The EU mutualized debt may be just a head fake. DLS

so nice to hear a clear thinker speak

Great interview, can't fault the thinking. As a counterpoint observation, when I went to the Cinema in Switzerland yesterday at 2PM it seemed pretty normal. Afternoon movie with about 30% full is what it would usually look like.

Gerard is clearly an alien wizard. That was an amazing interview

I'd like to expand my MMT request.... Any chance RV could line up a series of interviews on MMT, pro and con. I know there have been one or two in the past, but back then it seemed (to me) like an arcane academic topic. It's looking more and more like it will be put into practice, and may destroy, or save, western civilization. I think we really need to get to the bottom of it.

Tremendous. I had the pleasure of working with Gerard at Morgan Stanley for many years. Like a fine wine, he's getting better and better.

When I have an "epiphany" (in a book, article, study) I take the time to outline it . I do this to put the information in my active memory to use it as a tool. THIS ARTICLE QUALIFIES. Thanks to RealVision for providing a transcript. Do understand this is topical, things are changing fast, but should help over the next month or two. One additional opinion, for Italy to get bailed out, they NEED to increase taxes. Families in Italy have more net worth than families in Germany. Germany should not be bailing Italy out! Repeat this interview around August 1!

Gerard, what is the political risk with the election—if Trump wins or loses? Also, a data point of one: our beach towns reopened weeks ago and people are going out to eat, shop etc. with no raise in Covid #s. Covid seems to hit the nursing homes, chicken factory workers and the low-end of the economic spectrum where multiple families live together. The deaths seem to mainly hit those with an underlying condition and/or the elderly. In other words, healthy people are less nervous (for better or worse).

Romania announced it was scrapping its huge nuclear electric plans with the Chinese over the weekend. Mind you these are projects that are already underway physically. The belt and road is showing cracks...

Thanks Gerard. Great to hear more about the land I live in.

Aussie is doin him a heckin bamboozle, heck

Powerful interview. Rarely see Raul's face with such a serious look. Clearly respects Gerard's intellect. This is getting real.

Raoul, Is the probability of a 2nd liquidiation in markets rising? The old patterns of behaviour (short vol and short gamma strategies using leverage via repos and swaps) have come back hard. Leverage is building back up in the system (we are seeing repo fails again). So while the pain trade is an up market the likely hood that the market crashes (instead of just rolling over) also rises. Only thing is ....whats the trigger?

Is it almost time for Raoul to touch on his "Unfolding" framework or perhaps this has been done for higher subscription tiers?

Too much emphasis on Gold. The push for a hedge that has failed many years this past decades still impresses me. "Maybe this time will be different" right? Look at all the Millenial Robinhooders buying trash and all that other factors you find very hard to understand. The times are changing, and Gold won't be any different. Look ahead to the future and you'll see Bitcoin (BTC) is going to be the gold you're talking about now.

Loved this interview. Please make him a regular guest!

So fucking good!! I don't know where to start so I'll leave it at that. Please get him back. And love the Aussie talk in the mix.

Comment on the edit. You could try recording both the video and sound locally in the background of the video call, and then edit the 4 together rather than take the recording straight off the video call. That way you won't get the low res low frequency image and sound that occasionally stutters.

Gerard is succint in his approach similar to yourself Raoul. Very informative interview, thoroughly enjoyed!

Australia wants to tax Google, FB etc for their news sharing not for the money. but for the media control with the Murdoch Press. If we are talking of breaking up Google/FB because they are oligopolies, why did we never break up Murdoch press?

Fantastic. Please bring him back again

That was more useful information (bridging many gaps in my internal narrative) in an hour than 8 months of trolling my "alt" news feed. who the f**ck was that guy??

What is "JFC" that Minack keep referring to?

wrong on aussie housing and rental rates, just as he didnt expect stock to go up he will be wrong on aussie housing

That has to be one of THE best RV interviews. Admittedly I'm probably biased as a Sydneysider.....but it was excellent conversation. I for one would love to see Gerard back on more regularly.

Loved it. Literally buzzing inside thinking about what you guys were discussing.

Very interesting interview and ideas by Minack. In large part, he is actually echoing the ideas of Charles gave. You should do a long interview with him. he is the brightest of them all.

