Comments
Transcript
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AHOmg it's so crazy when I listen to this interview again now. it's just all too prescient! Thank you guys - good timing. Thank you Raoul and Kiril.
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ASThis is one of those times I wish RV had a 1-10 ranking system rather than a thumbs up/down. This would be a thumbs up x10. So obviously above and beyond what you can find anywhere else with any reasonable consistency. Even after RV devalued my original purchase price with some dubious financial engineering a while back, I still think it was the best investment decision I’ve ever made. Such win. I will have to listen at least 5 times to even begin to understand WTF is going on. And I thought I was reasonably intelligent.
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SARaoul says " the cost of money may not go up but the supply of of money may disappear" As it relates to the supply of money is he simply saying that the banks wont be lending or that you see run on deposits? and what does Kiril mean when he says "or it (money supply) may be not be available whee its needed"?
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TTkiril sokoloff puts forward in 13D the hypothesis that US government may devaluate the dollar. How likely does Raoul Paul think it may be? For investors who believe the dollar will strengthen is bad news. I rather imagine a scenario where people will scramble for liquidity in a recession, the dollar being the currency of choice. If the US devalues the dollar, with so much foreign capital that flowed and flows into american equities and bonds: wouldnt it trigger a capital flight? wouldnt it trigger a recession?
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JEAnother book to read from Kiril. Highly recommending "The Bubble that Broke the World". Next, "The Way the World Works"
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Rmnot sure about comment... focusing on either taking on china or on the local economy. I assume the purpose of the trade war, other than to win the election is to do just that. The proverbial 3 birds with one stone. A move that will undeniably be coined 'the Trump' in the years following.
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DMOnly on a site like this would I hear someone mention Garett Garrett and his writing. Amazing. I love this site.
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JHJust watched this again. One of the best interviews I’ve ever seen on RV, hands down.
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dbI really wish they would have gone beyond just the admission that commodities have value after a 7 year bear market to looking at oil stocks for instance. Should you buy them since they are 40% cheaper than when oil was $28 a barrel? I know the standard answer is no a recession is coming but OK then when do you buy extreme valuations in commodity stocks. I know the establishment would love the answer to be never. I'm an outlier & buying E&P's. Would love to see a follow up interview that looks closer at commodity opportunities in light of trouble on the horizon.
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ZHHyper intelligent conversation gentlemen.
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VSKiril and Raoul the Fed is not pushing on a string they cut the string -they do not want to expand the economy only the stock market. Why is their this amazing lack of realization that when the Fed pays interest on reserves they don’t want the banks to loan money?‼️
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OMExcellent
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BKUSA will bail out the junk bond market eventually following Japan and Euro CB.
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IPI don't understand why Mr. Sokoloff states that the events in Hond Kong are unfortunate, they are trying to protect democracy and probably high cost of living has contributed. Could the protests will push China to avoid a CNY devaluation for a bit? I find it unfortunate when a population becomes to elderly and dependent therefore on the State to protest anymore. Could you clarify what he meant by unfortunate?
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AHFolks, we do not have a recession until we have a recession! GDP just surprised to the upside! Its a clickbait subject to draw more subs. There has not been a bull on the interviews this series which biased like hell. All combined with a dollar sub for 3 months, gee! Realvision Interviews ha ve always been more on the bearish side since 2015. Get some bulls on the show. Right now not much better then zerohedge! Urban Carmel, Chris Ciovacco and Kip Herriage , Jawad Mian, JC Parets, Ryan Reeves, Tobias Carlisle, Joseph Fahmy, Walte Deemer, on the show . Last time I said Realvision is much too bearaish was 2016, the answer was there are no bulls to interview. Wrong! There are bulls out there, get them on!
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AHIts a shame I now need to turn off every video for the last minute. Stop advertising on your content.
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DCGreat and insightful conversation. My favorite transcribing error though has got to be on page 12 of the transcript when Kiril mentions "this very astute person in 1927" becomes, "this various dude, a person in 1927" Lol.
