🔴 Can Central Banks Save the Economy from Global Financial Crisis? | Recession Watch

Kristof great to have you back on real vision. Good morning. Gorgeous. We’re here to talk about recession week
but what I really wanted to sort of chat to you about was
Rails been talking about that kind of a thesis a big thesis of which one of the key elements in that
is going to be the role of central banks and whether
central banks can provide liquidity
What I wanted to chat to you about is that you know when I look at the market
I see all the yield curves and I look at the twos tend which is trying to sort of turn higher
Didn’t quite go negative, but we did go negative on
Three months ten year and obviously five five thirties turn higher last year
So in combination all these things are sort of saying we get them we go negative or we turn higher
Recession comes twelve months late and there’s a whole bunch of other indicators out there which are very very similar
So it’s suggesting to me that
recession is imminent now the chats we’ve had you think that
the messaging from yorkers might be slightly different and that were in a
new central bank paradigm
Could you maybe explain to us what?
Your view on yields and messaging from yields is and how that ties in to
This discussion and argument that you’ve been having about central banks that goes back well over 12 months sure. It’s a
First of all, it’s a never ignore a message sent by the European single market. I really think that whatever the message is
It’s a very key key
Signal that we have to look at very carefully. We know that
We GFC the usual steep
Flattening of the curve and the aversion of the curve especially the inversion was lasting at least a quarter and the subsequent
Steepness was a very strong signal that the recession was imminent
Is it still valid? I’ve got a reservation, which is very simple. It’s
When we’ve got 13 trillion of negative yielding fixed income instruments
Massively convinced that it is impacting the shape of the curve one way or the other
Where do you have duration liquidity and the semblance of hid in the world?
the US charisma
So basically a massively grow means that the the flattening of the curve and the this question the question of the risk
premia is as well a consequence of
These need for direction and the need for a fixed income
Liquidity, so you see what you’re saying there. Is it rather than the bond market?
Anticipating a recession what your effect is saying is that the global pot of bonds have gone negative of forced foreign investors
Into US Treasuries or the US bond market the notes and the Treasury market and their buyers of these
Of these instruments which has been pushing yields down now wouldn’t some people say well, okay
but it’s the similar sort of thing because
The Europeans are seeing a slowdown which is the reaction from the central bankers to for since negative rates
and so what we’re doing is we’re just
Transmitting the slowdown across the Atlantic and eventually while the messaging is the same is that not a valid argument
the fixed income market is sending a very strong message, which is the
official heads from the major central banks this felt while so it is
anticipating a very meaningful action from the central banks to move their official rates more in line with
What I call the new paradigm which is very subdued inflation and very poor growth one way
I look at it did some I’ve created
What I called the major major central bank’s
Official rights index which is an average of the seven major central banks rights so fed, DOJ
ECB Bank of England RBA Bank of Canada Albion said and I plot it against the
Chinese GDP growth and it’s stuck way. It’s just the coalition is very strong
Meaning that we have moved into a new paradigm, which is what I call the flatlining environment
Where in fact?
Central banks have to move lower than their neutral, right?
so we’ve basically seen a kind of global convergence of GDP into sort of mid low single digits because remember used to have
GG TM and you have three in the US now, we sort of everyone’s between one and five or one six or whatever
So seeing that convergence, but I guess in terms of the the sequencing because everyone’s seeing a slowdown
It’s pretty much clear. We’ve clearly got a manufacturing slowdown. Some people see the slowdown
Potentially morphing into a recession, but then the key question for the central banks or the central bank impetus
Here is does a slowdown become a recession can central banks
Stop that or if we get a recession that sets a capex recession in the u.s
can we have central banks act in a way which prevents equities or risk assets from selling off so that a
shallow recession doesn’t turn into a
significant global
Deflationary event or you know, a depression or anything like that how this new paradigm with central banks
Come into that and prevent the sequencing from following those lines
I think that when you look at the for example pre GFC
we went into the the the massive downturn with official rates at
Five to seven percent
With a balance sheet almost empty with low
Deficits so there was room to in fact to kick-start the economy and to to basically save the world
We are now going to a real downturn and there is no way to add to omit that
It’s a it’s not only on the manufacturing. It’s it’s both base
Even if the service economy
activity still quite resilient, but you see just like
Creeping under the surface some imbalances which are very concerning
We are going into that downturn with official rights
In low twos to major central banks with negative interest rates
fourteen trillion of balance sheet
So basically the ability of the central banks to answer the way they did it in 2008 is very limited. The problem is
the control for the burst because they don’t have the
meaningful tool to
address the the consequence of a massive downtown so they will need to be very
Plaintiff and that thing that this is the message we have this year
In fact last year what the central bank’s have tried to do they try to rebuild
Monetary policy ammunition to be able to address potential