I thought this was a great interview Raoul and Gerard. For the US, I believe the KEY to being able to make a plan for the future will be the outcome of the elections. Gerard was on point with Biden in the White House and Mitch Controlling the Senate. That combo could be a tough outcome for the US. All other outcome we will see fiscal spending here. In the mean time, I think the FED will do whatever it needs to to keep the market pumped up until then. US fiscal stimulus needs to happen after that in order to keep the US market from taking another big dive IMHO. Gold is the easy play in my book and should be continuously bought over time. Central banks and GOVT's WILL be forced to keep printing, that's all they know to do. Market rallied past my expectations which is fine. Reducing risk in the US equity markets the higher it goes seems to be prudent into the elections and gold accumulation seems the best bet in town. Like many others, we all feel a sense that something is not right and the markets continue higher. The next few months will be very interesting and being prepared and flexible will be important. Thank you to the speakers and also to all those who posted in the comments section below. Opinions expressed and thought processes appreciated! Diversity of opinions make you look harder at your own thought process.

Have been waiting for Gerard’s update on oz. thanks guys! Spot on!

Great interview Raoul and Gerard. Thanks. I don't know if its just me but it seems pointless to consider Macro or much at all if fiscal stimulus, FED/CB stimulus, and MMT will continue unchallenged? You two would be some of the smartest in the room, yet seemed reluctant to offer much to explain investing or outcomes in an MMT world. It would make any intelligent forecasting redundant wouldn't it? No one (politician) will take away the drug of stimulus now it is unleashed. No politician would commit suicide like that. Already in Australia there are hints at taking away some of the stimulus (free childcare) and people are up in arms The govt is propping up parts of housing, considering measures for Arts (because they missed out). local tourism etc etc. Even Gerard mentioned they will likely extend current measures. Are we seeing in the current rally the consequences of an MMT world if that's what it's called - where government fiscal stimulus replaces the private sector? The corporate solvency problem should be a massive factor, yet the share price v bond price of some distressed companies is amazing. Blaming RobinHood investors is a cop out as surely some serious shorting of those companies would be profitable for serious hedge funds? Yet the solution is that the FED buys it all and then just "magics it" away by holding on to it forever. Same as distressed EU banks - create an EU bank which buys up all the loans and then sits on them for 1000's of years. Then have a debt jubilee. There is no consequence for anything it seems. How can that work? Everyone gets to drive a volvo (I like that example Gerard)? There seems to be something off in all of this? Perhaps reflected in the admission that the current rally in stocks and currencies is "confusing". Gold going nowhere, bitcoin held in a kung-fu grip. I can't help wonder. Thanks again for the interview.

One of the GREATEST INTERVIEWS EVER. And I appreciate the little subtitle which explains the acronym.

I love analysts with a sense of humor, he's cool

Brazil keeps saving AUD - simple. But if China goes ahead with preventing its tourists and students coming to Australia AUD can sinks real fast down to 50c. And if, at same time, Brazil gets their act together and start increasing Iron Ore production then AUD is the best short ever. But, I still plan to wait if aud gets to 72c before shorting it.

Brilliant interview! Have been looking forward to this! Love Gerard and Raoul of course. Thank you both!

Excellent interview as I enjoyed hearing the Aussie view of the world; very informative and nicely managed by Raoul

This is the content I am here for.

lol.. the grinning face of Raul.. when asked the question - When? In regards to when Banks will ask Home Loan holders to start paying their loans again. If it wasn't for his ears I think side-ends of his lips would have meet at the back of his head. lol

Honest and direct interview. Well done. DLS

Sounds like a ton of risk out there and stonks don't care and none of it is priced in. Last time we seen this type of Robinhood day trading, tech melt up was 1999/2000. Will this time be different? I wouldn't bet on it. I wouldn't think we have to wait too long for the market to catch on but who would have thought the market would bounce like this either. The question remains is this a bear market rally or not?

All roads lead to BTC . Gold has not broken all time high ? The world is going digital the voice of authority is coming to a end. The people have a solution the politicians that endorse the peoples solutions will be voted in the ones that don't will be voted (or thrown) out.

Great interview! I would like to have Gerard back to steelman MMT, especially in the US. My understanding is that it relies on government to raise taxes in order to head off inflation. I would love if he could explain how the US Congress will do this in a responsive and reliable way. Haha By the way, is there any chance RV could reorganize the comments section? Everyone is so smart I feel the need to read through everything before I comment...but there's no organization and a bit overwhelming, and no way to know if someone has responded to you. Maybe set it up like reddit, with topics, and have notification of responses by email?

How & what would fiscal policy have on global markets? What has this look like historically? Great interview. Who are the winners & losers?

