,800 --> 00:15:27,720 Speaker 1: I just like just some lines I've seen, these are 249 00:15:27,800 --> 00:15:30,720 Speaker 1: kind of you know, like, yeah, I'm a data junkie. 250 00:15:30,720 --> 00:15:32,600 Speaker 1: I can give me more and more, okay, Like so 251 00:15:32,880 --> 00:15:34,640 Speaker 1: when I when I see one year, I want to 252 00:15:34,640 --> 00:15:37,520 Speaker 1: see in the context of twenty years, Like, look, we 253 00:15:37,560 --> 00:15:40,800 Speaker 1: had an alien body invasion, right, you took the economy 254 00:15:40,840 --> 00:15:45,000 Speaker 1: when we suspended global weekend all make activity for the 255 00:15:45,000 --> 00:15:48,200 Speaker 1: best part of eighteen months, right um, and then when 256 00:15:48,240 --> 00:15:50,560 Speaker 1: it switched back on, like on a base of like 257 00:15:50,760 --> 00:15:54,680 Speaker 1: minus minus minus, the recovery was positive, positive positive, right. 258 00:15:54,880 --> 00:15:58,640 Speaker 1: And and then before the supply destructions, that's clearly been 259 00:15:59,160 --> 00:16:02,080 Speaker 1: a degree of overordering just to kind of get inventories 260 00:16:02,120 --> 00:16:06,840 Speaker 1: back into situate as chaos as chaos just now, so 261 00:16:07,480 --> 00:16:11,800 Speaker 1: I see no sign. I see no sign that the 262 00:16:11,840 --> 00:16:18,160 Speaker 1: economy is doing anything, anything distinct from the trends that 263 00:16:18,200 --> 00:16:21,960 Speaker 1: we observed post two thousand and eight, except it's just 264 00:16:22,040 --> 00:16:27,600 Speaker 1: been amplified by this, you know, remarkable intervention from outer space, 265 00:16:27,640 --> 00:16:29,680 Speaker 1: if you will. I want to go back to the dollar, 266 00:16:29,800 --> 00:16:32,400 Speaker 1: but before we do, just one question based on that, 267 00:16:32,520 --> 00:16:35,760 Speaker 1: what do you think about central banks, specifically the Federal 268 00:16:35,800 --> 00:16:40,440 Speaker 1: Reserve now getting ready to raise interest rates given your 269 00:16:40,440 --> 00:16:43,920 Speaker 1: assertion that you know, the economy isn't necessarily as good 270 00:16:43,920 --> 00:16:46,480 Speaker 1: as it looks because of all the confusion and disruption 271 00:16:46,520 --> 00:16:50,480 Speaker 1: that we've experienced. Hey, listen, it's not it's not my assertion. 272 00:16:50,720 --> 00:16:54,840 Speaker 1: I'm simply commenting on the observations that I see daily. 273 00:16:55,640 --> 00:17:01,000 Speaker 1: I'm commenting on the genius of the enormous treasury market. Right, 274 00:17:01,560 --> 00:17:05,159 Speaker 1: this is an unprecedented situation in terms of where the 275 00:17:05,320 --> 00:17:09,000 Speaker 1: fixed income markets have priced for the Fed to begin 276 00:17:09,560 --> 00:17:12,439 Speaker 1: raising rates that the treasure markets going. Guys, don't see it, 277 00:17:12,640 --> 00:17:15,199 Speaker 1: don't see it. Don't see it. You know, And you 278 00:17:15,240 --> 00:17:18,560 Speaker 1: know what our record is like ten ten better than yours. 279 00:17:18,600 --> 00:17:21,639 Speaker 1: Like you know, you always get it wrong. We always 280 00:17:21,640 --> 00:17:24,520 Speaker 1: get it right. I mean, you do not need First 281 00:17:24,560 --> 00:17:29,520 Speaker 1: of all, the principle function of the Federal Reserve is 282 00:17:29,720 --> 00:17:33,080 Speaker 1: as a bank regulator for the for those with a 283 00:17:33,200 --> 00:17:36,719 Speaker 1: license to operate in the United States. Okay, it's record 284 00:17:36,800 --> 00:17:39,920 Speaker 1: in terms of being able to see the future, I'm 285 00:17:39,960 --> 00:17:44,720 Speaker 1: afraid is not very good. And so they require enormous bluster. 286 00:17:45,200 --> 00:17:52,719 Speaker 1: They invest in immensely in the almighty posturing of their institution. Okay, 287 00:17:53,000 --> 00:17:58,159 Speaker 1: it's nothing versus the majesty of thousands, if not hundreds 288 00:17:58,200 --> 00:18:01,359 Speaker 1: of thousands of small are and maybe not so smart 289 00:18:01,600 --> 00:18:05,000 Speaker 1: people engaging with each other. And and it gets more 290 00:18:05,040 --> 00:18:07,520 Speaker 1: and more interesting as you go out in time where 291 00:18:07,560 --> 00:18:11,800 Speaker 1: people are kind of thinking about themselves, their businesses and 292 00:18:11,840 --> 00:18:16,000 Speaker 1: how to protect themselves, how to prosper, and that brings 293 00:18:16,000 --> 00:18:20,000 Speaker 1: in the role of hedging. And and it's the hedging, 294 00:18:20,480 --> 00:18:24,000 Speaker 1: and it's the thousands of decisions taking which aligne and 295 00:18:24,080 --> 00:18:27,320 Speaker 1: create market prices, and they create interest rate levels, They 296 00:18:27,359 --> 00:18:31,119 Speaker 1: create expectations of where we will be, and those expectations 297 00:18:31,359 --> 00:18:42,160 Speaker 1: are distinct and at odds with the federal result. Let's 298 00:18:42,200 --> 00:18:45,760 Speaker 1: talk about the dollar. You sort of describe the sort 299 00:18:45,800 --> 00:18:49,479 Speaker 1: of post Briton Wood system is having been broken since 300 00:18:49,880 --> 00:18:52,800 Speaker 1: uh since two thousand seven or since two thousand eight, 301 00:18:52,800 --> 00:18:57,680 Speaker 1: but nothing has clearly replaced it. There's no obvious new regime. 302 00:18:59,280 --> 00:19:01,320 Speaker 1: As I said in intro and his lot, you know, 303 00:19:01,400 --> 00:19:03,080 Speaker 1: people are like, okay, this is the end, this is 304 00:19:03,119 --> 00:19:05,399 Speaker 1: the start. People are going to find some alternative because 305 00:19:05,400 --> 00:19:09,320 Speaker 1: they don't like seeing that FX reserves can suddenly disappear. 