Recession they realized that there was no room to rebuild those ammo
So this here is all a big shift, which is all about
You know what? We can’t reveal the military policy emissions
So let’s try to avoid any burst at the near cost and this is what they are doing
They are gonna try to be very preemptive
And what is interesting is they know they will not be able I think they have no illusion about their
Ability to kick-start the economy. I think they have no illusion about their ability to boost real inflation
So these mandates are quite an illusion
so they are focusing on what they can do, which is
Keeping the financial conditions as loose as possible. And that was the message of the Fed yesterday
To be honest when you look at the minutes
they know that they can’t backtrack because backtracking would mean just like a massive entwine of the
2019 risk parity euphoria, which was the main achievement of
2019 to be honest, so I think that they have to focus on
Their decided to focus on loose monetary
potential collisions
and to keep the term structure as low as possible and
this is the best way to deal with the massive debt burdened at the end of the day and
People often sort of look at the central banks and say, okay
What were facts is saying here is Doug fat fed, these feed back in Japan and the PBOC, etc
But then people say well, hang on a minute
You know in 2002 2003 the day they started cutting bracelets pretty much the top of the market
I think he had four days of euphoria. I’m similarly in
2007 and you can see perfectly that the secretary sell-off is exactly in line with the rate cut you saying that in those occasions?
that they delay too long and on this occasion that
Pre-empting it and some of the moves were seeing in yields
which you could extrapolate forward and say recession coming actually with those moves and yields or
anticipating central bank’s trying to prevent
slowdown turning into a recession
You look at GFC. We had four main episode 95 98 with pre-emptive a cut from the Fed they managed to
Engineer a soft landing of the economy and the equity market just read
2000 and 2007 far too slow to to
Cut rate the market the equity market just sort of even before the the the federal cut
We have again in the different paradigm
We are post GFC and he really think that what has been the main the main takeaway of the last ten years
the disconnect between
Financial assets and a real economy. It’s not about GDP. It’s not about inflation. It’s about
these markets are extremely addicted to central bank colleges if they come and
Put another few trillion of liquidity in the market have units the disconnect we have at the moment with fixed income just plunging
Diving and equity market very can can last a little bit for is there a danger that?
the central bank activity if you let’s say take
2016 as an example where?
Whether we go to Shanghai record or not, whatever we had China putting liquidity in theoretically Shanghai Accord
The Fed bitter relent and I was called at the top that never was
2016 look like the tops of o7 and 2000 but it never turned into anything worse because
Central bank’s came together and they all agreed to step put Italy put more liquidity into the system
Today we’ve got central banks in a little bit more the beggar-thy-neighbor
Mentality clearly with the trade war. I’m not sure the PBOC is going to necessarily agree with the Fed this time around and
And the ECB is in a messy place
Will they be working independently?
Or will they club together? Because that seems to be the key if you get a mr. Feeney t-38
To be honest for me to the cornerstone of the current dynamic and and I I think it’s very important that you go back to
2016 because what was the the the the the the most important part of?
2016 it was constructed actions between us and relaxed and we ended up with
between March
2016 and
June 2017 something like 2.5 trillion of cash injection
But even more importantly you had the accommodation guy which was meant to put pressure on the US dollar
This would not happen
How can we have a concerted action on to put to weaken the dollar?
in the current growth inflation and thread uncertainty you really think that Europe would say
You know what? You’re putting tariffs on our product and we are going to be
Foolish enough to shoot ourselves in the foot and to let our currency appreciate
Obviously not so we are in
Competition between the central bank’s to out of the super drove to do more than the neighbour
Because basically they don’t have many ammunitions. So one key pillar of their
Strategy is to weaken the currency and you’re just exporting deflation
And this is a zero-sum game and I think that it’s quite interesting that even if we are in a trade war
Which is a currency war the g7 proceed effects world is at all-time low
Because you have a spike and what the central bank is doing is just setting the spike to wing it back global
So in fact, it’s a zero-sum game. So within that you were talking about the doves hair after you outdrove the doves
and as we talked about earlier one of the sort of the
One of the worst parts and some of this whole sort of a central bank
Kind of framework is the Europe is in a mess
It’s a basket case and the appointment server Christine Lagarde called the nomination
Look Christine Lagarde to lead the ECB is sort of tacit exceptions. They probably got to do more than just a monetary
They’ve got to get the fiscal side going as well
So that can we go through each of these centralized what can each central bank do they’re not gonna work together
They go to work aggressively themselves. Europe’s not got much ammo. What are we going to focus on so before talking about that?
I’m gonna just add on something on the why I think that the central banks will have no choice to do more
it’s because at the moment their fiscal expansion tool is very
And for various reason in the US you have a political gridlock
Which means that I don’t see any bipartisan support for some
Infrastructure program right of the elections the Dems will never give a gift to a Trump and to see him potentially
