Comments
Transcript
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TPNice person, but unwilling to admit the extent the Fed is directly and explicitly propping up equity prices and zombie companies. But he was pretty transparent about the ineffectiveness of congress in getting the money to people who need it. With a broken congress and the administration we have, there is no reason to expect a favorable outcome.
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GFAnother exibxit of the quote "look at what they do, not what they say"
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mBGreat insight! This is info I need.
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avwaffle waffle and more waffle from the Fed. Interviewer tried but this Fed guy... jeez
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PP"The Fed was really designed to be the bank of the banks"....Davids quote. This is all you need to know. All these so called mandates (that keep creeping) are disguised to protect the banks and the politicians ---nothing they do protects the ordinary citizen. Check the value of your fiat money since they came into existence. How did we get into this mess? Banks and Politicians. With this much debt only two ways out ... default or inflation.... Anybody want to bet I'm wrong?
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DZAndolfatto is so nice and speaks so humbly in this interview. Although given how he rambles off from time to time, he seems uncomfortable with doing interviews like this. Good info whenever the conversation is focused.
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PBGood Interview.....Take away is the Treasury will get the blame for the coming explosion...Change Government and off to races we go again..LMFAO
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CMI don't understand David's statement about MMT not causing inflation and wish Pedro had followed up or that someone reading this can explain it to me. Thanks. From the transcript "The point is in terms of-- the big critique that you often hear it coming against this idea is inflation, but it's not really a legitimate critique. If you understand that the important conditioning statement is that the government is going to do socially and economically responsible spending. That's the weak part, but conditional on that, you don't have to worry about inflation, you don't have to worry about the debt, you don't have to worry about it. People who are attacking MMT on the basis of inflation or the debt or interest expense or debt crisis, are just off the mark. Where you should attack them is in that important conditioning statement, if you can really truly believe that the government will manage the economy in a socially productive manner."
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RPI thought this was a fascinating and open interview and Pedro did a good job at asking the right questions. One thing I noted was the continued references to its mandate and how for the Fed to do anything different, it would need to be changed. It felt like an appeal to change the mandate, whatever that means. He seemed to suggest that the Fed might not keep their independence as they are now tied at the hip to Treasury and Congress as their ability to use rates has diminished and the focus goes to fiscal policy. It seems that Reps or Dems will both use fiscal in a much more extreme way, post-election and we will enter a new world. Clearly, this is good for gold and bitcoin as a strategy to offset the new supply of currency. The question would be that policies like New Green Deal or UBI might be inflationary but maybe the narrowing of the wealth gap alleviates that. It's far from clear how that all plays out but it didn't prove inflationary in the 1930's to 1950's when we last focussed so much on fiscal, but this time we have weaker currency linkages due to fiat construct and that might be where the battle will lie ahead as the dollar or other currencies take the strain. The answer about asset prices was somewhat convoluted, dismissive and the unintended consequences are not considered, whether its price distortions or a more detailed analysis on the wealth effects. Overall, If found this very helpful in gaining an understanding of where things might change in the future and helped give further conviction to several of my views. A discussion like this is vital, like the Fed or not, they are the elephant in the room and we need to understand how they think.
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KKI like the interview, and thank you for bringing a real fed official to real vision. It gives me an understanding of the federal reserve thinking.
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TSGreat interview. Putting a candid human face to the FED is helpful. A peek behind the FED's frustration from being between the people and the politicians. I see, how from the FEDs view, they are doing the best they can provided their mandates. Thanks!
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FMVery good interview (Pedro could have exploited some other interesting topics—including what is going on with gold, bitcoin etc., in view of the current fiscal and monetary policies—but, all in all, I liked the discussion). I didn’t approach it from an indeological perspective but from a pragmatic one. We may have a ton of criticism about what the FED is doing (at least I have) but the more direct contact we have with FED officials, the more information we will have to assess potential impacts on the economy and capital markets. Great job!
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MHBullshit and giggles
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HHSupporting the treasury = bailing out corporate bond market?? Lmao dude drinking too much of his own koolaid
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HHTaking no credit for creating inequality, the redistribution should be blowing up rich people’s stock accounts and then the change can happen
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SPHe sounds like Jordan Peterson of Finance, lol. "Well, let me tell you why it is!" I am working class, and spent years after college saving 99.9% of my income to trade. If the rich are getting richer, so be it - so will the working class.
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MCI almost didn't whatch the video because of the thumbs down. I did well to read the comments and decided to give it a go: The video was very informative as to how the Fed thinks, like it or not. Pedro did a great job. I'm disappointed the realvision crowd effect is not as powerful as I had given it credit for and is too biased. Put your bias aside and concentrate on what you can get out of the content!
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LPThis was a very good interview. If anyone has a YouTube link where a current Fed official is candidly talking about their respectful intellectual curiosity in regards to MMT, please share. To me, the value in this interview is the apparent stark contrast between David's tone/attitude on MMT vs. Powell's various comments on MMT over the last few years. Pedro and/or Ed, if possible, please do a Part II, deep dive, with David in regards to his MMT comments. I think anyone bullish gold/crypto should want more of these types of interviews. And again, very good interview!