306 00:19:09,640 --> 00:19:12,800 Speaker 1: What is Is there something new? I mean, what is 307 00:19:12,800 --> 00:19:15,800 Speaker 1: is is there a threat to the existing order? Is 308 00:19:15,840 --> 00:19:18,760 Speaker 1: something new? You're going to replace it? Okay? So classification 309 00:19:19,040 --> 00:19:22,920 Speaker 1: bread and woods, I said, began to be the unwound 310 00:19:22,960 --> 00:19:26,320 Speaker 1: in a kind of somewhat private like undisclosed manner, by 311 00:19:26,359 --> 00:19:31,080 Speaker 1: the emergence of the euro dollar market. Yes, yes, the 312 00:19:31,160 --> 00:19:32,800 Speaker 1: end of the year. Yes, sorry, the end of the 313 00:19:32,800 --> 00:19:36,119 Speaker 1: euro dollar regime, as you say, began to break in 314 00:19:36,520 --> 00:19:38,520 Speaker 1: two thousand and seven. But what we can say is 315 00:19:38,560 --> 00:19:40,600 Speaker 1: we can say that you know, originally we had a 316 00:19:40,640 --> 00:19:44,240 Speaker 1: gold system and then we kind of dialed that back 317 00:19:44,560 --> 00:19:48,080 Speaker 1: after the mass of the nineteen thirties that we have 318 00:19:48,320 --> 00:19:51,240 Speaker 1: increasingly deployed U S dollars, So it was U S 319 00:19:51,280 --> 00:19:54,160 Speaker 1: dollars with gold, you know, with the ability to redeem 320 00:19:54,200 --> 00:19:58,639 Speaker 1: and receive gold um and then it became essentially a 321 00:19:58,880 --> 00:20:03,359 Speaker 1: dollar based collap That is what the eury dollar system is. 322 00:20:03,400 --> 00:20:05,800 Speaker 1: It's a dollar based collateral. So it's a dollar it's 323 00:20:06,000 --> 00:20:09,679 Speaker 1: a dollar system, so whatnot. And it's and that is 324 00:20:09,760 --> 00:20:18,080 Speaker 1: still the prevailing system. The problem, however, is profound conservatism 325 00:20:18,160 --> 00:20:23,000 Speaker 1: on the part of banks, right because they messed up, right, 326 00:20:23,200 --> 00:20:27,600 Speaker 1: they took too much juice from the fountain in the 327 00:20:27,640 --> 00:20:31,720 Speaker 1: early two thousand's and they kind of they went busted. 328 00:20:31,880 --> 00:20:35,800 Speaker 1: It wasn't for the extreme financial intervention, which I welcome 329 00:20:36,240 --> 00:20:38,880 Speaker 1: by the Federal Reserve, we would have been talking great 330 00:20:38,880 --> 00:20:41,760 Speaker 1: depression too. As it is, we're talking about a mild depression. 331 00:20:41,880 --> 00:20:45,199 Speaker 1: So the problem you have is that that facility is 332 00:20:45,240 --> 00:20:51,120 Speaker 1: still there, but it's encumbered by profound conservatism. And let 333 00:20:51,119 --> 00:20:53,800 Speaker 1: me take that in. Let me take that into this 334 00:20:53,880 --> 00:20:58,480 Speaker 1: weird tangent. I believe ext markets are not in a bubble, 335 00:20:58,680 --> 00:21:00,600 Speaker 1: or if I was to caveat, i'd say, I want 336 00:21:00,640 --> 00:21:05,320 Speaker 1: to say, like of listed stocks are not in a bubble, 337 00:21:06,000 --> 00:21:10,920 Speaker 1: and even those which have profoundly high valuations, and there 338 00:21:11,080 --> 00:21:14,480 Speaker 1: are not many, but the pinnacle of it would be Apple. 339 00:21:14,840 --> 00:21:17,320 Speaker 1: You know, two and a half trillion dollars. You know, 340 00:21:17,440 --> 00:21:20,119 Speaker 1: a few weeks ago was three trillion dollars, which is 341 00:21:20,160 --> 00:21:25,080 Speaker 1: to say, was capitalized greater than the market capitalization of 342 00:21:25,080 --> 00:21:27,720 Speaker 1: all German stocks, you know, the the notion that we 343 00:21:27,760 --> 00:21:30,919 Speaker 1: have those kind of five fang stocks, you know, without 344 00:21:31,000 --> 00:21:35,560 Speaker 1: the Ali Baba greater than the value of Japan, So 345 00:21:36,080 --> 00:21:41,520 Speaker 1: stock single US corporations trading greater than the value of 346 00:21:41,640 --> 00:21:45,200 Speaker 1: the stock markets of great sovereigns. And even then, I 347 00:21:45,600 --> 00:21:48,600 Speaker 1: still want to say, I struggle to say that that's 348 00:21:48,640 --> 00:21:50,800 Speaker 1: a bubble, and I want to relate that to the 349 00:21:50,800 --> 00:21:54,159 Speaker 1: euro dollar market, because what it's saying is it is 350 00:21:54,200 --> 00:21:59,399 Speaker 1: the pinnacle of this conservatism. Um. Like I say, a 351 00:21:59,520 --> 00:22:05,040 Speaker 1: mild oppression. Commercial risk it's scary if you're a banker, 352 00:22:05,440 --> 00:22:08,159 Speaker 1: is something that can bite you in the proverbio's you 353 00:22:08,200 --> 00:22:11,119 Speaker 1: can it can affect your career. And so there is 354 00:22:11,160 --> 00:22:15,960 Speaker 1: a crowding in two businesses which are perceived to be 355 00:22:16,160 --> 00:22:20,359 Speaker 1: devoid of commercial risk, and now nothing is devoid. But 356 00:22:20,400 --> 00:22:23,840 Speaker 1: then we have again, we have this remarkable incident of 357 00:22:23,880 --> 00:22:28,600 Speaker 1: the virus where we have, you know, an unprecedented plunge 358 00:22:29,040 --> 00:22:32,600 Speaker 1: in economic activity. And so that reveals again it's like 359 00:22:32,600 --> 00:22:35,240 Speaker 1: the tide goes down and you're like, wow, these guys, 360 00:22:35,240 --> 00:22:38,959 Speaker 1: their their profits were intact, their profits were up, Like 361 00:22:39,040 --> 00:22:42,280 Speaker 1: all that happens. These guys just don't have risk. So 362 00:22:42,560 --> 00:22:46,639 Speaker 1: what happens where is when when you can conceive of 363 00:22:46,680 --> 00:22:52,600 Speaker 1: a business as being risk less, it becomes price less. 364 00:22:52,920 --> 00:22:56,720 Speaker 1: You know, there is no upper bound to the valuation 365 00:22:57,000 --> 00:23:00,280 Speaker 1: of such businesses. And it's the same phenomena when we 366 00:23:00,320 --> 00:23:03,920 Speaker 1: had treasuries yielding forty basis points and of course negative 367 00:23:03,960 --> 00:23:07,440 Speaker 1: basis points with the European sovereigns that I'm really really 368 00:23:07,440 --> 00:23:10,000 Speaker 1: going to hack all for your listeners because again I'm 369 00:23:10,040 --> 