Capital Controls Present Political Solution

Featuring Russell Napier

Russell Napier is the definitive financial historian and with the dollar, in his view, just midway through a bull market, Russell looks at the impact on growth in developed economies and potential deliquification events in a highly geared global system. With Central Banks unable to deliver the certainty politicians crave, Russell argues that capital controls could make a comeback with ramifications for long term prospects, in particular for open ended funds. Filmed on March 2, 2017 in the Cayman Islands.

Published on
14 March, 2017
Topic
Emerging markets, US Dollar, Macro
Duration
56 minutes
Asset class
Commodities, Currencies, Bonds/Rates/Credit, Equities
Rating
18

Comments

  • CA

    CARLOS A.

    13 8 2018 21:14

    4       0

    UPDATE! Please...

  • JV

    Jason V.

    2 8 2017 10:33

    0       0

    Outstanding. One of the finest brains in the business.

  • EB

    ELIZABETH B.

    17 6 2017 12:38

    1       0

    Why no transcript?

  • JH

    John H.

    30 3 2017 02:49

    3       0

    Bernard: the USD bull market is based on how the present global system is set up, not because its undervalued like a stock. before the shale revolution, the US used to send billions of USD out into the world (to buy the oil), but keep following all those dollars: they lubricated the global expansion of credit. now, the US is sending much less USD out into the global system--even though, and this is the critical point--all the USD denominated debt from the past is still outstanding. the next leg of the dollar bull will be very intense because debt holders will all be scrambling to find USD to pay their outstanding debts, while their cash flows are in some local (weak) currency. perfect storm. Russell talks about "someone HAS to run a trade deficit." I.E: someone has to print the liquidity to enable the system to continue to function. (its been the US since '71, but Trump and Yellen are not playing along.

    long TLT, and long EUM (short EEM) to express the views here.

  • ii

    ida i.

    25 3 2017 12:52

    1       0

    To Mike B. : I have been following Napier for years, I had the same problem, that's why I listen particularly to Russell Napier to get the historic background, and to Julian Brigden to implement on a shorter term basis, that's why I asked for a roundtable with both present! You will find lots of Brigden material on Real vision.

  • TB

    Tyler B.

    22 3 2017 03:53

    2       0

    I think the premise is backward here. RP says Dollar strength CAUSES a crisis/decline of the business cycle. What if leverage/debt/misallocation of resources/FED intervention/central planning are the CAUSE of a crisis. Then the FED response of QE/rates lower for longer etc drive inflation higher while at the same time unemployment rises/lower GDP (stagflation). Republican administrations historically run massive deficits (see Bush's & Reagan) so I don't see a "shortage of dollars" in this case. Rates also can not be allowed higher with the record debt burden. We have REAL Rates are actually lower now even with the FED hikes which is inflationary. I guess I just can't get my mind behind the idea of a stronger dollar here. I'm not saying it can't happen but I can't see how it happens.

  • DS

    David S.

    21 3 2017 08:57

    1       0

    From the negative comments on China's 2% of FX gold reserves, I guess there are seven people who believe that China wants to destroy all there fiat currency reserves. Interesting. DLS

  • AH

    Andreas H.

    19 3 2017 11:40

    4       0

    ...its 1996 all over again. This will not stop until euphoria is back and taxi drivers start talking about the next
    hot stock! ETFs are capitalism, because there is criteria for a stock to be in an index. Look at the sp500 in 2000 and today, its a better filter then following active managers who can not be in cash a 100% in case of a crash and usually struggle because of this beating the market. Also you can exploit anomalies like the size effect (like going with the IWM etc.) with ETFs, arrange this with the cost average effect and you will be fine in 30 Years. That is the reason ETFs make the rise and active managers are dead in the water... not to talk about big (not small!) hedged funds...

  • AH

    Andreas H.

    19 3 2017 10:38

    0       0

    Super!!!

  • MB

    Mike B.

    18 3 2017 17:57

    5       0

    Have enjoyed listening to RN historical knowledge but have always struggled with translating that advice he gives so confidently into advantageous opportunities. Nonetheless, his ability to connect the dots or at the very least reveal the dots allows for greater understanding from which we should then draw conclusions. No one knows how this will play out but we do know that there are only a few options for large capital pools to invest and that is the $US and US debt markets. There will eventually come a time when an alternative to the US dollar is a necessity and Trump will soon find this out should the dollar bull market continue which is likely if you consider the dollar shortage dilemma which must be resolved. The world will demand it and the IMF will be called on to come up with a solution that accommodates the dollar shortage, the dollar handcuffs placed on the US monetary policy and allows the rest of the world to reduce dollar dependency. There is little doubt the world will sooner rather than later have an alternative to the US dollar for trade and debt obligations. We are heading for a global currency consisting of a basket of global currencies. The answer to the overwhelming debt burdens will have to be inflated away, and you will not know how or who is responsible. RV is illuminating and thought provoking.

  • ii

    ida i.

    18 3 2017 13:00

    10       0

    please organize a round table on Europe , gold, and the dollar with Russell Napier, Julian Brigden , Raoul Pal and Grant Williams !

