1 00:00:02,720 --> 00:00:16,480 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:18,640 --> 00:00:22,120 Speaker 2: Hello and welcome to another episode of the Odd Lots podcast. 3 00:00:22,200 --> 00:00:24,439 Speaker 3: I'm Joe Wassenthal and I'm Tracy Alloway. 4 00:00:24,640 --> 00:00:28,440 Speaker 2: Today listeners get a special live episode of the podcast 5 00:00:28,480 --> 00:00:31,000 Speaker 2: that we were recorded in Washington, DC at the annual 6 00:00:31,040 --> 00:00:33,640 Speaker 2: meeting for the Institute for International Finance. 7 00:00:33,800 --> 00:00:37,040 Speaker 3: That's right. We spoke with Ragoram Rajan. He is a 8 00:00:37,159 --> 00:00:40,000 Speaker 3: professor at the University of Chicago Booth School of Business 9 00:00:40,080 --> 00:00:43,080 Speaker 3: and of course the former head of India's Central Bank, 10 00:00:43,200 --> 00:00:45,360 Speaker 3: and he is exactly the person you want to talk 11 00:00:45,400 --> 00:00:48,400 Speaker 3: to when everyone seems to be talking about risks in 12 00:00:48,440 --> 00:00:48,920 Speaker 3: the market. 13 00:00:49,080 --> 00:00:50,839 Speaker 2: That's right, of course, and we bring it up in 14 00:00:50,880 --> 00:00:53,519 Speaker 2: the conversation. He was sort of famous for being one 15 00:00:53,560 --> 00:00:56,360 Speaker 2: of the early pupil to warn in I Guess two 16 00:00:56,440 --> 00:00:59,680 Speaker 2: thousand and five about brewing risks of the financial system. 17 00:01:00,040 --> 00:01:03,000 Speaker 2: So we talked about what's behind the surgeon gold, what's 18 00:01:03,080 --> 00:01:06,880 Speaker 2: going on with central banks, and how seriously they're taking inflation, 19 00:01:07,400 --> 00:01:10,679 Speaker 2: speculative fervor and frenzy in the market. All of the 20 00:01:10,720 --> 00:01:12,520 Speaker 2: things that are relevant right now. 21 00:01:12,600 --> 00:01:13,520 Speaker 4: So take a list. 22 00:01:14,560 --> 00:01:17,319 Speaker 2: Let's get started. Why is gold up so much? Let's 23 00:01:17,319 --> 00:01:21,280 Speaker 2: start with the really important question, What is your story 24 00:01:21,400 --> 00:01:24,720 Speaker 2: or theory behind the seemingly NonStop demand for gold? 25 00:01:24,760 --> 00:01:27,800 Speaker 5: Right, Well, there's no single story, right, it's a number 26 00:01:27,840 --> 00:01:31,200 Speaker 5: of stories. First it started taking off what twenty twenty three. 27 00:01:31,800 --> 00:01:36,759 Speaker 5: Clearly there is an element of geopolitical risk. Many central banks, 28 00:01:36,800 --> 00:01:41,440 Speaker 5: looking at the militarization or the weaponization of payments, are 29 00:01:41,560 --> 00:01:45,720 Speaker 5: basically saying, do I want all my reserves in developed 30 00:01:45,720 --> 00:01:50,240 Speaker 5: country currencies? Do I want something which I control directly? 31 00:01:50,760 --> 00:01:53,440 Speaker 5: So a movement to gold for that reason may have 32 00:01:53,560 --> 00:01:57,360 Speaker 5: started initially a lot of central banks moving to more gold, 33 00:01:57,480 --> 00:01:59,600 Speaker 5: but there are the reasons. I mean, what's the safe 34 00:01:59,640 --> 00:02:04,560 Speaker 5: acet if you look around the world. Certainly, if you 35 00:02:04,880 --> 00:02:08,840 Speaker 5: look at Japan, you know, huge amount of debt, probably 36 00:02:09,200 --> 00:02:12,720 Speaker 5: higher inflation than in the past, and interest rates really low. 37 00:02:13,160 --> 00:02:14,839 Speaker 5: Is that a place you want to put a lot 38 00:02:14,840 --> 00:02:18,360 Speaker 5: of money? In the Euro area, well, it's always been 39 00:02:18,400 --> 00:02:22,079 Speaker 5: a question of whether it's a cohesive unit, who's going 40 00:02:22,120 --> 00:02:24,680 Speaker 5: to bail the system out when there's a problem, And 41 00:02:24,760 --> 00:02:28,000 Speaker 5: of course the United States running large fiscal deficits you 42 00:02:28,080 --> 00:02:30,760 Speaker 5: know till the eye can see, So you know a 43 00:02:30,760 --> 00:02:34,480 Speaker 5: lot more questions about savee acets today, and that's the 44 00:02:34,520 --> 00:02:37,760 Speaker 5: second feature. Third of cause interest rates coming down, gold 45 00:02:37,800 --> 00:02:41,480 Speaker 5: is easier to hold. At that point, A bunch of 46 00:02:41,560 --> 00:02:44,640 Speaker 5: reasons why this is happening, I would say at this 47 00:02:44,760 --> 00:02:47,680 Speaker 5: point also that there is a fair amount of fraust, 48 00:02:47,720 --> 00:02:50,200 Speaker 5: so you can't completely discount the fact that gold prices 49 00:02:50,480 --> 00:02:53,920 Speaker 5: are probably moving along with the frauth as everything else. 50 00:02:55,360 --> 00:02:57,240 Speaker 3: Was this something that was on your radar when you 51 00:02:57,280 --> 00:02:59,560 Speaker 3: were at the RBI. Head of the RBI, how did 52 00:02:59,600 --> 00:03:02,120 Speaker 3: you think of out reserve diversification? 53 00:03:02,240 --> 00:03:07,559 Speaker 5: Then, well, yes, you do want to diversify your holdings. 54 00:03:07,680 --> 00:03:11,399 Speaker 5: The worry about your reserve assets and developed countries being 55 00:03:11,440 --> 00:03:16,600 Speaker 5: sequestered because of an angry president or prime minister wasn't 56 00:03:16,639 --> 00:03:19,880 Speaker 5: as big a concern, but there was definitely a view 57 00:03:19,919 --> 00:03:23,720 Speaker 5: that you needed some diversification. And you know, once you 58 00:03:23,960 --> 00:03:28,200 Speaker 5: get beyond the big reserve currencies, you know it's harder 59 00:03:28,240 --> 00:03:31,320 Speaker 5: to deal with the smaller countries. Gold is not liquid, 60 00:03:31,360 --> 00:03:33,600 Speaker 5: that is a problem. It sits on your bandsheet, but 61 00:03:33,600 --> 00:03:36,160 Speaker 5: if you want to transform it into something, it's sitting 62 00:03:36,200 --> 00:03:38,680 Speaker 5: in your walls. How do you convince the others that 63 00:03:38,760 --> 00:03:42,120 Speaker 5: it's a lot of countries have their gold in New 64 00:03:42,200 --> 00:03:44,600 Speaker 5: York or in London. There it's a question of moving 65 00:03:44,600 --> 00:03:47,240 Speaker 5: from one wall to another. But if it's in your 66 00:03:47,240 --> 00:03:50,760 Speaker 5: home country, it's harder. You need to rent a seven 67 00:03:50,800 --> 00:03:52,280 Speaker 5: four seven to take it elsewhere. 68 00:03:52,480 --> 00:03:54,880 Speaker 2: Yeah, I was talking to someone last night who pointed 69 00:03:54,920 --> 00:03:57,480 Speaker 2: this out. You know, there's this for a long time, 70 00:03:57,560 --> 00:04:00,280 Speaker 2: the price of gold could sort of be model or 71 00:04:00,600 --> 00:04:02,760 Speaker 2: linked to real raids in some way, and there's a 72 00:04:02,840 --> 00:04:05,280 Speaker 2: sort of nice stable relationship. And they point out, you know, 73 00:04:05,280 --> 00:04:07,920 Speaker 2: if you really look at when the divergence occurred, is 74 00:04:07,960 --> 00:04:11,200 Speaker 2: not long after Russia's invasion of Ukraine, and of course 75 00:04:11,240 --> 00:04:14,920 Speaker 2: the seizure of Russian assets, which fits into what you're 76 00:04:14,960 --> 00:04:17,680 Speaker 2: talking about, which is that if you are, you know, 77 00:04:17,760 --> 00:04:20,520 Speaker 2: a reserve manager at a bank or whatever, did that 78 00:04:20,640 --> 00:04:24,080 Speaker 2: wake people up to the possibility that your fiat currency 79 00:04:24,279 --> 00:04:27,320 Speaker 2: that isn't some foreign central bank or some foreign entity 80 00:04:27,360 --> 00:04:30,360 Speaker 2: could just disappear one day in a way that your 81 00:04:30,400 --> 00:04:31,800 Speaker 2: own custodied gold cannot. 