This was tremendous at multiple levels. Having a non-consensus view is exceptionally welcome. Equally, having someone who actually invests--with institutional skin in the game--is 100x more valuable than other guests who don't or haven't risked capital for a living at an enterprise-level. And, having someone with a great track record is even more valuable. Talk is one thing, but the rubber meets the road when being able to profit from ideas, as Ben has done. Please, more successful practitioners. Well done Ben and RV!

A lot of ideas thrown against the wall, but if there was any actionable information it escaped me.

Pure gold. Love Ben's counter theses to Rahul's.

Long EURO? European countries, HISTORICALLY, have been divided based on their own interests. This simple fact is not discussed here not to mention of Demographic trend. Just ask any businessmen the better place to start companies between US and EU... Also... would German bailout whenever shit happens down south? I doubt it.

No offense taken. One question: is Raoul speaking figuratively when he says Yen at 200? My order triggered at 106.25.

No offense taken. One question: is Raoul speaking figuratively when he says Yen at 200? My order triggered at 106.25.

I’m American not offended by what he says. We have lots of issues right now. I’m investing elsewhere these days.

Super interview and great to have 2 opposing views - it's what makes RV such a gem!

Raoul Pal, as always, goes on repeating his well-repeated arguments like a broken record to solicit views from others. Great views from Ben, nonetheless!

A lot of you guys in this comment section are very thankful (ohhh, thank you for this wonderful interview, ohhhh, thank you to let me learn so much...) when it comes to listening to interviews on RV (especially when very charismatic Raoul is involved). Just as you would be listening to a poems of enthusiastic poets in a french cafe. I was (unfortunately) the same. I have enjoyed uncritical listening to the prophet and uncritical reading of the reports. And I've let occasional inconsistencies that I spotted just slip away, not allowing them to be a stain on my "pride of being RV member" and on my "conviction that Raoul would have our back, he would let us know if his conviction in his “high conviction” trade (long dollar to the moon and beyond) was undermined". Here is my story with possibly valuable takeaways for many of you: I was following development of coronavirus since the end of January and I have seen it as a potentially worldwide health and economic (thanks also to Raoul and RV) problem since than (listening to John Campbell has kept me very up to date with knowledge about virus - especially evidence of transmission from asymptomatic and pre-symptomatic patients was THE MOMENT for me). I have managed to come to the decision to buy a big piece (the bigest position of portfolio at the initiation) of deep otm puts on s&p with 2 months duration on February 17th (2 days before the peak), some USDCNH 3 month duration calls and HYG and LQD puts a week latter and wti crude put a day latter and june20 eurodollar calls. I have closed all those positions (except of CNH and eurodollar) with 10x return way before the bottom (I managed to perform some decent risk management back than (which is probably always easier when market goes your way)). Than I have started listening to Raoul's every word with much deeper faith (he is very charismatic and has nailed it until then, so why not, right, after all “it was probably the last great macro trade of our lifetimes” as we have heard many times). I have gone shorting s&p futures afterwards and have bought a lot of EURUSD puts and USDJPY and additional USDCNH calls (those options represented a third of my then quite large portfolio then). I have closed equity shorts in time. But I didn't closed any of fx options. Contrary, I have added. Because “the next big moves are going to happen in the fx market”. Well ok. Lets go. Than there came March 23 with unlimited qe and fiscal bomb. My accounts combined were worth 3x more that at the beginning and I wanted to go take profits and have some serious capital. But I have failed. Because there was still something bigger in front of us. "The dollar”. I focused entirely on the dollar trade. I have sold equities that were left in portfolios, added much more fx options, opend spot fx positions. And waited. I didn't have very good feeling, because unlimited qe and Trump’s huuuuuge fiscal stimulus we somehow intuitively dollar negative happenings. But Raoul and RV team (Roger, Ash) stayed on dollar to the moon line and I decided to wait and follow GBP and EUR to parity with USD, AUD to half of USD. Then the EU mutualised fiscal rescue package was announced and EUR (and everything conected) exploded higher in following days. But I still listened to Raoul’s USD optimism and haven’t blinked. But a few days later with spots trading 5% to 7% richer than when I shorted, and with quite some leverage involved I was forced to cover. In the meantime the 5 years rates trade also failed to be in the money – but it wasnt a realy big bet. A week latter new report from Raoul was out, with unchanged convictions. And I went long dollar again, just to be stoped out once more last week. And now I am down quite substantially for the year. I still have a lot of (currently not very valuable) options that will expire during the next 2 to 12 months – all long USD against EUR,JPY and CNH. If things go forward the way that mr Melkman predicts, I will lose everything I had in my trading portfolios. And that definitely is not something I thought possible in the middle of March when I was thinking about covering everything, but was mesmerised to continue to participate “in the last and probably the greastest macro trade of our lifetimes”. I should have known that Raoul as a world-renowned dollar bull (that brand is strong and no-doubt can generate decent return for him) is not gonna change his public position, practically no matter what happens. So all of you guys out there that can not be more happy to see an interview with 2 participants with completely opposing positions, just dont forget that there is no place for relativism and multiple truths when you have an open position. No matter how smart words are used or how convincing arguments both sides use. The truth, the PRICE, will be only one - and wont care for the smartness of the arguments that let you to the trade. And if you participate, if you are not right, you are wrong! You lose money. There is no medium to long term left for you when market has moved against you explosively and you had no stops, because someone was still “bullish dollar, very certain”. And you can not have it both ways. You can not like both arguments, you can like poems of 2 poets with different existential experiences, you can like 2 different entertainment shows, but you just can not like 2 contradicting arguments for the price movement of an asset you own! Because the truth, the price is and is gonna be only 1! You have to work out which is the right and which wrong one. If you cant you better move out of the asset! And some prophets can be wrong after they have been right, but can not afford to admit it. The followers have to recognise it themselves. So here I am, loaded with decaying options, married to swollen L in the P&L, hopping for Raoul to finally be right on the dollar - possibly this year before all those options expire - and scratching my head, asking myself how could have I developed such a deep faith in a man who's business obviously is being highly convincing about his world renowned "high conviction" trades. CAVEAT EMPTOR