Boosting the economy in Japan and to thinking of them seem more obsessed
to arise the construction tax at the moment rather than during any
program of fiscal expansion in China, we know that the
deficits are already in percent of the GDP and
Therefore it’s already a very level
System. So the home to do much right now is very limited on top of that the transmission channels of liquidity are
And then you have Europe so Europe for the time being I don’t see that fiscal expansion
is coming in a very short term because
Anything with the optics time and you still have you know, the the master course and you’ve got the legendary
German of budget orthodoxy. So I think that the elimination of regard is a very strong signal but
Again is gonna take time. So in the meantime, what what the ECB would do
I think that more head cut I think is going to be very limited for one reason. It doesn’t work and
You take the risk to damage even more the banking system. I would either a very interesting
Post over the weekend about deutsche bank, but it’s not deutsche bank is not
In your psychotic story. It’s the overall
European banking system Japanese banking system with Swiss banking system
Which is not very surprising considering that the three central banks are already negative interest rate policy
so I think that going to do mercury they would just
in the meantime, they will just keep the term structure as low as possible because it’s a
easy way to deal with the dead for the time being you’re just reducing the debt servicing and
Basically doesn’t cost too much fun. Yeah for the different European countries. So Europe’s kind of stuck in that one area
You say the banks mean what they will do
We’ll probably see the banks continue to underperform because the banks after you but it’s a it’s a death by a thousand cuts
So it might take X number and euro, I mean you look at the overall banking sector the whole thing is on its knees
It’s the sort of 30-year lows and just on the banks are all joints
I find mind-blowing that we don’t even live here now is that the banks are supposed to be the the the provider of
The engine the engine of the earlier growth and not only they have to fight with negative interest rates
But on top of that they have to fight with the post GFC regulations
So basically, it’s you can you know, we always go back to the same topic? It’s
Post GFC we thought that a BL PQ will work but M is not the issue
the issue is V and we still haven’t addressed and if you just go through an
Equation, if you just explain it further just the fact that if you increase the military
Basically base it will end up by
Boosting the real economy and eeeh and the output so to make it very simple. Why didn’t work in
Pastorship seats because we we just floated the market with with a new cash
but the cash never went where it was supposed to go and one of the reason is
The bank’s just didn’t was we are not the the transmission channel. They were in the past
I mean basically low velocity of money and basically came a misallocation
Capital and not top of that you have was also the debt burden which is impacting the money velocity and it’s interesting to see that
Since GFC when you take the global amount of cash injected in the system divided by the global GDP
Yes collapse which means that even one extra dollar of cash injection by the central banks
Equal less than one dollar of real GDP created
so we are already to some extent reaching the limit of the earth monetary policy stimulus, but they know that
The purpose is not to boost the economy because they they knew they count. It’s to avoid the worst
So it sounds like the ECB is relatively impotent for the next 12 months
It will do more the same but more the same means death by a thousand cuts the bank
does that mean that the Fed has to be the heavy lifting and
They’re still tightening their balance sheet. They’re still running it off
Do you think they’re gonna stop that soon as well as cut rates?
So they’re going to are they literally going to come back and say okay. We’re gonna do QE 4
I’m gonna get rights the front end back down to pretty much zero. What’s their game plan?
And are they the key for the global system because it sounds like Europe’s not gonna be that much be used to anyone
Now you hope he’s not gonna be used for anyone. It’s just gonna fuel further disparity. Yeah
But the Fed what can the Fed do they have to follow to some extent?
We know we are talking a little bit a lot about the Fed independence
But when you look at over the last eight months the monetary policy of the Fed has not been
Independent in 2018. The Fed has been what he has been reacting to the tax reform from tom
has been reacting to
the potential
inflationary impact of the types and
Has been reacting to the political pressure by over tightening
So to some extent it was a reaction to the political environment
since the start of the year of the Fed had
to answer to the super adopts
What do you think? I think it’s quite
symptomatic that in June
Twice the Fed had to become very delish because the previous day the Ragland ECB were even modest
They can’t afford a staggering rally of the u.s. Dollar, but this is the case for each central bank
we are in a very I think fierce competition which is a bit different compared to the
2016 so with the with
What the Fed is doing?
Are they targeting or what they have to target certain tasks because when you look at the world we’ve got this
Enormous or particularly US but globally we’ve got this enormous
Pile of credits over the stock of credit and as everyone knows in in the u.s
Triple B’s around about half of the total Europe’s a long way behind but it still had a lot of credit expansion as well
are they gonna have to target these early because
The big risk is always the knock-on effects
You can it might have something happen in China or you might have something happen in Japan or it might be just something no one
At the thought of in like the trade war that creates a chain reaction, which goes beyond the central bank’s board
Do you think the central banks could let’s say we turn this all turns into a recession
