1 00:00:00,360 --> 00:00:03,200 Speaker 1: Jersey and Amanda gem Nation. 2 00:00:03,440 --> 00:00:06,640 Speaker 2: Well, Donald Trump's decision to slap every country with trade 3 00:00:06,920 --> 00:00:09,360 Speaker 2: barriers of at least ten percent. Australia obviously was on 4 00:00:09,360 --> 00:00:12,520 Speaker 2: that list. Antarcticas on that list. Russia is not funnily 5 00:00:12,600 --> 00:00:15,400 Speaker 2: enough because apparently, according to Donald Trump, it's already under 6 00:00:15,480 --> 00:00:18,400 Speaker 2: US sanctions. What does it all mean for us? What's 7 00:00:18,440 --> 00:00:20,599 Speaker 2: going to happen? We're joined by the founder of CEO 8 00:00:21,160 --> 00:00:24,200 Speaker 2: of the founder and CEO of fort Lake Asset Management, 9 00:00:24,200 --> 00:00:29,320 Speaker 2: one of Australia's leading economists, doctor Christian Balist Christian High. 10 00:00:29,920 --> 00:00:31,520 Speaker 3: Hi there, how are you going? Good to speak to you? 11 00:00:31,560 --> 00:00:31,920 Speaker 3: Go again? 12 00:00:32,000 --> 00:00:33,640 Speaker 1: No, it's good to have you on when we need 13 00:00:33,680 --> 00:00:35,080 Speaker 1: to nub this stuff out. Christian. 14 00:00:35,080 --> 00:00:39,279 Speaker 4: I was reading an article recently that we have all 15 00:00:39,320 --> 00:00:43,280 Speaker 4: our super You me everyone our super has invested a 16 00:00:43,320 --> 00:00:47,920 Speaker 4: lot overseas and which means like people worry about foreign 17 00:00:47,920 --> 00:00:50,440 Speaker 4: ownership in Australia, but we're one of those countries that 18 00:00:51,200 --> 00:00:52,680 Speaker 4: owns a lot of stuff overseas. 19 00:00:52,760 --> 00:00:56,639 Speaker 1: But will be will this affect our super well? 20 00:00:56,840 --> 00:00:59,680 Speaker 3: I think this is the interesting thing Jonesy is. It's 21 00:00:59,680 --> 00:01:05,680 Speaker 3: from Arkaple how much the Trump administration has neglected to 22 00:01:06,560 --> 00:01:09,600 Speaker 3: take into account of how many people and how many 23 00:01:10,280 --> 00:01:15,120 Speaker 3: sovereigns and what not bone assets in America, amongst other things. 24 00:01:15,800 --> 00:01:18,880 Speaker 3: And that with these tariffs, which a little bit petty 25 00:01:18,959 --> 00:01:21,679 Speaker 3: in a lot of ways, just failed to recognize the 26 00:01:21,680 --> 00:01:24,200 Speaker 3: bigger picture of all of this. And you're right that 27 00:01:24,400 --> 00:01:27,920 Speaker 3: say here in Australia, you know, over the years, our 28 00:01:27,959 --> 00:01:30,720 Speaker 3: superannuation system, which is the pride of the country, has 29 00:01:30,760 --> 00:01:32,920 Speaker 3: become so large and so big, and it was the 30 00:01:32,920 --> 00:01:36,360 Speaker 3: thing that saved us during the financial crisis. But because 31 00:01:36,400 --> 00:01:38,560 Speaker 3: we have got such huge growth in that era, we 32 00:01:38,640 --> 00:01:41,559 Speaker 3: have had to invest off shore. Australia is just too 33 00:01:41,600 --> 00:01:45,160 Speaker 3: small of the market for all of this superannuation money. 34 00:01:44,920 --> 00:01:47,520 Speaker 3: So what it does mean is that you know, the 35 00:01:47,600 --> 00:01:50,800 Speaker 3: Americans are beneficiaries of that superannuation money going in there. 36 00:01:50,840 --> 00:01:54,320 Speaker 3: We buy toll roads over there with big buyers of 37 00:01:54,400 --> 00:01:57,200 Speaker 3: general infrastructure, which helps the American people. And a lot 38 00:01:57,200 --> 00:01:59,320 Speaker 3: of this just is totally neglected in the way that 39 00:01:59,360 --> 00:01:59,880 Speaker 3: they're thinking. 