00:23:12,680 Speaker 1: going to go against all the propaganda. They get stuff 370 00:23:12,720 --> 00:23:15,160 Speaker 1: done on every single day that is not a cause 371 00:23:15,200 --> 00:23:19,199 Speaker 1: of the Federal Reserve or central banks buying treasuries. Okay, Um, 372 00:23:19,640 --> 00:23:22,439 Speaker 1: there's there's no need for them to buy. The private 373 00:23:22,480 --> 00:23:26,160 Speaker 1: sector can't get enough of those damned treasuries. And why 374 00:23:26,160 --> 00:23:28,240 Speaker 1: does it need the treasuries because it needs the treasuries 375 00:23:28,359 --> 00:23:31,520 Speaker 1: for the collateral to support and to create money. So 376 00:23:31,720 --> 00:23:34,399 Speaker 1: that's why there's been a log jam. No, no, no, 377 00:23:34,600 --> 00:23:40,320 Speaker 1: So Russia reserves okay, so reserves Okay. And again, if 378 00:23:40,320 --> 00:23:45,280 Speaker 1: I haven't annoyed or aggravated your listeners enough, hey, I'm 379 00:23:45,320 --> 00:23:47,080 Speaker 1: going to stay. I feel like you have a low 380 00:23:47,119 --> 00:23:51,840 Speaker 1: opinion of our listeners. They're gonna yeah, keep going. People 381 00:23:51,880 --> 00:23:53,800 Speaker 1: on Twitter. And when I say the B words, the 382 00:23:54,760 --> 00:23:57,800 Speaker 1: screw light up. Now what is the B word? Don't worry? 383 00:23:57,800 --> 00:24:02,800 Speaker 1: Don't worry. Uh. Let so let's preface it. The US 384 00:24:03,000 --> 00:24:07,520 Speaker 1: makes lots, makes a ton of damn stupid mistakes. It 385 00:24:07,600 --> 00:24:11,199 Speaker 1: gets careless, um it has you know, hey, like we 386 00:24:11,280 --> 00:24:15,840 Speaker 1: all have dumb as politicians, um and and they make 387 00:24:15,920 --> 00:24:20,840 Speaker 1: some you know, dumb unwise decisions and and sometimes that's 388 00:24:20,960 --> 00:24:27,240 Speaker 1: militarily and it's overreach um and and wrong. Okay, But 389 00:24:27,880 --> 00:24:31,480 Speaker 1: despite all of that, I'm gonna say that the US 390 00:24:31,720 --> 00:24:36,280 Speaker 1: is like an empire, and it's a benevolent empire. The 391 00:24:36,480 --> 00:24:42,359 Speaker 1: empires that have duration that persist, they persist owing to 392 00:24:42,640 --> 00:24:47,440 Speaker 1: a form of benevolence. Right now, it's a self interesting 393 00:24:47,440 --> 00:24:49,760 Speaker 1: you know that, it's a you know, it's we can 394 00:24:49,840 --> 00:24:52,760 Speaker 1: keep in all of our Scottish economists and whatever in 395 00:24:52,760 --> 00:24:56,399 Speaker 1: our invisible hand. Um is benevolence, which is on the 396 00:24:56,400 --> 00:24:58,880 Speaker 1: basis that we will possiper from this. But for us 397 00:24:58,920 --> 00:25:04,720 Speaker 1: to prosper we have to invest and encourage prosperity with 398 00:25:04,800 --> 00:25:08,080 Speaker 1: our neighbors. So priming you know. The prime example, you know, 399 00:25:08,119 --> 00:25:11,080 Speaker 1: the Second World War. We have the Marshall Plan and 400 00:25:11,160 --> 00:25:15,280 Speaker 1: the US funds direct and guess the region back on 401 00:25:15,400 --> 00:25:19,720 Speaker 1: his beat. That's benevolent, sure, But of course the US 402 00:25:19,840 --> 00:25:23,040 Speaker 1: has has won that deal like many times over by 403 00:25:23,080 --> 00:25:27,240 Speaker 1: having this prosperous, peaceful European neighbor that it trades with. 404 00:25:27,520 --> 00:25:30,879 Speaker 1: Right done, great, wonderful. Same thing with Japan. You know, 405 00:25:31,160 --> 00:25:33,320 Speaker 1: we had a problem. We fixed it, we paid it, 406 00:25:33,359 --> 00:25:36,400 Speaker 1: we we we got it sorted. Great trading partner, another 407 00:25:36,440 --> 00:25:40,359 Speaker 1: prosperous region in the world. And then China finally seeks 408 00:25:40,359 --> 00:25:42,560 Speaker 1: a moment where it gets an avenue to kind of 409 00:25:42,680 --> 00:25:46,280 Speaker 1: kind come out of the cloud of his political theology 410 00:25:46,320 --> 00:25:48,600 Speaker 1: and it says, hey, listen, you know we want to 411 00:25:48,600 --> 00:25:51,080 Speaker 1: be rich. And you know, and back in two thousand 412 00:25:51,119 --> 00:25:54,600 Speaker 1: and one Clinton Clinton Science Offices, you know what, why 413 00:25:54,640 --> 00:25:56,879 Speaker 1: not you join our club, joined the w T o 414 00:25:57,400 --> 00:26:00,600 Speaker 1: trade with us. We're taking a bit the A rich 415 00:26:01,280 --> 00:26:05,119 Speaker 1: China is a better China, China that wants to trade 416 00:26:05,119 --> 00:26:07,760 Speaker 1: and get rich with us. Is is it China that 417 00:26:08,000 --> 00:26:11,160 Speaker 1: enriches America? So I call that, I call that benevolence. 418 00:26:11,440 --> 00:26:15,400 Speaker 1: Like was the Iraq invasion a mistake? Yeah? Okay, But 419 00:26:15,520 --> 00:26:18,320 Speaker 1: you know when it comes to when I I traveled 420 00:26:18,320 --> 00:26:20,440 Speaker 1: the world, I'm not all the time on this little 421 00:26:20,720 --> 00:26:25,200 Speaker 1: volcanic rock. But I tell you, the only line outside 422 00:26:25,240 --> 00:26:29,560 Speaker 1: embassies when people are seeking visas, the only line is 423 00:26:29,600 --> 00:26:34,040 Speaker 1: the US embassy. Okay, So the US reigns supreme, and 424 00:26:34,080 --> 00:26:39,320 Speaker 1: the dollar reigns supreme because it radiates freedom. You know, 425 00:26:39,320 --> 00:26:42,679 Speaker 1: like people write songs about living in America, you know, 426 00:26:42,720 --> 00:26:45,919 Speaker 1: like the Rolling Stones are incredible because it's the sound 427 00:26:45,920 --> 00:26:48,480 Speaker 1: of l A in the nineties seven. You know, I mean, 428 00:26:48,600 --> 00:26:51,720 Speaker 1: they're not writing songs about downtown Moscow. They're not talking 429 00:26:51,720 --> 00:26:54,920 Speaker 1: about not writing songs about bag Dad, Okay, Right, as 430 00:26:54,920 --> 00:26:58,800 Speaker 1: wonderful as these places culturally