GM69: The Global Economy from a Liquidity Perspective ft. Michael Howell
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 4 September 2024
⏱️ 63 minutes
🧾️ Download transcript
Summary
Michael Howell, Managing Director of Crossborder Capital and Author of the Capital Wars Substack, returns in this episode to speak with Alan Dunne about the liquidity cycle’s influence on global markets. Michael outlines how he sees rising liquidity growth providing a favourable backdrop for risky assets and that the conventional narrative that the Fed has been tightening liquidity via quantitative tightening is misplaced. They discuss how the requirement to refinance $70 trillion in debt every year, and the prospect of double digit growth in debt, will inevitably lead to monetary inflation with profound implications for assets like gold and equities. In contrast, although tactical duration issuance by the US Treasury has supported US Treasuries the longer term outlook is less favourable. The conversation also touches on global FX markets, the recent unwinding of the JPY carry trade, and Michael’s perspective on a possible tacit agreement to weaken the US dollar, which could have far-reaching consequences for liquidity and asset markets.
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Episode TimeStamps:
02:12 - Introduction to Michael Howell
03:15 - Howell's framework for looking at markets
06:32 - How Asian central banks impact U.S equities
09:17 - Do different types of liquidity have different effects?
12:17 - The last 15 years from a...
Transcript
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| 0:00.0 | So if you think that we're going to see these type of increases over the next 25 years, |
| 0:14.0 | just looking at compound interest, growing at that level means that the stock of liquidity |
| 0:20.0 | is going to expand by about 10fold |
| 0:22.6 | between now and 2050, which means the gold price, if it keeps pace paroosue, is going to go up |
| 0:28.8 | 10 times as well. |
| 0:29.9 | So you're looking at $25,000 an ounce. |
| 0:34.1 | Imagine spending an hour with the world's greatest traders. |
| 0:39.6 | Imagine learning from their experiences, |
| 0:46.4 | their successes, and their failures. Imagine no more. Welcome to Top Traders Unplugged, |
| 0:51.2 | the place where you can learn from the best hedge fund managers in the world so you can take your manager due, or investment career to the next level. |
| 0:55.0 | Before we begin today's conversation, remember to keep two things in mind. |
| 0:59.0 | All the discussion we'll have about investment performance is about the past, |
| 1:02.7 | and past performance does not guarantee or even infer anything about future performance. |
| 1:07.7 | Also understand that there's a significant risk of financial loss with all investment strategies, and you need to request and understand the specific performance. Also understand that there's a significant risk of financial loss with all investment |
| 1:11.4 | strategies, and you need to request and understand the specific risks from the investment |
| 1:16.1 | manager about their product before you make investment decisions. Here's your host, |
| 1:20.9 | veteran hedge fund manager, Nealz Kostrup Larson. |
| 1:37.0 | Welcome and welcome back to another conversation in our series of episodes that focuses on markets and investing from a global macro perspective. |
| 1:45.6 | This is a series that I not only find incredibly interesting as well as intellectually challenging, but also very important given where we are in the global economy and the geopolitical cycle we want to dig deep into the minds of some of the |
| 1:53.0 | most prominent experts to help us better understand what this new global macro driven world may |
| 1:58.4 | look like we want to explore their perspectives on a host of game-changing |
| 2:03.1 | issues and hopefully dig out nuances in their work through meaningful conversations. |
... |
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