The Vicissitudes of Markets – Live with Luke Gromen

Published on
August 12th, 2020
Duration
80 minutes

A Tug-Of-War Between Themes – Live with Louis Llanes


The Vicissitudes of Markets – Live with Luke Gromen

Live ·
Featuring Luke Gromen

Published on: August 12th, 2020 • Duration: 80 minutes

In a world of dissenting views, contradictory ideas, and endless tergiversation both at the policy and market structure level, analysis takes on a life of its own. Increasingly, its rigor and intellectual depth must expand beyond traditional theories and thinking. In part, this is due to the unprecedented nature of the world we find ourselves in today, but more so, it is result of a looming tectonic shift in the macro, political and economic edifice that has been in place since World War II. That is, Bretton Woods and the subsequent decoupling from gold in the early 70s. Will this system survive? And, if not, what is to replace it? To this end, we’ve invited the Luke Gromen, founder and president of Forest for the Trees to join us on this segment of Real Vision Live. He’ll be sitting down with Ed Harrison for a journey into the U.S. dollar and the hegemonic role it has induced for the United States. Beyond this, they will try to uncover what the future holds for the currency and it’s global reserve status.

Comments

Transcript

  • MG
    Miguel G.
    14 August 2020 @ 13:04
    I thought this was a great discussion other than the point that Luke made about the stock market going down being a threat to national security. I couldn't disagree more as the lower/middle class is vastly underweight equities and wouldn't lose a minute of sleep if the market lost 50%. The top 10% in the United States own 92% of all stocks in America. Will it effect consumption in the US in the short run, possibly but it'll be vastly beneficial imo to allow prices to clear and give the other 90% of American's a chance to grow with America at a much lower multiple. Instead, they are not only getting locked out of financial assets, but getting screwed on the other end in terms of wage growth. If real estate was allowed to clear in 2008, a much more important asset to the working class, why cant stock prices. To think other wise is ridiculous imo and its whats wrong with today's policies. The percent of Americans that benefited from financial asset appreciation the last decade is a small percentage of total Americans. Lets not fool ourselves that the stock market is important to all of us, its benefited a few and left behind many.
    • RG
      Richard G.
      15 August 2020 @ 13:32
      3a-
    • TS
      Thomas S.
      16 August 2020 @ 17:44
      How would the retirements of all the boomers look if the market dropped 50 percent and didn’t immediately rebound like it just did and instead was followed by a slow rise?
    • DM
      David M.
      19 August 2020 @ 16:37
      I don't think you're looking at the situation through the correct lens. You're highlighting problems which are real, but you have to look at why those problems exist and why the laizze-faire approach isn't being taken. Luke has said in many interviews, 70% of GDP is from consumer spending, 200% of spending growth comes from rising asset prices. The stock market drives US GDP growth. And we all know in this political environment GDP will be bolstered by any means necessary, and that means.. get the market higher.
  • DK
    Daniel K.
    18 August 2020 @ 08:03
    I would love to hear Luke debating Steve Van Metre on subject of dollar strength and gold price drop. I know Steve’s interview with Brent Johnson is coming; would also like to have Steve to interview Jeff Snider (although it may turn into a love fest as both are in USD shortage camp:) )
  • JG
    James G.
    17 August 2020 @ 21:12
    My assets in a chair.
  • MD
    Mark D.
    16 August 2020 @ 09:33
    Luke speaks about complex topics with simplicity and common sense and makes them a ‘given’ to understand and foresee unfolding. Love listening to him speak.
  • RK
    Richard K.
    15 August 2020 @ 18:29
    Excellent. Maybe Luke could interview Kiril Sokoloff and/or Victor Sperandeo.
  • CG
    Chinmay G.
    15 August 2020 @ 00:52
    Great interview Ed! Luke is awesome. Kept the conversation very simple to understand. Looking forward to next week on Precious Metals.
  • BM
    Biju M.
    13 August 2020 @ 23:01
    Its time to bring Lyn Alden!
    • JF
      Jack F. | Real Vision
      14 August 2020 @ 01:13
      Your wish is our command. Lyn will be on our platform twice next week - once with Ron William, a tactical trader, and then a Real Vision Live with Raoul (!). The interviews will be part of our precious metals coverage, and will focus on gold and silver. Maybe some bitcoin as well :)
    • JH
      Jesse H.
      14 August 2020 @ 13:40
      Oh sweet! I can’t wait for Raoul & Lyn. That’s gonna be gold, pardon the pun ;-)
    • JE
      Jonathan E.
      14 August 2020 @ 21:59
      wow!
  • AI
    Andras I.