enormously rich, all right, but 431 00:26:58,880 --> 00:27:01,639 Speaker 1: but there's no ing and zang, Right, they don't they 432 00:27:01,680 --> 00:27:05,679 Speaker 1: don't offer what. They don't offer freedom assets. So you 433 00:27:05,720 --> 00:27:09,560 Speaker 1: can trade, you can kind of prosper. But if you're 434 00:27:09,600 --> 00:27:13,280 Speaker 1: not willing to create a free structure where you've got law, 435 00:27:13,760 --> 00:27:18,120 Speaker 1: you've got order, you've got contracts, that things work right, 436 00:27:18,240 --> 00:27:21,280 Speaker 1: where you don't have to seek permission to get married, 437 00:27:21,320 --> 00:27:25,639 Speaker 1: blah blah blah, Okay, where you can't get confiscated, Okay, 438 00:27:25,760 --> 00:27:27,959 Speaker 1: then you've got a big problem because you can't create 439 00:27:28,040 --> 00:27:32,560 Speaker 1: the assets that foreign people like. The only countries that 440 00:27:32,680 --> 00:27:37,880 Speaker 1: have consistently demonstrated this freedom access of the United States 441 00:27:38,520 --> 00:27:41,320 Speaker 1: the United Kingdom, which is kind of small and irrelevant 442 00:27:41,560 --> 00:27:45,160 Speaker 1: increasingly so, but in terms of that motivation, in terms 443 00:27:45,200 --> 00:27:48,439 Speaker 1: of if you wanted to anoint triple A status in 444 00:27:48,560 --> 00:27:53,120 Speaker 1: terms of political economy, the United States, the United Kingdom, 445 00:27:53,119 --> 00:27:55,720 Speaker 1: and let's throw in Australia. You know, people want to 446 00:27:55,760 --> 00:27:59,680 Speaker 1: buy their their sovereign bonds. Um, they've got big reservations elsewhere. 447 00:28:00,480 --> 00:28:04,199 Speaker 1: So so the argument here is that banks are conservative, 448 00:28:04,280 --> 00:28:07,879 Speaker 1: investors are conservative. They're looking for safe assets at the moment, 449 00:28:08,040 --> 00:28:12,480 Speaker 1: that's mostly dollar denominated assets, maybe some things for Europe 450 00:28:12,560 --> 00:28:16,160 Speaker 1: or maybe Japan or something like that. Is there any 451 00:28:16,240 --> 00:28:20,399 Speaker 1: chance that the definition of a safe asset starts to 452 00:28:20,600 --> 00:28:24,960 Speaker 1: change in the current geopolitical situation? You know, maybe there 453 00:28:24,960 --> 00:28:29,360 Speaker 1: are countries out there who decide, well, freedom isn't actually 454 00:28:29,920 --> 00:28:33,280 Speaker 1: that important to me, and I would rather align myself 455 00:28:33,880 --> 00:28:37,800 Speaker 1: with someone like a Russia or China something like that. Okay, 456 00:28:37,840 --> 00:28:42,800 Speaker 1: I mean really really so, like the wild GDPs a 457 00:28:42,880 --> 00:28:47,160 Speaker 1: hundred tilling dollars approximately, right, Russia was one point seven 458 00:28:47,320 --> 00:28:52,240 Speaker 1: rapidly heading to one trailing Okay, China fifteen, but you know, 459 00:28:52,720 --> 00:28:56,320 Speaker 1: massively upstated you know, they they've they've reached fifteen without 460 00:28:56,320 --> 00:28:58,360 Speaker 1: the ability to create wealth. You know, the stock market 461 00:28:58,360 --> 00:29:00,440 Speaker 1: has gone nowhere for decades, right, be is they don't 462 00:29:00,440 --> 00:29:04,200 Speaker 1: create wealth, they create GDP? Right, Okay, So I I'm 463 00:29:04,240 --> 00:29:07,600 Speaker 1: I'm undecided. Um, So I've just I've said to you 464 00:29:07,720 --> 00:29:10,560 Speaker 1: fifteen plus what's going to be one? So sixteen I 465 00:29:10,600 --> 00:29:14,120 Speaker 1: can throw in my way with sixteen trill in dollars, 466 00:29:14,200 --> 00:29:16,200 Speaker 1: or I can choose to trade, you know, with the 467 00:29:16,240 --> 00:29:20,120 Speaker 1: happy clappy guys who actually create wealth and have GDP 468 00:29:20,320 --> 00:29:25,760 Speaker 1: of avery four troy. Okay, what am I gonna do? Really? 469 00:29:25,880 --> 00:29:28,440 Speaker 1: I mean, you you help me? What am I missing? No? 470 00:29:28,480 --> 00:29:30,800 Speaker 1: I mean we have to ask the question. I mean, 471 00:29:30,880 --> 00:29:33,560 Speaker 1: I've thought about this recently with the number of companies 472 00:29:33,640 --> 00:29:37,560 Speaker 1: voluntarily leaving Russia even though the sanctions don't require it. 473 00:29:37,600 --> 00:29:42,080 Speaker 1: Which is that ultimately, Yes, I'm sure there's a moral element. 474 00:29:42,200 --> 00:29:44,760 Speaker 1: I'm sure there's a pr element in many cases, but 475 00:29:44,800 --> 00:29:46,960 Speaker 1: also in many cases, I just don't think they're walking 476 00:29:46,960 --> 00:29:51,120 Speaker 1: away from that much money. Yeah, absolutely, well, they're exactly, 477 00:29:51,160 --> 00:29:54,000 Speaker 1: They're not walking away from much. And if they don't 478 00:29:54,040 --> 00:29:57,640 Speaker 1: walk away, they jeopardize a lot, right, Okay? And and 479 00:29:57,680 --> 00:30:00,280 Speaker 1: where where I thought you were going. Also is I 480 00:30:00,320 --> 00:30:03,640 Speaker 1: want to say the sanctions that were introduced by the 481 00:30:03,760 --> 00:30:06,160 Speaker 1: by the U. S side and elsewhere, we're t it 482 00:30:07,240 --> 00:30:10,360 Speaker 1: like they were like like we're scared, like these guys, 483 00:30:10,560 --> 00:30:13,400 Speaker 1: these guys crazy. You know, he's got a nuclear bomb 484 00:30:13,600 --> 00:30:16,080 Speaker 1: and you know, and so we're gonna go slow. You 485 00:30:16,160 --> 00:30:20,000 Speaker 1: remember the sanctions. You can, maybe you have to fact 486 00:30:20,080 --> 00:30:21,960 Speaker 1: check this, but I'm pretty sure most of the U. S. 487 00:30:21,960 --> 00:30:25,240 Speaker 1: Sanctions were announced at the start of the month with 488 00:30:25,320 --> 00:30:27,800 Speaker 1: the notion that they be implemented, like on the twenty seven. 