82 00:04:32,200 --> 00:04:32,760 Speaker 6: I think it did. 83 00:04:33,080 --> 00:04:36,719 Speaker 5: I think that's a strong reason you see the movement 84 00:04:37,160 --> 00:04:40,880 Speaker 5: starting in twenty two twenty three, it starts peaking up 85 00:04:40,880 --> 00:04:45,760 Speaker 5: more strongly. But it's also the willingness to weaponize a 86 00:04:45,800 --> 00:04:48,520 Speaker 5: lot of stuff. As you know, a number of countries 87 00:04:48,560 --> 00:04:51,920 Speaker 5: are trying to build alternatives to Swift, because Swift can 88 00:04:51,960 --> 00:04:57,000 Speaker 5: be weaponized. Now, these need not be your traditional sort 89 00:04:57,040 --> 00:05:01,080 Speaker 5: of quote unquote rogue countries, which you know have been 90 00:05:01,120 --> 00:05:03,640 Speaker 5: on the list of sanctions for a long time. This 91 00:05:03,760 --> 00:05:06,960 Speaker 5: could be any country which fears political change. I mean, 92 00:05:06,960 --> 00:05:11,080 Speaker 5: if Canada can turn out to be antagonistic to a 93 00:05:11,080 --> 00:05:15,039 Speaker 5: close neighbor, what about a country five thousand miles away. 94 00:05:15,400 --> 00:05:19,039 Speaker 5: So trust has broken down in the system, and that's 95 00:05:19,160 --> 00:05:21,360 Speaker 5: part of the reason why people are trying to build 96 00:05:21,400 --> 00:05:24,880 Speaker 5: alternatives which don't make them dependent. Payments are so crucial 97 00:05:25,440 --> 00:05:28,000 Speaker 5: you don't want to be dependent on any one country 98 00:05:28,040 --> 00:05:30,120 Speaker 5: that can change the nature of payments. 99 00:05:30,560 --> 00:05:33,000 Speaker 3: So it feels like we're at this really weird juncture 100 00:05:33,080 --> 00:05:35,640 Speaker 3: where there's a lot of distrust in the system, a 101 00:05:35,720 --> 00:05:39,920 Speaker 3: lot of unpredictability around the behavior of the United States 102 00:05:39,960 --> 00:05:44,560 Speaker 3: in particular, and yet the US dollar and US treasuries 103 00:05:44,640 --> 00:05:47,719 Speaker 3: form the basis of the global financial system. How do 104 00:05:47,760 --> 00:05:51,320 Speaker 3: you see that evolving over time given some of these concerns, 105 00:05:51,360 --> 00:05:54,560 Speaker 3: given concerted efforts to for instance, create a new. 106 00:05:54,480 --> 00:05:58,120 Speaker 5: Swift, Well, I think part of the reason is the 107 00:05:58,200 --> 00:06:01,520 Speaker 5: Tina factor. There is no alternative, right, The US market 108 00:06:01,600 --> 00:06:05,039 Speaker 5: is still the deepest market in the world, treasure markets 109 00:06:05,080 --> 00:06:09,520 Speaker 5: and so on. It is liquid. Many institutions operate here, 110 00:06:09,960 --> 00:06:13,160 Speaker 5: and yeah, people still trust the rule of law prevailing 111 00:06:13,360 --> 00:06:16,479 Speaker 5: in the US. Potentially, the fact that there's been so 112 00:06:16,600 --> 00:06:21,280 Speaker 5: much agonizing about the seizure of Russian reserves is actually 113 00:06:21,279 --> 00:06:23,719 Speaker 5: a good thing because it says that it doesn't happen 114 00:06:23,760 --> 00:06:27,080 Speaker 5: on a whim, that countries actually think about it and 115 00:06:27,120 --> 00:06:31,120 Speaker 5: then are finding ways that sort of look legal to 116 00:06:31,279 --> 00:06:32,839 Speaker 5: actually sequester them. 117 00:06:33,240 --> 00:06:35,200 Speaker 6: And so I think that's to the good. 118 00:06:35,640 --> 00:06:39,159 Speaker 5: Of course, fact that it's even questioned is what a 119 00:06:39,440 --> 00:06:41,960 Speaker 5: number of other countries worry about, that we may not 120 00:06:42,320 --> 00:06:44,039 Speaker 5: have control of those reserves. 121 00:06:44,120 --> 00:06:47,719 Speaker 2: Speaking of dollar alternatives, there is no alternative, Okay, we 122 00:06:47,760 --> 00:06:51,200 Speaker 2: talk about gold. President Trump perceives the existence of this 123 00:06:51,680 --> 00:06:54,680 Speaker 2: entity called the bricks to be an assault on the 124 00:06:54,800 --> 00:06:57,280 Speaker 2: US dollar. You know, I always think it's pretty wild 125 00:06:57,320 --> 00:07:00,640 Speaker 2: that there is this entity that exists because O'Neill thought 126 00:07:00,640 --> 00:07:03,159 Speaker 2: it was a good acronym over twenty years ago. These 127 00:07:03,160 --> 00:07:06,159 Speaker 2: were gonna be growth markets. But like, how seriously should 128 00:07:06,200 --> 00:07:08,479 Speaker 2: we take this entity? What does it represent to you? 129 00:07:08,920 --> 00:07:12,320 Speaker 2: Is there a germ of something that could represent so 130 00:07:12,440 --> 00:07:14,760 Speaker 2: build something that is an alternative to the dollars. 131 00:07:14,800 --> 00:07:16,880 Speaker 4: So how should we think about this this entity. 132 00:07:17,160 --> 00:07:20,560 Speaker 5: Well, Jim O'Neil thought of it initially as this fast 133 00:07:20,560 --> 00:07:24,840 Speaker 5: growing group of countries and it has, I mean, there's 134 00:07:24,840 --> 00:07:27,960 Speaker 5: been differences across this group. China and India have grown 135 00:07:28,040 --> 00:07:30,200 Speaker 5: much faster than the rest, and of course China has 136 00:07:30,240 --> 00:07:34,200 Speaker 5: been spectacular in the early years of the brigs nomenclature. 137 00:07:35,200 --> 00:07:40,000 Speaker 5: Is there a cohesive structure there on some issues where 138 00:07:40,160 --> 00:07:44,840 Speaker 5: for example, it's sort of the emerging market collective against 139 00:07:44,880 --> 00:07:49,200 Speaker 5: the industrial country collective issues such as green transition, who 140 00:07:49,280 --> 00:07:53,040 Speaker 5: has responsibility? But again there's a lot of divergence. China 141 00:07:53,080 --> 00:07:55,840 Speaker 5: has much more of an industrial base than say India. 142 00:07:56,200 --> 00:07:59,400 Speaker 5: If you look at who emits you know most in 143 00:07:59,480 --> 00:08:02,160 Speaker 5: the world, it's China. So even on the green issue, 144 00:08:02,480 --> 00:08:05,480 Speaker 5: there is a divergence in opinion. I think with the 145 00:08:05,520 --> 00:08:08,920 Speaker 5: addition to bricks of all these countries like Iran and 146 00:08:08,960 --> 00:08:13,200 Speaker 5: so on, it becomes much less cohesive and seems much 147 00:08:13,240 --> 00:08:18,200 Speaker 5: more like a anti West kind of structure, which certainly 148 00:08:18,280 --> 00:08:22,880 Speaker 5: India doesn't subscribe to, which Brazil probably doesn't subscribe to. 149 00:08:23,040 --> 00:08:24,840 Speaker 6: Again to the extent that some of the. 150 00:08:24,760 --> 00:08:29,040 Speaker 5: Others, and of course within the bricks there are antagonisms, right, 151 00:08:29,120 --> 00:08:33,000 Speaker 5: India and China for the border conflict in twenty twenty. 152 00:08:33,679 --> 00:08:37,000 Speaker 5: So I think the sense that it is a cohesive group, 153 00:08:37,040 --> 00:08:39,880 Speaker 5: it's a talking place, the sense that they will come 154 00:08:39,920 --> 00:08:42,680 Speaker 5: together with a common currency, I mean, forget about it. 155 00:08:42,920 --> 00:08:45,800 Speaker 6: That's not going to happen. May they build up a 156 00:08:45,880 --> 00:08:47,720 Speaker 6: payments system which is different. 157 00:08:47,800 --> 00:08:51,000 Speaker 5: Yeah, I mean yeah, I'm happy as a country to 158 00:08:51,040 --> 00:08:52,960 Speaker 5: be part of five different payment systems. 159 00:08:53,040 --> 00:08:54,240 Speaker 6: Gives me diversification. 160 00:08:54,679 --> 00:08:56,800 Speaker 5: If somebody tries to put the squeeze on me, I 161 00:08:56,880 --> 00:08:58,400 Speaker 5: move to a different payment system. 162 00:08:58,760 --> 00:09:01,560 Speaker 6: But does that mean I'm going to quote with a currency. 163 00:09:01,600 --> 00:09:02,120 Speaker 6: Probably not. 164 00:09:02,679 --> 00:09:05,520 Speaker 3: So we started out talking about gold, which seems to 165 00:09:05,559 --> 00:09:07,320 Speaker 3: reach a record high every day. 166 00:09:07,360 --> 00:09:07,600 Speaker 1: Now. 167 00:09:08,280 --> 00:09:11,200 Speaker 3: Stocks are also still pretty high. I know we had 168 00:09:11,280 --> 00:09:14,960 Speaker 3: something of a correction recently, but yeah, for five minutes. 169 00:09:15,080 --> 00:09:18,440 Speaker 3: In general, things seem to be going relatively well for 170 00:09:18,480 --> 00:09:21,920 Speaker 3: equities as well, which is a very strange situation where 171 00:09:21,920 --> 00:09:24,920 Speaker 3: you have the safe haven asset going up along with 172 00:09:25,160 --> 00:09:30,400 Speaker 3: stocks still quite high. I know you famously presented a 173 00:09:30,440 --> 00:09:33,120 Speaker 3: paper at the two thousand and five Jackson Hole where 174 00:09:33,120 --> 00:09:36,800 Speaker 3: you talked about financial stability and risks that you saw 175 00:09:36,960 --> 00:09:40,199 Speaker 3: in the system, and I think Alan Greenspan wasn't very 176 00:09:40,320 --> 00:09:43,199 Speaker 3: nice about it at the time and probably lived on 177 00:09:43,240 --> 00:09:47,040 Speaker 3: to regret that. But when you look at the market landscape, now, 178 00:09:47,440 --> 00:09:48,440 Speaker 3: what risks do you see? 179 00:09:48,520 --> 00:09:52,200 Speaker 2: Please say something equivalently historic, understand for our podcast, that's 180 00:09:52,240 --> 00:09:52,880 Speaker 2: all we're asking. 