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TSyou come right next to my house and we dont get drinks! sad
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LCNew technology in emerging markets? hmmmm. Tech in emerging markets is stolen tech. Seems to me fiat is going to be devalued over the next 20 years to informally default on debt.
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DPOne of my favorite guest, amazing interview. My big takeaway is the shift in outlook from Mr Sokoloff compared to the previous video he did around 18 months ago. After listening to it a second time, my guess was that the change was mostly motivated by the escalation of the trade war that create a serious risk of secular change in the world. Is it about deglobalisation, dedollarisation, demographics... i wonder. My big fear is, the history of finance for the last 200 years came from the combined effect of strong demographics, increasing interconnection of the world and benign environmental impact of human activity. How do you price anything on a reversal and do we have any historically significant example of something like this happening. Black Plague in Europe maybe. Fascinating and terrifying times ahead... And bring back Mike Green, and maybe Neil Howe, for a full two hours videos on demographics please :)
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CGGreat quote at the end from Roosevelt. You need to post that so people can read it over and over and let it sink in. It may be the theme of the secular change that you brought up. While sophisticated economic types may largely dismiss it, I think that many workers on the street have an intuitive sense of it.
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PGAny advice for someone who is not an experienced investor and has his money in index funds, what to do now?
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tWYou continue to spoil us. Thank you.
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IFAnother writer from New York not understanding the trade issue. Trump is literally destroying competition for American businesses. Business owners like less competition. What more needs to be said? This isn’t a concept that needs to be complicated. Why don’t we do a piece interviewing small businesses? Or just watch the 80’s Michael Moore flick Roger & Me...
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MDCan you get google chromecast put onto your videos. Any and every video feed that is something has chromecast. If i am just missing where it is can somebody enlighten me?
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SSGreat interview! Who or what has been suppressing the price of gold since 2011? thanks. SAS
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HMMy new favourite RV interview. Who could possibly down vote it?
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SDRaoul, great series. Congratulations! An observation: it seemed to me that the greatest and brightest minds in Finance these days are exhausting the capacity of the leading indicators they’ve grown to trust. Would you agree? It could just be my inexperience, but I observed it nonetheless. If ever Real Vision decided to explore new indicators to look at the global financial situation over the coming months, I’d be curious to see you incorporate some reflections on the leading discussions taking place in the humanities departments across the globe (psychology, criminology, communications, journalism, political science, economics, etc.) – these disciplines are all pointing towards a major societal event in the near future if you look at them separately. These subjects could rely on indicators that may prove useful to you when looking at other ways to parse the data.
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RAThis was a fantastic series and a great final interview with Kiril Sokoloff. I have thoroughly enjoyed each of Kiril’s pieces, whether as interviewee or interviewer. Kiril has access to many that others could only dream of getting a return phone call from. RV through their reputation and contacts has given us access to what we could never get on our own. Rather than add to the excellent substantive comments below from my fellow RV’ers I would like to delve into a “procedural” aspect if you will allow me—I hope this doesn’t generate too many thumbs down, but I feel it needs to be said. The production capability of RV is CLEARLY evolving and these segments are seemless in the excellence of their Production technique. As I have said before, it looks easy but trust me it ain’t. The lighting, the Audio, the pacing of the back and forth, as well as the clear preparation and editing to extract the “heart of the watermelon” and is second to none. I don’t want to offend the person who didn’t like the “back and forth” Camera work, but I think it is part of what makes the Production of these segments so great—from a behavioral aspect we all subtlety subconsciously gain “clues” as to how our messages are received and evaluate messages being given to us by the smallest of facial expressions (or body language) and nuances of the timing and framing of responses. To be able, in real time, for us to evaluate how a back and forth is going from great RV guests and accomplished interviewers is invaluable and adds to the richness and our tessellation of the material being presented. For instance, having been with RV almost from the beginning and having watched dozens of Raoul’s interviews I have NEVER seen him so engaged and totally focused on the answers that Kiril is giving to his questions. Raoul’s facial expressions show just how interested he is in what Kiril is going to say next—Raoul is fully and totally absorbed in this interview even though, as in most RV interviews, there has been some off camera preparation with the material to be presented. OK, enough flattery.....and on to the “trivia”....having watched Kiril’s interview with his Asian Real Estate mogul buddy Ronnie Chan several times, it’s pretty clear who Kiril was referring to due to his most excellent Ronnie Chan “impression” at one point in the interview!