    14 August 2020 @ 02:09
    One thing that I miss from these models is the overseas (shadow) banking systems' (interbank wholesale) eurodollar creation effect, which had a multitude of implications. 1, The Fed and M2 are somewhat irrelevant if the banks don't cooperate - USD is not a domestic market, fed funds and eurodollar rates break at the worst possible times... Etc. Not just njo direct control over this market but also no clear idea of the size and complexity of it. 2, After GFC and profits disappearing with lower and lower rates rates, banks are less and less willing to take on the chore of lubricate the international monetary system and act as a drag on almost all economies (not just US but China.. Etc), clearly visible in underperformance of pre-2008 trends 3, Rise of populism as a result of underperformance and further distortion of wealth distribution --- There is a multiple hours presentation about this on Macrovoices (search eurodollar university), highly recommended. Recorded in 2017-2018, there was an update interview this year. Further basics: Prof. Perry Mehrling (whom I recommended to Ed already) of Columbia University recorded (in 2013?) his semester long course covering shadow banking course, where he presents a model (Money View) of central banking and connecting the financial and economic systems, a history of banking, various systems, money, broker/dealer models.. Etc. He's using Marcia Stigum's money markets book, but it's not dry at all. Available on his website (amongst shorter/updated versions) for free. It's a long haul but helps tremendously to understand what's going on.
    • NR
      Nathan R.
      14 August 2020 @ 14:22
      This. Pockets of transient inflation inside a deflationary vortex. Caveats: Productivity explosion from revolutionary tech, Fed Reserve Act changed to make liabilities legal tender, War Everyone screaming "inflation" from M2 and QE needs to look at 31 years of Japan. The US and Europe are headed this way....but without the, ahem, "cultural solidarity."
  • MD
    Matt D.
    14 August 2020 @ 06:28
    Great interview Ed, Luke is definitely an excellent guest - both in his insights and as a person. I like the fact he doesn't seem to have an agenda and can always keep a solid contextual framework (geopolitical often) for his ideas. I like his idea of an informal organic discussion - often a source of creative ideas. Enjoyed this, thanks!
    • JH
      Jesse H.
      14 August 2020 @ 13:38
      Absolutely. What Luke is getting at with his last comment re. An informal discussion is like The Exchange he did with Grant and Brent years ago over some bourbon. That would be awesome ;-)
  • MR
    Michael R.
    14 August 2020 @ 02:41
    A Pro's Pro.
  • RM
    Ron M.
    14 August 2020 @ 01:34
    Love, Luke! The best macro guys can explain complex things simply. Luke is definitely one of them.
  • SB
    Stephen B.
    14 August 2020 @ 01:26
    During my long (and successful) career in business, the golden rule we were constantly reminded of was "there is always a bigger picture at work and you need to understand it". Luke is the ultimate analyst of The biggest, big picture. Priceless!
  • EK
    Eric K.
    13 August 2020 @ 23:41
    This was superb! Great job Ed in your questioning. I’ve heard Luke talk dozens of times and as one commenter said he really connects the dots. I’ve unfortunately usually only understood a little less than half of what he’s said. Today I think it clicked for me. Thanks to you both for a great dialog!
  • BM
    Biju M.
    13 August 2020 @ 23:12
    Luke is on target as usual. Added one more to my list for a revisit.
  • DB
    Donna B.
    13 August 2020 @ 22:55
    Fantastic! I look forward to reading the transcript so I can absorb more of what was said. Thank you gentlemen.
  • TB
    Tobin B.
    13 August 2020 @ 22:08
    Thanks Ed and Luke. I do have a tough time following Luke's train of thought, as it has several switches…The Strong points are inflationary and deflationary cause and effect
  • AW
    Angela W.
    13 August 2020 @ 21:49
    Outstanding Gentleman. Luke thank you for the macro historical picture connecting so many dots. Exceptional thinker laying out complex topics so clearly. Thank you for helping us to navigate these crazy times. Yes Please Ed, thanks for creating more sessions with Luke.
  • GB
    Graeme B.
    13 August 2020 @ 21:42
    Exceptional. Luke is so clear and reasoned with his perspective.
  • JE
    Jonathan E.
    13 August 2020 @ 20:30
    Real quality you get the best guys. Fed versus Gov on yield rates is essential info.
  • OM
    Owen M.
    13 August 2020 @ 19:27
    Great one! Thank you RV, ED, and Luke.
  • PU
    Peter U.
    13 August 2020 @ 18:28
    one of the best from Ed and RV to date!
  • AS
    Andrew S.
    13 August 2020 @ 16:45
    Nobody connects the dots better than Luke. The "banquet of consequences" has finally arrived. A healthy allocation to gold makes sense. Thanks.