181 00:09:53,040 --> 00:09:56,320 Speaker 5: Let me say something historic in the sense of talking 182 00:09:56,360 --> 00:10:01,000 Speaker 5: about history. Okay, look at every financial cris in the 183 00:10:01,080 --> 00:10:03,040 Speaker 5: last one hundred years, and there are a couple of 184 00:10:03,080 --> 00:10:06,600 Speaker 5: papers that have been written recently about it. If you 185 00:10:06,679 --> 00:10:10,920 Speaker 5: look at the monitary policy settings before those crises, they. 186 00:10:10,840 --> 00:10:11,959 Speaker 6: Always have a U shape. 187 00:10:12,720 --> 00:10:17,480 Speaker 5: Easy times that's when the risks build up. Tightening that's 188 00:10:17,480 --> 00:10:20,440 Speaker 5: when it starts crumbling and it falls apart. 189 00:10:20,600 --> 00:10:20,960 Speaker 6: Okay. 190 00:10:21,600 --> 00:10:26,480 Speaker 5: Whether that use shape is policy rates or whether it's 191 00:10:26,600 --> 00:10:32,240 Speaker 5: some kind of deviation from neutral, it's always accommodative followed 192 00:10:32,240 --> 00:10:36,560 Speaker 5: by tightening. That's when the financial collapse occurs. And the 193 00:10:36,559 --> 00:10:39,760 Speaker 5: more the credit in the easy phase, the worst it is. Okay, 194 00:10:39,800 --> 00:10:42,880 Speaker 5: that's what's been established post global financial crisis. And you 195 00:10:42,920 --> 00:10:46,040 Speaker 5: can see that shape before the global financial crisis, and 196 00:10:46,280 --> 00:10:49,720 Speaker 5: including in Europe where there were countries at the periphery 197 00:10:50,640 --> 00:10:53,760 Speaker 5: where the shape was more pronounced because they have higher inflation. 198 00:10:53,840 --> 00:10:56,480 Speaker 5: So the monitary policy setting was too loose for them 199 00:10:57,040 --> 00:10:59,520 Speaker 5: and countries at the core where it was much more 200 00:10:59,720 --> 00:11:02,920 Speaker 5: eq and so Germany France didn't have the kind of 201 00:11:03,000 --> 00:11:06,960 Speaker 5: financial crisis except through their lending to the peripheric countries, 202 00:11:07,640 --> 00:11:11,200 Speaker 5: as did the peripheric countries. So what does that tell us. 203 00:11:11,600 --> 00:11:14,640 Speaker 5: It tells us be really careful when you have a 204 00:11:14,679 --> 00:11:18,959 Speaker 5: long period of easing followed by tightening. Now immediate reaction. Well, 205 00:11:18,960 --> 00:11:21,560 Speaker 5: we had a tightening, nothing happened. Well, we had a 206 00:11:21,600 --> 00:11:25,680 Speaker 5: tightening after an enormous amount of spending by governments which 207 00:11:25,920 --> 00:11:29,320 Speaker 5: essentially took the debt up from the private sector. Banks 208 00:11:29,320 --> 00:11:31,320 Speaker 5: got bailed out, remember the provision at the beginning of 209 00:11:31,320 --> 00:11:35,400 Speaker 5: the pandemic. Nothing actually happened because things like the paycheck 210 00:11:35,440 --> 00:11:38,800 Speaker 5: prorection program gave them the money back. So we had 211 00:11:38,840 --> 00:11:41,600 Speaker 5: a lot of support from the public sector to the 212 00:11:41,640 --> 00:11:45,800 Speaker 5: private sector. And that's why when the tightening happened, barn 213 00:11:45,880 --> 00:11:51,320 Speaker 5: sheets weren't really adversely affected. But credit keeps growing, not 214 00:11:51,520 --> 00:11:55,440 Speaker 5: in the households but in the corporate sector. So we 215 00:11:55,559 --> 00:11:58,719 Speaker 5: haven't had a really strong tightening. Except remember in the 216 00:11:58,760 --> 00:12:02,000 Speaker 5: tightening phase, we had Silken Valley Bank, which was people 217 00:12:02,080 --> 00:12:07,560 Speaker 5: forget the largest crisis in terms of nominal losses in 218 00:12:07,600 --> 00:12:11,079 Speaker 5: the US banking system, and yet twenty two bank runs 219 00:12:11,080 --> 00:12:14,000 Speaker 5: at the same time as Silicon Valley Bank happened. Enormous 220 00:12:14,040 --> 00:12:17,800 Speaker 5: intervention by the FED to support the banking system, including 221 00:12:18,280 --> 00:12:21,600 Speaker 5: by pushing out reserves and back into the system and 222 00:12:21,720 --> 00:12:24,520 Speaker 5: giving people an easy way to borrow against full nominal 223 00:12:24,600 --> 00:12:27,280 Speaker 5: value of their liabilities. We forget that that was a 224 00:12:27,280 --> 00:12:32,640 Speaker 5: big crisis which we avoided because of intervention. Going forward, 225 00:12:33,760 --> 00:12:36,160 Speaker 5: you have a lot of frauth in the system. And 226 00:12:36,240 --> 00:12:39,440 Speaker 5: now we're talking about cutting rates, But we're talking about 227 00:12:39,480 --> 00:12:42,679 Speaker 5: cutting rates when inflation has been high for a reasonable 228 00:12:42,720 --> 00:12:45,240 Speaker 5: amount of time. It's plat road at three, it's still 229 00:12:45,280 --> 00:12:47,920 Speaker 5: nowhere near two. People are saying, is there a new 230 00:12:48,480 --> 00:12:50,040 Speaker 5: sort of target three? 231 00:12:50,160 --> 00:12:50,920 Speaker 6: Not two? 232 00:12:51,480 --> 00:12:54,480 Speaker 5: And you're seeing that demand is still strong, whether it 233 00:12:54,559 --> 00:12:57,680 Speaker 5: comes from resilient households, whether it comes from the AI boom, 234 00:12:57,920 --> 00:13:01,199 Speaker 5: whether it comes from government spending, even while supply in 235 00:13:01,240 --> 00:13:04,920 Speaker 5: the US is more constrained because of the immigration constraint 236 00:13:05,040 --> 00:13:09,880 Speaker 5: that is being put so strong demand weaker supply. Is 237 00:13:09,920 --> 00:13:13,080 Speaker 5: that really conducive to disinflation? 238 00:13:13,840 --> 00:13:14,240 Speaker 6: Maybe not? 239 00:13:15,200 --> 00:13:17,719 Speaker 5: And so what's the bottom line. You have a lot 240 00:13:17,720 --> 00:13:21,640 Speaker 5: of frauth in anticipation of further cuts, and you have 241 00:13:22,000 --> 00:13:23,920 Speaker 5: some risks that in fact it may go. 242 00:13:23,920 --> 00:13:25,160 Speaker 6: The other way. 243 00:13:25,240 --> 00:13:28,360 Speaker 5: And the system in many ways, whether it stocks, whether 244 00:13:28,400 --> 00:13:31,160 Speaker 5: it's leveraged in some parts of the system, as we've seen, 245 00:13:31,920 --> 00:13:33,120 Speaker 5: is priced for perfection. 246 00:13:49,120 --> 00:13:52,120 Speaker 2: You hear from people that the FED and other officials 247 00:13:52,160 --> 00:13:56,640 Speaker 2: and like policy has been modestly restrictive, somewhat restrictive. But 248 00:13:56,920 --> 00:13:59,559 Speaker 2: as you just described, inflation is not close to to 249 00:14:00,240 --> 00:14:04,400 Speaker 2: it's closer to three percent. Obviously, risky assets are surging 250 00:14:04,800 --> 00:14:07,959 Speaker 2: even with some of the little like credit cockroaches. I 251 00:14:08,000 --> 00:14:10,760 Speaker 2: think Jimmie Diamond used that term like, actually spreads have 252 00:14:11,000 --> 00:14:14,040 Speaker 2: totally been fine. Do you think that term restrictive is 253 00:14:14,040 --> 00:14:16,920 Speaker 2: at all appropriate to describe the current stance of monetary 254 00:14:16,960 --> 00:14:17,840 Speaker 2: policy in the US. 255 00:14:18,000 --> 00:14:22,040 Speaker 5: So restrictive is always in famous central bank speak relative 256 00:14:22,040 --> 00:14:24,560 Speaker 5: to an r star, And nobody knows what our star is, 257 00:14:24,600 --> 00:14:27,200 Speaker 5: what the equilibrium rate is. But if you think the 258 00:14:27,400 --> 00:14:31,840 Speaker 5: strong demand and somewhat more constraints supply, our star is 259 00:14:32,280 --> 00:14:36,560 Speaker 5: higher than it was historically. But look at another indicator. 260 00:14:36,600 --> 00:14:40,440 Speaker 5: And I know people sort of complain about financial conditions 261 00:14:40,640 --> 00:14:44,000 Speaker 5: indices and say what does it really mean? But look 262 00:14:44,040 --> 00:14:48,640 Speaker 5: at the Chicago Financial Conditions Index. You know, almost right 263 00:14:48,680 --> 00:14:51,600 Speaker 5: from the time of the FED raising interest rates, it 264 00:14:51,640 --> 00:14:55,400 Speaker 5: has actually been coming down, becoming more supportive rather than less. 265 00:14:56,000 --> 00:14:59,320 Speaker 5: So whatever the FED is saying about restrictive, yes, there's 266 00:14:59,360 --> 00:15:01,040 Speaker 5: one part where it's really restricted. 