489 00:30:27,880 --> 00:30:29,720 Speaker 1: You know, it's like really it's like, oh, we're gonna 490 00:30:29,760 --> 00:30:32,600 Speaker 1: gonna go slow this guy. You know, it was the 491 00:30:32,640 --> 00:30:37,120 Speaker 1: private sector. Private sector picked her up when too right, right, morally, 492 00:30:37,120 --> 00:30:40,680 Speaker 1: we're outrage and and and secondly to your point, you 493 00:30:40,760 --> 00:30:43,800 Speaker 1: know these countries because they're not free, they're they're they're 494 00:30:43,880 --> 00:30:46,840 Speaker 1: down irrelevant, right, I'm not going to jeopardize like there's 495 00:30:46,840 --> 00:30:50,880 Speaker 1: just no optionality in staying here, especially with the suicide 496 00:30:50,920 --> 00:30:53,880 Speaker 1: policies they're pursuing. I'm not going to jeopardize training, like 497 00:30:53,920 --> 00:30:56,280 Speaker 1: with the free world, to carry on in this theater 498 00:30:56,400 --> 00:30:58,800 Speaker 1: of the absurd boom done. So this is not a 499 00:30:58,840 --> 00:31:01,640 Speaker 1: Biden Victories is a of its sector Victory saying, like 500 00:31:01,960 --> 00:31:05,520 Speaker 1: making choices a point emergement history, and you were asked 501 00:31:05,520 --> 00:31:07,360 Speaker 1: to make a choice. History will judge you in the 502 00:31:07,400 --> 00:31:16,240 Speaker 1: future in terms of those choice that you made. There's 503 00:31:16,280 --> 00:31:18,200 Speaker 1: something that I wanted to ask you. Um and it 504 00:31:18,320 --> 00:31:21,840 Speaker 1: sort of goes back to your experience um at Eclectica 505 00:31:22,160 --> 00:31:24,800 Speaker 1: and also the way you think about things now. So 506 00:31:25,120 --> 00:31:29,320 Speaker 1: you're known as a contrarian investor or a contrarian thinker, 507 00:31:29,360 --> 00:31:32,080 Speaker 1: but at the same time, it feels like you're very 508 00:31:32,120 --> 00:31:35,520 Speaker 1: a tune to trends in the market, to momentum. I 509 00:31:35,520 --> 00:31:39,320 Speaker 1: think Eclectica was described as a momentum um hedge fund 510 00:31:39,360 --> 00:31:42,000 Speaker 1: at one point. But how do you sort of square 511 00:31:42,040 --> 00:31:47,040 Speaker 1: those two things? So thinking differently two what everyone else 512 00:31:47,120 --> 00:31:51,160 Speaker 1: is thinking about at the moment. Yeah, so I have 513 00:31:51,240 --> 00:31:54,880 Speaker 1: to point at ecliptic. What's called many things something on 514 00:31:54,880 --> 00:31:57,760 Speaker 1: on a on a family radio show. Um. So yeah, 515 00:31:57,760 --> 00:32:00,120 Speaker 1: people like, hey, well let me let you know. And 516 00:32:00,160 --> 00:32:03,720 Speaker 1: I'm doing my questionnaires. So you're contraining. Okay, take the 517 00:32:03,920 --> 00:32:07,600 Speaker 1: box you follow trends. Take the box really that these 518 00:32:07,600 --> 00:32:10,840 Speaker 1: things are inconsistent, like you know, and I usually I 519 00:32:10,840 --> 00:32:13,840 Speaker 1: have I always have to remind people that I I 520 00:32:13,880 --> 00:32:17,800 Speaker 1: sound like a modon, but in fact I'm an oxymordon. Okay, 521 00:32:19,320 --> 00:32:21,520 Speaker 1: so it sounds like you've learned that you've usually outlined 522 00:32:21,560 --> 00:32:26,320 Speaker 1: before you think, so keep going. I got a lot 523 00:32:26,360 --> 00:32:30,680 Speaker 1: of spare time. So hey, you know I read I 524 00:32:30,760 --> 00:32:33,760 Speaker 1: learned from the master, you know, the George George Suros. 525 00:32:33,840 --> 00:32:37,960 Speaker 1: You know, this is all sorts like you take understanding 526 00:32:38,080 --> 00:32:40,440 Speaker 1: from the genius to the marketplace. You know, if I'm 527 00:32:40,480 --> 00:32:43,720 Speaker 1: in a foreign city, I will go and eat in 528 00:32:43,760 --> 00:32:46,560 Speaker 1: a busy restaurant, and nine times out of ten that's 529 00:32:46,560 --> 00:32:48,840 Speaker 1: a wise decision. I won't past. I won't walk past 530 00:32:48,920 --> 00:32:52,080 Speaker 1: like an empty restaurant going wow, yeah, I really got 531 00:32:52,080 --> 00:32:54,320 Speaker 1: to eat there, right, you know, so there's a little 532 00:32:54,320 --> 00:32:57,200 Speaker 1: bit of that. The biggest mistake, right, you see it 533 00:32:57,240 --> 00:33:00,720 Speaker 1: with Tesla, Right, people put narrative. It's let me let 534 00:33:00,760 --> 00:33:04,200 Speaker 1: me even let me take on another well rehearsed term 535 00:33:04,240 --> 00:33:07,760 Speaker 1: from my lexicon. It is the conceiqu It is the 536 00:33:07,880 --> 00:33:11,719 Speaker 1: arrogance of a well conceived argument. Okay. Your job as 537 00:33:11,720 --> 00:33:17,760 Speaker 1: a speculator is to stop pile well conceived ideas. Okay, 538 00:33:17,880 --> 00:33:20,720 Speaker 1: then your second job is to be an infantory manager 539 00:33:20,920 --> 00:33:24,840 Speaker 1: and to remember that you have stopped this larger full 540 00:33:24,880 --> 00:33:28,160 Speaker 1: of wonderful ideas. But you only get to play with 541 00:33:28,200 --> 00:33:34,360 Speaker 1: those ideas when you get confirmation from strangers, when people say, yeah, yeah, 542 00:33:34,480 --> 00:33:36,760 Speaker 1: this thing is going up, Yeah we got a trend, 543 00:33:37,000 --> 00:33:40,080 Speaker 1: or the inverse, Okay, you know that's that's what I So, 544 00:33:40,400 --> 00:33:43,920 Speaker 1: it's a humbling believe. I began with arrogance. I began 545 00:33:43,960 --> 00:33:48,200 Speaker 1: with conceit. I began with with with like well formulated arguments, 546 00:33:48,560 --> 00:33:51,080 Speaker 1: and I sat with a career going nowhere for the 547 00:33:51,120 --> 00:33:54,240 Speaker 1: best part of eight years super education. But I was 548 00:33:54,360 --> 00:34:00,640 Speaker 1: missing I was missing the Jesse Littlemore. Jesse Jesse Littlemore effectively, 549 00:34:00,760 --> 00:34:04,920 Speaker 1: was the first real head fund manager operating at the 550 00:34:04,920 --> 00:34:08,759 Speaker 1: turn of the previous century who actually, you like this 551 