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AHOutstanding series. I enjoy the long format, almost an anti-CNBC. Thank you. As Sept/Oct. are important for your $ view., it would be great to hear non obvious views on cable as the Boris/general election/no deal situation evolves in the UK.
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GRBond market - humans. Equity market - machines. Simply put. Excellent.
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WWBrilliant! The Real Vision Recession Watch interviews are worth the price of an annual subscription alone.
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HAWhat was the book about the 1920 that Kiril mentioned?
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JMWhat a pleasure listening to Kiril, a bright mind and great communicator.
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LLPro gold. Gold has been artificially suppressed since 2011. Nice to see this widely discussed.
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LLFourth Turning. Yes, the road map for this generation. Best book I have read in 15 years.
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SWHe always has this pro China undertone, like they are this innocent and good global actor, makes me wonder if he has significant interest in China.
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IPmay I ask a question to Raoul .... here in Europe roboadvisory is all the rage and is proposed as a solution to make consultancy affordable to everyone, which is true, and yet it worries me. If we have a downturn, won't these robots all be giving the same signals ... but too late? Roboadvisory cannot think out of the box
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DSGreat interview and series! Because of politics, I do not see a lot of MMT work done before the election. After the election I see a concerted effort to implement MMT on a broad scale by both parties to generate inflation. It will be the Sorcerer’s Apprentice for both Congress and the Administration. MMT should not be used to encourage bad behavior like forgiving debt and handouts to rich or poor. It should be used for infrastructure as the money will go into the economy and wages for workers. It should go into negative taxes for individuals, couples and families who are actually working to encourage a work ethic instead of the dole. We have time before the election to get MMT more economically directed and hopefully be more effective in the short run. I have no illusions that any Congress or any Administration will be prudent with MMT. I do believe they will always feather their own nests whenever it comes to spending other-people’s-money. Buy gold now, avoid the post MMT rush. DLS
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JHGreat interview, as Raoul always delivers! Love to see a debate between Kiril and say Kyle Bass or Peter Zeihan. Not a cnbc shoutfest, an honest exchange of ideas in an 'agree to disagree' environment about our collective future. I keep hearing myself saying 'yes, BUT' in this interview where Kiril would say something I disagreed with and Raoul would go to the next topic. For example- 'China will rely on entrepreneur class to develop further.' Well, many of those people are Cantonese from the south not the north. Given north/south geopolitical tensions is that realistic to expect them to empower an area that historically has tended to break from the core of china? And at a time when power is centralizing? Best
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HYIt's actually very easy to cause inflation, outside of what the BOJ and every other central bank is trying to do. Kiril hit upon it. You can revalue and fix the price of gold to $3000 or $5000 an ounce (whatever level you want) and defend that peg within 1%. Instant, overnight inflation.
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AHWhat an amazing and insightful overview. The next months are going to be telling. I have the feeling of living in a time where events of major significance are happening just a bit too quickly to get a proper fix on them. Saw the SPY hit a record on Friday on the lowest volume of the year. Another little flashing yellow light that may not mean anything. But in the context... So good to hear these insights spoken from minds with such depth of knowledge and experience. Super interview.
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JVAwesome. RealVision has raised the bar AGAIN. Great content in the past few weeks. Thanks.
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GPAwesome,Thank you Raoul & Kiril
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NIInteresting interview. When Raoul asked about gold, Kiril said, "And it's been suppressed since 2011. So, where gold is has no reflection for its true market value. It's been artificially suppressed". Raoul, would you please ask Kiril about the mechanism by which he believes the gold price has been suppressed. Let us know in your summary video. Or Kiril, if you are reading the comments please expand. Thanks.
