Dysfunction and Dependence: A Close Look at the U.S.-China Relationship

Published on
November 30th, 2018
Topic
Financial System, Geopolitics, China
Duration
64 minutes

Dysfunction and Dependence: A Close Look at the U.S.-China Relationship

The Interview ·
Featuring Stephen Roach

Published on: November 30th, 2018 • Duration: 64 minutes • Topic: Financial System, Geopolitics, China

Stephen Roach, former chairman of Morgan Stanley Asia and author of “Unbalanced: The Codependency of America & China,” sits down with Grant Williams to provide another perspective on the relationship between the two world powers. Roach, a noteworthy China bull, breaks down the dysfunctional economic and political relationship between the U.S. and China, and makes a prediction about the ongoing trade war between the two countries. Filmed on November 16, 2018 in New York.

Comments

  • DY
    Dmytro Y.
    16 December 2018 @ 09:59
    It’s been fairly interesting interview. The foreword by Grant looks misleading. I heard nothing bullish about China from this interview. It was rather bearish. An ironical observation: someone spent five years in Hong Kong and is already a great China pro in Real Vision rankings... not a particularly high standard it seems .... but thanks for the interview anyway. Interesting though again too little meat on the bone
  • SB
    Stewart B.
    11 December 2018 @ 12:55
    There is a suggestion that China now will grow into a Japan style economy. This may happen. There are other analogues. In the 50s/60s the USSR grew strongly. In fact many academics (eg Samuelson) believed USSR would overtake US. Contrary to what us market types think, states can some times still grow under extractive absolutist government control, but it is almost always from a low base and is only sustainable for a small number of decades. I hope this is not the case.
  • SL
    Seth L.
    7 December 2018 @ 15:57
    This was really good. An incredibly interesting perspective with very valuable insights. Interestingly though, I still came away bearish from it. If economic freedom is being contracted, so too will growth.
  • LB
    Louis B.
    6 December 2018 @ 00:27
    Great interview, thanks. This man has nothing to sell or gain financially from being here. But wow... reading the comments, it's plain to see how divisive this subject is! As the saying goes: the more one knows, the more one realises how little one knows. But, it seems, many here prefer to know even less... Suffering from cognitive dissonance, maybe? Co-dependency and imbalance will lead to something, but we simply don't know what yet. i prefer to keep an open mind and keep learning.
  • HH
    HODL H.
    4 December 2018 @ 21:31
    Annoying around 20 minutes in he talks about Corruption campaign but doesn't discuss Xi and his family's corruption...sweet
  • AM
    Andrew M.
    3 December 2018 @ 14:46
    Please can we get Kyle Bass, Mike Green or Raoul interviewing either Diana Choyleva and/or Leeland Miller (for a long form this time). They are two of the best China watchers out there. Both very unbiased and apolitical, while Diana's background growing up in Bulgaria before the wall came down makes her insights pretty special.
  • DP
    David P.
    3 December 2018 @ 10:55
    The piece of chinese history at the beggining was interesting. Later on in the interview, it appeared pretty obvious that he was focused on generalities, maybe to not offend some people. A bit dissapointing.
    • NA
      N A.
      13 December 2018 @ 05:39
      I was also a bit disappointed by the second part of the interview. Having just seen him at the MS conference in Singapore a few weeks ago where he presented several slides on the joke that was Lightizer's report on IP theft and the lack of substance in this whole debate I am a bit shocked to see him not mention this now. During that speech he said forced transfer of technology is a joke, it was all done willingly and he said the estimated losses due to IP theft are so grossly exaggerated based on no substantial data that "it is not worth the paper it is written on". Anyway thanks RV for the interview, highly interesting nonetheless. Good to get some balance in this debate.
  • JB
    Jason B.
    2 December 2018 @ 23:45
    Stephen Roach would have been applauding the Soviet Union central planning economic miracle too. Oh wait. A lot of American "economists" was applauding the Soviet Union as a model for economics until it collapsed...
    • SW
      Scott W.
      3 December 2018 @ 15:26
      When asked what he worries about in China he didn't mention the return of the CCP to "the core values of marxism". I would have pressed on that. Expound if you will sir upon the meaning and implications of said core values. And how the ruling party might achieve something positive and lasting through more strict application of said values. And how the western lens and perspective tends to assess marxist vales with western prejudice and bias. Could Orwell have been on to something when he penned “There are some ideas so absurd that only an intellectual could believe them.”? Is there any possibility that the CCP knowingly promotes memes of "western" bias to western intellectuals in the hopes that they propagate ambivalent, in-actionable and judgment-free macro analysis from the western ivory towers?
