1
00:00:02,720 --> 00:00:08,000
Speaker 1: Bloomberg Audio Studios, podcasts, radio news all.

2
00:00:08,000 --> 00:00:10,119
Speaker 2: Are you here for more, Nourreel Rubini, chairman and CEO

3
00:00:10,119 --> 00:00:13,680
Speaker 2: of Verbini Macro Associates, who's also not psyching himself out, Noreel,

4
00:00:13,720 --> 00:00:16,520
Speaker 2: are you on the positive camp here? And if so, how.

5
00:00:17,960 --> 00:00:20,280
Speaker 3: Well I mean in the positive camp in the following sense.

6
00:00:20,320 --> 00:00:24,439
Speaker 3: I've been arguing for weeks now that tech trum start

7
00:00:25,200 --> 00:00:29,479
Speaker 3: because there's a revolution coming from AI and other does

8
00:00:29,520 --> 00:00:33,480
Speaker 3: and industry of the future. It's an AI, robotic automation,

9
00:00:33,640 --> 00:00:39,440
Speaker 3: a siliconductor, fintech, defence tech, green tech, act tech, you

10
00:00:39,560 --> 00:00:43,120
Speaker 3: name its space exploration quantum. This thing is going to

11
00:00:43,159 --> 00:00:47,599
Speaker 3: increase US potential growth from the current two percent to

12
00:00:47,640 --> 00:00:50,000
Speaker 3: a level I expect by the end of this decade

13
00:00:50,040 --> 00:00:53,519
Speaker 3: closer to four percent. So two hundred business points increasing

14
00:00:53,920 --> 00:00:58,240
Speaker 3: productivity growth instead, even in the worst scenario on trade,

15
00:00:58,280 --> 00:01:02,400
Speaker 3: domestiction to migration, and we're going to escalate the potential

16
00:01:02,440 --> 00:01:05,960
Speaker 3: heat to potential growth could be maybe fifty business points.

17
00:01:06,280 --> 00:01:08,080
Speaker 4: So the ratio between two hundred.

18
00:01:07,800 --> 00:01:12,160
Speaker 3: Business points up because of technology and negative fifty basis

19
00:01:12,200 --> 00:01:17,560
Speaker 3: points is four to one. So tech Trump studies and

20
00:01:17,640 --> 00:01:21,880
Speaker 3: therefore the US American exceptionalist is going to remain in

21
00:01:21,959 --> 00:01:26,280
Speaker 3: spite of bad trade policies, in spite of bad migration policies.

22
00:01:26,560 --> 00:01:29,240
Speaker 3: So in that sense autistic that not just in the

23
00:01:29,280 --> 00:01:32,040
Speaker 3: short run, those of the medium term. We're going to

24
00:01:32,080 --> 00:01:35,360
Speaker 3: avoid the severe reception and you have to remain strong.

25
00:01:36,040 --> 00:01:38,920
Speaker 2: And you know, so tech trumps tariffs and at the

26
00:01:38,959 --> 00:01:41,039
Speaker 2: same time, like for health Ham, it was the regulation

27
00:01:41,120 --> 00:01:44,480
Speaker 2: trumping tariffs as well. At this point, what about the

28
00:01:44,520 --> 00:01:46,679
Speaker 2: issues with the dollar in the back end of the curve,

29
00:01:46,800 --> 00:01:49,680
Speaker 2: so higher yields and weaker dollar, and if we move

30
00:01:49,720 --> 00:01:52,280
Speaker 2: out of dollars a reserve currency, even on a margin,

31
00:01:52,560 --> 00:01:53,400
Speaker 2: how do you factor that in?

32
00:01:54,880 --> 00:01:57,920
Speaker 3: Well, regardless the dollar, there are different types of investors.