Could the central bank’s?
Cratons particularly affect create enough liquidity liquidity to stop the recession turning into acid destruction
What are we gonna tell you? Well, how do they break that that leap?
I think we are adjusting thought of the biggest bubble ever. And do you remember we we talked about it last time?
it’s what has been the sequence since
2000 1999
In fact, we are the bubble bubble burst
Heavy consequence. We are created a bigger bubble to deal with the consequence of the bubble burst and
so on we are now in the ultimate bubble, which is just
Inflating the dependent roller set to keep the financial conditions as loose as possible
to basically give you know when you look at
Is it any better than six months ago?
It will literally be better in six months time, of course not the difference
We are below 2% on 10 years which in fact impact
Massively the debt servicing of Italy which is helping to to some extent offset
the fact that growth will be very subdued and I think this is the when you look at the
where I need Europe Anna he can can
rice cash
To some extent some of them can just do it in a negative ield. So basically you’ve got
European corporate able to be paid to borrow money
This is quite crazy
But I think this is one of the cornerstone of the current dynamic and you took there about the three we’re in this third bubble
And I think some people will argue that
We may have already reached the Minsky moment where the certain things going on on sort of global framework. Where?
It once the bubble bursts there’s not much you can do about now you Spacey saying no the bubbles. Not burst
Central banks have got its back for now
But it’s got a go, you know, it’s gonna reach that point of no return
You just say it’s not next year is
Two years down the road or three it down run because the central bank’s just know they’ve got to put in a lot more liquidity
Just to keep this whole charade going
You know idea which was to some extent the the beauty of the previous si course
we had booms and bursts and booms and busts which is what which was to some extent making the
task of the central bank’s much easier because when you have a boom you just managed to raise rates and to
Create some margin of manoeuvre in terms of monetary policy
We thought have booms and busts. We just have just like a very disappointing
Growth outlook. We have a baseline with the basically seven relations
So basically again, they encounter for the bus so that we try to prevent the the potential downturn
But don’t make me wrong. This is a very very tricky
Journey and and I would cook I call that the the tight hot work of the central banks because things will not improve
So when you trying to stay on the baseline?
You see that the cliff on on each side and the and it says it’s very dangerous or journey
because I don’t think that Chinese God but were the two main pillars and engines of the
world war for the last
Organization this would not involve. Okay, we had some some friendly talks in Osaka
but we all know that it’s just a joke and and and
We we will very soon that deal is done and ninety percent ninety
Percent doesn’t mean anything what is ninety percent. It’s the part that
China is ready to
make concessions on the problem is the ten percent the ten percent is
The usual backdoors that China use to not comply they will not negotiate on that
So the best case scenario here, it’s regular talk and they’re gonna talk. I don’t think that
Trump will go into a
aggressive rhetoric
before the elections but the big risk is one is if he’s re-elected because it would not care about the second mandate and
this will become just
White but the in certainties are still
Prevailing you can see with the tariffs against Vietnam. I am absolutely convinced that
The next target will be Europe and the on the auto sector we saw with with India
It’s quite scary to see that even Japan and South Korea
You know
starting a
Trade war between the two. So this would not basically involve on the other side. The second engine was the Chinese Gulf
If you look at the forecast from the US
and evil from the NBS
Chinese ghost should be at five point four percent by 2020 and below 4 percent by 2030
so the word god, I don’t think would get better and
we are in what I
describe as a flatlining environment for a much longer period
But any small event can just change the outlook and the obvious world and I could agree with the vowel. It’s
If I’m wrong about the the conflict between China and Trump and we have a release condition in the next few months
That’s going to be very very tricky. So it sounds that we got the we got convergence basically
So we’ve got convergence of GDP. We’ve got convergence of
Asset price returns pretty much conversions of volatility or volatility dimension is is getting Mercer’s your outlook
Therefore can be slower for longest all of them. We crater into a
Full-blown recession you actually think that central banks can keep us at this
Kind of ideal level which might be one to two percent growth where every quarter people go
we’re gonna go over the edge, but they provide the liquidity and we extend this low growth environment in which
yields, continue to converge drugs continues to converge volatility stays where it is the stock of assets continues to rise meaning that the
Ultimate end game becomes potentially worse. You think that is that your outlook? Is that use a twelve month outlook? Yes
My twelve months our clue. It’s a smoke
just more central bank robbery and the super dogs would take out the bazookas and
And they’re gonna do more and forcing the other ones to do more. It’s a
You know, it’s a massive. It’s maybe the biggest bubble we have ever seen in the financial markets ever and I
am very scared about the the final outcome, but I’m not sure that the other choice I
Always talk about what I call the the central banks
not the
Monetary policy ladder toolkit with eight different steps starting with conventional
Right cuts going down to debt monetization
We already there. What are the central bank’s doing?
They are just monetizing the the debt nothing less nothing more