Thanks for the great insights. A question I’ve not yet heard an answer to: Let’s assume central banks take the majority of corporate debt onto their balance sheet via asset purchases in the corporate bond market. What would the economic consequences be if they simply write off the debt (jubilee) versus if the debt stays on the central bank balance sheets? Who would feel the pain of a jubilee? Certainly there would be consequences? Otherwise it would have been done a long time ago.

Great interview, thanks for looking after your Aussie mates!

Thanks RP and Gerard for a great analysis of the global issues as seen from Down Under! Since I broadly agree with Gerards views, I have to sit back and analyze if my applause is caused by 'confirmation bias' ; it is so easy to sit comfortably in your own echo chamber! From the 'top of the world', Scandinavia, I have made up my own view of what could possibly happen longer term in Europe going forward. First, I totally agree that Europe needs to be in crisis to make important changes. That crisis seems to be coming. But lets not forget that crisis according to the Chinese is made up of two words, Danger and Opportunity. I think we all see the dangers, but I believe that a lot of forces are now coming together to push Europe in a direction where they will take those opportunities to go forward. And for those who think the EU will break apart; I think there is only one parameter relevant for this question: Does the Franco-German axis hold. All else follows. Europe really needs to achieve independence in three areas: 1. Energy 2. Monetary/currency 3. Military. 1.Energy:Since Europe is a net importer of fossil fuel, going forward with a massive investment program in renewables is logical and it will provide both energy independence and jobs/growth in the aftermath of the Covid 19. MMT would be put to productive investment. Solar in the south and windpower in the north. We know it will work. 2.Monetary:In order for this to happen EU needs to be made into some sort of fiscal union. We see the first signs of this happening, and the Covid 19 crisis and the weaponising of the USD will push it forward. Also the deglobalisation will make Germany and the rest of the north more dependant on the EU market to sell their industrial products, since protectionism increases elsewhere. As a result it will not be only the south that has problems; also the north will have problems. The German car industry is hemmorhaging at present. This could create the common basis for a common policy response, and a Euro bond market. The Euro currency would then be quite attractive as an alternative to the USD. 3.Military: The UK is leaving the EU, which means that the road is now 'open' towards further deepening of the military/defence arm of the EU. Externally, Erdogan has proven to not be a friend of Europe, and the message is well understood. Note how his last attempt to throw refugees at Europe fell flat on its face. And Trump has proven to the Germans that relying on the US for defence can no longer be taken for granted. Merkel has said publicly that Europe has to make its own destiny. The US has sanctioned the Nordstream pipeline from Russia to Germany, because it will reduce the US's influence in Europe. Work has stopped because the private contractors cannot stand up to the US sanctions, but the Germans say that the project will be completed, one way or another. France has said it will modernise its nuclear weapons, and all European countries are increasing their military expenditures. With the coming MMT and unemployment, and its big arms industry,Europe has the means and the reason to rebuild its military. Europe just needs to hold its own against Russia, 500Million in the EU against 150 Million Russians. How difficult could that be if the need and will is there? I think 1,2 and 3 mutually reinforce each other. This could take a decade, but I think it will come. It just makes perfect sense for Europe to do it. Sorry for being so long...

Good talk guys thanks. Why does everyone know about the US? Even senators involved.. I don't even know who the prime minister of Australia is, or if even that's what they are called. This will change in time

At 34.08 min, regarding the Aussie dollar bounce - the market is signaling reduced growth and increasing inflation (i.e. stagflation). That explains the bounce in utes, reits, TIPS and non-USD commodity currencies (e.g. CAD, AUD) but financials and industrials are not reflating at the same rate. I think in the fight between inflation and deflation, the market is pricing the in-between-scenario (stagflation). Position yourself accordingly. Good luck!

he said "could bring an end to the secular nation state era". jesus christ

Is it possible that one reason the market is going up rapidly is the anticipation of a sharp increase in inflation despite the problems in the economy and COVID-19 second wave? Rising inflation, rising asset prices. DLS

Smashed it. Again. One of the best macro thinkers of our time.

When (as in that Draghi quote) there is talk of cancellation of private debt: does this refer to business debts or personal too? Are there any precedents involving, for example, cancellation of private mortgage debt of populous ? Anyone out there know about this?

Excellent interview today! It would be great to have Gerard Minack back after the summer for an update.

Hmmm, a melodramatic Italian with a gun....

Interesting video. thank you. for a small retail investor, what is a good way to go short the yuan/renminbi ?

I enjoyed this interview, thanks.

Smart and meaty, 10/10. TY gentlemen.

