WEBVTT - Single Best Idea with Tom Keene: Win Thin & Constance Hunter

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The single best idea is to learn the Bloomberg terminal

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<v Speaker 2>with a dollar dynamics of the last twenty four hours.

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<v Speaker 2>I was visualizing in my head way too early in

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<v Speaker 2>the morning a chart of gold back on teen years.

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<v Speaker 2>I want to walk through it. I think it's so important.

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<v Speaker 2>The pros talk about standard deviation. The single best idea

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<v Speaker 2>is to try to understand central limit theorem and the

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<v Speaker 2>idea of percent change and how you gauge that looking

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<v Speaker 2>at the past data. And one way we do this

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<v Speaker 2>to keep it short is standard deviation. One standard deviation

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<v Speaker 2>is no big deal. Two standard deviations in the realm

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<v Speaker 2>of okay, it's going to happen. And three standard deviations

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<v Speaker 2>as a general statement indicates stress. If you take goal

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<v Speaker 2>analgarithmic y axis back twenty years, twenty four years I

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<v Speaker 2>think I did, and you plot it out. We are

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<v Speaker 2>at two standard deviations right now with gold at fifty

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<v Speaker 2>three hundred, where is three standard deviations? Seven thousand, four

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<v Speaker 2>hundred is a quick estimate, not to the dollar, but

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<v Speaker 2>in the vicinity of seven thousand, four hundred is where

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<v Speaker 2>I would suggest the recent two decades of gold indicates

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<v Speaker 2>a stress. We talked about the stress today with win Thin.

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<v Speaker 2>He's at the Bank of Nasau, Doctor Thin, iconic out

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<v Speaker 2>of Columbia. With all of us work over the years

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<v Speaker 2>under Robert Mandel and in the academics of his specific

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<v Speaker 2>rim and Burma win Thin on this dollar moment.

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<v Speaker 3>Professor Mindel was a brilliant economist and I think any

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<v Speaker 3>international economist should read his works today. It's still to

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<v Speaker 3>me groundbreaking. He introduced whole idea of capital flows before

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<v Speaker 3>capa flows.

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<v Speaker 2>Actually, is Donald Trump aware of the capitol flow risk

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<v Speaker 2>when he says weak dollar?

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<v Speaker 3>Well, right now, they're having this sort of in this

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<v Speaker 3>ott sweet spot where they're getting you know, they're getting

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<v Speaker 3>weaker dollar without the spillover into other markets. But you know,

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<v Speaker 3>we've seen time and time again in both development and

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<v Speaker 3>immerging markets. You know the times when these moves get

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<v Speaker 3>very disorderly, it's hard to get that genie back in

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<v Speaker 3>the bottle.

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<v Speaker 2>That really well said. And of course one way to

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<v Speaker 2>look at this is again to go to the Bloomberg

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<v Speaker 2>terminal and I took dollar yen. Dollar yen has come in.

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<v Speaker 2>It's a stronger yen. It's basically one sixty two down

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<v Speaker 2>to one fifty two fifty three stronger yen fine, where

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<v Speaker 2>does the end become ever stronger? And there's any number

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<v Speaker 2>of interpretations of this, but to my quick eyeball in

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<v Speaker 2>math too early in the morning, we have a way

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<v Speaker 2>to go to get the real strong yen stress and

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<v Speaker 2>I would vary, I'm just making this real rough. It's

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<v Speaker 2>like ten below from a one to fifty two to

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<v Speaker 2>under one strong in week dollar. Basically, we're not there.

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<v Speaker 2>And that's the idea of that the genies out of

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<v Speaker 2>the bottle is maybe that where we're heading the genie

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<v Speaker 2>will be rubbed at the FED today. It'll be an

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<v Speaker 2>interesting day, to say the least constant hunter of EIU.

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<v Speaker 2>On this moment.

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<v Speaker 1>For Jerome, PA, we're seeing elevated goods prices where goods

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<v Speaker 1>prices had been zero to slightly negative for quite some time,

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<v Speaker 1>because of course we have increased productivity in that sector

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<v Speaker 1>of the economy. We obviously have China exporting disinflation or

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<v Speaker 1>deflation to the rest of the world by their extraordinary

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<v Speaker 1>supply that they provide, and the tariffs upended that, so

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<v Speaker 1>something that was not contributing to higher inflation was actually

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<v Speaker 1>contributing to lower inflation has gone away constants.

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<v Speaker 2>Under there in the separation between services and goods. Of

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<v Speaker 2>course we'll do our fed covers a s afternoon we

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<v Speaker 2>leave the Torsten Slock his essay today and pro productivity

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<v Speaker 2>important on podcasts on Apple and Spotify, on YouTube podcasts.

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<v Speaker 2>It's single best idea