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WDFantastic interview with excellent questions posed and some dubious answers.
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JDThanks for this, RV. I don't get the downvotes - are we trying to trade in this market or not? Echoing Raoul's comment, I found this very helpful to get a better understanding of what's coming down the pipe. A couple of interesting take-aways: - Seems like we're the indefinite merger of the Fed and Treasury - David kept mentioning that they co-ordinate during a crisis, and it seems pretty clear that both COVID and the debt bomb can be considered crises for the next year at least. - Mentioning the Fed mandate, limited tools, potential of future conflicts with the administration, etc, and that to do things differently that mandate would need to change could imply that those conversations are happening at the Fed. - MMT is here, and is here to stay. Hate it or like it, it's the world we're investing in. - Digital currency and the future of banks - he seems to imply the potential of Richard Werner's fear of a "digital dollar" making the central bank *the only bank*. - clearly understands the pressure on pension funds - helicopter mandate coming indefinitely. Gives solid support Luke and Lyn's views on what's coming wrt to fiscal and monetary policy, and hence the dollar. If you don't find this valuable in developing a macro framework, I'm not sure what to say. Disagree with it, but also know that you're investing within it.
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MWThe Fed is only criticised when it embarks on extremes - very high rates and very low rates. Let the market do more of the adjustment and allow more volatility. It’s complete Fed arrogance to think they have tools to solve everything. Allow the market to be complex and adaptive.
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JLThis Fed Freak has 12 years of evidence since GFC that proves what he says is a bunch of sh*t The Fed is making stock saves job #1 Yellen and Powell both said if stocks fail everything fails Look at an overlay of each Fed "tool" against a stock chart 2% GDP avg on 2X the debt This is a lame discussion and lacks real questions Real Vision had a chance here and lost it I would like a hot at asking some questions
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LFIt should not be surprising, but what a disappointing interview. Real Vision usually broadcasts interviews of real substance and provides me with valuable insights. This was surprising and a true waste
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CDI liked the point he made about how in the 80s the fed was accused of helping the rich with high interest rates because it was like basic income for rich, never heard that before
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JAAh now I understand stand why the comments are turned off on youtube.
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TGIt's nice to see that a journalist who wore the hashtag off of #RussiaGate and #RussiaCollusion is getting a second chance. Very diverse platform.
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JJA waste of an hour.
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mwSo he's pretty much saying this is what congress has mandated them to do. A congress owned by the elite, not a representation of the people.
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JEYou seem like a nice guy, so nothing personal, but please take this message back to the throngs of phds you work with: the reparations we will demand for destroying our currency and country go far far far beyond payments in money.... keep this in mind as you make your decisions!
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BRThis was excellent. Fantastic to get someone on who is directly and integrally involved with policy that influences so many people around the world. This is to be encouraged for sure. It would be very difficult to do that interview, I hope we get more from the Fed, who next? thanks again
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TPI'm utterly appalled David has such a high position in the Fed from this remark -- "Forget about debt, forget about interest rates, you're just off the mark there (about MMT)" This is the kind of thinking guiding monetary policy. This is the kind of thinking that leads to a situation like Japan. There is no escaping once you've engaged the digital printing press on infinity mode. (The Japanese govt owns 25% of the Nikkei, for example.) Also, I find his comments about "asset inflation is different from inflation how we define it" -- I bet its different, so they can move the goalposts and claim job "well done" while the population and savers are punished through Zero Interest Rate Policies soon to become real negative rates. The Fed is an incompetent governor and its time for something different. Luckily their competitors will be nipping at their heels in short order, and I couldn't be happier about it.
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RMDoes anyone think fed officials actually believe what they say? Actual question, I don't know if they are completely deluded or psychopaths that lie. In the 80's when rates were high asset prices went down and people bought housing / real estate with regular wages and participated in the economy more generally. Now it's a game of giants borrowing at basis points and those outside of asset management are priced out. I would hope for more of a challenge from the interviewer. Having said that, thank you RV for arranging this type of diversity in its guest lineup.
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BTWhat a bunch of horsesh*t. Whether the Fed intended to or not, its policies have resulted in deepening the wealth divide. What can the Fed do? How about stop propping up asset prices. Allow deleveraging so that those who are not leveraged can buy assets at affordable prices.
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GFI'm glad I watched this. First comment: David was nervous, as evidenced by his laugh. And I understand - he wanted to avoid saying anything that might get him in trouble back in the office, so to speak. Having said that, I appreciate his honesty about where the Fed stands and where he comes from. Second comment/question: Why does the Fed believe that 2% inflation represents price stability? I think I know the answer, but I would very much have liked to hear David's response. Third comment/question: Does the Fed recognize its complicity in maintaining zombie companies with ultra-low interest rates? Defined as companies that would be bankrupt or unable to continue operations at more normal rates or that have to keep borrowing just to pay the interest on their outstanding debt. I know, this applies to the government as well, which is the primary reason they do it, but do they appreciate the damage to the economy, and the mis-allocation of resources that they cause by this policy? That is, they are actively preventing Schumpeter's creative destruction. I have others, but I'll leave it here for now.
