Daily Briefing – July 30, 2020

Published on
July 30th, 2020
Duration
28 minutes


Daily Briefing – July 30, 2020

Daily Briefing ·
Featuring Nick Correa, Ed Harrison, and Marc Chandler

Published on: July 30th, 2020 • Duration: 28 minutes

Managing editor, Ed Harrison, hosts Marc Chandler, chief market strategist at Bannockburn Global Forex, to discuss currency markets, the dollar’s reserve status, and the world's loosening grip on the goal of economic efficiency. Chandler and Harrison parse how a seemingly weaker US recovery is expressing itself through currency markets. Chandler also shares his thoughts on why the dollar losing reserve status and the loss of US hegemony are not as compelling by appealing to the dollar’s cyclical trends. Finally, they discuss how nations are reducing their dependency on economic efficiency as the end all, be all, what that looks like, and how the pandemic is catalyzing these trends. In the intro, Nick Correa reviews the latest GDP numbers for the U.S. economy and what implications it has over the next few months.

Comments

Transcript

  • PW
    Paul W.
    2 August 2020 @ 21:27
    "US has 8000 tons of gold....most in the world for central banks" err not so..... Euro zone central banks have 10,000 tons.... and China officially has 2000 tons(declared) but based on their mining and buying in last 20 years its actually probably closer to 20,000 tons.
  • SW
    Scott W.
    31 July 2020 @ 10:51
    Currently, 100% of Uranium fuel used to power our nuclear power plants (20% of US electricity production and 60% of US green energy production) is imported, about 40% from potential unfriendly folks. Risky business!! We are loosing our seat at the nuclear table whereas we used to be the driver of nuclear proliferation. Trump appears to have recognized this and slowly, trying to help. But time is of the essence. Russia and China OWN the nuclear space currently and they are pulling away. Nuclear is definitely on the grow due to its green energy characteristics!!
    • MT
      Mark T.
      31 July 2020 @ 15:52
      Not sure trump recognizes anything at all unless it directly benefits him.
  • JM
    Jackson M.
    31 July 2020 @ 01:16
    Can someone please explain "Current Account deficit and budget deficit have people questioning the viability of the dollar and its global functioning" (11 min mark)? Still learning a lot about macroeconomics. Thanks!
    • GH
      Gregory H.
      31 July 2020 @ 07:21
      Budget Deficit Example - For 2020, say the US Government takes in $3.5 trillion, but spends $8.0 trillion, it would be running $-4.5 trillion deficit... For some context, during the 2008 financial crisis I believe the largest single year deficit was around $-1.4 trillion... And during the second half of the 2010s, deficits were roughly $500 billion a year... For 2020, it could be $3 trillion - $5 trillion easily I think... hope that helps for federal budget deficits...
    • JM
      Jackson M.
      31 July 2020 @ 12:50
      Thanks Gregory, why would that have people questioning the $$ though?
  • JC
    JP C.
    31 July 2020 @ 04:03
    Am not a gold bug and am not advocating for a gold standard. But its not the quantum of gold but the price of said quantum that matters. E.G. Gold at $5000 or even $10000 per ounce changes the calculus ...but not a perfect solution either. (Hat tip to Grant Williams See "Cry Wolf" presentation and Jim Rickards).
    • jh
      jon h.
      31 July 2020 @ 12:15
      Agreed, as Kyle Bass once said, "price will solve everything". Seems to me Chandler dismisses gold's place in monetary history. Rickards once again predicts a crazy high number of $15,000 by 2025. He backs it up with two metrics. 1) a 40% value of M1 and he does not say gold has to be formally adopted as a backing. Like you mentioned in Williams Cry Wolf, gold isn't a choice. It is forced upon a broken system. 2) the average gain from the last two gold bull market cycles. https://youtu.be/TnOcRRJHTmk
  • DS
    David S.
    31 July 2020 @ 00:12
    Currently I would suggest that Venezuela government is easily defined as a dictatorship of a tyrant. It is neither a socialist country under the Karl Marx definition or the democratic socialist definition. Just a tyrant – a cruel and oppressive ruler. DLS
    • RG
      Renaud G.
      31 July 2020 @ 00:57
      A democratically elected tyrant to be more precise. :-)
    • DS
      David S.
      31 July 2020 @ 08:21
      I have a bridge for sell. DLS
  • ED
    Edward D.
    30 July 2020 @ 23:14
    His macro level vision is extraordinary. Fascinating.
    • JR
      Jason R.
      31 July 2020 @ 02:30
      Yeah...extraordinarily BAD. The guy thinks we're in an economic recovery! (LOL).
    • EM
      Eivind M.
      31 July 2020 @ 06:18
      I wasn't too impressed. For an "FX guy" he sure sounds clueless about the global Eurodollar and repo system and how the dollar shortage has influenced nearly every crisis in the last 30 years. He doesn't even seem to grasp that the asset sell-off is directly linked to the mad dash for dollars in the squeeze. I am fairly certain he will be proven dead wrong about the dollar before 2020 is over.
  • NH
    Naser H.
    31 July 2020 @ 04:33
    Man its amazing how we can have so many different views about one thing! These markets are hard to predict. But still good to hear different views. I think Mr. Marc Chandler is right in the long term. There may something going on in the short term if there is a W shape to come. But El Erian thinks we are still in square root. hmmm!