33
00:01:57,960 --> 00:02:02,360
Speaker 3: There are those that are fixing investors, foreign reserve asset

34
00:02:02,400 --> 00:02:05,920
Speaker 3: managers of the wealth funds where in fixed income some

35
00:02:05,960 --> 00:02:08,160
Speaker 3: of them are worried about the dollar because of course

36
00:02:08,160 --> 00:02:12,040
Speaker 3: we have undermined the credibility of the US dollar. If

37
00:02:12,040 --> 00:02:13,760
Speaker 3: I'm right that we're going to go from a two

38
00:02:13,880 --> 00:02:16,880
Speaker 3: to four percent growth in the US, there will be

39
00:02:16,960 --> 00:02:21,079
Speaker 3: a massive capex an investment boom that's already occurring right now.

40
00:02:21,520 --> 00:02:25,320
Speaker 3: It's a mac seven hyperscalers firms in a NASDAC but

41
00:02:25,400 --> 00:02:29,040
Speaker 3: even nontech firms have to have an AI strategy and

42
00:02:29,120 --> 00:02:32,520
Speaker 3: how they're going to do less investment because of because

43
00:02:32,560 --> 00:02:35,639
Speaker 3: of trade restriction, No way. So we have massive tail

44
00:02:35,680 --> 00:02:40,560
Speaker 3: winds imply larger investments shore GDP and capital inflows that

45
00:02:40,600 --> 00:02:44,160
Speaker 3: are going to be FDI, green Field and brown Field,

46
00:02:44,360 --> 00:02:48,160
Speaker 3: and portfolio investment into the equity market. So the dollar

47
00:02:48,280 --> 00:02:52,359
Speaker 3: can weakend because fixed income folks are nervous about US

48
00:02:52,560 --> 00:02:55,640
Speaker 3: meddling with the reserve currency role of the dollar. But

49
00:02:55,720 --> 00:02:59,240
Speaker 3: that massive inflow of capital to finance this investment boom

50
00:02:59,400 --> 00:03:02,400
Speaker 3: is going to imply get Any weakening of the dollar

51
00:03:02,480 --> 00:03:04,359
Speaker 3: is going to be very gradual. I don't think there'll

52
00:03:04,400 --> 00:03:07,000
Speaker 3: be a collapse in the value of the dollar, and

53
00:03:07,040 --> 00:03:09,160
Speaker 3: I don't think that the US dollar is going to

54
00:03:09,200 --> 00:03:14,040
Speaker 3: be undermined to any significant extent as a global reserve currency. Yes,

55
00:03:14,320 --> 00:03:17,120
Speaker 3: the Chinese and our enemies are going to try to

56
00:03:17,160 --> 00:03:19,959
Speaker 3: create alternative payment rails that are not based on the

57
00:03:20,040 --> 00:03:23,320
Speaker 3: US dollar substitute for sweets and so on, but that'll

58
00:03:23,360 --> 00:03:25,000
Speaker 3: be a very very gradual process.

59
00:03:26,600 --> 00:03:28,600
Speaker 1: I am curious though, as we go through this process,

60
00:03:28,800 --> 00:03:31,079
Speaker 1: Doctor Rubini, there's been a lot of talk because not

61
00:03:31,160 --> 00:03:32,919
Speaker 1: just with the dollar, but when you talk about the

62
00:03:32,960 --> 00:03:36,720
Speaker 1: technological advancements or the potential there. These two aren't necessarily

63
00:03:36,720 --> 00:03:39,800
Speaker 1: divorced from one another. And someone was bringing up kind

64
00:03:39,800 --> 00:03:41,240
Speaker 1: of you go back, you look at the other big

65
00:03:41,280 --> 00:03:45,520
Speaker 1: sort of the Industrial Revolution, obviously the digital revolution a

66
00:03:45,520 --> 00:03:48,920
Speaker 1: few decades ago, and this idea that it wasn't just

67
00:03:49,000 --> 00:03:52,000
Speaker 1: about one country leading the charge. In fact, a lot

68
00:03:52,000 --> 00:03:53,840
Speaker 1: of the countries that led the charge ended up not

69
00:03:53,880 --> 00:03:57,240
Speaker 1: being the primary beneficiaries down the road, Great Britain.

70
00:03:56,880 --> 00:03:57,360
Speaker 4: For example.