267 00:15:01,200 --> 00:15:04,360 Speaker 6: Nobody is getting a mortgage today at these rates. That's 268 00:15:04,400 --> 00:15:05,400 Speaker 6: an exaggeration. 269 00:15:05,520 --> 00:15:09,479 Speaker 5: But you're seeing the mortgage market is tight, so household 270 00:15:09,520 --> 00:15:13,680 Speaker 5: borrowing against houses is dead in the water. But everywhere 271 00:15:13,680 --> 00:15:17,360 Speaker 5: else look at credit spreads, they're really at historic lows. 272 00:15:17,880 --> 00:15:21,440 Speaker 5: And that's suggesting that we have a funny financial market, 273 00:15:21,480 --> 00:15:25,320 Speaker 5: which is actually quite frothy in many places. So I 274 00:15:25,360 --> 00:15:28,400 Speaker 5: worry about that, and I worry because central banks sort 275 00:15:28,400 --> 00:15:30,280 Speaker 5: of seem to say somebody else is going to take 276 00:15:30,320 --> 00:15:35,040 Speaker 5: care of financial stability. Where about inflation versus growth? And 277 00:15:35,440 --> 00:15:38,160 Speaker 5: when you talk about all the discussion about FED policy, 278 00:15:38,680 --> 00:15:41,120 Speaker 5: there's not a lot of talk about where the financial 279 00:15:41,160 --> 00:15:44,040 Speaker 5: markets are. And what I told you about the U 280 00:15:44,160 --> 00:15:46,960 Speaker 5: shape suggests we should be paying more attention because this 281 00:15:47,000 --> 00:15:51,080 Speaker 5: is the time the kind of vulnerabilities get created in 282 00:15:51,160 --> 00:15:55,360 Speaker 5: the frenzy. Maybe it is AI investment moving from being 283 00:15:55,400 --> 00:15:59,400 Speaker 5: financed internally to being financed by credit. Maybe it is 284 00:15:59,480 --> 00:16:02,400 Speaker 5: some of the credit standards that are building first brands, 285 00:16:02,400 --> 00:16:07,000 Speaker 5: as an example, is when the problems are built, and 286 00:16:07,040 --> 00:16:08,120 Speaker 5: we should keep that in mind. 287 00:16:08,720 --> 00:16:11,920 Speaker 3: You know, you mentioned the investment boom that we're seeing, 288 00:16:12,080 --> 00:16:15,360 Speaker 3: and it does feel like AI related companies are spending 289 00:16:15,840 --> 00:16:20,440 Speaker 3: enormous amounts of money, are ranging some very interesting, somewhat 290 00:16:20,440 --> 00:16:26,040 Speaker 3: circular financing deals to each other with your central banker 291 00:16:26,160 --> 00:16:30,040 Speaker 3: hat on how should a central bank deal with inflationary 292 00:16:30,120 --> 00:16:34,560 Speaker 3: pressures that come from an investment boom versus, for instance, 293 00:16:34,960 --> 00:16:37,120 Speaker 3: some other type of boom in the system. 294 00:16:37,600 --> 00:16:41,880 Speaker 5: Well, this is the great Austrian dilemma, right what the 295 00:16:41,920 --> 00:16:47,960 Speaker 5: Austrian economists used to call malinvestment. Is this malinvestment or 296 00:16:48,040 --> 00:16:51,560 Speaker 5: is this good investment? Almost surely if you draw the 297 00:16:51,600 --> 00:16:55,240 Speaker 5: parallel with say the telecom investment during the dot com boom, 298 00:16:55,560 --> 00:16:58,120 Speaker 5: some of this infrastructure will be used. 299 00:16:58,240 --> 00:17:00,200 Speaker 6: Eventually, the AI will. 300 00:17:00,120 --> 00:17:03,560 Speaker 5: Get good enough for many companies to use it and 301 00:17:03,640 --> 00:17:07,480 Speaker 5: improve productivity. I mean, we all know spectacular examples of 302 00:17:07,640 --> 00:17:11,399 Speaker 5: AI in our work, and Bloomberg sort of summarizes a 303 00:17:11,440 --> 00:17:15,399 Speaker 5: whole lot of stuff using AI. My turget writing becomes 304 00:17:15,480 --> 00:17:19,600 Speaker 5: much more accessible. When I say, you know, make this engaging. 305 00:17:19,920 --> 00:17:23,840 Speaker 5: I tell Chad GPT so there are ways that we 306 00:17:23,880 --> 00:17:27,320 Speaker 5: all think the promise of AI will eventually show up. 307 00:17:28,040 --> 00:17:31,959 Speaker 5: But it's that transition from when the infrastructure is created 308 00:17:32,000 --> 00:17:34,840 Speaker 5: to when people use it and pay for it, which 309 00:17:34,880 --> 00:17:38,520 Speaker 5: is the big issue, right because these are investments which 310 00:17:38,560 --> 00:17:41,680 Speaker 5: are large, which have high depreciation rates at this point, 311 00:17:42,080 --> 00:17:45,440 Speaker 5: and so they need the revenues in order to make 312 00:17:45,520 --> 00:17:50,200 Speaker 5: them justify the investment costs. And there I worry a 313 00:17:50,280 --> 00:17:53,840 Speaker 5: lot more. We've seen all these surveys saying companies, yeah, 314 00:17:53,840 --> 00:17:56,119 Speaker 5: they have that toe in the water, but are they 315 00:17:56,240 --> 00:17:59,640 Speaker 5: rolling out in a big way. Yeah, Goldman Sachs will 316 00:17:59,720 --> 00:18:03,040 Speaker 5: because it has really smart programmers and people capable of 317 00:18:03,080 --> 00:18:06,600 Speaker 5: doing that. The average company on the street is probably 318 00:18:06,760 --> 00:18:10,400 Speaker 5: not that advanced, and maybe it's not as much into 319 00:18:10,440 --> 00:18:13,679 Speaker 5: services etc. That it can employ it in such a 320 00:18:13,680 --> 00:18:17,080 Speaker 5: big way. It will come, But the pace is really important, 321 00:18:17,280 --> 00:18:20,800 Speaker 5: and the Austrians always talked about the fact that the 322 00:18:20,920 --> 00:18:25,160 Speaker 5: pace is critical. If the pace is much longer down 323 00:18:25,200 --> 00:18:28,479 Speaker 5: the line, at some point the markets realize that the 324 00:18:28,480 --> 00:18:31,399 Speaker 5: net present value of these investments are not that high, 325 00:18:31,800 --> 00:18:35,000 Speaker 5: especially if you add in that little piece about interest 326 00:18:35,119 --> 00:18:38,200 Speaker 5: rates being higher than being lower, or star being higher, 327 00:18:38,320 --> 00:18:41,679 Speaker 5: long rates therefore being higher and that would make the 328 00:18:41,720 --> 00:18:45,639 Speaker 5: present value of the revenues lower than we anticipate. So 329 00:18:46,160 --> 00:18:52,440 Speaker 5: I do worry that this investment is something that may prove. 330 00:18:52,560 --> 00:18:55,639 Speaker 6: A little more elusive the returns. What does the central 331 00:18:55,680 --> 00:18:58,360 Speaker 6: Bank do about it? I think cautions. 332 00:18:58,880 --> 00:19:01,400 Speaker 5: I think it tells the supers look for this kind 333 00:19:01,440 --> 00:19:04,480 Speaker 5: of lending, make sure that it is it is reasonable, 334 00:19:05,200 --> 00:19:07,040 Speaker 5: but it has to have an eye on the credit 335 00:19:07,440 --> 00:19:10,600 Speaker 5: expansion that is taking place and say, well, that's part 336 00:19:10,680 --> 00:19:14,520 Speaker 5: of my calculation as to whether we're really in a 337 00:19:14,520 --> 00:19:16,760 Speaker 5: boom time and whether I need to cut rates further. 338 00:19:17,240 --> 00:19:21,159 Speaker 5: So I would factor that into my rate decision, and 339 00:19:21,240 --> 00:19:24,320 Speaker 5: I presume that's part of what they're looking at. 340 00:19:24,520 --> 00:19:27,200 Speaker 2: You know, we started this conversation and talk a little 341 00:19:27,240 --> 00:19:30,480 Speaker 2: bit about geopolitics, the seizure of Russian gold and other 342 00:19:30,560 --> 00:19:33,879 Speaker 2: sort of big, deep issues related to trust. Something I'm 343 00:19:33,960 --> 00:19:36,880 Speaker 2: very interested is not geopolitics but politics. I mean, we're 344 00:19:36,920 --> 00:19:40,679 Speaker 2: in DC right now where the government is currently shut 345 00:19:40,760 --> 00:19:43,879 Speaker 2: down with no imminent prospect as far as anyone knows, 346 00:19:44,040 --> 00:19:48,600 Speaker 2: of reopening. There are similar evident dysfunctions elsewhere in the 347 00:19:48,680 --> 00:19:51,439 Speaker 2: rich world. The complete collapse of the two party system 348 00:19:51,720 --> 00:19:54,520 Speaker 2: in the UK, for example, seems to be getting a 349 00:19:54,560 --> 00:19:57,919 Speaker 2: lot of attention when you think about, you know, the 350 00:19:58,000 --> 00:20:01,160 Speaker 2: sort of ability of central banks to do their job 351 00:20:01,280 --> 00:20:05,639 Speaker 2: to address concerns. How worried are you about the political 352 00:20:05,720 --> 00:20:10,440 Speaker 2: environment that buttresses the independence of the autonomy of these institutions. 