Why would Norway sell USD assets when it can fund at zero? It has no choice but to hold USD assets. Fed - An issuer of a currency doesn't need to fund itself via reserves held as deposit. There is no possibility of insolvency.

Best interview I have seen yet. Mainly because as a layman I was able to understand practically the human behaviors that made up the difference of opinion. Especially on the Norway and USD topic. Amazing back and fourth. Please more contrary discussions as they are such an amazing learning opportunity

Hey Real Vision, this was a great interview. It would be great to have Ben come back and discuss emerging markets. I am from Brazil and know that he put on a trade regarding the brazilian real devaluation and banked massively on that trade, it would be great to understand his rationale behind that trade as well as his view of emerging markets post-covid. Thanks

Fantastic. Two very smart guys

Great interview, clearly a brilliant guy. Anyone notice that he sounds like Arthur.

Ben Melkman should come back to talk ONLY about E.M.s! LOL....AWESOME INTERVIEW

This guy is a gem. He should be a recurring interview.

awesome interview ... its really a pleasure to watch someone whos thought so deeply about every detail of the macro. thanks of the the content.

Ben is a Big thinker! I enjoyed your exchange on the USD. I really like his idea to go long the Krone against others.

Just remember, an options trade at 10 to 1 is only 10 to 1 if it hits on the first try. On the second try that same 10 to 1 trade is now 4.5 to 1. A proper risk / reward structure is probability times magnitude, not just magnitude. On the third try, assuming you can still find a 10 to 1 trade it's now below 3 to 1. On the 5th try it's almost even money.

summary from very much a retail investor - gold, emerging market equities and NOK:other european us currencies

Ok so here we are : EURUSD at 1.60 is the biggest nonsense ever! This guy didn’t know that low rates and a strong currency is what happen in Japan after 1990! Where is japan now!? For some one bullish Europe this is not a bullish scenario at all! This is deflation and no growth and this is a very risky scenario for the euro! This is the end game for euro zone!!! For the survival of the euro and the euro zone, a weak currency that spurs growth is vital! The consensus belief that a strong euro is bullish Europe is dead wrong!!!

Greats stuff, thank you both!

Quality guest who pushes Raoul on his views. I think the overall back and forth is great. Back to watch for a 2nd time.

Onshoring / regionalisation inflation will largely be offset by automation IMO. I'm bullish for future productivity.

This is one of the best interviews / discussions on RVTV to date and I’ve watched a lot of them

Great talk, thanks guys.