"I'm quite partial to MMT" He didn't seem to be kidding, either. What? I thought he knew macro, not this idiocy of endlessly expanding balance sheets in hope of stirring up inflation. Big strike against Mr Minack, in my book.

Wow. Gerard is a brilliant. Thanks a ton for this RV. Definitely someone else I need to follow....

Excellent interview and really interesting guest. Lots of original and direct ideas with no fluff.

The 61.8% retracement was a hoax.

Great interview - thank you! I don't see any sustainable recovery (even with central banked fiscal expansion) without government policies to support and boost housing markets in the US, UK, EU and Australia. On Sweden, the reason its macro picture has been weak despite an informal lockdown is because its economy is highly reliant on exports and global trade. Sweden is basically an industrial engineering exporter. So I don't think policymakers in Sweden would be surprised by the dip in economic performance, frankly. Their light touch lockdown was not really driven by economics, as they are fully aware of their reliance on external demand. Reporting of this in the fin press (Bloomberg, FT, etc) to ram home the point that even light lockdowns don't save economies have slightly missed the point.

Haha "married me for good times and bad times, but not lunch times".

Nice work GM! Morrison/Frydenberg ride into town on their horses... backwards. Like a scene form “Three Amigos”.

Is there anywhere we can follow Gerard? I appreciate his views on the Australian economy.

Excellent, thx Gerard & Raoul. I totally appreciate how much you share your views. Really helpful, thought provoking.

First rate guest. Clear responses with detailed theses and counterarguments. Really enjoyed it.

Really great and insightful Interview. More of you Raoul, more of such good talks.

From the book Lords of Finance – The Bankers Who Broke the World by Liaquat Ahamed: "Von Havenstein faced a real dilemma. Were he to refuse to print the money necessary to finance the deficit, he risked causing a sharp rise in interest rates as the government scrambled to borrow from every source. The mass unemployment that would ensue, he believed, would bring on a domestic economic & political crisis, which in Germany’s current fragile state might precipitate a real political convulsion. As the prominent Hamburg banker Max Warburg, a member of the Reichsbank’s board of directors, put it, the dilemma was ‘whether one wished to stop the inflation & trigger the revolution,’ or continue to print money. Loyal servant of the state that he was, Von Havenstein had no wish to destroy the last vestiges of the old order." The fact is the debts have reached a stage where they cannot be paid back. The US, EU, Britain, Japan, China, and all the highly indebted economies in the world have no choice but to either default/restructure or inflate them away through currency debasement and inflation. This is a great quotation from FOFOA and to all those deflationists out there: "My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction. Not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today's dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! (smile) Worthless dollars, of course, but no deflation in dollar terms! (bigger smile)". Here is the link to the above quote and it is a great read http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post.html As Kiril Sokolof said to Raoul "Gold is easy ..."

Great guest and interview. Gerard's responses and views were cogent and easy to follow. Could have listened for a lot longer and it didn't feel like an hour. Great to get perspectives on other markets like Australia as well. Well done RV!

Awesome interview with lots of good and useful insights. Obviously a very sharp and clear mind, really appreciate the clarity of his communication and willing to express his views clearly. Really hope we will get to hear him again as this develops. Always good to also get more perspectives from outside the US/UK. Would be interesting to get some fresh perspectives on the EU/EUR from the inside, Italy, France, Germany etc, providing the inside-looking-out, to contrast the outside-looking-in perspectives.

What a fantastic discussion! Thank you Raoul and Gerard for sharing your thoughts in a way that financial novices like myself can understand (even if only barely). Keep up the great work RV!

Excellent conversation. However, I think that the long term risks of MMT have been down played even though there may be short or medium term benefits. I am not convinced governments can be trusted to spend printed money productively or with adequate restraint cf. the last 50 years. Ultimately state investments will squeeze out the private sector and we will end up in communist or crony capitalist dystopia.

Raoul and team, thanks for extending the line of questioning to Asia and Australasia. It really helps bring into play the considerations into the macro view outside of the US/Europe narrative. It's a good feeling to have someone with so much experience see the same thing you are seeing (specifically the Australia and NZ economies) be equally as confused on WTF is going on. Could this been a regular line of questioning to your guests in the future?

Great interview Raoul, Gerard is one of those few people who you could listen to for hours and not disagree with. He makes complete sense and has the foresight to understand the nuances of a Macro picture. He makes me proud to be an Aussie.

I understand why RP reads his stuff. Pruned of excess, not a word wasted, resonant with reality. Thanks guys.