353 00:20:10,600 --> 00:20:11,959 Speaker 6: It's a great question, you know. 354 00:20:12,080 --> 00:20:18,080 Speaker 5: The view about what distinguished developed countries from emerging markets 355 00:20:18,080 --> 00:20:23,360 Speaker 5: and developing countries was always is the institutions, and Trio 356 00:20:23,560 --> 00:20:27,240 Speaker 5: won the Nobel Prize for it. Last here, the developed 357 00:20:27,240 --> 00:20:33,439 Speaker 5: countries have strong institutions. The developing and emerging markets don't 358 00:20:33,480 --> 00:20:38,560 Speaker 5: have strong institutions. So was the prescription for development, build 359 00:20:38,600 --> 00:20:39,360 Speaker 5: the institutions. 360 00:20:39,680 --> 00:20:42,320 Speaker 4: It's that simple. Just build good institutions, was the change. 361 00:20:42,359 --> 00:20:43,119 Speaker 6: It didn't work. 362 00:20:44,160 --> 00:20:47,880 Speaker 5: You put in, you know, inflation targeting regimes in other countries, 363 00:20:48,400 --> 00:20:51,920 Speaker 5: maybe politicians got into the act, pushed the center bank. 364 00:20:52,240 --> 00:20:56,360 Speaker 5: Didn't work as well. What worked was getting the politics right, 365 00:20:57,160 --> 00:21:00,399 Speaker 5: consensus amongst the parties in a country that this was 366 00:21:00,440 --> 00:21:03,240 Speaker 5: the way to develop. Let's not go to the extremes 367 00:21:03,320 --> 00:21:06,120 Speaker 5: on spending. Let us, you know, have a much more 368 00:21:06,200 --> 00:21:07,959 Speaker 5: modest spending program. 369 00:21:08,400 --> 00:21:11,600 Speaker 6: Let's bring inflation in check. Let's give the. 370 00:21:11,280 --> 00:21:15,840 Speaker 5: Central bank its independence. Okay, When the politics became more 371 00:21:15,920 --> 00:21:22,120 Speaker 5: conducive to macroeconomic stability the institutions naturally developed. I would 372 00:21:22,240 --> 00:21:26,359 Speaker 5: argue that in Brazil it was a combination of the 373 00:21:26,400 --> 00:21:29,480 Speaker 5: parties deciding that we don't want to go the old way. 374 00:21:30,040 --> 00:21:33,800 Speaker 5: So Cardoso is the guy who brought in inflation targeting, 375 00:21:34,200 --> 00:21:38,440 Speaker 5: but it was Lula who appointed governors who would continue 376 00:21:38,440 --> 00:21:40,600 Speaker 5: that rather than reversing it as soon as he came 377 00:21:40,640 --> 00:21:45,400 Speaker 5: into power. That combination right left combination, which built into 378 00:21:45,400 --> 00:21:50,120 Speaker 5: the consensus, gave Brazil a strong institution, the Central Bank, 379 00:21:50,160 --> 00:21:53,240 Speaker 5: which actually carries it through and has carried it through. 380 00:21:53,440 --> 00:21:55,679 Speaker 5: We're not seeing the kind of inflation in Brazil that 381 00:21:55,680 --> 00:21:58,040 Speaker 5: we're seeing in Argentina. Brazil broke from. 382 00:21:57,880 --> 00:21:59,840 Speaker 6: The back, and I think you can see this again and. 383 00:22:00,080 --> 00:22:02,639 Speaker 5: Gain in many emerging markets. Why am I telling the 384 00:22:02,680 --> 00:22:07,760 Speaker 5: story because our confidence in industrial country institutions should be 385 00:22:07,840 --> 00:22:11,960 Speaker 5: directly proportional to our confidence in the politics being consensual. 386 00:22:12,440 --> 00:22:15,560 Speaker 5: And that consensus, as you say, has broken down in 387 00:22:15,680 --> 00:22:18,439 Speaker 5: part because parties of the extreme left and the extreme 388 00:22:18,520 --> 00:22:22,119 Speaker 5: right are looking more appealing than parties at the center 389 00:22:22,240 --> 00:22:27,160 Speaker 5: because they offer unorthodox solutions. Solutions we've tried before in history, 390 00:22:27,200 --> 00:22:29,840 Speaker 5: often when not work. But it's time to try them 391 00:22:29,840 --> 00:22:34,080 Speaker 5: again because we haven't seen them not work recently. Let's 392 00:22:34,200 --> 00:22:36,840 Speaker 5: try the old experiment again, shut down the economy and 393 00:22:36,880 --> 00:22:40,960 Speaker 5: see what happens. So my sense is that we blame 394 00:22:41,000 --> 00:22:44,560 Speaker 5: it on the institutions not being strong enough. These institutions 395 00:22:44,600 --> 00:22:47,640 Speaker 5: are as strong as we can make them, but it's 396 00:22:47,680 --> 00:22:51,720 Speaker 5: the politics that has to support them. When the center 397 00:22:51,840 --> 00:22:57,240 Speaker 5: bank is assaulted at every corner by the administration, there 398 00:22:57,320 --> 00:23:02,240 Speaker 5: is no set of structures can protect it, and almost 399 00:23:02,280 --> 00:23:06,040 Speaker 5: surely it will bend. It is naturally, you know, you 400 00:23:06,119 --> 00:23:09,440 Speaker 5: protect the tenure of the central bank governor or the. 401 00:23:09,080 --> 00:23:11,200 Speaker 6: Chairman, that's not going to help. 402 00:23:11,720 --> 00:23:16,080 Speaker 5: If you can affect its finances, you can affect who's 403 00:23:16,160 --> 00:23:20,639 Speaker 5: appointed next. There's so many levers the government has, so 404 00:23:20,800 --> 00:23:26,080 Speaker 5: institutions cannot be made fully independent. They will always bend. 405 00:23:26,600 --> 00:23:29,359 Speaker 5: And that's what we're saying. It's the politics that has changed, 406 00:23:29,400 --> 00:23:30,520 Speaker 5: not so much the institution. 407 00:23:31,280 --> 00:23:34,080 Speaker 3: Is there anything a central bank can do to, if 408 00:23:34,119 --> 00:23:38,199 Speaker 3: not be fully independent, at least protect its ability to 409 00:23:38,240 --> 00:23:38,560 Speaker 3: say no. 410 00:23:39,119 --> 00:23:42,119 Speaker 5: Well, I think ultimately it comes down to the integrity 411 00:23:42,160 --> 00:23:45,400 Speaker 5: and the backbone of the people there. They can try 412 00:23:45,440 --> 00:23:48,960 Speaker 5: and be as persuasive as they can, but there's some battles. 413 00:23:49,000 --> 00:23:51,320 Speaker 5: They really have to fight and say, look, you know 414 00:23:51,560 --> 00:23:54,880 Speaker 5: I've tried. You said no, no, no, It's my turn 415 00:23:54,960 --> 00:23:57,760 Speaker 5: to say no. And that can take you a little 416 00:23:57,800 --> 00:24:01,600 Speaker 5: way because you have some institution protection, not a whole lot. 417 00:24:02,080 --> 00:24:05,040 Speaker 5: I think cheer Powell has in this country has done 418 00:24:05,520 --> 00:24:09,120 Speaker 5: as good a job as could be expected from anyone. 419 00:24:09,280 --> 00:24:13,679 Speaker 5: He has had the integrity, had the backbone, has ignored 420 00:24:13,960 --> 00:24:16,399 Speaker 5: all the slights and the arrows that have come his way. 421 00:24:17,440 --> 00:24:19,400 Speaker 6: But there's only so much he can do. 422 00:24:19,760 --> 00:24:21,280 Speaker 4: And actually the term expires. 423 00:24:21,560 --> 00:24:23,760 Speaker 6: One of his term expires. But he also has to 424 00:24:23,840 --> 00:24:25,399 Speaker 6: keep an eye center. 425 00:24:25,560 --> 00:24:29,720 Speaker 5: Banks have to play out the politics also without being 426 00:24:29,720 --> 00:24:35,199 Speaker 5: elected politicians. What would be harmful for the FED is 427 00:24:35,560 --> 00:24:38,960 Speaker 5: if it becomes obvious that the Fed sort of created 428 00:24:38,960 --> 00:24:42,439 Speaker 5: a recession. They're being set up in a sense to 429 00:24:42,520 --> 00:24:46,200 Speaker 5: be the four guys if there is a recession, and 430 00:24:46,440 --> 00:24:50,639 Speaker 5: that is why you ben, because you don't want to 431 00:24:50,720 --> 00:24:53,800 Speaker 5: be the guys who held rates so high that there. 432 00:24:54,080 --> 00:24:57,359 Speaker 5: But that comes at the cost of potentially sort of 433 00:24:57,800 --> 00:25:01,400 Speaker 5: weighing the risks on both sides and maybe cutting when 434 00:25:01,440 --> 00:25:05,320 Speaker 5: inflation is still a much bigger issue in other times, 435 00:25:05,920 --> 00:25:07,760 Speaker 5: you might be more resistant to these cuts. 436 00:25:08,400 --> 00:25:09,440 Speaker 4: I was gonna ask. 437 00:25:09,880 --> 00:25:12,640 Speaker 2: Is the fact that, again the FED would never say 438 00:25:12,680 --> 00:25:15,240 Speaker 2: that we're comfortable at two point five. They're never gonna 439 00:25:15,440 --> 00:25:18,000 Speaker 2: officially say that. But the facto, you look at that 440 00:25:18,040 --> 00:25:19,840 Speaker 2: line and it came down quite a bit from its 441 00:25:19,880 --> 00:25:22,520 Speaker 2: peak in twenty twenty two or whenever that was. So 442 00:25:22,720 --> 00:25:24,840 Speaker 2: they made a lot of progress, but it sort of 443 00:25:24,880 --> 00:25:28,199 Speaker 2: stalled out. That gap between where they are now and 444 00:25:28,240 --> 00:25:31,800 Speaker 2: what the official goal is to some extent is that 445 00:25:31,920 --> 00:25:36,240 Speaker 2: itself an indication of the political change that extra mile 446 00:25:36,440 --> 00:25:38,880 Speaker 2: or whatever it is, is not worth it in this environment. 