00:34:08,880 --> 00:34:13,080 Speaker 1: ability to see around corners, he felt. He sends the 552 00:34:13,480 --> 00:34:16,480 Speaker 1: San Francisco earthquake in what nineteen o way I want 553 00:34:16,480 --> 00:34:19,360 Speaker 1: to say, um, Now, he didn't know what's going to happen, 554 00:34:19,800 --> 00:34:23,160 Speaker 1: but he was so closely attuned to markets and how 555 00:34:23,200 --> 00:34:26,920 Speaker 1: they were trading and trends that he had a sense 556 00:34:27,000 --> 00:34:29,839 Speaker 1: that something was gonna give and you know something game 557 00:34:30,000 --> 00:34:33,480 Speaker 1: that's that's that's the world that I'm talking about. Keeping 558 00:34:34,040 --> 00:34:38,239 Speaker 1: keeping your thoughts pure to trend. Now again, that's not 559 00:34:38,280 --> 00:34:40,480 Speaker 1: easy because just now, if you look at the US 560 00:34:40,560 --> 00:34:44,160 Speaker 1: thy year, thirty year or ten year treasury bond, you 561 00:34:45,200 --> 00:34:47,600 Speaker 1: um trends against you. So I mean I had a 562 00:34:47,640 --> 00:34:50,759 Speaker 1: simple rule, you know, I would I would take the 563 00:34:50,760 --> 00:34:54,520 Speaker 1: market CDs if if treasury ten years went went above two, 564 00:34:54,560 --> 00:34:56,759 Speaker 1: their trading above two, I think that goes closer to 565 00:34:56,760 --> 00:34:59,840 Speaker 1: to forty. Looks like they might go to three. But 566 00:35:00,080 --> 00:35:01,680 Speaker 1: you know they can go all the way from forty 567 00:35:01,719 --> 00:35:05,040 Speaker 1: basis points the three basis points. Heck, they might even 568 00:35:05,360 --> 00:35:08,839 Speaker 1: markets are mendacious, right, they might even push the three 569 00:35:08,840 --> 00:35:13,759 Speaker 1: twenty forty right, probably and I think most likely will 570 00:35:13,800 --> 00:35:17,279 Speaker 1: mean revert back to the prevailing trend um. So you 571 00:35:17,280 --> 00:35:20,000 Speaker 1: can get wide ranges. And so Marcus A. Humbling. You've 572 00:35:20,040 --> 00:35:22,480 Speaker 1: always got to be listening, and you've always got to 573 00:35:22,480 --> 00:35:25,719 Speaker 1: be able to take positions on and unfortunately take them off. 574 00:35:26,040 --> 00:35:28,840 Speaker 1: So we just have a few minutes left. You're you're 575 00:35:28,840 --> 00:35:33,120 Speaker 1: on this volcanic rock, the gorgeous island in St. Barts. 576 00:35:33,160 --> 00:35:35,759 Speaker 1: The people you must interact with who stay at your 577 00:35:35,800 --> 00:35:39,600 Speaker 1: properties hotels, some of the most successful people of all 578 00:35:39,719 --> 00:35:42,040 Speaker 1: time in the history of the world. Um, you must 579 00:35:42,080 --> 00:35:44,040 Speaker 1: interact what do you learn from them? Like you must 580 00:35:44,080 --> 00:35:46,799 Speaker 1: like you know, in addition to running properties and of 581 00:35:46,840 --> 00:35:49,880 Speaker 1: course you're amazing, uh you know, you're surfing life. You 582 00:35:49,960 --> 00:35:52,400 Speaker 1: must learn a lot from just hearing and talking to 583 00:35:52,440 --> 00:35:54,480 Speaker 1: the people that come through your properties. What do you 584 00:35:54,640 --> 00:35:59,080 Speaker 1: what are you learning these days? They're really rich, a 585 00:35:59,400 --> 00:36:03,080 Speaker 1: really really and they wanted to spend money, you know, 586 00:36:03,080 --> 00:36:06,440 Speaker 1: like the pent up demand. Obviously the two years. I 587 00:36:06,520 --> 00:36:09,000 Speaker 1: mean when I look at my reservations, when we're just 588 00:36:09,400 --> 00:36:12,560 Speaker 1: we are you know, bling bling full full is stretching 589 00:36:12,600 --> 00:36:15,759 Speaker 1: into next year. But given the precious preciousness of the 590 00:36:15,880 --> 00:36:18,840 Speaker 1: time I really wanted because we were talking about the dollars. 591 00:36:18,920 --> 00:36:21,239 Speaker 1: So if there's going to be a further turning point, 592 00:36:21,400 --> 00:36:24,759 Speaker 1: I fear the further turning point. So like this, if 593 00:36:24,760 --> 00:36:27,200 Speaker 1: you go this death that I prescribed to the euro 594 00:36:27,280 --> 00:36:31,040 Speaker 1: dollars system from two thousand and eight, it first rolled 595 00:36:31,120 --> 00:36:35,279 Speaker 1: through America, like you know, with Lehman's at all. Two 596 00:36:35,400 --> 00:36:38,160 Speaker 1: years three years later it rolled through Europe. We had 597 00:36:38,400 --> 00:36:42,120 Speaker 1: the European sovereign debt crisis. And back then I was 598 00:36:42,200 --> 00:36:46,399 Speaker 1: sure that the final domino, this this system will end 599 00:36:46,840 --> 00:36:51,200 Speaker 1: when the Chinese domino drops. And so back then twelve 600 00:36:51,280 --> 00:36:54,480 Speaker 1: years ago, I had had a month, I had a 601 00:36:54,560 --> 00:36:58,000 Speaker 1: special sits fund. I raised a hundred million dollars. I'd 602 00:36:58,000 --> 00:37:00,880 Speaker 1: have made a billion dollars if I was right proved. 603 00:37:00,960 --> 00:37:03,880 Speaker 1: It turned out my timing was off, and so I 604 00:37:04,000 --> 00:37:06,719 Speaker 1: burned forty million dollars and I gave sixty walked away 605 00:37:06,760 --> 00:37:09,319 Speaker 1: from it. Yeah, why was it? Why was I off? 606 00:37:09,520 --> 00:37:11,840 Speaker 1: And again to shocking in terms of my mind works. 607 00:37:12,000 --> 00:37:15,000 Speaker 1: I'm not a volue investor. I'm not a momentum investor. Yeah, 608 00:37:15,080 --> 00:37:17,040 Speaker 1: I want to say, can training ensure? What else am I? 609 00:37:17,040 --> 00:37:20,160 Speaker 1: I'm a time investor Chinese system and I didn't know this. 610 00:37:20,239 --> 00:37:22,480 Speaker 1: I've only recently gained this. So I didn't gain this 611 00:37:22,520 --> 00:37:24,719 Speaker 1: from my my customers, but I gain it from you know. 612 00:37:25,239 --> 00:37:28,120 Speaker 1: I engaged with the smallest minds on the planet and 613 00:37:28,120 --> 00:37:32,919 Speaker 1: and the Chinese hottest, the Chinese HOTTORSCOO, which they used 614 00:37:32,960 --> 00:37:35,920 Speaker 1: the same like twelve characters and all that notices, But 615 00:37:36,000 --> 00:37:40,400 Speaker 1: they used twelve characters, different characters, but they don't measure 616 00:37:40,840 --> 00:37:44,480 Speaker 1: the heavily bodies and their movement and over the course 617 00:37:44,480 --> 00:37:46,680 Speaker 1: of one year, but it's over the course of twelve years. 