When you’ve got the BOJ who has something like forty five percent of the total ggb market
Yielding zero to some extent. It’s it’s like the red line. The red line of the of the government is the
me holding the
BOJ subtle bank balance sheet. So I think it’s it’s already doesn’t mean too much. It’s just numbers and
With the with the sort of you talked about one thing that could flare up and kind of break. The framework is is the
Flare up in the trade war which I guess would also be potentially in a currency or an Indy
But I mean, are there any other things out? I mean what if
What if we get a death spiral on European banks?
I think it’s gonna be a slow death rather than a death spiral but let’s say we got that or
What if you Darrell talks about the rate of change of the LIBOR two year on two year LIBOR?
That’s at this very very aggressive move
so off the very very low levels and when I think you
Bring that forward thirty six months or like a thirty six months
It shows that you’ll see a sudden tightening of financial conditions. You can a central bank
Provides sufficient liquidity to him at central bank balance sheets. We’re talking, you know, nineteen twenty trillion globally
Four or five in the big big nations, but that’s dwarfed by the size of the financial asset stock and the overall economies
I mean you talking here they’re not going to do
That we’re not talking about another trillion another four trillion of QE
It’s a doubling in order to be able to make sure this bubble which keeps on getting bigger
Doesn’t hit that that tricky moment
Interestingly enough for giant Sam. I came to the conclusion a little while ago that
you can’t understand major central banks and
I think that those limitations are almost
Intellectual, would you bet on pure Eau de not going absolutely white
I would not bet on that and I would never bet against the
Ability of the central banks to go into what I call the twilight zone of the monetary policy. I think there are no limits and
look at the the ECB they start to buy your etf’s they still have a lot of
stocks available
So it’s I think that it’s it’s quite a desperate the situation but what can they do
In fact in 2019. I think that the
Biggest problem we are its they’ve been so far than the old that that can
It’s almost impossible to buy platinum
2018 has been a good example of that as soon as the central banks are not providing the
Usual amount of cash into the system. It’s just putting about
And so in terms of kind of preparing for this and I guess we’re I think it’s almost the biggest question here
Is that talked about the very beginning the recession?
Is it slow that it turns into recession and the recession could turn it to something bad for equities?
but then if you take this logic you’re talking about the potential for a recession should reignite QE and if you
Do the Ivy I’ve got the chart of five central bank’s balance sheet versus the S&P and it’s the same
Over the last ten years. So basically the QE comes before the recession rising the equities
Is that gonna be one of the sort of ways to place? I mean should people be getting long equities here. I
Had that discussion this morning with a yeah when I’m a customer. I need some
we we talk a lot about the disconnect between again between
what we saw as a very
anxious message from the fixed-income saying while
Recession is roomy. This import of that you had the S&P just going into a new or demise
And again, I think it’s the strong belief
broad-based belief that all the central banks will put rates much lower and
The failed middle one percent, but it isn’t that similar to you know
Going back to the previous two peaks the fed cup rates
We had effects of the blow not quite a blow of top of markets went higher
For a few days few weeks and then it was the viewers. Well, actually no they can’t resist it or again
Are you saying that the actually being early this time? They’ve been a slightly earlier and again?
Before what GFC and after gypsy I think is a completely different game
I think that if you put they’ve got the the the the way to put trillions of of cash center in the system
For QE, and I think we would be a main pillar of the of their of their actions, especially for the ECB and the BOJ
It’s in the trade miss and i’m gonna go back to you. We had an interview back in march and your TV
There was buy gold because central banks are gonna go absolutely mad in terms of this world and you buy gold
Because they’re going to try and pre end the recession and we helped saw that break
In fact, actually the breaker and gold I think was when we just overtook the previous peak of negative yielding debt
We went from twelve to thirteen, didn’t we in that trend go. When is that still the right trade? Here? I am. Mr
Lee come inside I never been as bullish as
In the past on God, it’s I was bullish when we met in March and God was 21300
but I still believe that real yields will go further lower and
And I still believe that because you can have so much
cash injection plus a
currency war between all the central bank’s trying to
To put cash on their respective currencies. So you have a risk of debasement of the the fiat currencies
I think the God is a God desire
He’s a has got a girdle mix in part of it and most of the target are you looking for a man? I?
Remember, my first target was 1500 and so I will keep it like that for everyone
But they think is gonna do our yeah and and in other areas
I mean a lot of people thinking the work way to trade this is various part of the yield curse of
Buying bonds either buying bonds or notes the front end buying treasures at the back end
Do you think that’s still the right trade?
You think there’s a juice in that or should you be buying euro dollars some people to say actually, you know what?
You’re a dollar 100 calls, maybe two years out because actually the US will go negative
Do you think that’s the sort of thing to do as well?
I I think that I you know, what is the main risk for me?
But because I’m going to go back to the your question meet. So the main risk is