447 00:25:39,080 --> 00:25:41,560 Speaker 5: First, I agree with you, they will never say that 448 00:25:41,600 --> 00:25:43,560 Speaker 5: extra mile is not whether and I don't think it's 449 00:25:43,560 --> 00:25:45,720 Speaker 5: in front and center of their mind. They think that. 450 00:25:46,840 --> 00:25:50,080 Speaker 5: I do think they believe that the risks are more 451 00:25:50,160 --> 00:25:53,879 Speaker 5: towards economic weakness. Now, of course, we don't know whether 452 00:25:54,000 --> 00:25:57,879 Speaker 5: the weak jobs numbers are because of demand or supply, 453 00:25:58,440 --> 00:26:02,399 Speaker 5: and that's still an open question. When we get the 454 00:26:02,480 --> 00:26:05,040 Speaker 5: jobs data, etc. We're going to look at it more closely. 455 00:26:05,440 --> 00:26:08,240 Speaker 5: Companies are not firing, they're also not hiring, and maybe 456 00:26:08,240 --> 00:26:12,000 Speaker 5: they don't at this point productively gains, etc. So it's 457 00:26:12,040 --> 00:26:13,840 Speaker 5: still an open question whether. 458 00:26:13,760 --> 00:26:15,200 Speaker 6: There's economic weakness. 459 00:26:15,680 --> 00:26:18,840 Speaker 5: I think the FED is putting some weight on that. Now, 460 00:26:19,119 --> 00:26:21,480 Speaker 5: what I'm arguing is maybe they're putting more weight on 461 00:26:21,520 --> 00:26:24,080 Speaker 5: that because back of their mind, it's also this view 462 00:26:24,160 --> 00:26:26,840 Speaker 5: that they don't want the FED to be blamed for 463 00:26:26,880 --> 00:26:30,359 Speaker 5: a recession. This is the wrong time to have a 464 00:26:30,400 --> 00:26:35,360 Speaker 5: FED created recession. From the larger institutional perspective. Again, there's 465 00:26:35,400 --> 00:26:37,719 Speaker 5: not front of mind. This is back of mind, and 466 00:26:37,760 --> 00:26:41,679 Speaker 5: you would keep that in mind. So yeah, it's not 467 00:26:41,920 --> 00:26:44,280 Speaker 5: that they say three percent is okay. They would love 468 00:26:44,359 --> 00:26:48,119 Speaker 5: to go towards two. It's just which risk is bigger 469 00:26:48,200 --> 00:26:48,639 Speaker 5: right now. 470 00:27:04,600 --> 00:27:07,240 Speaker 3: When you were at the RBI and you had to 471 00:27:07,280 --> 00:27:10,240 Speaker 3: make the decision basically are you going to try to 472 00:27:10,280 --> 00:27:14,160 Speaker 3: get control of inflation or are you going to focus 473 00:27:14,200 --> 00:27:17,119 Speaker 3: on short term growth? At that time, what were the 474 00:27:17,160 --> 00:27:19,840 Speaker 3: sort of political considerations going through your mind. 475 00:27:20,480 --> 00:27:24,440 Speaker 5: Well, they made very clear to you what the political 476 00:27:24,480 --> 00:27:29,000 Speaker 5: considerations are. The politicians always want lower interest rates. They 477 00:27:29,040 --> 00:27:32,440 Speaker 5: hear it from the industrialists, they hear it from every constituency. 478 00:27:33,040 --> 00:27:35,439 Speaker 5: And while I was at the RBI, we didn't have 479 00:27:35,480 --> 00:27:38,879 Speaker 5: an inflation committee, which is what I pushed, and we 480 00:27:38,960 --> 00:27:40,200 Speaker 5: got that over my term. 481 00:27:40,640 --> 00:27:42,200 Speaker 6: But I was always making the decision. 482 00:27:42,720 --> 00:27:45,000 Speaker 5: The problem when you're making the decision is that there's 483 00:27:45,000 --> 00:27:48,080 Speaker 5: a single point of contact for people to pressure. And 484 00:27:48,119 --> 00:27:50,520 Speaker 5: so I heard it from a lot of politicians, this 485 00:27:50,600 --> 00:27:54,160 Speaker 5: is what we like. What you have to tell them is, look, yeah, 486 00:27:54,160 --> 00:27:56,760 Speaker 5: that's what you like, but you also like low inflation. 487 00:27:57,200 --> 00:27:59,520 Speaker 5: And in order to get low inflation, I have to 488 00:27:59,560 --> 00:28:04,399 Speaker 5: be more restrictive, and as soon as I can, I 489 00:28:04,480 --> 00:28:07,920 Speaker 5: will reduce rates. But believe me, at this point it's 490 00:28:07,960 --> 00:28:10,640 Speaker 5: not in your interest for me to do it. And 491 00:28:10,680 --> 00:28:13,520 Speaker 5: they respect that when you explain it to them very 492 00:28:13,520 --> 00:28:18,240 Speaker 5: carefully and you say, look, they would push you, but 493 00:28:18,760 --> 00:28:22,199 Speaker 5: if you succumb, you bear the entire blame because they 494 00:28:22,240 --> 00:28:26,120 Speaker 5: will say, you know, he could have said no, and 495 00:28:26,400 --> 00:28:28,520 Speaker 5: of course what would happen if he said no. 496 00:28:29,119 --> 00:28:29,639 Speaker 6: We don't know. 497 00:28:29,760 --> 00:28:33,880 Speaker 5: But you are meant to be their protection and it's 498 00:28:33,880 --> 00:28:36,800 Speaker 5: important you recognize that and have the backbone to stand 499 00:28:36,880 --> 00:28:39,840 Speaker 5: up now. Fortunately, and you have this very long title 500 00:28:39,880 --> 00:28:44,360 Speaker 5: for me. Initially I had a tenured position in academia, 501 00:28:44,920 --> 00:28:46,480 Speaker 5: so I could say no and you know. 502 00:28:46,640 --> 00:28:47,360 Speaker 6: Lose my job. 503 00:28:47,480 --> 00:28:51,080 Speaker 5: I go back to a position in academia. Many civil 504 00:28:51,120 --> 00:28:54,120 Speaker 5: servants don't have that luxury, but that gives you back 505 00:28:54,160 --> 00:28:56,920 Speaker 5: moon the fact that you can say No, is very 506 00:28:57,040 --> 00:28:59,920 Speaker 5: very important, and you know Powell has that he doesn't 507 00:29:00,040 --> 00:29:03,080 Speaker 5: need the job, he doesn't need the money. He obviously 508 00:29:03,160 --> 00:29:06,560 Speaker 5: cares about doing a good job for the country, and 509 00:29:06,600 --> 00:29:10,240 Speaker 5: he cares about his legacy. So I think it's good 510 00:29:10,280 --> 00:29:13,320 Speaker 5: to be that way. Less good if you're a careerist 511 00:29:13,880 --> 00:29:16,560 Speaker 5: and appointed precisely because you've said yes. 512 00:29:17,040 --> 00:29:20,200 Speaker 2: I have an Indian economy related question that's a little 513 00:29:20,240 --> 00:29:23,760 Speaker 2: bit sideways from central banking and macro. There is a 514 00:29:23,760 --> 00:29:27,840 Speaker 2: lot of fantasizing or dreaming or hoping that India could 515 00:29:27,840 --> 00:29:32,360 Speaker 2: be a manufacturing center. That's sort of another gravitational poll 516 00:29:32,400 --> 00:29:35,680 Speaker 2: that's separate from China. I'm sure Apple they're doing a lot, 517 00:29:35,720 --> 00:29:38,520 Speaker 2: but they would love to have more of their sort 518 00:29:38,520 --> 00:29:42,560 Speaker 2: of advanced production in India. There's moving some final assembly. 519 00:29:42,840 --> 00:29:45,840 Speaker 2: What are the main constraints? How realistic in your view 520 00:29:46,400 --> 00:29:49,320 Speaker 2: is that prospect that there could be a meaningful shift 521 00:29:49,400 --> 00:29:52,400 Speaker 2: of supply chains to India outside of China. 522 00:29:52,480 --> 00:29:57,280 Speaker 5: India has made changes over the last decade or so 523 00:29:57,920 --> 00:30:02,080 Speaker 5: in terms of infrastructurectually started before the Global Financial crisis. 524 00:30:02,120 --> 00:30:05,880 Speaker 5: The Global financial crisis interrupted that process, but if you 525 00:30:05,960 --> 00:30:08,960 Speaker 5: look at Indian infrastructure today, it's come a long way 526 00:30:09,040 --> 00:30:10,160 Speaker 5: from the Indian. 527 00:30:09,840 --> 00:30:11,040 Speaker 6: Infrastructure of old. 528 00:30:11,240 --> 00:30:13,240 Speaker 5: Look at the Indian airports. I mean they're as good 529 00:30:13,280 --> 00:30:15,880 Speaker 5: as the best in the world, certainly in the major cities, 530 00:30:15,920 --> 00:30:21,160 Speaker 5: but across railways improving their ability to freight. There are 531 00:30:21,160 --> 00:30:24,600 Speaker 5: some private sector ports which have the efficiency that posts 532 00:30:24,640 --> 00:30:30,000 Speaker 5: elsewhere in the world have. So infrastructure great job makes 533 00:30:30,000 --> 00:30:33,760 Speaker 5: it much easier. Still some issues to be ironed out. 534 00:30:33,840 --> 00:30:36,880 Speaker 5: Power is an issue that needs to be more fixing. 