618 00:37:46,840 --> 00:37:50,680 Speaker 1: If only I had known not like thing time moves 619 00:37:50,719 --> 00:37:54,200 Speaker 1: that are different cardins in China. Now you had twelve 620 00:37:54,440 --> 00:37:56,799 Speaker 1: onto when I launched that fund, and that takes you 621 00:37:56,840 --> 00:37:59,480 Speaker 1: into today. This is the best, This is the best. 622 00:37:59,560 --> 00:38:02,680 Speaker 1: I was right. I was right just early. I've ever 623 00:38:02,719 --> 00:38:06,279 Speaker 1: heard that. Actually, you got the twelve years cycle right 624 00:38:06,320 --> 00:38:08,680 Speaker 1: when you were making those videos of Chinese ghost cities, 625 00:38:08,920 --> 00:38:11,640 Speaker 1: the real estate emplosion. Actually was right. You called it. 626 00:38:11,680 --> 00:38:15,200 Speaker 1: You were just off the wrong cycle of the Chinese horse. 627 00:38:15,640 --> 00:38:18,480 Speaker 1: It's the best best I've ever heard. I blame the 628 00:38:18,560 --> 00:38:22,560 Speaker 1: dumb hortschool U, but you right. Listen, Remember I think 629 00:38:22,600 --> 00:38:26,520 Speaker 1: I charged fifty basis points management fee. I couldn't charge it. 630 00:38:26,520 --> 00:38:29,399 Speaker 1: I could not charge a performance fye until you successfully 631 00:38:29,440 --> 00:38:32,279 Speaker 1: redeemed right. I do not know why the world has 632 00:38:32,320 --> 00:38:34,200 Speaker 1: not gone that way, but there you go. So yeah, 633 00:38:34,239 --> 00:38:37,320 Speaker 1: Horoscoo takes you to today. Why is the day relevant 634 00:38:37,800 --> 00:38:42,160 Speaker 1: when when it's so? There's been two profound sovereign failures 635 00:38:42,239 --> 00:38:46,600 Speaker 1: of late Europe sold its energy short like the number 636 00:38:46,600 --> 00:38:50,640 Speaker 1: one role of a sovereign is to secure energy resources. 637 00:38:50,800 --> 00:38:54,200 Speaker 1: Europe has five years left. Right, So dollar versus the Euro, 638 00:38:54,280 --> 00:38:56,200 Speaker 1: I think the dollar breaks the buck, if you will, 639 00:38:56,239 --> 00:38:58,759 Speaker 1: which to say, I think the dollar trades much much 640 00:38:58,840 --> 00:39:01,440 Speaker 1: higher versus the Europe owing to the shame and the 641 00:39:01,640 --> 00:39:05,960 Speaker 1: errors of European politicians a generation ago. Secondly, China, China 642 00:39:06,000 --> 00:39:10,880 Speaker 1: facilitated a credit boom in order to satisfy the political 643 00:39:11,000 --> 00:39:15,000 Speaker 1: desire for GDP growth, because when they have GDP growth, 644 00:39:15,200 --> 00:39:17,479 Speaker 1: their citizens are willing to put up with a heck 645 00:39:17,520 --> 00:39:20,120 Speaker 1: of a lot of civil dis liberty or whatever. Right, 646 00:39:20,600 --> 00:39:25,239 Speaker 1: but when you allow domestic real estate assets to be 647 00:39:25,280 --> 00:39:28,480 Speaker 1: four x g d P, you're gone. I don't I 648 00:39:28,560 --> 00:39:31,960 Speaker 1: do not care how clever your bureaucrats are. They were 649 00:39:32,000 --> 00:39:35,360 Speaker 1: never clever in the first place. Boomarkets make dumb people 650 00:39:35,480 --> 00:39:40,160 Speaker 1: look intelligence. Okay, So I fear China And then you 651 00:39:40,200 --> 00:39:43,759 Speaker 1: know again this lacking the democracy gene, and so they 652 00:39:43,800 --> 00:39:49,239 Speaker 1: could not embrace our technology with the boosters and the vaccines, 653 00:39:49,239 --> 00:39:51,080 Speaker 1: and they had to go like with their own thing, 654 00:39:51,280 --> 00:39:55,160 Speaker 1: which hasn't worked. And so there's zero tallerance campaign on 655 00:39:55,239 --> 00:40:00,319 Speaker 1: top of the Russia confloration, et cetera, et cetera. And 656 00:40:00,360 --> 00:40:04,080 Speaker 1: with this property thing like GDP is going down. So 657 00:40:04,239 --> 00:40:08,040 Speaker 1: in terms of the fourth turning, I fear in the 658 00:40:08,120 --> 00:40:12,760 Speaker 1: next three years that things could really get so weak 659 00:40:13,120 --> 00:40:16,920 Speaker 1: in China and and a flight of capital that you 660 00:40:17,040 --> 00:40:20,719 Speaker 1: might see a mad max reaction from the Chinese. I 661 00:40:20,840 --> 00:40:25,719 Speaker 1: fear they may replicate what the Taiwanese ironically did back 662 00:40:25,760 --> 00:40:30,040 Speaker 1: in seven, which say they might devalue. It would be 663 00:40:30,040 --> 00:40:34,120 Speaker 1: an economic crime, but they might do that, and at 664 00:40:34,120 --> 00:40:37,439 Speaker 1: that point the US would have to intervene and we'd 665 00:40:37,480 --> 00:40:41,200 Speaker 1: have to have a global conference of leaders and decide 666 00:40:41,440 --> 00:40:46,480 Speaker 1: on a new monetary order. Well, he it was fantastic 667 00:40:46,560 --> 00:40:48,680 Speaker 1: to talk to you. We will absolutely have you back 668 00:40:48,760 --> 00:40:56,160 Speaker 1: in three years is the time, or maybe twelve years, 669 00:40:56,239 --> 00:40:58,520 Speaker 1: or maybe twenty four years, but at some point we 670 00:40:58,520 --> 00:41:01,120 Speaker 1: would love to have you back. Um. I hope you 671 00:41:01,360 --> 00:41:03,839 Speaker 1: have a great day surfing in St. Bart's. Thank you 672 00:41:03,880 --> 00:41:06,279 Speaker 1: so much for coming on odd lots, Thanks so much here, 673 00:41:06,600 --> 00:41:09,200 Speaker 1: Thank you. I love talking to you. It was so clear, 674 