  • AA

    Ateet A.

    18 3 2017 09:24

    6       0

    Please bring him back and discuss Europe. One of the best interviews I have seen.

  • B

    Bradford .

    17 3 2017 22:15

    2       0

    Great

  • M

    Mark .

    17 3 2017 21:57

    3       0

    I will have to load that into my iPod and listen to it four more times so I catch all of that LOL

  • GF

    George F.

    16 3 2017 08:33

    2       0

    UK capital controls?

    Budget 2017: offshore pension transfers face 25% tax charge

    25 per cent could be deducted from schemes outside European Economic Area

    https://www.ft.com/content/d56bc1b2-0408-11e7-aa5b-6bb07f5c8e12

  • HJ

    Harry J.

    16 3 2017 03:40

    3       1

    Are we down to guns ammo and gold?

  • DS

    David S.

    15 3 2017 20:51

    10       0

    Maybe I am just old, but it does not appear to me that there is any safe haven asset, maybe there never was. We skate on thin ice from investment to investment trying to make a little while not losing too much. Best of luck to all of you. DLS

  • DM

    Daniel M.

    15 3 2017 16:52

    8       0

    Great interview!! Love his accent. Could listen to him for hours. Keep bringing him back RV.

  • JL

    John L.

    15 3 2017 11:00

    1       0

    Looks like his ex-wife voted eight times this morning.
    Boca

  • JV

    Jens V.

    15 3 2017 10:23

    3       0

    Great interview. A good week on Realvision indeed..

  • MO

    Mac O.

    15 3 2017 09:20

    4       0

    Very good. But I wish there had been some discussion on Europe and the euro.

  • GT

    Graham T.

    15 3 2017 08:59

    5       1

    The last 6 interviews have been amongst the best I have ever seen/heard. What a run!! Almost as good as my Chelsea FC. Thanks good lads .

  • JC

    John C.

    15 3 2017 07:07

    5       0

    Awesome! What I like to call a "Classic Real Vision" interview (can you have a classic if the medium has only been around for a couple years? :). The answers (and questions) are incredibly well thought out and there is just so much experience here with so much to be learned. Great stuff!!

  • AV

    Alexander V.

    15 3 2017 04:43

    8       0

    Another brilliant interview! Please bring Russell back soon!

  • WA

    WAYNE A.

    15 3 2017 02:17

    3       0

    To add humor to the discussion, the Plaza accord is impossible. The Plaza no longer exists. it is a high end Condo.

  • SD

    Stephen D.

    15 3 2017 02:06

    13       0

    Peter V, you are so right! I've been reading and loving Russell Napier for years. He's so erudite and so articulate (and yes, so confident). But if I'd followed all his advice I'd be bankrupt many times over. But that doesn't mean he's not worth listening to, he's a writer not a fund manager.

  • DS

    David S.

    15 3 2017 00:11

    3       7

    China has !,843 metric tonnes of gold which is 2% of their FX reserves. USA has 8,134 metric tonnes which is 74% of FX reserves. Wikipedia data December, 2106. German, IMF, Italy and France have more gold reserves than China. China has 2% gold in their FX reserves, they will not want to upset the fiat currencies any time soon. if possible.

  • PV

    Peter V.

    14 3 2017 23:16

    7       2

    How does R.N. remain so confident and yet continue to be so wrong.?

  • WS

    William S.

    14 3 2017 22:38

    13       0

    Bernard S. wrote: "How is the world starved of dollars?" I would recommend sifting through everything Jeff Snider has written on this topic in the past several months (http://www.alhambrapartners.com/commentaryanalysis/), as well as viewing his recent RealVisionTV interview. In my estimation, Snider's ongoing commentary is absolutely *essential* reading.

  • GG

    Gerald G.

    14 3 2017 22:02

    1       1

    I think that, today, "The Triumph of Optimism" would be more aptly titled "The Triumph of Greed and Willful Disbelief in Risk".

  • RM

    Robert M.

    14 3 2017 21:59

    1       0

    Great interview and the silver coin was poetry.
    Had an issue when he pinged sustained growth in the EZ as the key thing that would halt the DXY rally.
    To me, this is only half or perhaps even 1/4 right, the key metric is the real growth differential of US-EZ. This is already setup for a DXY top here. Same as it was for the previous DXY tops.

  • WS

    William S.

    14 3 2017 21:41

    23       7

    I understand the assumptions/premises underlying both Raoul's and Russell's undying belief in the persistent appeal of the USD as the "last man standing / safe haven of last resort" currency ...... but I am increasingly inclined to believe that "past performance will not be a predictor of future returns" when it comes to the Almighty Dollar. I discern a burgeoning global distrust of the USD -- for all the reasons that many other people (including Grant) have articulated, and I also suspect there are reasons/motivations/as-yet-unknown agendas at work in the world which will be revealed at just the right juncture, and which will provide the last little push that knocks the already teetering USD off the global reserve currency precipice upon which it has been so precariously perched since the 2008 GFC. I don't foresee a *replacement* for the USD as the global reserve currency, but rather a handful of currencies (perhaps propped up in one fashion or another by gold) that could emerge in the context of the next liquidity crisis, and which could engender just enough confidence in their neighbors that we could end up seeing a small number of *regional* reserve currencies. In any event, I have become 95% convinced that the USD has already become a "dead currency walking" -- it only remains for enough of the rest of the world to come to that realization ... and I believe that moment of clarity is much closer at hand than is believed by many otherwise brilliant macro-analysts -- Raoul and Russell among them.