much higher dollar and I still believe that despite all the course that the US dollar should
Should reverse I think that you still want to belong of I think that the most the better-looking
Currency within the agree and and and the US dollar is still is the right one
Why do you want to buy against the dollar? Well, you know, we we discuss about that as well
It’s a there is nothing that you want world on a very long term
It’s still the reserve currency and and I think that there is still
imbalances in the US that are funding so I think that you need to be longer Treasuries and
I will I will personally more be more focused on the five to seven years part of the curve has on the long end
I don’t like the long run for for some reasons, but I will focus on the five to seven years
Do you think in the long and we’ll have we’ll worry about inflation?
I’ll go a little bit higher and I still think that the curve would keep on sitting not
necessarily a huge
Steep thing but I think that the transistor vice versa five thirty. It was probably can maintains the exact place
Okay, and so, um in terms of you know, you talk about the dollar bare thee
With with effects of all being nearly all time loads of the dollar
Basically, I mean shouldn’t it just be a grinding movin we’ve seen that just goes up a bit down a bit up up
isn’t the big move of the dollar kind of the endgame actually where all this breaks down because then it’s a pile back into the
dollar, so
Isn’t the dollar when the central banks fail?
We’re all second graph. So it’s not the catalyst. It’s the the everything is going to be the outcome of a fader. Yeah
And and it’s it’s going to be a the outcome of her massive funding global funding issues
And and this is I you know, it’s a what is the big difference between the ECB and the Fed?
I think the issue is ready to do anything. I think that the Fed to some extent is still a bit
worried about
The magnitude of the answer they should give to the market
they still want to be seen as independent and they are thinking that too much now will be seen as
As an allegiance to the to the White House the ECB can promise
Negative rates for 30 years if they want to the Fed can’t do that. So it’s going to be
whatever people think are things could be very difficult to out of the disregard of
Do you think that a serve game just fine back to dollar before you wrap it up?
but do you think that the dollar therefore is although we’re gonna see we’ve got the ammo from the
From the Fed essentially come down and people say all right differential
But it sounds like within that as they cut rights the US has become more attracted to everybody else
and so people come here if you think rates are coming down you probably US 10-year yields are gonna fall to one or below and
F we just want to get long for the capsule games, so do you think that the dollar
Even the most you say the customer rates, they’re $4 down
But actually that we’ll just track capsule into the US and not offset it the issue with that
Is basically even if let’s say less
Let’s assume that the Fed cuts 25 bibs in try and 25 in September. So 50 bibs you still have
Let’s say 250 beeps of positive callaghan
so the yo, and if the ECB does 20 bits of cut you in fact
It’s the 50 bits of the Fed are not enough to
make the
twin probe in fact the carry when you are
Just to induce the positive carry of the dollar
so basically, I think that the Fed to to make to put pressure on the Dora needs to do a lot and very quickly and
I don’t see that opinion next six months
So I still think that the dollar the long dollar is in the trade
And so then to summarize you you’re basically saying what we’ve got here is we’ve got a very clear slowdown but central banks are
early, they’re aggressive and
So therefore the sequencing really is. Yeah, we might see a shaving of global GDP down towards make the magic zero
But we won’t plumb it through yet. They’ll do everything to keep it
And so these signals that we’re seeing are
affected a little bit earlier actually signals that we’re seeing and actually not the same as the signals we use were used to
Prior to the GFC. I think that the the signals that might be slightly different, but they are worrying enough
to have the central bank’s intervening and
I’m comments that when you have rates at six percent you can be a bit patient before
going into
Easy mode because you know that you can cut by 300 pips very quickly when you have it’s a 250
You know that you have to do it quick to give the kickstart very before that the the the the global picture becomes
Why should we do 50 straight off?
The that it’s it’s again. It’s
This is why the Fed task is so complicated compared to the ECB if they do 50 after
Telling us man that everything is fine equity market. Would you think while they know something? We don’t know or
People will think why we have an employment rate at three point seven that cutting 50
It means that they are pleasing the white house. So they have, you know to navigate between the all these potential
Criticism or
worries to give a little bit and and
Not too much and not too quick. This is what what is the the main challenge of the Fed right?
So well, thank you very much. It sounds in some ways
It’s a sort of another thing as we discuss with goal is it’s a sort of semi
Optimistic outlook based on the ability of central banks to step in and maybe offset the worst that we might be expecting
Yeah, because it’s a way we are again with God
it’s um
it’s definitely not an Armageddon scenario because the crime with the Armageddon scenario you have basil delivered and
And we saw it in 2008. My main scenario is like you know what we need mediocrity
We love mediocrity
We’re going to sell mediocre for longer period of time millet is much better than and then than the best
And I’m funny enough. What is the potentially the biggest risk now?
it’s much better data and that would sound a bit extreme, but
Financial markets need with data at the moment not weak but not just owned either. He has to be
Brilliant, well sounds like we fight another day. Thank you very much once again for coming and good to see. Thank you