    • AM
      Andrew M.
      3 December 2018 @ 21:02
      it's more than just "Marxist values" though. because the country is so large and sprawling, the CCP have resorted to outright authoritarianism and despotism in order to try and maintain control. Consider the following: > Orwellian "social score system" - i still can't believe Western media haven't condemned this more. very spooky > People like Jack Ma forced to hand over their wealth and pledge their undying loyalty to the CCP. Or else. > rampant propaganda and censorship. This now extends to the economy an financial stability > widespread capital controls > 1m+ political prisoners in internment camps > The (sometimes live) harvesting of of organs from 100,000s of people (mostly ethnic minorities) over the years. Almost unfathomable. People can kind of put up with this when growth is humming along at 6.5% and the govt is adding millions of jobs. In reality, it's closer to <4%, they need to engineer a soft landing (and stop kicking the can down the road), and they can't just grow babies as they approach a demographic cliff. I believe Xi and the CCP know this, hence he's President for life. But to me it seems unsustainable. And, in fact, China now appears the very opposite of Deng's famous quote "bide your time and hide your strength". It's as though they're trying to make the most of their moment before a much-needed financial restructuring - and Trump has called them on this bluff, for now.
    • CC
      Charles C.
      7 December 2018 @ 00:36
      seems a misrepresentation to me
  • yd
    yon d.
    2 December 2018 @ 23:25
    Exceptional interview and Grant's presentation is perfect! Grant's questions are clear, concise and controlled. Thank you so much Grant for bringing such an amazing guest, who's wisdom is pulled to the surface through a wonderful interview. Thank you, RealVision
  • YW
    Yowshi W.
    2 December 2018 @ 19:05
    Dont know what happened since update...but page doesn’t scroll as fluidly as it used to...
  • JO
    James O.
    2 December 2018 @ 17:50
    The comments made me suspicious that this guy is someone who Ben Hunt might call a stalking horse. Not worth listening to, far too many complications in his background for him to match the truthfulness of Kyle Bass.
    • RR
      Rex R.
      4 December 2018 @ 14:27
      Agreed, almost uniformly, every time RealVision puts forth an "Academician" instead of an investor with real personal market participation-- being in the game with his/her investor's own money--- I am disappointed. Give me Kyle Bass every time over the "trained economists" Harvard/Yale professors.
    • DS
      David S.
      7 December 2018 @ 00:26
      I am not sure why you want to hear one only one point of view. You do not have to agree with the opposite point of view, but you can always learn something. DLS
    • NA
      N A.
      13 December 2018 @ 05:43
      Don't worry, there are enough hedge fund managers on the other side of Bass' trade an in time I'm sure they will come to RV. Most happen not to be based in Texas, cause let's face it, I wouldn't be a US specialist based in Shenzhen either. In the mean time, let's appreciate that between the extreme pro China few and the China Armageddon view, the reality is probably somewhere in between.
  • MM
    Mike M.
    2 December 2018 @ 16:40
    Academic versus Steve Bannon, Kyle Bass......? An easy decision for the guys who reside in the real world.
    • DS
      David S.
      2 December 2018 @ 18:11
      Why take sides? The more you know the better you can structure and follow the trade. DLS
    • JO
      James O.
      2 December 2018 @ 20:18
      A stalking horse does sides.
    • JJ
      JJ J.
      5 December 2018 @ 21:07
      30 or so years at Morgan Stanley qualifies as a market participant to me. He said he moved to academia to switch to the slow lane.
  • BT
    Brian T.
    2 December 2018 @ 15:26
    Grant was his usual excellent self asking a lot of open ended questions and being extremely respectful of someone with obvious gravitas. I did not find Mr. Roach's more sanguine views on China particularly compelling, however. I saw very little specific refutation of the arguments of Kyle Bass and other China bears. Mr. Roach noted that the Chinese are working on their debt problem, but did not describe any reasonable path out of some sort of meaningful Yuan devaluation or other debt-deflationary economic calamity. In fact, he described no path at all. The most telling part for me was the last minute or so of the interview where Mr. Roach stated he could not see a framework for resolving the core differences between the U.S. and China over the important issues such as intellectual property rights and hacking. If this is the best a bull can do, the bears win flat out. Timing is of course an unknown, as the wheels can be kept on the bus far longer than anyone expects. However, it seemed pretty clear to me that Roach offers no tactical, concrete ways that China can escape from its overindebtedness, and no clear way or even a rough dirt path of how the U.S. and China can resolve extremely important strategic differences. If he doesn't know what it could be, who can?
