All-Stars #47 Luke Gromen: It’s not Stocks or Bonds but the USD that is the “odd man out”

Macro Voices

Hedge Fund Manager Erik Townsend

Business, Investing, Business:investing

4.8 • 3.4K Ratings

🗓️ 19 August 2019

⏱️ 30 minutes

🔗️ Recording | iTunes | RSS

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Summary

All-Star Luke Gromen is back for another fantastic All-Stars Interview. Why it’s the USD (not stocks or bonds) that is mispriced, and why it sets up an equity bear trap. Great interview! Link: http://bit.ly/2Z2EBxn

Transcript

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0:00.0	This is a special edition of Macrovoises with hedge fund manager Eric Townsend.
0:14.2	The premier financial podcast targeting professional finance, high net worth individuals, family
0:19.8	offices, and other sophisticated investors.
0:23.0	Now for this special edition of Macrovoises, here's hedge fund manager Eric Townsend.
0:30.0	Macrovoises All Stars episode 47 was recorded on August 19th, 2019.
0:36.6	I'm Eric Townsend.
0:38.5	Forrest for the trees founder Luke Gromon is back with us again this week.
0:43.1	Luke, what's caught your attention recently?
0:45.9	Hi Eric, thanks for having me back on.
0:47.6	You know, back in our interview on Macrovoises All Stars on May 28th, we said the following.
0:53.3	Quote, a good friend of mine said recently, he thinks it's possible that both stocks and bonds
0:57.9	have it right with low yields and high valuations and that it's the FX markets and specifically
1:03.2	the dollar that might have it wrong.
1:05.2	And given what's transpired in the past few weeks, I'm inclined to think that's right because
1:09.3	with Fed funds rates over interest on excess reserves or I OER, which is an esoteric money
1:14.8	market plumbing issue, is suggesting is in short suggesting the Fed is losing control
1:19.8	of the price of money in the US, which of course should not happen.
1:23.3	Fed funds went above IOER on March 20th of 2019 and it stayed there.
1:28.8	We went on to say the only ways to fix this are to supply more dollar liquidity soon,
1:33.7	either swap lines, rate cuts, more QE.
1:36.4	And this is not well understood.
1:38.1	What is really not well understood is the underlying core issue causing this, which was rising
	...

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