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DVI will need to rewatch this series a second time. Lots of info here to digest. First thing I want to look up now is, How have active managers prevailed in EM compared to their Passive counterparts. And how much of it is because of China's massive rise over the last 19 years.
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JS‘You’re going to get zapped here, watch out ... ‘
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MFThanks for the recession watch weeks. Fantastic content, fantastic interview partners and great discussions. Would love to see more thematic series like this in the future.
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DPWas that fellow who persuaded Roosevelt to devalue the dollar against gold G. F. Warren? Gold and Prices is a great read!
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DLPeople are running the bond market, machines are running the stock market.... Great stuff!
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phWhat a shame these two weeks are over. Fantastic reporting. Enjoyed every minute of it.
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JWGreat interview. Would love to see Brian Reynolds back on at some point. He's been spot on since 2014. Also a big name that has disappeared recently is Jim McCaughan (Former CEO Principal Global Investors) -- a favorite and also one of the more prescient bulls of the last decade. Lastly, Tony Dwyer -- whatever bearish news I see on fintwit...tell that to Tony Dwyer!!!
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MSRaoul, outstanding 2 weeks. You've spoken with many people over the past 2 weeks. It would be good to do a short video of yourself summarizing your thoughts and what you've learned if anything, what has made you possibly change your view, maybe new thoughts on what is of the utmost importance to confirm your recession view (aside from the movement of the dollar which you've made clear) etc.
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CTLets balance out the bearishness and get some bulls on. Maybe give Jawad and Urban Carmel a call?
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TFExcellent!
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CTKiril rocking some nice SLEDS!
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LWGreat video, lots of gems - thank you! Looks like Precious Metals and the Miners are the best protection of what’s potentially to come. I guess a gold confiscation is also in the cards. Does anyone know if shareholdings in miners worked well in the past when physical gold became illegal?
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SLThe ending quote is haunting
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BMPerfect!
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RMIn the words of Keynes, "You can bring a horse to water, but you can't make it drink." Spot on, Kiril. Also, I loved the Wanniski reference. My favorite economist, Mike Darda, worked for him. Always a treasure trove listening to the legends like Mr. Sokoloff. Thank you for coming on!!
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JEYou kept the best till last. Brilliant interview. Thank you. Thank you.
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mhWatch Raoul interview Kiril and wear diamonds! Fantastic interview, thank you.
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REWith all due respect, "the bond market run by humans and the stock market by machines"? There isn't any manipulation by the bond market due to central bank buying and regulations that force pensions and insurance to only be able to buy the bond market?
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pjKiril has such an AUthentic and AUthoritative grasp of the world that it would AUgur well for the AUdience to AUdit their portfolios.
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ABI want to se Marc Faber here to.
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GHOutstanding and thought provoking. Kiril said the price of Gold has been supressed. How and by whom would be interesting to hear from this Legend.
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Svbut, this time its different! deficits don't matter. print mo' money!
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GCLove Kiril's clear insights and grasp of market history. THANK YOU RV
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LZlegend!
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GFAbout the fed cutting rates. Trump tweeted that the US would pull out of Syria, he was overruled by the pentagon. Trump wants out of Afghanistan, so far not even a cease-fire. Trump wants the fed to cut rates.....so what? If Chairman Powell blows off Trump and is punished, he will be the first person punished for blowing off Pres Trump. I would guess that the same people who want the US military everywhere also want a strong 'imperial' dollar.
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RRTo the entire Real Vision team: Thank you for all of the effort that goes into delivering the best content in the industry. It is incredible to be able to listen to discussions between some of the most brilliant minds in their respective fields. Amazing interview! The ease with which Kiril can reference similarities between today and the not so obvious points in domestic and global economic/financial history is astonishing.
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AAThanks Raoul for the series. It was super insightful in peeling the onion to understand what's coming. Mr. Kiril is one of the reasons how I found RV and got hooked. Amazing thinker and is obvious why you feel he your mentor. It was interesting to hear he is not playing the bond trade? Gold check, Dollar check but it depends. Silver didnt mention but I guess he is bullish. The feeling of a fourth coming is in front of our eyes. Thanks again!