    • DS
      David S.
      2 December 2018 @ 16:15
      When it comes to government debt, it looks like many countries are in a race to the bottom including China and the US. DLS
    • TM
      Timothy M.
      2 December 2018 @ 20:17
      Brian, I totally agree with your summary. China is still a command economy. while I respect roach's points that us investors can really understand Chinese goals, I think China is a train wreck.
    • GH
      Garrett H.
      3 December 2018 @ 03:58
      I agree, would have liked more details on the debt situation within China and they would handle a crisis. One thing he made clear was that China is difficult to understand from an outsiders point-of-view, particularly with the opaque economic and political system. A debt calamity and restructuring seems imminent for both the US and China. A lot will come down to how the elites can handle the populace during an economic crises. Long-term China seems better positioned to recover from an economic crisis because they can shift from an industrial to a consumer economy and begin consuming goods that previously flowed to the US for dollars. The US on the other hand is facing a world that is no longer financing their deficits and doesn't have the manufacturing base China does.
  • DS
    David S.
    2 December 2018 @ 15:17
    RVTV is doing a great job bringing many different points of view to subscribers with in-depth interviews. The comment section’s purpose is to get more information pro and con on the interview. If you agree or disagree give your reasons. Many comments do not discuss the ideas but are mere ad hominem attacks. This makes RVTV's job much harder to find quality people to be interviewed. It can be RVTV’s Achilles heel - a weakness despite overall strength. If necessary, it would be better to drop the comment section than to lessen the quality of interviewees. I much prefer both. DLS
    • JW
      James W.
      3 December 2018 @ 03:15
      It's also not helpful when every interview gets a 90%+ rating. It was worthwhile to have Roach on, but in terms of providing insight, analysis, or critique WRT to China, has has proven everywhere to be a consistent dud IMO. Contrast with the interview here with Ann Stevenson Yang, for example.
    • DS
      David S.
      7 December 2018 @ 19:20
      The thumbs up or down is not a rating on opinions in the video. A person may disagree with the content, but learned something relevant. DLS
  • ZY
    Zheng Y.
    2 December 2018 @ 13:15
    Mr Roach know a little about asia, even with his five years ground experience, check out Japan and China median income and std, u know he speak nothing about the real social and economy structure of both country. The only thing he right, is the ending which predict the upcoming event,
  • ZY
    Zheng Y.
    2 December 2018 @ 13:15
    Mr Roach know a little about asia, even with his five years ground experience, check out Japan and China median income and std, u know he speak nothing about the real social and economy structure of both country. The only thing he right, is the ending which predict the upcoming event,
  • RD
    Rahul D.
    2 December 2018 @ 07:03
    Interesting conversation. Enjoyed listening to Roach’s co-dependency framework. He is right on the US-China trade war prediction. The 1 Dec agreement at the G20 is purely cosmetic and won’t last.
  • JW
    James W.
    2 December 2018 @ 03:53
    Seems inevitable in retrospect that we would hear this descent into psychobabble and rot. Far more insightful fortunately is the commentary from RV subscribers.
    • DS
      David S.
      2 December 2018 @ 14:40
      Are the insightful comments the one that agree with you? DLS
    • JW
      James W.
      3 December 2018 @ 04:12
      My primary problem with Roach is that he seems utterly incapable of making and distinctions. You would not know that he was not carrying forth about Germany, Switzerland, or the Netherlands. One wonders whether he ever spent any time in the countryside, or among peasants, commoners, or average working stiffs. He consistently gives one the impression that he knew China exclusively from his hotel room and interactions with the executive and governing classes.
    • JW
      James W.
      3 December 2018 @ 04:53
      And it's exceedingly ironic for you to have asked me that question when you have suggested eliminating the comments section because you are afraid of seeing critical commentary here.
    • DS
      David S.
      4 December 2018 @ 07:18