Or they could write up gold on the asset side of their BS...could also have impact of sparking some inflation

the usd near term bull or bear disagreement came down to this: will the holders of usd assets sell their assets when the dollar has moves up? this is a question of the outlook these countries have on the usd. then they talked about this obvious collapse in the dollar in the future. this I think is the answer to that question. the countries holding the usd likely see that same thing coming so when there is strength in the usd they get a chance to unwind there overweight position in usd for a gain. not sure why Raoul thinks that the central banks of the world dont see the same thing everyone else sees. the usd is in trouble longer term everyone can see it. so if there is more global usd assets than usd debt (world is net long usd... brilliant way to put it) why wouldnt that global position shift. it isnt going to shift from increased debt but it can from decreased usd asset holdings. just look at the charts, there is a clear bearish dollar signal. the answer to this debate boils down to global confidence in the dollar longer term. the world I am living in has a very bearish view of the dollar longer term so therefore it is also flat to negative short term.

that nok information was great. I wish I had of known that when the oil price was over sold. could have made a beautiful trade on what was mentioned plus the over sold oil. but still great to know. also the fact that the treasury has all that money set aside is very important for the usd going forward. dxy has been weak even though the treasury has been holding back all of that liquidity what is going to happen when they put it into the system which is most definitely going to happen before the election. the fed is not likely to stop their accommodation. so there will be a double increase in liquidity. seems to be shaping up for the dollar bear scenerio. only thing that would change that is some sort of liquidity shock. I think Ben has the right side here. a short usdnok trade and then just bail if there is some type of global shock to the system or a negative to the price in oil.

I have to say this was a great exchange but it left me with a ton of questions. 1. Wouldn't the dems want to tank the market going into the election? a) give them a lower equity base to build from b) cause Trump to possible pullout of the election or if he does go forward remove the stock market credit argument. That being said Ben indicates that the treasury has all this money to spend, so will they spend it and in what ways with what effects? 2. Covid second wave causing more massive economic disruption in the USA which will effect all of the world going forward. How can a wave of liquidity stop a solvency issue from lack of real demand, pushing on a string scenario? Does the deep state want Trump in or Biden or do they even care? The Fed is acting like they want Trump back in or is it they know doing nothing the whole house of cards implodes on itself? Going forward I cannot see how inflation doesn't end the Fed with higher interest rates. So many questions lol.

Brilliant conversation. It was like looking chess played at championship level. Thank you RV!

What a wonderful interview! Where else would I, a simple guy raising a family learning to trade/invest a little better with each passing day, be able to listen to two giants go back and forth discussing macro AND practical trades to take advantage of their views? Just amazing.

fucking awesome.

Does anyone have a link for the issuance projections Ben talks about?

I'll add to Craig's question below.... Does anyone have a link for the issuance projections Ben talks about?

Fantastic interview! Please bring Ben back to discuss EM and commodities.

Brilliant.

What we need is data in a graphic form that puts together Fed purchases and treasury issuance, I'm pretty sure looking at the St Louis fed data (FRED site) that FED purchases are down since a month ago, and issuance is up, so there is a bump in liquidity, but I'm not sure, if someone has a link to the weekly issuance I think we would all appreciate

Subscribers definitely need to hear is views on EM please. Perhaps a 30mins slot on its own? Thank you for everything you do RV.

I love this guy literally , I'm in love, I watched the interview twice....

so really the FED has drawn out liquidity from the market, so why does it go up thanks to "FED liquidity"? Seems like it is the belief that there will be FED liquidity soon

Awesome conversation -- riveting! Re COVID, few points 1) US testing massively now ,~600,000 / day (vs France c. 20,00000 per day from what I read) 2) virus has mutated into a less virulent strain + 3) cases tend to be younger due to protests and youth going to bars / clubs 4) thus, deaths continue to drop 5) US shutting things back down a bit and more people wearing masks in social proximity to others. So need to wait and see if we get a death rate spike in the next 5-7 days which will be key.

Norwegian scenario played out with Australia - AUD - this time as people were allowed to draw upon Superannuation funds during the crisis.

What about SGD and SG reserves? Both Temasek and GIC own a lot of foreign assets too.

Scenario for DEFLATION is Biden winning + GOP keeping Senate & probably winning the House. Low voter turnout will benefit Biden, but it will be because older GOP voters are pissed at Trump, but they still vote GOP for other seats. Then McConnell forces through austerity at the Federal level, broke Democratic states like NJ / CA / IL / maybe NY all really get hit very hard with contracting economies. Scenario for INFLATION is Trump winning & Dems probably winning Senate & House. Even if GOP holds Senate, Trump will be far more likely to work with populists on the Democrat side, he won't be hesitant to spend for healthcare / infrastructure / tax incentives to relocate supply chain jobs domestically. GOP too will be under tremendous pressure to spend if we're in a depression. Schumer probably will be a lot more willing to work with Trump to accelerate spending programs if he's Senate leader because AOC might primary him in 2022.