  • MD
    Matt D.
    31 July 2020 @ 04:01
    Good work Ed - great interview and Mark was interesting. Two can of worms - is efficiency is code for deeper socialism or less capitalism or free markets...? The last Daily Brief comment section seemed to melt down a bit over Ash's innocent statement. Second - FA Cup. I think we (Arsenal) will be competitive. Will be a cracker. Pity no crowds. Cheers.
  • DR
    Danilo R.
    31 July 2020 @ 03:40
    Right, because Europe will be tremendous growth going further. Hedge managers piling on the Euro because of “better” Covid reaction. The momentum is shorting the dollar, because the masses are always right. Bottom line, the US is loading up on tech ... including biotech and fintech and if ignore the noise, the US has much better GDP beyond the myopic election cycle.
  • PB
    Paul B.
    31 July 2020 @ 03:25
    Good Talk ED...I agree with him largely...I said back when the USD peaked at 1.03 DXY,,,,thats all shes got. slow downward grind to 70 or less
  • dw
    darcy w.
    31 July 2020 @ 03:00
    Someone give Marc Chandler an award for always having the perfect metaphor or analogy to reduce his thoughts and views so succinctly.
  • DR
    Derrick R.
    31 July 2020 @ 02:41
    Do European banks corroborate this mans thesis?
  • MC
    Michael C.
    31 July 2020 @ 01:45
    Whoever runs marketing for RV stop posting them on Zerohedge everyday. It's dilutive and reveals: 1.) That you know that these DB's are the lowest value content on the platform 2.) You are in a wild feeding frenzy with other media platforms willing to do anything to grab market share 3.) These DB's are designed to be low value teasers to tag potential paying subscribers
    • JM
      Jackson M.
      31 July 2020 @ 02:28
      They’re also on Apple podcasts for free
    • DP
      Duane P.
      31 July 2020 @ 02:40
      Who says RV has anything to do with it? Zerohedge reposts proprietary content from all over the place.
  • TB
    Timothy B.
    31 July 2020 @ 01:08
    Haven't watched the vid yet but wanted to comment on the odd way the term economic efficiency is used in the intro. How can efficiency be a final goal ("end all, be all")? As a means to an end it can be described figuratively as a crucial intermediate goal, but it certainly can not be thought of as something that can be compromised, otherwise it would be possible to optimize the efficiency of the goal to become less efficient. Efficiency is an accounting of available resources relative to the goal to which their consumption is directed. Goals can change, but to account for the effect that the pursuit of any given goal has on scarce resources is in principle unavoidable. Were a country to declare a policy of loosening it's grip on economic efficiency as a goal I would interpret that claim to mean that (hopefull) it had realized that the pursuit of economic efficiency as a final goal had been foolish and that now it meant to embark on a policy designed to remove the barriers to economic efficiency it had previously established so that real goals had a better chance of being realized.
    • PP
      Patrick P.
      31 July 2020 @ 01:53
      Timothy... I'm sorry but I've read your comment at least 5 times and I have no idea what in the hell you're trying to say... Next time watch the video first ...lol
  • WH
    William H.
    31 July 2020 @ 01:44
    Definitely like the fx commentary here. Looks to be an excellent primer so to speak for tomorrow live interview Ed is doing with Andres Steno Larson. Hope to hear more on the fx markets. Thanks Ed!
  • YM
    Younes M.
    31 July 2020 @ 01:12
    Marc touched on exactly what I've been thinking might unfold as well with the economic efficiency angle. It certainly feels like the events of 2020 thus far have conspired to nudge society to engage in deeper self-reflection and perhaps reprice the long term costs of economic efficiency, social justice, and environmental threats. Whether it has any staying power is the question.
  • DM
    Dominic M.
    31 July 2020 @ 01:03
    10/10. Please have Marc Chandler on again.
  • CX
    Cindy X.
    31 July 2020 @ 00:46
    What's different and new? Sounds like another cnbc talking head.
    • MC
      Michael C.
      31 July 2020 @ 00:47
      Well said Cindy. At least he was better than that guy from marketing called Tyler.
  • DS
    David S.
    30 July 2020 @ 23:27
    Solid interview with Mr. Chandler and his views on the FX market and financial resiliency vs. financial efficiency. Hopefully the decline in the $US will help increasing the price of gold and maybe Bitcoin for you younger folks. DLS
  • DT
    David T.
    30 July 2020 @ 23:10
    So, astronomic debt and money printing is ok? And, we just gonna reverse all that? BS. This has to end up bad, there's no other way. 'Democratic Socialism' will bring it all into the ground.
  • CM
    Cory M.
    30 July 2020 @ 23:06
    Another great guest! I really liked Marc's forward thinking (moving away from an era of efficiency) and the way he interwove that with FX and other history. Even you, Ed, got your questions swept away a few times by Marc's completeness. Look forward to seeing Marc again.
  • MT
    Mark T.
    30 July 2020 @ 22:43
    Is he basing his analysis of Gold on carrying cost or current price/oz?