71
00:03:57,360 --> 00:04:00,000
Speaker 1: With the Industrial Revolution, of course, most of the benefit

72
00:04:00,040 --> 00:04:02,440
Speaker 1: it ended up being to what within a burgeon in

73
00:04:02,440 --> 00:04:05,120
Speaker 1: the United States of America. Is there a chance that

74
00:04:05,120 --> 00:04:07,560
Speaker 1: we could see that play out again where China and

75
00:04:07,600 --> 00:04:10,920
Speaker 1: deep seek and everything else affiliated with that becomes the

76
00:04:10,960 --> 00:04:11,920
Speaker 1: real beneficiary.

77
00:04:13,200 --> 00:04:15,280
Speaker 4: I don't think so. For the following reason.

78
00:04:15,800 --> 00:04:19,279
Speaker 3: In these twelve Industries of the future, US currently is

79
00:04:19,400 --> 00:04:22,400
Speaker 3: number one, China is number two in all of them

80
00:04:22,480 --> 00:04:28,000
Speaker 3: but green tech and electric vehicles, the mobility revolution. Secondly,

81
00:04:28,040 --> 00:04:32,080
Speaker 3: in the past innovations, where loger itmay, they've spurt of growth,

82
00:04:32,480 --> 00:04:35,920
Speaker 3: say after the first Internet revolution in the nineties, US

83
00:04:35,960 --> 00:04:38,280
Speaker 3: god goes from one to three, then it flattens out

84
00:04:38,279 --> 00:04:40,880
Speaker 3: and goes back to two. Instead, the nature of this

85
00:04:41,040 --> 00:04:46,039
Speaker 3: revolution in technology lead by eye is exponential. US growth

86
00:04:46,200 --> 00:04:49,720
Speaker 3: today two percent, four percent by the end of this decade,

87
00:04:50,040 --> 00:04:53,159
Speaker 3: six percent by the end of the next decade. When

88
00:04:53,160 --> 00:04:57,159
Speaker 3: it's exponential, you have a first mover advantage, and whether

89
00:04:57,160 --> 00:05:01,120
Speaker 3: it's first because of economy of scale and net remains

90
00:05:01,160 --> 00:05:04,159
Speaker 3: first and whoever is second remains a second.

91
00:05:04,480 --> 00:05:05,920
Speaker 4: China is going to do well, but.

92
00:05:05,920 --> 00:05:08,000
Speaker 3: The idea they're going to catch up with US, I

93
00:05:08,000 --> 00:05:09,400
Speaker 3: think is totally far fetched.

94
00:05:09,600 --> 00:05:11,920
Speaker 4: And everybody else is not even number three or four.

95
00:05:12,360 --> 00:05:15,599
Speaker 3: There are some pockets of excellence in Europe, in Israel,

96
00:05:15,600 --> 00:05:20,279
Speaker 3: in India, in Japan, in Taiwan, in South Korea, and

97
00:05:20,360 --> 00:05:22,400
Speaker 3: so on and so on. So in this game about

98
00:05:22,440 --> 00:05:26,000
Speaker 3: the technology of the future, US remains number one, China's

99
00:05:26,040 --> 00:05:28,240
Speaker 3: going to be number two, and everybody else is going

100
00:05:28,320 --> 00:05:31,039
Speaker 3: to be adopting this new technology. And by the way,

101
00:05:31,400 --> 00:05:34,080
Speaker 3: you don't need to be innovating. Even if you adopt

102
00:05:34,240 --> 00:05:37,480
Speaker 3: the technology, you'll have some productivity growth. You know, after all,

103
00:05:37,720 --> 00:05:40,360
Speaker 3: in sub soual And Africa there has never been any

104
00:05:40,600 --> 00:05:44,400
Speaker 3: iPhone or smartphone produced, but even a poor farmer using

105
00:05:44,440 --> 00:05:49,919
Speaker 3: a smartphone can do lots of business transaction, selling the crop, ensuring, financial,

106
00:05:50,000 --> 00:05:52,359
Speaker 3: and so so upon. In the US is going to

107
00:05:52,400 --> 00:05:55,560
Speaker 3: remain number one, Chinese number two, and everybody is going

108
00:05:55,640 --> 00:05:58,920
Speaker 3: to be behind but adopting either the technology of the

109
00:05:59,040 --> 00:06:02,919
Speaker 3: US or those of China and innovating either with US

110
00:06:03,040 --> 00:06:06,120
Speaker 3: or with China. But you're going to get first mover advantage.

