BREAKDOWN: Let Them Eat Equities! The Economic Chickens Come Home to Roost, Feat. Luke Gromen
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 2 September 2020
⏱️ 53 minutes
🧾️ Download transcript
Summary
One of the best-known macro analysts breaks down last week’s Jerome Powell speech and whether it truly represents a new policy era for the Federal Reserve.
This episode is sponsored by Crypto.com, Bitstamp and Nexo.io.
Today on the Brief:
- Debt will exceed U.S. GDP for the first time since 1946
- SPACs in action!
- Decentralized exchange volume flippens centralized exchanges
Our main conversation is with Luke Gromen, founder of the Forest for the Trees consulting firm.
In this conversation, we discuss:
- Chairman Powell’s speech and whether this is a true policy departure
- The evolving relationship between the Federal Reserve and Treasury Department
- What it would mean to get China to start “footing the bill”
- The gold narrative
- Why stock price gains are unlikely to keep U.S. citizens satisfied with the economy for long
Find our guest online:
Website: fftt-llc.com
Twitter: @LukeGromen
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Transcript
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| 0:00.0 | To me, the punchline is that if you look back over the last 100, 120 years, anytime you get |
| 0:06.1 | sovereign debt levels as high as they are now in the U.S. and more broadly across the developed |
| 0:10.6 | world, there's four outcomes 100% of the time. It's restructuring slash default, it's inflation, |
| 0:18.3 | it's financial repression, or it's hyperinflation. That's it. Those are your choices. |
| 0:23.2 | And so if we can assume that the United States is not going to restructure or default as treasuries, |
| 0:28.4 | which I think is pretty safe, we can set that one aside. Historically, and this ties into the |
| 0:33.5 | political current size and lack thereof, if we were going to reform entitlements in the |
| 0:38.5 | United States, the time to have done so was prior to 2008, because post-2008, after you bailed |
| 0:44.3 | out the banking system, you made it politically impossible for all intents and purposes to |
| 0:49.6 | reform entitlements because you can't cut payments to retirees after you've bailed out Wall Street. |
| 0:56.7 | Welcome back to The Breakdown with me, NLW. |
| 1:00.8 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 1:06.6 | The breakdown is sponsored by crypto.com, BitStamp, and nexo.io, and produced and distributed by CoinDess. |
| 1:15.4 | What's going on, guys? It is Wednesday, September 2nd, and today I am so excited to bring you another conversation with Luke Gromon. |
| 1:25.5 | Luke is one of the most interesting and thoughtful guys out in the macro scene, |
| 1:29.9 | and I know you'll love this conversation. First up, however, let's do the brief. |
| 1:35.4 | First up on the brief today, debt will exceed 100% of GDP this year for the first time since |
| 1:41.8 | World War II. So basically, in the context of the massive response to |
| 1:47.1 | COVID-19, the U.S. debt level will exceed economic output for the first time in 70 years since |
| 1:54.2 | 1946. In many ways, the real question about this, because come on, let's be serious, there's not |
| 2:00.5 | many people who are surprised at this, the real question about this, because come on, let's be serious, there's not many people who are surprised at this, the real question becomes how do we get ourselves out of it? |
| 2:06.6 | And as the Wall Street Journal put it, after World War II, federal debt levels remained relatively |
... |
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