40 00:02:01,080 --> 00:02:04,919 Speaker 2: Well, and we're hearing also like for example, our beef 41 00:02:04,960 --> 00:02:08,840 Speaker 2: that Donald Trump is saying that Australian beef, why aren't 42 00:02:08,840 --> 00:02:11,120 Speaker 2: they take American beef? But our bio laws are so 43 00:02:11,160 --> 00:02:14,679 Speaker 2: strong for a reason. And I know both Anthony Albanezi 44 00:02:14,720 --> 00:02:17,000 Speaker 2: and Peter Dutma said, we are not touching our bio laws. 45 00:02:17,040 --> 00:02:20,239 Speaker 2: They're staying exactly as they are. But this will impact Americans, 46 00:02:20,280 --> 00:02:22,239 Speaker 2: won't it. I mean, they for all intents and purposes, 47 00:02:22,280 --> 00:02:24,320 Speaker 2: elected Donald Trump because of the price of eggs. Their 48 00:02:24,400 --> 00:02:26,280 Speaker 2: McDonald's prices are going to go up. What will this 49 00:02:26,360 --> 00:02:27,440 Speaker 2: mean for Americans? 50 00:02:28,560 --> 00:02:30,720 Speaker 3: Well, exactly, I mean they'll probably end up paying more 51 00:02:30,720 --> 00:02:32,799 Speaker 3: for their own beef, because when you think about it, 52 00:02:32,880 --> 00:02:36,320 Speaker 3: Americans might not be the best producers of beef in 53 00:02:36,400 --> 00:02:38,359 Speaker 3: terms of the efficiency and the cost at which they 54 00:02:38,400 --> 00:02:40,960 Speaker 3: do it at. And the way the global order works 55 00:02:41,360 --> 00:02:43,840 Speaker 3: is that, you know, the best cost producer of things 56 00:02:43,880 --> 00:02:48,040 Speaker 3: globally tends to get the most amount of demand. And 57 00:02:48,120 --> 00:02:50,120 Speaker 3: so to the extent that Australians are very good at 58 00:02:50,120 --> 00:02:52,800 Speaker 3: producing beef, the quality is good, we do it at 59 00:02:52,840 --> 00:02:54,920 Speaker 3: a lower cost than what the Americans do, which is 60 00:02:54,960 --> 00:02:58,480 Speaker 3: probably the case. You know, Ultimately, what this means is 61 00:02:58,480 --> 00:03:01,480 Speaker 3: that if they have to repatch create all of that demand, 62 00:03:01,520 --> 00:03:04,080 Speaker 3: and that they only start buying American a beef American 63 00:03:04,120 --> 00:03:08,000 Speaker 3: beef and drop the Australian beef imports, their consumers will 64 00:03:08,040 --> 00:03:10,680 Speaker 3: ultimately pay more. But that is what Trump wants. And 65 00:03:10,720 --> 00:03:13,720 Speaker 3: there are so many examples like that across so many 66 00:03:13,720 --> 00:03:17,520 Speaker 3: different areas where the Americans are not the best producers, 67 00:03:17,600 --> 00:03:20,359 Speaker 3: are not the most efficient producers of things, and ultimately 68 00:03:20,400 --> 00:03:22,920 Speaker 3: their consumers will pay a higher price for that. But 69 00:03:23,000 --> 00:03:25,160 Speaker 3: that is a gamble that he is willing to take. 70 00:03:25,560 --> 00:03:27,440 Speaker 3: It's an interesting one. But that's where he's gone. 71 00:03:27,480 --> 00:03:30,480 Speaker 2: What is the gamble? He said yesterday was Independence Day 72 00:03:30,720 --> 00:03:33,440 Speaker 2: and he said the operation has taken place and the 73 00:03:33,480 --> 00:03:35,920 Speaker 2: patient lives. It's probably too soon to say that with 74 00:03:35,960 --> 00:03:38,600 Speaker 2: all the markets crashing around the world, what is his 75 00:03:38,720 --> 00:03:41,440 Speaker 2: long term goal? Will this benefit America even? 76 00:03:42,800 --> 00:03:45,240 Speaker 3: Yeah, I mean he's got this idealistic view that he 77 00:03:45,280 --> 00:03:49,080 Speaker 3: wants to, you know, make well, obviously, make America great again, 78 00:03:49,600 --> 00:03:53,080 Speaker 3: make America first, all of that sort of stuff ready. 79 00:03:53,120 --> 00:03:54,600 Speaker 2: It's market's not ready. 