Author Since: Mar 11, 2019

  1. Recession really is the hot topic this week, it is good to know more about it and gain insights from experts!

  2. Central bankers keep printing money all it does is inflate asset prices-you need more and more money to buy the same goods

  3. If you want "interest" money, then inflation, recession and limitless money printing, QE are the part of the package. You can't have one without the other. Will the people be willing to understand the deadly effects of interest? No. So suffer the consequences.

  4. End the fed + End welfare + End warfare = FREE HUMANITY. It's that simple. The problem is many slave sheep will defend the very matrix that has enslaved humanity for generations. These sheep are happy being slaves as long as the chain they wear is Gucci.

  5. Very nice consolidation at the end of the talk: the FED has to navigate between what they want to do in anticipation of the recession (cut rates and a lot at once to get the bulls rolling) and a rate discount spree as the ECB can because they would shoot themselves in the leg. Ironically, in fact, they've already shot themselves by two things:
    1) Saying all is swell last fall when the equities dumped;
    2) Saying all is swell this spring/summer.

  6. It's hard to understand this guy so I can't process the information in audio form. I will have to wait til I can actually watch it with subtitles.

  7. Can CB's SAVE the global economy??? It's their global debt based fiat currency system that has brought it to the edge of destruction!!! Man am I on the wrong channel. I guess I'm just not educated enough to understand what noble, and virtuous people the Central Bankers are???

  8. He sounds like he's got a bunch of shit stuck in his throat and it's hard to make out what he's saying, but he seems quite knowledgeable and I'm glad to hear his take on things.

  9. Slavery based on usury attached to a manmade bartering tool supported by a bankers monopoly…they created this system..the title is idiosy..

  10. Actually if CBs going to be able to keep it together for longer with stimulus I think gold will keep on continue to rise in a continuous way.

  11. only fiscal policy can save the economy. But Europe has no central govt capable of fiscal spending. And the EU also follow stupid right wing austerity economics which is a huge cause for depopulation of the white Europeans. A form of "White Genocide" if you will. Ironic isn't it?

  12. Why’re you afraid of deflation when central banks are about to print a fuckton of money? So stupid, it’s inflation that’s coming, big time

  13. The question is absurd. Central banking, fiat currency, fractional reserves, etc, are the cause of the coming crisis.

  14. Sadly, public is enslaved in debt notes and computer credits worth nothing. If there is a massive downturn, anyone in debt will be crucified. How to repay underwater mortgages? The game is real. The score is fake, fabricated, and can be forgiven with no consequences to the food supply. Sadly those with collateral will be losing their collateral just like in 2008, moving in to their RV to camp on BLM land for free as gypsies. Standard of living will fall.