  • NZ

    Nicholas Z.

    14 3 2017 21:07

    8       0

    Raoul, good interview. I too echo SS's comments above. China and Russia have oodles and oodles of gold. It would be useful to raid test Luke Gromens theories regarding China buying Oil, paying in Yuan and allowing free exchange for gold. The Chinese and Russian gild holdings must be a factor moving foward and it would be worthwhile hearing Russells opinions on the subject. Thanks for the interview

  • SS

    Steven S.

    14 3 2017 21:02

    14       0

    Great interview. Raoul why didn't you ask Russell about China's challenge to the greenback's global trade dominance? & what effect this could have on US dollar strength? ie. China's RMB import trade policy which then allows those not wanting RMB to take physical gold via the Shanghai Gold Exchange. China already is the largest producer of Gold and has one of the largest reserves. IF this strategy successfully grows in popularity (ASEAN, Russia, Iran, Saudi Arabia), maybe the plaza accord is already happening.......this has to have an impact on USD.

  • EK

    Emil K.

    14 3 2017 20:21

    8       0

    Bernard S. there are dollars and there are 'dollars'. The world is being starved of 'dollars'. I recommend the most recent interview with Jeffrey P. Snider as well as his world-class blog at Alhambra Investment Partners. The video "Step into Liquid" by Santiago Capital also addresses this issue. Daniel Want's interviews here address the disappearance of collateral. Basically if you imagine an inverted pyramid with cash, coins, gold and silver at the bottom (i.e. dollars) and wholesale finance such as basis swaps, options, eurodollar futures, esoteric financial instruments, etc. at the top (i.e. 'dollars') then you can see how dollars are being created by central banks but the contraction of bank/shadow-bank balance sheets at the top of the pyramid overwhelms that with 'dollars' disappearing.

  • TJ

    Tay J.

    14 3 2017 19:06

    1       0

    Triumph of the Optimists was the first book referred to.
    I'd still like to know which of Barton's books they were speaking about.

  • OL

    Otto L.

    14 3 2017 19:02

    9       1

    Ending on capital controls and the 15 guys in the room reminds me to remind you to interview Jim Rickards whose Road to Ruin picks up where y'all left off. Great discussion, thanks.

  • AD

    Aaron D.

    14 3 2017 18:47

    2       0

    Brilliant interview. Certainly packed with lots of key information.

  • SC

    Shane C.

    14 3 2017 18:24

    0       0

    How great was that? I love market and economic historians who can be honest. I agree that the dollar strength is real and has staying power...have to figure out how we can free up dollars to feed global demand

  • TM

    The-First-James M.

    14 3 2017 17:56

    2       0

    Great interview. One of the very best so far.

  • TM

    The-First-James M.

    14 3 2017 17:55

    2       0

    For anybody who wants to know which UK Investment Trust Boards Russell is sitting on, they are the Scottish Investment Trust (SCIN.L) and the Mid Wynd International Investment Trust (MWY.L).

  • TJ

    Tay J.

    14 3 2017 17:47

    0       0

    The books...!?! What were those books talked about around 15 minutes before the end. "Barton's" book? "Trial for the Optimists?" Are they listed in the show notes (yet)?

    The clarity with which Russell describes big macro-trends is simply brilliant. Thanks.

  • SK

    Stefan K.

    14 3 2017 17:21

    1       0

    Very interesting. Does Napier still have a target of 400 Points for the S&P500 as a coming generational low?

  • RF

    Robert F.

    14 3 2017 17:20

    2       0

    As a dollar bear this gave me a lot to consider. Nice work gentlemen!

  • dd

    darrell d.

    14 3 2017 17:08

    2       0

    Everyone is bullish dollar but trading as if bearish dollar (reflation and commodities). Great observation. However, then the trade is so lopsided strong USD (bear TLT) the market sometimes manages to inflect pain on the majority of the people. Lots of moving parts

  • NH

    Neil H.

    14 3 2017 15:48

    3       0

    there was so much information in this interview it gave me a lot to chew on. It appears that everyone is long the dollar and the fundamentals are all lined up to drive it higher. not sure what event will turn the dollar lower but when it happens everyone will need to exit at the same time.

  • bs

    bernard s.

    14 3 2017 13:56

    2       6

    How is the world starved of dollars? What is this statement based on?

  • JH

    Jesse H.

    14 3 2017 13:46

    0       0

    Good interview.

  • JS

    John S.

    14 3 2017 11:33

    14       2

    Excellent