Interview with Charles Gave

Featuring David Hay, Charles Gave

Charles Gave, Founding Partner & Chairman of Gavekal Research, discusses markets with David Hay, CIO of Evergreen Gavekal. Charles explains how monetary expansion has been cratering the velocity of money, suggests that entrepreneurs will drive the next decade of growth, and predicts an equity sell-off the moment faith in central banks fails.

Published on
7 July, 2016
Topic
History, Financial System, Monetary policy
Duration
36 minutes
Asset class
Bonds/Rates/Credit, Equities
Rating
21

Comments

  • TE

    Tito E.

    18 9 2018 13:35

    1       0

    I keep coming back to this interview!

  • JV

    Jason V.

    4 5 2017 07:30

    1       0

    I have a sneaking feeling that Charles Gave might just be the very best mind in finance...

  • PB

    Pieter B.

    7 10 2016 18:35

    0       0

    Great interview with some excellent lessons. Thank you very much!

  • LV

    Luís V.

    5 8 2016 21:21

    0       0

    This was a outstanding Master Class. Hat Tip. Most trouble in present econ Phd´s view is the axioms that they use, on top of that the wrong models. Or models at all. Listening to CGave I remembered the problem of induction that philosopher David Hume so accurately explained. It´s impossible to call a proposition (regarding the future) knowledge. We need to account for the changes in axioms and concepts as we study these problems. That are greater when we talk about economics and the markets.
    Beware tech-simple-fans: tech might bring more deflation probability in to a world with excess capacity in labour.
    Congratulations to RV tv Community.

  • KR

    Kevin R.

    28 7 2016 23:53

    0       5

    His accent is so slurred that I can't make out half he says. Wish there was closed caption on this...

  • DH

    Dale H.

    20 7 2016 10:30

    1       0

    I have watched this twice now and I am just as impressed the second time. I don't normally take notes, but I have. The information is really important to me and I enjoyed the way it was delivered. The questions were great too and they made it flow very well. I will be there any time I see Charles will be speaking again. Pen in hand. There are so many gems and great quotes here, I'm sure they have been pointed out already so I will sign off with a big thank you RV.

  • rb

    roberto b.

    18 7 2016 14:39

    2       0

    Good analysis, Charles is a brilliant intellectual but little insight into the modern banking system and money creation process. Hope to see Prof Keen on RVTV soon :-)

  • RE

    Rachel E.

    15 7 2016 11:47

    1       0

    Dave is a prefect fit for REAL TV. RGD !!!

  • MB

    Matthias B.

    12 7 2016 09:32

    0       0

    pricelessly brilliant. I will have to watch it a 3rd & 4th time to adequately absorb all that info. i feel too flattered about the +ve comments about Switzerland, but then again we are reputed to be critical or glass half empty ( and given the big challenges we face). could we have a discussion on the impacts of helicopter money, now that it seems that Jap is starting that domino and, how ironic, being advised this week from Mr Bernanke again. it seems that this should weaken FX even more, but EQ markets may love it. but can there be any real benefits to the real economy? i am still puzzled to see a clear path on this matter for EQ markets in particular, since they already strongly deviate from reality. tks!

  • db

    don b.

    12 7 2016 02:51

    0       0

    https://americanprinciplesproject.org/economics/new-george-gilder-book-the-21st-century-case-for-gold-a-new-information-theory-of-money/ George Gilders new Book explains why zero interest rates are so destructive.

  • jd

    john d.

    11 7 2016 07:28

    3       0

    Nice work David. Excellent conversation ...

  • DS

    David S.

    11 7 2016 04:56

    1       0

    In response to Guillermo G. 7/8/19: I have already commented that this was an interview of wisdom which I enjoyed very much. Even wisdom must be used practically. How do you discover the real market interest rate so you can sit back and let it operated?

  • SS

    Sam S.

    10 7 2016 15:22

    4       0

    In my opinion-----the number one problem is "false perceptions" spewed by governments, banksters and the news media about everything from finance, politics and the legal system. None of it's working and something's got to give. The little guys will get creamed one way or the other. RV at least give us a glimpse into those in the know. Great interview----the truth hurts.

  • WM

    Will M.

    10 7 2016 15:05

    7       0

    What a superb commentary. Wisdom and experience just sound so enlightening. Not so sure about China given its own deep banking problems and risk of devaluation of the yuan, but the discussion of interest rates and academia running the monetary system was priceless!!! Thanks Charles & David.

  • tt

    test t.

    10 7 2016 13:55

    0       0

    Good

  • JV

    James V.

    10 7 2016 12:41

    6       0

    Excellent interview. Charles is brilliant, but I also want to compliment David on his excellent questioning and dialog which added to the discussion. Well done!

  • DL

    Derek L.

    9 7 2016 23:55

    1       0

    Really interesting stuff. Also, I did not know that Bernanke was an economic adviser to Japan in the late 90's. Wonderful.....

  • MC

    Mike C.

    9 7 2016 21:20

    1       2

    Listen in @ 2:50 left in the video. This is the way it will go.....regardless of who THINKS they're in control. The single most overlooked fundamental I see across many thesis/opinions. We are moving to a new age economy where old school dynamics overlook the impact technology has on the world. Technology will help restore this free market equilibrium that is so often referenced via deregulation, privatization and big risk(perceived as anyway but truly is not). ETR folk...I'm optimistic;)

  • KB

    Kreso B.

    9 7 2016 20:50

    1       10

    Invest in China 2016. Clown.

  • SS

    Stewart S.

    9 7 2016 18:38

    2       0

    An excellent understanding of how the politicians & PHD professors have screwed up the system. Suggests he should be chairman of the federal reserves.