80 00:03:55,160 --> 00:03:57,520 Speaker 3: No, that's that's exactly the issue. And so it's a 81 00:03:57,520 --> 00:03:59,280 Speaker 3: little bit like a it's a little bit like a 82 00:03:59,280 --> 00:04:02,520 Speaker 3: path and swallow a cow. They're not ready for this. 83 00:04:02,760 --> 00:04:05,400 Speaker 3: It takes a while to expand and get yourself up 84 00:04:05,480 --> 00:04:08,120 Speaker 3: to scratch from an efficiency perspective, to get all of 85 00:04:08,160 --> 00:04:10,200 Speaker 3: your intellectual property and these sorts of things up to 86 00:04:10,240 --> 00:04:13,520 Speaker 3: scratch with the best producers in the world, and what 87 00:04:13,600 --> 00:04:16,320 Speaker 3: you get in the intervening period until you get to 88 00:04:16,360 --> 00:04:19,520 Speaker 3: that point, ultimately your consumers will pay a much higher 89 00:04:19,560 --> 00:04:23,560 Speaker 3: price as you are transitioning to a lower cost producer 90 00:04:23,560 --> 00:04:25,640 Speaker 3: of those things. And so what you get is you 91 00:04:25,640 --> 00:04:28,200 Speaker 3: get this short term spike in prices because they're not 92 00:04:28,360 --> 00:04:31,400 Speaker 3: as good at doing it. You know, their car industry 93 00:04:31,440 --> 00:04:34,360 Speaker 3: is a great example of that versus Japanese. The Japanese 94 00:04:34,400 --> 00:04:37,640 Speaker 3: are known for banking great cars and doing it very efficiently. 95 00:04:39,000 --> 00:04:40,960 Speaker 3: And you know, all of a sudden, if all of 96 00:04:40,960 --> 00:04:44,480 Speaker 3: that demand drops away for Japanese cars as an example, 97 00:04:44,839 --> 00:04:48,680 Speaker 3: and the Americans have to fulfill those orders, They're just 98 00:04:48,760 --> 00:04:50,559 Speaker 3: not going to be equipped to do that in terms 99 00:04:50,560 --> 00:04:53,440 Speaker 3: of the skill of the people, the plants, the equipment, 100 00:04:53,520 --> 00:04:54,440 Speaker 3: all of those sorts of things. 101 00:04:54,600 --> 00:04:56,080 Speaker 1: It's like, we don't look at history at all. 102 00:04:56,120 --> 00:04:59,000 Speaker 4: This is exactly what happened in the seventies with Leiah 103 00:04:59,040 --> 00:05:03,239 Speaker 4: koger And and Chrysler. And he said at the time 104 00:05:03,640 --> 00:05:06,599 Speaker 4: that if we could make out of every ten Chryslers, 105 00:05:06,600 --> 00:05:08,760 Speaker 4: if they could make one as good as a Japanese car, 106 00:05:08,960 --> 00:05:09,720 Speaker 4: he'd be happy. 107 00:05:10,400 --> 00:05:13,000 Speaker 1: He actually said, yeah. 108 00:05:12,640 --> 00:05:16,480 Speaker 3: Yeah, no, exactly. And it's just it's amazing how many 109 00:05:16,560 --> 00:05:18,760 Speaker 3: examples of this type of stuff we see in terms 110 00:05:18,839 --> 00:05:21,520 Speaker 3: of the rap sheet of countries that he's put there, 111 00:05:21,560 --> 00:05:24,040 Speaker 3: in the things that he's gone after. I mean, he's 112 00:05:24,360 --> 00:05:26,680 Speaker 3: a lot of the things that they are seeking to do, 113 00:05:26,760 --> 00:05:29,440 Speaker 3: they have no competitive advantage compared to some of these 114 00:05:29,480 --> 00:05:32,400 Speaker 3: other countries. And I'll tell you what, it's going to 115 00:05:32,400 --> 00:05:35,640 Speaker 3: be an interesting experiment. And the thing with this is, 116 00:05:35,680 --> 00:05:38,279 Speaker 3: you know that the presidential term is only four odd years, 117 00:05:39,360 --> 00:05:42,320 Speaker 3: and you know by the time these industries finally get 118 00:05:42,320 --> 00:05:46,400 Speaker 3: onto their seat and potentially start doing things in an 119 00:05:46,400 --> 00:05:49,040 Speaker 3: efficient way. I mean, some of these industries would have 120 00:05:49,160 --> 00:05:51,240 Speaker 3: lead times of ten to fifteen years in order to 121 00:05:51,240 --> 00:05:54,440 Speaker 3: get to that type of efficiency level. So I saw 122 00:05:54,680 --> 00:05:57,719 Speaker 3: the look and then get in four years, and that's 123 00:05:57,760 --> 00:05:59,960 Speaker 3: the worrying thing I think, and that is why global 124 00:06:00,080 --> 00:06:02,599 Speaker 3: markets are tanking. That is why fear is at peak 125 00:06:02,680 --> 00:06:06,080 Speaker 3: levels at the moment, because markets are saying, well, what 126 00:06:06,080 --> 00:06:08,240 Speaker 3: do we do? How do we invest in this world 127 00:06:08,279 --> 00:06:10,360 Speaker 3: where more than likely a lot of these tariffs and 128 00:06:10,720 --> 00:06:13,160 Speaker 3: this crazy type of stuff is going to be unwound 129 00:06:13,200 --> 00:06:17,040 Speaker 3: after Trump goes So what do we actually do? Do 130 00:06:17,640 --> 00:06:19,960 Speaker 3: we build our plants in America do we not build them? 131 00:06:20,680 --> 00:06:23,640 Speaker 3: What do the Japanese do? Do they keep producing more cars? 132 00:06:23,640 --> 00:06:25,919 Speaker 3: Do they not do it? So it just throws so 133 00:06:26,000 --> 00:06:28,080 Speaker 3: much dust up in the air that everyone sort of, 134 00:06:28,480 --> 00:06:31,040 Speaker 3: I think, sits there like stun Mullet's going, what on 135 00:06:31,080 --> 00:06:32,720 Speaker 3: earth do we do and how do we actually run 136 00:06:32,760 --> 00:06:34,279 Speaker 3: our businesses in this type of bragiame? 137 00:06:34,440 --> 00:06:36,800 Speaker 1: Can we go into a recession and indeed a depression? 138 00:06:37,960 --> 00:06:40,240 Speaker 3: Well, and that is where markets are heading. And that 139 00:06:40,400 --> 00:06:42,600 Speaker 3: is the thought bubble that's gone into the mind of 140 00:06:42,640 --> 00:06:44,880 Speaker 3: the markets at the moment is everyone says, with all 141 00:06:44,920 --> 00:06:48,640 Speaker 3: of this uncertainty, it is surely going to make people 142 00:06:48,720 --> 00:06:54,719 Speaker 3: sit on their hands do nothing. Ultimately, consumers will probably 143 00:06:54,760 --> 00:06:57,920 Speaker 3: start to pull back as well. So you get this 144 00:06:58,000 --> 00:07:02,080 Speaker 3: sort of circular effect where businesses and consumers and that, 145 00:07:02,240 --> 00:07:05,600 Speaker 3: you know, the whole the whole ecosystem effectively just pauses. 146 00:07:06,240 --> 00:07:09,200 Speaker 3: And with that you start to get slower growth, potentially recessions, 147 00:07:09,240 --> 00:07:12,840 Speaker 3: and that can lead into things like defaults with mortgages, 148 00:07:13,560 --> 00:07:16,120 Speaker 3: corporate defaults as the case may be, and the whole 149 00:07:16,120 --> 00:07:18,280 Speaker 3: thing can get pretty ugly pretty quickly. And that's where 150 00:07:18,320 --> 00:07:21,120 Speaker 3: the markets will like to entertain those sorts of thoughts 151 00:07:21,840 --> 00:07:25,000 Speaker 3: in you know, in the fantasy of fear. That's where 152 00:07:25,040 --> 00:07:27,679 Speaker 3: markets want to go. They want to consider the worst case. 153 00:07:27,760 --> 00:07:30,840 Speaker 3: I sell now and think later. That's how they will. 154 00:07:30,920 --> 00:07:32,040 Speaker 3: That's that's how they will. 155 00:07:32,320 --> 00:07:34,480 Speaker 1: All I can think of is a python swallowing a cow. 156 00:07:36,000 --> 00:07:39,520 Speaker 1: You made me a matter of fact, I well, Christian, 157 00:07:39,600 --> 00:07:42,840 Speaker 1: thank you for explaining that. It's always great to talk 158 00:07:42,880 --> 00:07:43,480 Speaker 1: to you. Christian. 159 00:07:44,400 --> 00:07:45,800 Speaker 3: No thanks, thanks to the check off