111
00:06:06,320 --> 00:06:08,159
Speaker 3: The second ones are not going to catch.

112
00:06:08,000 --> 00:06:12,719
Speaker 1: Ups in terms of global economic conditions and whatever structural

113
00:06:12,800 --> 00:06:15,200
Speaker 1: changes are taking place in Norriel. Do you get a

114
00:06:15,240 --> 00:06:18,400
Speaker 1: sense here that the lack of international cooperation, at least

115
00:06:18,400 --> 00:06:21,000
Speaker 1: as it stands right now visa these what we saw

116
00:06:21,040 --> 00:06:24,359
Speaker 1: over the last few decades, that that might actually be

117
00:06:24,440 --> 00:06:27,080
Speaker 1: a benefit to the United States or could it actually

118
00:06:27,160 --> 00:06:27,800
Speaker 1: hamper us?

119
00:06:29,320 --> 00:06:32,000
Speaker 3: Well, the reality is that the global system is going

120
00:06:32,040 --> 00:06:36,279
Speaker 3: to be divided in two areas. One with US is

121
00:06:36,320 --> 00:06:39,480
Speaker 3: friends and allies, and some of the countries in the

122
00:06:39,480 --> 00:06:42,200
Speaker 3: global South, said the Indians of the world are going

123
00:06:42,240 --> 00:06:47,800
Speaker 3: to be following the economic, monetary, trading, financial, technological, and

124
00:06:47,839 --> 00:06:50,120
Speaker 3: I would say even the military and security system of

125
00:06:50,160 --> 00:06:56,840
Speaker 3: the United States. Instead, China, Russia, North Korea, Iran, Cambodia,

126
00:06:56,920 --> 00:07:00,400
Speaker 3: Pakistan and a few others are going to be in

127
00:07:00,440 --> 00:07:03,520
Speaker 3: the technological and economic and trading area.

128
00:07:03,640 --> 00:07:04,200
Speaker 4: Of China.

129
00:07:04,279 --> 00:07:07,479
Speaker 3: Now, if we reach an agreement on China to partially

130
00:07:07,720 --> 00:07:12,000
Speaker 3: escalate with the risk the relationship on what's strategic, high

131
00:07:12,000 --> 00:07:15,680
Speaker 3: tech and related critical things like rare earth medals and

132
00:07:15,720 --> 00:07:18,080
Speaker 3: things are critical to us and to them, but we

133
00:07:18,120 --> 00:07:21,240
Speaker 3: still do business on the stuff is law value added

134
00:07:21,560 --> 00:07:24,480
Speaker 3: or media value added? After all, we don't need to

135
00:07:24,920 --> 00:07:27,880
Speaker 3: produce in US t shirts or cheap toys, right, that

136
00:07:27,920 --> 00:07:30,400
Speaker 3: doesn't make any sense. So we could have a ground

137
00:07:30,400 --> 00:07:34,160
Speaker 3: bargain in which we decouple fully on technology and that's

138
00:07:34,200 --> 00:07:37,360
Speaker 3: the risking and still we do some trade and then

139
00:07:37,400 --> 00:07:40,840
Speaker 3: everybody else Europe, Asia, the Global CEU can do business

140
00:07:41,000 --> 00:07:44,360
Speaker 3: with the US, with the China apart from technology, in

141
00:07:44,400 --> 00:07:47,920
Speaker 3: which led to choose either American AI or Chinese EE.

142
00:07:48,200 --> 00:07:51,160
Speaker 4: That's going to be a full decappening and.

143
00:07:51,080 --> 00:07:53,880
Speaker 1: You're already starting to see those choices being made. Doctor Rabini,

144
00:07:53,920 --> 00:07:56,600
Speaker 1: really appreciate you taking time for us. Neurial Rabini, of course,

145
00:07:56,640 --> 00:07:59,400
Speaker 1: the chairman and CEO over at Rubini Macro Associates