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NHvery engaging. Always great to hear from Kiril
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DSPersonal consumption expenditures rose 4.3% in the second quarter while gross private domestic investment declined 5.5%. It would be interesting to hear an economist discuss the second quarter GDP including consumer spending, savings, IRA withdrawals, etc. Is this different from the past? How is it affecting the market? How will it affect the election? Thanks. DLS
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dwWow! This interview was even better than the first interview in Bermuda. Thanks to Raoul and Mr. Sokoloff for their tremendous insight. The comment on gold as true money / sophisticated asset is a key take away for me.
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CDRaoul thank-you so much for a completely brilliant series on the evaluation of a recession!!!!! Excellent work!!!!!!!!!!!!!!!
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MMLove Kiril's response to the bond and equity market divergence: "Bond market is run by humans, stock market is run by machines"
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JHRaoul and RV team - you guys really outdid yourselves with this one...it was absolutely fantastic, and for me personally, it was worth its weight in gold (excuse the pun ;-). Best RV interview all year long, IMHO. You have set the bar extremely high with this one, and I think future interviews will have a hard standard to live up to. Kiril is a huge asset to your network -- please bring him back soon. I learn so much listening to him, both in terms of current events and historically. I can easily see why he would be a mentor for Raoul, or any top-notch, astute and thoughtful investor. I am encouraged by his comments on the current environment, as many of his remarks and insights concur completely with my own hunches and perspectives. It's incredible to me that it took so long for this cycle to end - but algos plus an irresponsible Fed determined to punt the cycle, and an irresponsible US government determined to conduct more fiscal stimulus at any cost, were key factors. My money is on the fact that Kiril is bang on the money: though he doesn't say it outright, the cycle is almost certainly ending this year. Actually, I think it's already ending, and the Fed is right now "pushing on a string." The narrative has shifted, and even as we've seen this week, improved earnings year-over-year are starting to prompt share price falls. Why? Simple - expectations of future business are poor at best...and it is systemic, not localised. Plain as day, I think, if you listen carefully, and read between the lines. Thank you all once again - this interview alone would be worth the older, higher price of RV subscription for an entire year. Nothing I've seen in any other financial media platform even comes close.
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BPI've watched all of these multiple times (well, not the crypto guy). Well done - really great series. keep doing it.
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RMAs a RV sub since the beginning, I really appreciate these long format interviews. Simply cannot get this anywhere else. So thanks! Also, to Raoul's point that the Fed cannot get inflation, well when MMT hits after the next election (both parties will use some form of MMT) and $s flow to the bottom 99% rather than just the top 1%, then the govt will finally be generate inflation, and probably lots of it.
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LAExcellent series- thank u. Astute observations & Kiril is "king of diplomacy"- refusing to name names. Even with lowering interest rates people are no longer suckers in buying these inflated assets. I have changed my opinion to a lower dollar stance since the FED is going to lower interest rates despite being negative interest rates in other major economies. I think massive debt matters regardless of all these MMT people saying it doesn't matter. Gold & PM to prevail - they are the most inexpensive assets right now relative to all other assets.
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AEGreat interview. Keep up the good work!
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DDFantastic series! Nice going RV
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PBKiril & Raoul, this was a real treat and a great way to start the weekend!
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MDTechnology been source of deflation for sure. The low cost of capital has invited hosts of folk to destroy capital in a multitude of ways as well. Which has had the bigger impact in the last decade? Either seemingly not quantifiable.
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SGexcellent conversation, very interesting content thanks Raoul & Kiril. One comment... way too many camera changes. Side view is all that is needed.
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MEExcellent video.
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ABCan't believe this is the last of two weeks on recession, it's been a fascinating series and what a finish with Mr Sokoloff and the parting quote from FDR. Well done RV team.
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THThis series ended with a bang! Thanks Raoul and all the guests. You really have raised the bar high.
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TEGuests and interviews this week have been unreal. I've really enjoyed it.