00:41:09,360 --> 00:41:13,880 Speaker 1: like you know, years ago he like mastered media obviously 675 00:41:13,960 --> 00:41:16,799 Speaker 1: with those YouTube videos of the Chinese ghost cities, and 676 00:41:17,239 --> 00:41:19,680 Speaker 1: you could hear instantly why talking to him, why he 677 00:41:19,800 --> 00:41:22,000 Speaker 1: was so compelling. There's a lot of I feel like 678 00:41:22,040 --> 00:41:24,160 Speaker 1: there's a lot of quotes in that conversation that I'm 679 00:41:24,160 --> 00:41:27,480 Speaker 1: probably gonna use going forward. But yeah, I mean I 680 00:41:27,480 --> 00:41:30,440 Speaker 1: thought a number of really interesting points. I did think 681 00:41:31,160 --> 00:41:33,400 Speaker 1: what he said about the private sector, the sort of 682 00:41:33,440 --> 00:41:36,759 Speaker 1: triumph of the private sector when it comes to sanctions 683 00:41:36,800 --> 00:41:40,400 Speaker 1: in Russia and people making you know, maybe moral decisions. 684 00:41:40,440 --> 00:41:42,719 Speaker 1: Of course, they don't want to be associated with a 685 00:41:43,040 --> 00:41:46,719 Speaker 1: regime that is invading another country. But on the other hand, 686 00:41:46,760 --> 00:41:49,480 Speaker 1: these are also very practical decisions tied to the size 687 00:41:49,480 --> 00:41:52,000 Speaker 1: of the market and the feasibility of actually leaving it. 688 00:41:52,440 --> 00:41:54,319 Speaker 1: There were so many interesting points. I mean, just like 689 00:41:54,719 --> 00:41:58,280 Speaker 1: I thought, it's a point about the endurance of dollar 690 00:41:58,440 --> 00:42:01,799 Speaker 1: and dollar assets was really powerful that ultimately like what 691 00:42:01,840 --> 00:42:05,360 Speaker 1: the US can manufacture in droves and the scale that 692 00:42:05,400 --> 00:42:09,080 Speaker 1: others can't our assets that are tied to freedom and 693 00:42:09,120 --> 00:42:11,840 Speaker 1: a stable legal system and the rule of law basically, 694 00:42:11,880 --> 00:42:14,920 Speaker 1: and that no one else is the capacity to manufacture 695 00:42:14,960 --> 00:42:16,840 Speaker 1: the As you put it, I think the term users 696 00:42:16,880 --> 00:42:19,120 Speaker 1: freedom assets at a scale the U S can and 697 00:42:19,160 --> 00:42:23,279 Speaker 1: how powerful that is is one reason to sort of 698 00:42:23,840 --> 00:42:26,560 Speaker 1: bet on the over of like when people do the 699 00:42:26,600 --> 00:42:29,040 Speaker 1: demise of the dollar so forth. To bet on the 700 00:42:29,120 --> 00:42:32,120 Speaker 1: over is simply that point. Yeah, I mean, I agree 701 00:42:32,120 --> 00:42:35,120 Speaker 1: with that, and the idea of a safe asset shortage 702 00:42:35,160 --> 00:42:37,840 Speaker 1: is something that's come up again and again. But I 703 00:42:37,880 --> 00:42:41,000 Speaker 1: would also say there are probably a few countries out 704 00:42:41,040 --> 00:42:44,680 Speaker 1: there who aren't necessarily as interested in freedom assets and 705 00:42:44,760 --> 00:42:47,759 Speaker 1: may look at alternatives. But again, the question for them 706 00:42:47,800 --> 00:42:51,000 Speaker 1: is whether or not they sacrifice economic growth in order 707 00:42:51,040 --> 00:42:54,600 Speaker 1: to secure You know, I guess security from this idea 708 00:42:54,600 --> 00:42:58,480 Speaker 1: of the dollar being weaponized, But overall I agree with 709 00:42:58,520 --> 00:43:02,240 Speaker 1: that thesis. And I just to say that I wasn't wrong. 710 00:43:02,320 --> 00:43:04,800 Speaker 1: I was early, but I wasn't even early because I 711 00:43:05,080 --> 00:43:07,239 Speaker 1: was at the right calendar I was. I was right 712 00:43:07,280 --> 00:43:08,760 Speaker 1: that it was going to be the year of the tiger, 713 00:43:08,960 --> 00:43:13,640 Speaker 1: it was just two instead. Has got to be one 714 00:43:13,640 --> 00:43:16,600 Speaker 1: of the best lines I've ever heard from an investor. 715 00:43:16,880 --> 00:43:18,560 Speaker 1: I mean, I know it's mostly a joke, but there 716 00:43:18,640 --> 00:43:21,360 Speaker 1: is also a kernel to that, right, because when you 717 00:43:21,440 --> 00:43:25,560 Speaker 1: have a centralized economy like China, there are all these 718 00:43:25,600 --> 00:43:29,439 Speaker 1: different lovers that they're able to pull in order to lengthen, yeah, 719 00:43:29,600 --> 00:43:31,880 Speaker 1: the cycle, and we've seen that over and over and 720 00:43:31,920 --> 00:43:33,640 Speaker 1: over again. You know, people have been calling for a 721 00:43:33,640 --> 00:43:36,840 Speaker 1: massive crash for for years and it never seems to happen, 722 00:43:37,000 --> 00:43:39,759 Speaker 1: or it didn't seem to happen until last year. And 723 00:43:39,800 --> 00:43:42,000 Speaker 1: it's not going away. I mean, nothing I've seen in 724 00:43:42,040 --> 00:43:44,839 Speaker 1: any news reports suggests this is the thing. This thing 725 00:43:45,000 --> 00:43:48,080 Speaker 1: is stabilizing, so we're gonna have to revisit that specifically 726 00:43:48,080 --> 00:43:51,520 Speaker 1: against it. Yeah, for sure. This has been another episode 727 00:43:51,560 --> 00:43:54,120 Speaker 1: of the All Thoughts podcast. I'm Tracy Alloway. You can 728 00:43:54,160 --> 00:43:57,080 Speaker 1: follow me on Twitter at Tracy Alloway and I'm Joe 729 00:43:57,120 --> 00:43:59,480 Speaker 1: Why Isn't All. You can follow me on Twitter at 730 00:43:59,480 --> 00:44:02,800 Speaker 1: the Stall. Follow our guest Hugh Hendry. He's on Twitter 731 00:44:02,920 --> 00:44:06,680 Speaker 1: at Henry Underscore Hugh Big. Thanks to our producers Collin 732 00:44:06,719 --> 00:44:09,200 Speaker 1: Tipton and Magnus hum Rickson. Be sure to follow the 733 00:44:09,239 --> 00:44:12,920 Speaker 1: Bloomberg had a podcast Francesca Levi at Francesca Today and 734 00:44:13,120 --> 00:44:15,960 Speaker 1: check out all of our podcasts Bloomberg under the handle 735 00:44:16,239 --> 00:44:18,160 Speaker 1: at podcasts. Thanks for listening.