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MTNo chance of this ever happening but wouldn't it be great to hear Mr Andolfatto view point of a company like Kodak (KODK) that a little over 24 hours ago was worth peanuts being loaned (loan ???) $765M of taxpayers money.
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TZI can't watch this video! Anyone could help? It sais I need an RV Essential or higher. Well, I have it, yet it's blocked.
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LBYou know, when I saw that it was a Pedro de Costa interview, I thought to myself "oh man... it is going to be another one of those..." However, after watching whole the video I must say that I was positively surprised. Nice set of questions, good interview Pedro. Very good to see that David pointed out one of the central points of failure of MMT, that is if politicians are able to correctly decide what is valuable and where limited efforts should be spent. A very big "if".
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PUReal Vision should stop editing the communities comments (provided the comments are not vulgar or highly offensive). I wonder if RV is also editing the thumbs up or thumbs down too!
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KPWas very insightful to see some of the thinking that goes on at the fed. For any investment thesis this has to be one of the most important elements to consider these days and based on what I heard it will only be more and more dominant. The most important takeaway for me: The fed has no boundaries as long as they can justify their actions as helping achieve their mandate. None. Especially if the treasury will back them up even with a flimsy cover facility. They will buy Equity or CDOs or anything else consequences be damned.
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AWI like that Da Costa has been reactive to past feedback and now presses a Fed official with the points we care about: asset inflation, price distortion, wealth inequality. I found it depressing yet useful to hear: 1) "preventing asset inflation is not part of our mandate" (and laughing it off) 2) excuses the Fed'actions as a what else can we do, 3) has sympathy for MMTers, 4) thinks the government is capable of "managing the economy in a socially productive manner". 5) unwillingness to accept that foreigners are less interested in buying Treasuries as a safe haven asset Gold was not mentioned a single time in the whole interview. Further improvements I'd like to see when interviewing Fed officials: 1) getting a Fed official to admit they're taking us to Japanification, secular stagnation, zombification, consolidation, moral hazard 2) neo-Keynesian framework is making the boom-bust cycle worse, 3) debt jubilee inevitability, 4) ask the Fed official how much gold they own and why it's doing what it's doing.
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NRTurning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity.
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PHThis interview proves the people running the Fed only work for the asset owners in America. Targeting 2% inflation only halves the value of the dollar over 30+ years, and currency debasement is not a path to prosperity.
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HCGreat interview! Thanks RV.
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MSFascinating to hear from inside the Fed regardless of how people view the institution (love or hate them this is super valuable)
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JAI really enjoyed this interview with Mr. Andolfatto, fascinating to hear directly from those at the Fed who are making big decisions about things in the moment in these momentous times! Also, a Fed official confirming that MMT has it right in terms of how the financial system works seems huge! It’s funny that the big drawback to MMT is now, “well, it’s right but you can’t really count on those in power to be socially responsible.” I think you can...we just need a brand new crop of decision makers and politicians.
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PTIt would be nice for him to defend the Fed's actions in encouraging WallStreeters to overlever in their search for yields and profits, leaving companies more vulnerable to insolvency and credit downgrades - knowing that they would be backstopped by the Fed stepping into the credit markets. Same story: privatizing the profits of their Wall Street buddies, but Fed bailouts of their losses.
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CBBased on the comments, I am not watching the video and putting an hour to better use. Thank you
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JL"Maybe your viewers feel like there should be a mandate to stabilize asset prices" - What an arrogant statement. I'll speak for myself, I don't know what other viewers want. But I would like asset prices that aren't manipulated, they could be highly volatile for all I care. Quite the opposite of what this bureaucrat is ignorantly suggesting.
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DNI didn't think this was the worst interview...Feels like David gave a pretty honnest/realistic assessment of what can/cannot be done and the various barriers/incentives that exist within the Fed.
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EHEd Harrison here for Real Vision staff. Re-posting about the comments on this video quickly. We have always loved our viewers comments because they are thought-provoking and respectful. However, some of the comments posted on this video were not thoughtful, pure rage against the wind emptiness. This is a warning: if you have nothing of substance to add to the conversation, just don't comment. It is always going to be tricky with a Fed interview!
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RKActually shocking to see the "quality" of the people at the FED.
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DDI thought Pedro asked all the right initial questions but I wish he would have followed up on them and pressed David (who was pretty much just toeing the party line and did not offer too much on top of what we hear at typical Fed pressers) a bit more
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PVNice to hear from a FED insider. However it would also be nice if the interviewer would challenge/question the opinions. Conversation is lacking in depth...
Chapters
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The View From Inside the Fed
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The Fed's Toolkit and the Policy Coordination Debate
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Asset Prices, Inflation, and Inequality
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Digital Currencies, Technological Advancement, and the Future of Banking
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Modern Monetary Theory
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Beyond Economics: Learning From Other Disciplines
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Thinking Globally
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Post Pandemic Outlook