535 00:30:37,200 --> 00:30:40,760 Speaker 5: But green power is a big, big growth area and 536 00:30:41,120 --> 00:30:44,000 Speaker 5: that contributes a lot to the par grad Lots of 537 00:30:44,040 --> 00:30:47,960 Speaker 5: positives some states. India is not a uniform country. The 538 00:30:48,000 --> 00:30:51,240 Speaker 5: South and the West are more developed, more advanced in 539 00:30:51,320 --> 00:30:54,600 Speaker 5: terms of labor capabilities, a lot of manufacturing coming there. 540 00:30:54,640 --> 00:30:57,360 Speaker 5: I sort of advise the state of tham Nada. There's 541 00:30:57,400 --> 00:31:02,040 Speaker 5: a lot of Asian manufacturing which is coming. Crocs opening 542 00:31:02,120 --> 00:31:05,240 Speaker 5: up plant there. We have Fox Gone etc. A lot 543 00:31:05,240 --> 00:31:09,920 Speaker 5: of them looking at Indian women, discipline, workforce, educated and 544 00:31:10,280 --> 00:31:13,240 Speaker 5: they want them to work in their factories. So that's 545 00:31:13,280 --> 00:31:18,040 Speaker 5: the good news. India still has, you know, issues with bureaucracy. 546 00:31:18,600 --> 00:31:21,400 Speaker 5: It has issues with taxation. We need to make the 547 00:31:21,440 --> 00:31:27,000 Speaker 5: taxation much more predictable. It has still issues with Yes, 548 00:31:27,400 --> 00:31:30,720 Speaker 5: there are a strong group of Indian engineers that you 549 00:31:30,800 --> 00:31:34,160 Speaker 5: can do to improve engineering. This is why the whole 550 00:31:34,240 --> 00:31:37,200 Speaker 5: number of companies are starting what they call global Capability 551 00:31:37,320 --> 00:31:38,840 Speaker 5: centers in India to do. 552 00:31:38,840 --> 00:31:39,400 Speaker 6: Their R and D. 553 00:31:40,160 --> 00:31:44,240 Speaker 5: But getting high school educated, good quality workers, you've got 554 00:31:44,240 --> 00:31:46,040 Speaker 5: to go to the South and the West because they're 555 00:31:46,040 --> 00:31:48,400 Speaker 5: not so available in other parts. 556 00:31:48,240 --> 00:31:50,360 Speaker 6: Of the countries. So India has to work harder there. 557 00:31:51,160 --> 00:31:52,120 Speaker 6: If we didn't have. 558 00:31:52,040 --> 00:31:54,640 Speaker 5: The kind of tariffs that the US put on India, 559 00:31:54,760 --> 00:31:56,840 Speaker 5: it would look a lot more attractive. I think they're 560 00:31:56,880 --> 00:32:00,240 Speaker 5: working on it. You know, there's some good news emerging 561 00:32:00,280 --> 00:32:03,520 Speaker 5: on Indian purchases of Russian oil and so on, so 562 00:32:03,600 --> 00:32:06,560 Speaker 5: I think there will be a deal done. India could 563 00:32:06,640 --> 00:32:11,280 Speaker 5: well be one of the alternatives to China. But is 564 00:32:11,320 --> 00:32:13,800 Speaker 5: there a place for a one point four billion country 565 00:32:14,320 --> 00:32:17,160 Speaker 5: even as China stays in manufacturing with a one point 566 00:32:17,160 --> 00:32:20,960 Speaker 5: four billion population. Probably not, And that's where India is 567 00:32:21,000 --> 00:32:24,080 Speaker 5: going to be much more focused on services. We have 568 00:32:24,120 --> 00:32:27,840 Speaker 5: to see what AI does there. But Indian services is 569 00:32:27,960 --> 00:32:31,280 Speaker 5: the positive growth story for India. India now accounts for 570 00:32:31,320 --> 00:32:33,520 Speaker 5: about four and a half percent of service exports in 571 00:32:33,560 --> 00:32:37,120 Speaker 5: the world, and that's growing really fast. Indian service exports 572 00:32:37,120 --> 00:32:40,719 Speaker 5: are on power with Indian manufacturing exports. So it's something 573 00:32:40,800 --> 00:32:43,840 Speaker 5: that I think you will look to more. You know, 574 00:32:44,200 --> 00:32:47,520 Speaker 5: where's the labor arbestrage today? It's not in your low 575 00:32:47,560 --> 00:32:51,040 Speaker 5: skilled worker, it's in your high skilled worker. And Indian 576 00:32:51,160 --> 00:32:53,840 Speaker 5: MBA costs you fifty thousand dollars from the best schools 577 00:32:53,840 --> 00:32:58,840 Speaker 5: in India, a US NBA who whom I teach, costs 578 00:32:58,840 --> 00:33:01,280 Speaker 5: you about five times that amount. That's where the labor 579 00:33:01,400 --> 00:33:05,120 Speaker 5: arbitrage is because today you can employ that worker there 580 00:33:05,640 --> 00:33:07,920 Speaker 5: and give a presentation to your client here. 581 00:33:08,280 --> 00:33:09,520 Speaker 6: That's what the pandemic did. 582 00:33:09,880 --> 00:33:11,600 Speaker 5: That's why services are exploding. 583 00:33:12,000 --> 00:33:16,560 Speaker 3: Since you mentioned tariffs and we were talking about manufacturing, 584 00:33:16,800 --> 00:33:21,080 Speaker 3: what responsibility, if any, and what ability does the central 585 00:33:21,080 --> 00:33:24,400 Speaker 3: bank in India have to offset the impact of the tariffs. 586 00:33:24,600 --> 00:33:27,720 Speaker 5: This is true of central banks everywhere right. The tariff, 587 00:33:28,120 --> 00:33:31,840 Speaker 5: since it's largely set by the US and others haven't 588 00:33:31,960 --> 00:33:36,480 Speaker 5: joined in yet, is a demand shock for the rest 589 00:33:36,480 --> 00:33:38,680 Speaker 5: of the world. They're not seeing as much in terms 590 00:33:38,720 --> 00:33:41,160 Speaker 5: of demand in the US, and is a supply shock 591 00:33:41,200 --> 00:33:44,479 Speaker 5: for the US. So that's another reason why inflation may 592 00:33:44,480 --> 00:33:46,800 Speaker 5: be higher in the US where our star is sort 593 00:33:46,800 --> 00:33:50,160 Speaker 5: of higher and for the rest of the world, it's 594 00:33:50,360 --> 00:33:54,360 Speaker 5: an opportunity to lower lower rates. And I mean, if 595 00:33:54,360 --> 00:33:58,360 Speaker 5: you look at Indian inflation, it's been lower than anticipated. Again, 596 00:33:58,520 --> 00:34:01,880 Speaker 5: I usually don't comment to Indian monasty policy. People think 597 00:34:01,920 --> 00:34:02,840 Speaker 5: I know more than I. 598 00:34:02,760 --> 00:34:03,640 Speaker 6: Do, and I don't. 599 00:34:04,080 --> 00:34:07,720 Speaker 5: But across the world, I think there's more scope for 600 00:34:07,760 --> 00:34:10,760 Speaker 5: the central banks to come in. I would still say 601 00:34:10,800 --> 00:34:14,360 Speaker 5: that you do need to look at you know, Froth, 602 00:34:15,000 --> 00:34:17,279 Speaker 5: more so in the US where the frauth seems to 603 00:34:17,320 --> 00:34:21,440 Speaker 5: be more pronounced, but certainly I mean, Japan is a 604 00:34:21,480 --> 00:34:24,440 Speaker 5: place where inflation is picking up and people are getting 605 00:34:24,440 --> 00:34:27,400 Speaker 5: more antsy about inflation, and central bank has sort of 606 00:34:27,440 --> 00:34:30,000 Speaker 5: stayed a little behind the curve to make sure that 607 00:34:30,080 --> 00:34:32,920 Speaker 5: it is sustained inflation. At some point it will have 608 00:34:32,960 --> 00:34:36,160 Speaker 5: to react. So but barring that, most of the countries 609 00:34:36,200 --> 00:34:38,640 Speaker 5: have room to actually cut rates. 610 00:34:38,560 --> 00:34:41,040 Speaker 2: Let's actually let's go back to Froth with our a 611 00:34:41,200 --> 00:34:44,200 Speaker 2: few minutes left. You mentioned the sort of risks that 612 00:34:44,280 --> 00:34:47,200 Speaker 2: emerge when the central bank isn't cutting them out at 613 00:34:47,239 --> 00:34:49,879 Speaker 2: a time when financial conditions are already loose, et cetera. 614 00:34:50,239 --> 00:34:51,879 Speaker 4: Push that forward a little bit. 615 00:34:51,960 --> 00:34:55,040 Speaker 2: If there is some event something bad happens, it's not 616 00:34:55,120 --> 00:34:57,840 Speaker 2: going to look like two thousand and eight. Most likely, 617 00:34:58,000 --> 00:35:01,080 Speaker 2: the balance sheets of households are allow stronger. Banks seem 618 00:35:01,160 --> 00:35:02,560 Speaker 2: to be much stronger. 619 00:35:02,160 --> 00:35:02,600 Speaker 6: Than they were. 620 00:35:02,960 --> 00:35:08,640 Speaker 2: Where would you look for something actually bad emerging out 621 00:35:08,680 --> 00:35:10,440 Speaker 2: of this sort of cocktail that you described. 