I am planning on gold in $US terms to go up with inflation and deflation as discussed. The third possibility is the US has nominal inflation and/or deflation for a long time. This is like Japan's attenuated government induced GDP except in the US we have massive corporate and private debt. Slow growth and mild inflation/deflation may go on ad nauseam with infrastructure and the Fed trying to offset deflation. The velocity of money will continue to decline as profitable invest will continue to be a problem to find. I will keep my gold, but an equity position in the new economy stocks with profits and cash flow may outperform gold. Net, net it may take a while for the major deflation and then inflation to be triggered. Just an idea. DLS

Love this guy. Looks like Captain Jack Sparrow with the Incredible market wits needed navigate very uncertain waters. Very intelligent and deep thinker. A high quality and valuable interview. Keep it coming.

Certainly one of the best interviews yet. It is great to see two experts with differing perspectives be able to communicate respectfully and informatively in a way that respects both their own views AND those of RV viewers.

What happens if nothing changes much between EUR,$, and Yen and we go on for years more? Thanks...and please have him back soon. Like in 3 or 4 months. Want to see the update and finish the convo.

Thanks for this Ben, Raoul. The Bullish Euro thesis was fascinating. I made a note to wait a year and come back to this.

Gold is global purchasing power. Amen.

Fascinating & stimulative exchange. All that was missing were high ball glasses of Kentucky Bourbon. Stand by....🥃chin chin🥃

Buy Gold, Bitcoin. 400 SPY calls and Eurodollar options. Sleep like a baby every night whilst the Dollar Bulls/Bears sweat, toss and turn, cry for mommy when things don't go their way.

Wow. Exceptional exchange of macro analyses..

Felt like the conversation was abruptly cut short. I'm sure both Ben and Raoul would have wanted to talk about EM, and the audience would have liked to hear it too. This is where RV could take a leaf out of Joe Rogan's formula. Let the conversation flow and come to its natural conclusion.

I understand Democrats like to spend. But, this is election year. They must surely realize that another stimulus is going to help Trump win. What are the odds that they will get another stimulus through the Congress before the election? Won't they want the market to tank and blame that on Trump? One possibility is Democrats may ask for things to be in the stimulus that are too hard for Republicans to approve -- green new deal, cuts to military, etc. Thereby creating a logjam.

Good chat. Raoul dropped an F-bomb. Maybe it IS time to go long the $USD...

On the net international investment position held by non-US entities, there are a couple of issues I see 1. The net assets bought by non-US entities are marked to market right, in a global flight to safety, these assets will get marked down especially the risky tranche of assets get hit drastically. 2. The classification of assets will be important - what's liquid (like treasury bills) vs. illiquid (private equity, HY credit, etc) . Not all of those assets would be in liquid/cash like instruments.

Fascinating macro discussion. Loved the end talking about the political implications of the USD and EURO and not just economics. Ty Raoul and Ben!

Interviews w/ Ben is why I subscribe. Excellent.

Absolutely brilliant. Fantastic interview.

Really incredible! thank you, Raoul and Ben!

As mentioned in other RVTV presentations, a zero-coupon bond and cash is a distinction without a difference. There is a major difference in Japan and the US, however. The corporations and citizens of Japan have solid balance sheets. Cancelling the Japanese government's loans on the BOJ balance sheet might work as a clearing process. In the US with the government, corporations and citizens only having debt, the compensating balances are a real problem. Either way it is just a shell game between CBs and governments. DLS

Wow! This content is absolutely fantastic. Love the different view points being explained!

What a beautiful high level discussion.

Brillant, throughly enjoyed the different views, and we definetely in for a very interesting time into US elections

Wow! Please make Ben a regular contributor as that was a real powerhouse of a conversation. I now need to go away and have a think about all of that. Brilliant.

