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Real Vision: Finance & Investing

USD's Reserve Status, the Eurodollar System, and International Trade ( w/ Lyn Alden & Hugh Hendry )

Real Vision: Finance & Investing

Real Vision

Investing, Business News, News, Business

4.11.1K Ratings

🗓️ 24 January 2021

⏱️ 62 minutes

🧾️ Download transcript

Summary

The Interview, Recorded on December 1, 2020.: Hugh Hendry, founder and former CIO of Eclectica Asset Management, welcomes Lyn Alden of Lyn Alden Investment Strategy for a wide-ranging discussion on international trade and the Eurodollar system. Hendry mounts a nuanced defense of the dollar's role as the global reserve asset, whereas Alden sees a slow but steady de-dollarization happening around the world, which she expects will continue. Hendry and Alden discuss whether China's role in international trade is "mercantilist," and whether its stagnant reserves of U.S. Treasurys is a true macroeconomic bellwether. Lastly, Hendry and Alden look forward to identify potential solutions to these problems, such as digital currencies (Alden's solution) and ultra-negative rates (Hendry's solution). Hugh Hendry's YouTube channel can be accessed here: https://www.youtube.com/c/HughHendryOfficial/videos. Key learnings: Alden and Hendry agree that structural forces have prevented the dollar from weakening to the levels implied by its persistent trade deficit. But while Alden thinks the Eurodollar system will expand beyond the control of the U.S., Hendry argues that American commercial banks will continue to control the supply of dollars in reality, and that the U.S. will remain the global monetary hegemon. Hendry has also provided a transcript he has personally edited to clarify some of his points in this interview: https://rvtv.io/3gysJZT Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0

At M&M we sell big brands at low prices.

0:03.6

Our clothes and footwear are always up to 65% less.

0:07.5

And so are our radio ads.

0:09.7

So here's some Calypso music to fill the time. M&M, M&M, big brands, low prices, always up to 65% less than RRP. And it is a spectacular pleasure to be with you today on behalf of the Real Vision

0:50.9

crew who have again with their immense generosity thrown the universe

0:56.0

at us and put us together and who knows well I know something we're going to try and keep

1:02.0

this we're going to keep it kind of rapid,

1:05.1

because I've got a plane to catch and going back to London. And so I think we're going to try and wrap in 60 minutes.

1:11.2

But let's kind of play games, you know, like let's pretend it's an episode of billions.

1:16.3

Oh no, no, there's not actually. But you know, the people can go, sometimes I get pumped across the tapes and I start writing and you know our

1:27.5

dear fellow great and I have to say with great respect Luke Gorman he I do use him he he brings out a

1:35.9

rage in me but it's good because you know he's working at it and I always regard

1:40.0

you to as being part of the same fight club.

1:43.4

So it's, and that's to say that I respect the hard work in the endeavor of both of you.

1:51.0

And it's incredible how much I think we agree with and sometimes it tends to be just perhaps

1:56.8

emphasis which separates us. But it's those tiny little details sometimes that makes all the difference.

2:02.8

So I hope to explore all of that.

2:04.8

So how it used to be with me, my guys and girls would put people in front of me

2:10.6

because I never saw anyone.

2:12.1

I'd be like, yeah, you know, I listen to music, I read books. But every now and again, and indeed in 2007 I had the opportunity to meet that Deutsche Trader Greg with the mortgage-backed trade.

2:30.0

And back then it was like the first meeting was catastrophic, the second was mediocre, and the third was revelatory.

2:36.0

So these things do work. So that's kind of like I say, let's role play if you may indulge me and I may go back to pretending I'm a hedge fund

...

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