622 00:35:10,640 --> 00:35:15,239 Speaker 5: That's a great question because leverage, So the dot com 623 00:35:15,239 --> 00:35:18,359 Speaker 5: bust wasn't as big a deal. Yeah, and that's what 624 00:35:18,440 --> 00:35:22,040 Speaker 5: gave the FED confidence. You remember the Alan Greenspan speech 625 00:35:22,040 --> 00:35:25,600 Speaker 5: in two thousand and four. Effectively, we can't predict bubbles, 626 00:35:25,640 --> 00:35:28,600 Speaker 5: what's the bubble and what's not when it's building, but 627 00:35:28,719 --> 00:35:32,160 Speaker 5: we can pick up the pieces when it bursts, and 628 00:35:32,400 --> 00:35:33,920 Speaker 5: so therefore we're not going to try and. 629 00:35:34,280 --> 00:35:35,360 Speaker 6: You know, ward off bubbles. 630 00:35:35,360 --> 00:35:38,960 Speaker 5: This is despite his Irrational Exuberance speech, which was precient, 631 00:35:39,320 --> 00:35:41,520 Speaker 5: but it didn't act on it. Right, he made that 632 00:35:41,600 --> 00:35:45,200 Speaker 5: speech in ninety six. Now, the point I'm trying to 633 00:35:45,239 --> 00:35:50,440 Speaker 5: make is it's leverage which kills because leverage then transmits 634 00:35:50,480 --> 00:35:54,880 Speaker 5: through the system. The one hundred billion in subprime mortgage 635 00:35:54,920 --> 00:35:56,560 Speaker 5: backed securities that were to. 636 00:35:56,520 --> 00:35:58,600 Speaker 6: That was what that's the problem. 637 00:35:59,040 --> 00:36:03,799 Speaker 5: We don't so I can tell you the candidates. There's 638 00:36:03,840 --> 00:36:07,400 Speaker 5: been a huge increase in private credit. There is a 639 00:36:07,480 --> 00:36:10,960 Speaker 5: huge increase in low quality bonds without the bond covenants, 640 00:36:11,000 --> 00:36:13,960 Speaker 5: and the kind of credit events and the what's the 641 00:36:14,239 --> 00:36:16,400 Speaker 5: violence on creditors that's happening. 642 00:36:16,600 --> 00:36:17,359 Speaker 6: How much of that? 643 00:36:18,040 --> 00:36:21,240 Speaker 5: But it also depends on who holds them. Are these 644 00:36:21,560 --> 00:36:25,520 Speaker 5: entities that have runnable claims? Are these entities that a 645 00:36:25,520 --> 00:36:28,200 Speaker 5: lot of other borrows depend on, so that when they 646 00:36:28,200 --> 00:36:32,440 Speaker 5: shut down, somebody gets cut out of the market, and 647 00:36:32,480 --> 00:36:35,440 Speaker 5: then there's this sequence of defaults. Is there a contagion 648 00:36:35,520 --> 00:36:39,080 Speaker 5: built in somewhere? So if you look at the two 649 00:36:39,080 --> 00:36:42,040 Speaker 5: thousand and eight seven eight crisis, when did the problems 650 00:36:42,080 --> 00:36:42,839 Speaker 5: really build up? 651 00:36:43,280 --> 00:36:44,240 Speaker 6: In five six seven? 652 00:36:44,960 --> 00:36:47,719 Speaker 5: And John Taylor sort of has this graph showing that 653 00:36:47,800 --> 00:36:50,279 Speaker 5: the FED policy was too easy, should have raised rates 654 00:36:50,360 --> 00:36:53,040 Speaker 5: much more at that point according. 655 00:36:52,600 --> 00:36:53,479 Speaker 6: To the tailor rule. 656 00:36:54,120 --> 00:36:56,920 Speaker 5: One can debate that, and Bernanke has debated that. But 657 00:36:57,040 --> 00:37:01,000 Speaker 5: the point is the problems emerge in the time of 658 00:37:01,080 --> 00:37:05,120 Speaker 5: too easy money before it collapses. So we are in 659 00:37:05,200 --> 00:37:08,760 Speaker 5: that period when things look really good, the future looks 660 00:37:08,800 --> 00:37:12,359 Speaker 5: infinitely rosy, and this is where you know you can 661 00:37:12,400 --> 00:37:16,880 Speaker 5: see that that credit standards may may weaken. Banks have 662 00:37:16,920 --> 00:37:19,080 Speaker 5: a lot of money that they want to lend. They 663 00:37:19,080 --> 00:37:22,440 Speaker 5: are lending to the guys who pass the private credit 664 00:37:22,560 --> 00:37:25,719 Speaker 5: on and so there's a lot of exposure there. You know, 665 00:37:25,760 --> 00:37:28,840 Speaker 5: the IMF came out with some statements yesterday that a 666 00:37:28,880 --> 00:37:31,759 Speaker 5: whole bunch of banks that Tier one capital would be 667 00:37:31,760 --> 00:37:34,280 Speaker 5: wiped out if there was serious defaults in the private 668 00:37:34,320 --> 00:37:40,520 Speaker 5: credit industry. So lots of connections, building frauth, a huge 669 00:37:40,600 --> 00:37:45,759 Speaker 5: technology which promises in finite bounty. These are all worrisome signs. 670 00:37:46,000 --> 00:37:49,000 Speaker 5: Does it have to lead to a bus No. But 671 00:37:49,120 --> 00:37:51,879 Speaker 5: there's a famous paper in two thousand and two by 672 00:37:51,920 --> 00:37:54,600 Speaker 5: Claudia Boio and Philip Low, who became Governor of the 673 00:37:55,120 --> 00:37:59,560 Speaker 5: Reserve Bank of Australia, which basically says the combination to 674 00:37:59,600 --> 00:38:03,440 Speaker 5: warry is an increasing asset prices and an increase in 675 00:38:03,520 --> 00:38:07,359 Speaker 5: credit when you see both run for the hills. So 676 00:38:08,280 --> 00:38:09,800 Speaker 5: we're seeing that emerging. 677 00:38:10,560 --> 00:38:14,040 Speaker 3: Shall I try one more time to get that headline 678 00:38:14,200 --> 00:38:17,759 Speaker 3: very very quickly? Is private credit your candidate for an 679 00:38:17,840 --> 00:38:19,359 Speaker 3: upcoming financial blow up? 680 00:38:19,480 --> 00:38:19,520 Speaker 4: No? 681 00:38:19,680 --> 00:38:19,919 Speaker 6: Would? 682 00:38:19,920 --> 00:38:23,400 Speaker 5: I would say it's a combination of the untested private 683 00:38:23,400 --> 00:38:27,880 Speaker 5: credit and the fact that we have huge hopes built 684 00:38:27,920 --> 00:38:32,719 Speaker 5: into the future and are investing accordingly. It's that combination 685 00:38:33,360 --> 00:38:38,800 Speaker 5: credit plus asset prices. We seem to project a glorious future, 686 00:38:39,360 --> 00:38:40,480 Speaker 5: which I worry about. 687 00:38:41,080 --> 00:38:41,360 Speaker 6: Again. 688 00:38:41,480 --> 00:38:43,719 Speaker 5: It's not a certainty about a blow up, but it's 689 00:38:43,760 --> 00:38:44,520 Speaker 5: a cost for worry. 690 00:38:44,920 --> 00:38:46,600 Speaker 4: And you also said run for the hills. I'm going 691 00:38:46,680 --> 00:38:47,000 Speaker 4: to make that. 692 00:38:47,200 --> 00:38:49,360 Speaker 2: I'm going to make the twit rug around Roger, and 693 00:38:49,400 --> 00:38:53,000 Speaker 2: thank you so much for doing this. Really appreciate getting 694 00:38:53,040 --> 00:38:54,160 Speaker 2: the chance to chat it. 695 00:39:08,719 --> 00:39:11,720 Speaker 3: All right. That was our episode with ragu Rejon, recorded 696 00:39:11,880 --> 00:39:14,560 Speaker 3: live in front of an audience at the annual IIF 697 00:39:14,640 --> 00:39:18,000 Speaker 3: meetings in Washington, DC. This has been another episode of 698 00:39:18,040 --> 00:39:20,960 Speaker 3: the Authoughs podcast. I'm Tracy Alloway. You can follow me 699 00:39:21,040 --> 00:39:22,560 Speaker 3: at Tracy Alloway. 700 00:39:22,440 --> 00:39:25,200 Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart. 701 00:39:25,440 --> 00:39:29,160 Speaker 2: Follow our producers Carmen Rodriguez at Carman armand Dashel Bennett 702 00:39:29,160 --> 00:39:32,640 Speaker 2: at Dashbot and Kelbrooks at Keilbrooks. From our odd Lots content, 703 00:39:32,680 --> 00:39:34,840 Speaker 2: go to Bloomberg dot com slash odd Lots with the 704 00:39:34,920 --> 00:39:37,520 Speaker 2: daily newsletter and all of our episodes, and you can 705 00:39:37,600 --> 00:39:39,600 Speaker 2: chat about all of these topics twenty four to seven 706 00:39:39,680 --> 00:39:43,960 Speaker 2: in our discord Discord dot gg slash od lots and if. 707 00:39:43,840 --> 00:39:46,040 Speaker 3: You enjoy ad thoughts, if you like it when we 708 00:39:46,080 --> 00:39:49,040 Speaker 3: record these live episodes. Then please leave us a positive 709 00:39:49,080 --> 00:39:52,239 Speaker 3: review on your favorite podcast platform. And remember, if you 710 00:39:52,320 --> 00:39:54,920 Speaker 3: are a Bloomberg subscriber, you can listen to all of 711 00:39:54,960 --> 00:39:57,839 Speaker 3: our episodes absolutely ad free. All you need to do 712 00:39:57,920 --> 00:40:00,440 Speaker 3: is find the Bloomberg channel on Apple podcas casts and 713 00:40:00,520 --> 00:40:02,960 Speaker 3: follow the instructions there. Thanks for listening.