This was quite a stimulating discussion from both of you. The question I have can all these governments implement their fiscal policies without a vaccine? I am not seeing a discussion on how governments can revive economies without a vaccine. How can they implement all these infrastructure projects if workers are still required to implement social distancing and the wearing of a mask? I can't imagine how workers can build a bridge or layout 5G networks without being close together not to mention wearing that mask for 8 hours can be quite suffocating. I haven't seen any discussion from any macro player how governments can restore economies without a vaccine. The way I see it no vaccine no recovery. I don't see how these tech companies can survive when there are industries who require employers to work outside or serve people getting laid off. Amazon is not on an island by itself. Raoul, perhaps you can interview a macro thinker on how this plays out without a vaccine. I think there is a wrong assumption in my opinion that a vaccine is coming. Am I missing something here about the necessity of a vaccine and the implementation of fiscal policy and economic well being?

we should bring Ben back soon to discuss emerging markets!

excellent!

Only Real Vision provides such deep debates of issues! Brilliant! Such brilliant! Challenge us to sort out our own belief!

Please get Ben on to cover emerging markets soon. Great video

Raoul, has this chat changed your mind on the dollar outlook? Still think there will be the spike in dollar strength before it bombs? Interested to hear your thoughts.

Brilliant!!!! Love a good intellectual debate with apposing views......this would be a great regular monthly discussion as time reveals the outcome.

A lot of opinion and very little data to back it.

Amazing interview. Really enjoyed the arguments for and against the dollar in the short term. Thank Raoul and Ben !!!!! Please get Ben back soon !!!!!

Amazing interview. Really enjoyed the arguments for and against the dollar in the short term. Thank Raoul and Ben !!!!! Please get Ben back soon !!!!!

Concerning the debt jubilee. He argues central banks can't have negative equity because they would be insolvent. Steve keen argues it does't matter because central banks can print money. So basically they can't be insolvent. The latter would still lead to a currency crisis imo.

Melkman is brilliant.

Always interesting to hear folks say there was austerity in the last decade. European governments talked about it but never really got ratios lower. The US household sector deleveraged ever so slightly but was still virtually at all time highs and the US government debt doubled from 10 to 20T. Total debt is at all time highs in the developed world which is why growth, inflation, and interest rates are at all time lows. McKinsey's 2010 study on overindebted economies concludes that austerity is the only way out but nobody is willing to do that so we're likely to get T.S. Eliot's prediction, "The world ends with a whimper, not a bang"

Just excellent.

Thats the most compelling argument on the USD bear case I have heard so far. It ended way too early. More please! So the elephent in the room over the next 3 months is the $1.6trn in the TGA. Trumps slush fund to trash the USD, jack up domestic inflation and equity prices and boost nominal gdp in the lead up to the election. Nice ! But because there is no growth a weak USD produces stagflation in the US. The American people see their cost of living spike. They become even more angry. Meanwhile, the weak USD creates disinflation and deeper recession in countries that run trade surpluses since they lack the boost to their terms of trade to offset the weaker USD (ie local currency strength). This provokes a policy response from the likes of the RBA, BoJ and ECB. Then we are back where we started but everyone is just more angry. Europe runs a trade and current account surplus. Does Europe want a much stronger Euro? Do they still run a surplus at 1.50? Are they politically equiped to handle a very strong Euro? Lets not forget what a gift it would be to the Chinese when Trump trashes the USD. CNY would go back under 7. They would love that. This is a strategy of shrinking into greatness.

I'm curious why you think the Fed would continue to pay interest on excess reserves if real rates go positive (ie inflation at 3.5 and FF at 5 in your example). They only need to ask the treasury for a trillion every year if they continue to pay IOER. Stop paying IOER and let the FF market be reborn.

Brilliant, pertinent discussion. Magic

And another name for a zero coupon perpetual is currency. That converts QE to true money printing.

Good to have a slightly different take on the inflation debate - thanks for the insight. Great interview.

Ben Melkman should have a discussion with Jeff Booth

This was really excellent! thank you!!

I loved this interview. Great views on markets, FX, bonds. And his Euro thesis sounds possible. I'm quite convinced the USD will go lower in the long term. The question is now, will it spike one more time before we go down (Raoul's thesis). So in the meantime, I think I will let others fight that battle and keep my money in Gold, miners and BTC.

Thanks Raoul and Ben. A good discussion in a clear manner. The Krone point and Raoul's comment about Japanese repatriation was interesting and new, and the options to get some leverage for negative rates. Only 10-times leverage? A bit to think about - I would wonder if there must be something that is "the strongest" factor - politics, demographics, solvency, debt ?? The digital space wasn't even (well the Chinese digital currency by Raoul) considered just to add another unknown into the mix. Enjoyed listening and learning. Thanks.