  • J

    John .

    9 7 2016 14:38

    3       0

    Brilliant. Even smart, well-educated gold bears are seeing trouble ahead and the allure of gold, an asset that is still under-owned and under-appreciated.

  • MT

    MICHAEL T.

    9 7 2016 13:17

    3       0

    Or... digital currency. (I wonder who set up Bitcoin?)

  • BD

    Bruce D.

    9 7 2016 13:06

    4       0

    Fabulous discussion, articulate and clear of thought from both David and Charles. My question is simple, if one Central Bank monetizes all of their debt, what do you think the rest of the world will do? They will be forced to do the same exact thing, which will in effect destroy all confidence in paper, fiat currencies. BOOM, you will then witness the 21st century version of the Wiemar Republics hyperinflation. How will the Central banks respond then? In the only way they can to maintain control.....some type of gold standard through a common world currency. Who has the gold, and in what country will once again mean something, just like Greenspan recently stated, now that he can be honest again. If you don't own your proper share before then, good luck finding some at a good price........the entire world cannot follow the Japanese model, as the citizens will NOT allow it! Helicopter money will intensify the speed of the denouement.....bring it on and get it over with, and maybe then we can rebuild with a new model, which is inevitable. WITHOUT PH.D. Economists in charge!

  • MT

    MICHAEL T.

    9 7 2016 11:55

    8       0

    RVTV= Access to Genius, Experience, and Clarity of Thought.

    Feels like standing on the shoulders of giants!
    Can't thank you enough!

  • DS

    David S.

    9 7 2016 03:43

    12       0

    The smartest person in the room often gets you into trouble! I want to listen to the wisest person in the room. He or she combines hard work, IQ and experience to form opinions and more importantly options. It is the gold standard, but extraordinarily hard to find. Mr. Gave is certainly one.

  • AP

    A P.

    8 7 2016 23:56

    3       1

    Thoughtful and Excellent!!

    For those finding this too pessimistic: (1) get hedged; (2) tune in to your favorite financial cable tv channel to celebrate stocks at all time highs.

  • WK

    William K.

    8 7 2016 23:42

    0       0

    Risk parity depends not on getting the long end of curve correct, but betting on the 5 yr and leveraging up. Wealth destroyer. Brilliant.

  • JC

    Justin C.

    8 7 2016 23:19

    12       0

    David Hay, Anatole Kaletsky, Charles and Louis-Vincent Gave are amongst the finest minds out there for my money. Wisdom in spades. Love it!

  • MH

    Michael H.

    8 7 2016 21:01

    53       1

    His framing of interest rates seems so sensible, and yet I don't think you could find a single macroeconomics textbook that describes rates as he did. I have a PhD in economics and was tenure-track faculty for several years, and it's very clear to me now that the way that (almost all) academics think about rates is fundamentally wrong. The ways that rates are incorporated into mathematical models are fundamentally wrong. It's not that our technocrats are stupid; they have plenty of analytical horsepower. Yet they rely on fundamentally useless models. Their incompetence is their failure to recognize it, or at least do anything about it.

  • SM

    Sam M.

    8 7 2016 19:21

    10       0

    That was awesome, watched it twice. I'm someone that knows close to nothing, but I've never heard of interest rates framed in that way.

  • AH

    Andreas H.

    8 7 2016 18:18

    7       26

    Also: Could we get a bear and a bull into one room and discuss their cases? For what is all this central banks bashing good for? 1. Adapt to it and make money, that is our goal here! 2. Yes, low interest rates allocates money to bad ideas, but do you think the solar industry, Facebook, new forms of oil drilling (hey, the US is now more independent of the middle east, go celebrate!!!), google, amazon, tesla, industrialization of emerging markets (china is a wonder guys!!!) would exist without low interest rates? 1 good idea of 100 bad ones can change and will change the world! Yes, there will be a blowup, so what? We will be able to build upon what has been done. No second wave internet companies without the first wave!!! Why should money be expensive if inflation is low? Money is there for the good of people & the best investor is an optimist (WB!!).

  • AH

    Andreas H.

    8 7 2016 17:56

    5       5

    Come on! All that complaining? What is the solution? And what is your bet?

  • B

    Bojo .

    8 7 2016 16:51

    3       0

    Excellent! Mathematical inevitability plus common sense, a rare combination to see.

  • MK

    Mark K.

    8 7 2016 16:35

    10       0

    It is interesting to see more and more seasoned investment minds, who are not traditional gold bugs, suggesting that adding gold to your portfolio now makes sense. As respected commentators like Gave turn positive on gold, investment demand will only continue to grow.

  • CC

    Christopher C.

    8 7 2016 15:44

    3       0

    So misallocation (Non-market free market priced) of capital prioritizes investment for short term gain in unsustainable (politically connected) ventures which dampens/retards growth. While growth is what is required to support the underlying monetary system. What could go wrong?

  • EL

    Elizabeth L.

    8 7 2016 15:11

    9       0

    Thank you for the wisdom Charles. Great job interviewing David. I learned a great deal.

  • TS

    Thomas S.

    8 7 2016 14:36

    28       0

    "You should not confuse having had the best grade at school with being smart" This comment is so true.

  • GG

    Guillermo G.

    8 7 2016 13:54

    34       0

    Charles, always a practical man with tons of knowledge behind him. His point is clear: economic growth is produced by people´s interactions not by the constant manipulation of the variables. Set the right interest rate, go home and let the normal business cycle run its course and let the chips fall where they may.

  • RM

    Richard M.

    8 7 2016 13:53

    2       0

    True Wisdom! Excellent.