  15. Central bank = Money mafia. We are in a sewage system that the money changers have created and they owned both parties of the US political machine as well in all major world’s leaders pockets all doing their biddings for the syndicate. This collapse is on schedule and been planned for decades to end the cash system

  16. 💙💛💚🧡 If this interview didn't get your DICK HARD then you have some serious issues. Buy Bitcoin and Buy Gold. This decade (2020-2029) will be the Bitcoin & Gold Moon Season 💙💛💚🧡

  17. Question for the Expert:
    How can the Central Bank create inflation here in San Francisco ?
    We have SOOOOOOO little inflation here !!!

  18. #Ripple $XRP



    #FED #IMF #BIS #ECB #WorldBank #BOE #CentralBanks





    #XRPtheStandard #IoV

  19. #Ripple #Multihop #ILP bridges every people, all organisations and all assets class connect together into one world bigger ecosystem, #xRapid #XRP unlocks $27 Trillion Banks' pre-funded capital in Nostro/Vostro accounts, #XRP solves DTCC $1.6 Quadrillion "Liquidity" problems.


    > Central Banks held private conference (CBPC) on 24~27th June 2019 in Berlin, Germany (186 delegates, 99 organizations, 50 countries)

    > V20 meeting was then carried after G20 meeting 28th/29th June 2019 in Osaka, Japan for new regulations and legal framework of crypto industry

    > New appointment of ECB Chairwoman by IMF Christine Largade

    > New appointment of FED Nominee Judy Shelton (high possible next Chairwoman, Trump's ex financial advisor)

    > Trump first time ever publicly tweet about Bitcoin on 11th July 2019

    > Trump uses XRPtipbot in Twitter

    > Steven Mnuchin public address for cryptocurrencies

    > FED Faster Payment Task Force on 5th Aug 2019

    > More are coming..

  21. #XRP has been planned 30 years ago since 1988!


  22. Banks are printing worthless paper due to a fractional reserve system. This is the creation of DEBT. The debt- based economy is a worm eating its own tail. The banks are not the SAVIOR of the financial system; they are the CAUSE of calamity. The collapse of the Euro causes a banking systems freeze- up at the time WAR appears between the US, allies and Iran; and also WAR appears between Russia and the financially collapsed EU. As self-serving institutions, the banks will not lend to one another, as libor goes up and lending then ends. They will not provide money for insurance, as wharves fall silent. Remember the 'credit crunch' in the 2008 meltdown? This was banks taking care of themselves. Stagflation; deflation; hyperinflation; are all generated by banks serving themselves. There is no such thing as 'helicopter money'; because they have debt ONLY, and this drops TOILET PAPER onto a population in crisis. Use sound judgement and see that BANKS intend to ride out the worldwide distress and STILL BE HERE when the human population has been decimated by CRISIS. They carpet bag the properties under mortgage; and start off again when the dust settles. The banking system ENDS during the Great tribulation Isaiah 55: 1. That is also the END of man's rule over man Romans 9: 28. The Rule of Christ Jesus arrives, 'in power and great glory' Matthew 24: 29, 30 Matthew 25: 31, 34. WE are not abandoned; the end has been written; a large number of people are saved; healed and given a new beginning; and this matter has been WRITTEN ahead of time to create FAITH Romans 10: 13- 15. YOU ALSO can live in Paradise Luke 23: 43 on earth with your children Revelation 7: 9, 14-17 along with the dead of yours raised up back to life. Acts 24: 15 Revelation 20: 13 The 'living God'; the God of prophecy CARES ABOUT YOU.

  23. How will banks save the economy when they can't even save themselves? They failed and had to be bailed out because their business model is based on fraud and manipulation, not making money. A better question is why aren't bankers in jail? Oh right it's because they can buy their way out and they are too big to jail and too big to fail. Two tier justice system. If you're powerful enough you can get away with anything. Criminals can keep on committing crimes until they destroy their own system. Their own greed has caused a complete loss of confidence in their system. This system isn't going to last too long. Good job Zionist bankers. You have destroyed the world.

  24. Thank you for the most informative video. The insights presented were clear and direct. The signs are becoming very clear. A plan is necessary. "People don't plan to fail, they fail to plan." I am subscribed, notified and anxiously await the follow up videos. Thanks again for all of your time and effort.

  25. Awesome Analysis. The conclusion is a bubble bust is coming of massive proportions, which the central banks can do nothing about, except print more money, distorting and moving further to negative interest rates! Capitalism is fucked. Devaluation, devalution more devaluation, nom de rigueur! Bitcoin is the only solution, to bring sanity back!

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