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jlthank you kiril
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VNhttps://www.theguardian.com/world/2019/jul/25/china-business-xi-jinping-communist-party-state-private-enterprise-huawei Above article seems to indicate that before Xi private firms were indeed driving growth but that maybe changing. At the time Xi took office, private firms were responsible for about 50% of all investment in China and about 75% of economic output. But as Nicholas Lardy, a US economist who has long studied the Chinese economy, concluded in a recent study, “Since 2012, private, market-driven growth has given way to a resurgence of the role of the state.” Very insightful interview regardless!
KIRIL SOKOLOFF: But the excesses are so great that we get desensitized. And what would had been a single at the last cycle peak, this cycle peak, we're just okay, so it's another crazy excess. And I worry about people who bought bonds that didn't know what they bought, or that people who bought index funds who didn't know what they bought. And the heroes in the boom become the villains in the bust.
RAOUL PAL: When I got a big question in my mind, there's one person I really want to speak to. So, when I started developing this idea about thinking there's a recession coming, I always thought, I wonder what Kiril Sokoloff thinks. Kiril's a bit of a mentor for me, he really is a legend within our industry. And I don't use that word lightly. He knows everybody there is to know. And he's incredibly well-respected. And I've taken the long trip out from New York, up to the Adirondacks to Kiril's house on the lake here to come and sit down, spend some proper time with him to pick his incredible mind.
Kiril, 18 months since we actually got together on camera, and started to talk about things. And I've been thinking of something that I'm seeing in the data and the research that I'm looking at that I really want to pick your brains on, because I really respect how you think about things. And so, my hypothesis is that we're looking potentially likely to be going into recession, I think the global situation is more concerning than most people think it is. Even today, we've had Jerome Powell indicating that they're going to cut rates, but nobody really believes that maybe the cycle's ended. And I already think it is. But I wanted to know, what are you thinking?
KIRIL SOKOLOFF: Well, the great question of our time is whether this is a mid-cycle correction, like '95 or '98, with the Fed easing into a recovery, or whether it's recession, like 1989, 2001, or 2007. And I have a very hard time seeing that this is '95, and I can go into why I don't think it is. I'm totally agnostic, I'll let the market decide for me. But all the evidence on economic data and above all, confidence and trust. Because this is really a confidence and trust issue. How are you going to put confidence and trust back into the picture? You've done a savage cutting on that. I cannot believe it's possible for trust to be restored in the next year and a half. Just impossible.
RAOUL PAL: So, how do you rebuild trust?
KIRIL SOKOLOFF: It takes years, decades, it's extremely significant.
RAOUL PAL: So, your sense is we're maybe in a cynical turning point, but we're actually, this is a secular turning point as well in many respects?
KIRIL SOKOLOFF: It could be. If the US goes for protectionism and the rest of the world were to follow, it definitely would be a secular turning point. If the US goes for protectionism, and the rest of world doesn't follow, you won't be quite as bad. But then you have the whole cycle of wealth distribution coming. And how's that going to play out? And if Trump doesn't get reelected, what then happens to all of the deregulation and tax cut, all the things he did to get the stock market up? Will buybacks be outlawed? There's so many things that could happen that are significant watershed event that the market isn't paying any attention to but it's a significant risk.
And then, of course, you have what I call the burden of the debt, which might be the reason why it's so hard to get growth. And the last time we tried to do economic growth with more debt, solving the problem of debt with more debt, was in the 1920s. And we know how that ended up. So, we got 250 trillion and counting of global debt, which is more than three times global GDP, we've added debt at the rate of depending on the country one and a half or two times more than nominal GDP in the last 10 years. So, we've leveraged up the system. And maybe the burden of debt is too great to grow. And even though interest rates are low, a lot of the debt was used for nonproductive purposes. So, it's not generating any cash flow.
And then of course, you have demographics, which into recently, the US was a hopeful spot, and now, it's almost as bad as others with the population growing at the lowest rate in 8 years this last year. So, if in fact, it is beginning of a recession that has immense implications, which is why I'm glad you asked me the question. And the first is, will the recession be over by the election? And the second is how will this impact China-US trade relations? It is very, very significant.
So, my