      James W. - If the choice is better interviews without a comment sections or poor interviews with a comment section, it is easy for me to choose. I encourage your critical comments not comments without meaning. Your use of the “psychobabble” is a direct ad hominem attack. If you disagree with co-dependency discuss why co-dependency is an incorrect trope. You may be correct, but we will never know your position if you do not present an argument. DLS
    • DS
      David S.
      7 December 2018 @ 19:24
      There is nothing ironic here. It is literal. DLS
  • DS
    David S.
    2 December 2018 @ 02:57
    Thanks for a very instructive interview. This is not the forum, but the Chinese/US trade war is only a small part of a rapidly changing world. If we do not blow ourselves up first, Japan, China, India, Pakistan, Southeast Asia along with Australia and New Zealand are forming a massive market. They will figure it out with or without the West. If you want to make money long term, medium term or short term, you need to figure out how to invest in these markets. Focusing your portfolio on Chinese debt problems is insufficient. DLS
  • GB
    Gordon B.
    1 December 2018 @ 17:05
    A countervailing opinion https://www.theepochtimes.com/why-china-has-already-lost-the-trade-war_2494509.html Not Kyle Bass
    • DS
      David S.
      2 December 2018 @ 03:03
      Well I guess the trade war is over. All my worries were for nothing. It is time to go have a micro-beer. Cheers. DLS
    • HO
      H2 O.
      2 December 2018 @ 03:55
      Know your sources. Epoch Times is a Falungong front. Pure propaganda.
    • JW
      Jeremy W.
      3 December 2018 @ 04:36
      @ H2 0. You don't look at the media outlet, you look at who wrote it. It was written by Daniel Lacelle. A European Economist who has been on RVTV. He did his own China video on here only recently.
    • JW
      Jeremy W.
      3 December 2018 @ 04:59
      To anyone interested. Daniel Lacelle isn't a "Falun Gong" economist. He has nothing to do with the movement. Read the article. He argues only on economic grounds (around trade, debt and currency). The above user's instant dismissal of the economic argument in the article because it was published in The Epoch Times is beyond ignorant. That in itself is bordering on propaganda (i.e. misleading information). Gordon B: You might find this interesting, Bloomberg article citing a paper from EconPol Europe re: the trade war. Daniel wrote his article April 2018. Bloomberg article is November 2018. For reference sake. It makes Daniels article even more interesting knowing it was written almost 8 months ago. https://www.bloomberg.com/news/articles/2018-11-19/china-is-paying-for-most-of-trump-s-trade-war-research-says
  • MP
    Matthew P.
    1 December 2018 @ 14:21
    WOW. His counter argument to quantitative facts e.g. debt/gdp ratio is “meh, I dont think that matters” and addresses chinese currency manipulation by explaining the benefits of a low value currency. Lol. The fact that this guy is an educator at an ivy league school which he made sure to mention many times and such a prominent figure in us china relations is unbelievable.
    • MM
      Michael M.
      1 December 2018 @ 15:29
      Yeah, this guy seems weak on practical theory, as most within academia are. Codependence was designed, China was brought in to WTO organization in part because US needed new foreign trade surpluses to recycle into treasuries as Germany & EU went offline with Euro adoption. China goes from 60 billion treasury holdings in 2001 to 1.6 trillion in short order. Also pull up corporate profits as percent of GDP FRED data, and try not to see the clear and obvious dynamic that allowing corporate board rooms of industrial base to “opt out” of 20-30k US benefit cost mandate per employee, send those jobs to China, and add difference back into margin created. Both of those decisions made huge assumptions about how China would behave with newfound power as commodity import powerhouse, and how American displaced worker and voter would react.
    • DS
      David S.
      2 December 2018 @ 15:24
      It would be an honor to take Professor Roach course. Unfortunately, I am not Yale quality. Thank you RVTV for providing this interview. DLS
    • DR
      David R.
      5 December 2018 @ 20:19
      Indeed, DLS ..... it's my sentiment too.
  • SL
    Stephen L.
    1 December 2018 @ 10:23
    Great interview, thanks grant. On balance, i still feel bearish.
  • my
    markettaker y.
    1 December 2018 @ 03:15
    Wow - Grant was very gentle with Roach. A total sell-out, this guy. Hard to even know where to begin. I feel like he gets almost everything completely wrong. But most unforgivable is his whitewashing of CCP rule in every conceivable way. Talk about 'wrong side of history.'
    • DS
      David S.
      4 December 2018 @ 07:33
      Grant's interview is not a sellout. It is also not a counter argument to Mr. Bass's debt crisis position. It is a reasoned pro and con discussion about China. Are we now so tribal that we cannot just listen to an experienced person's opinion without prejudice? DLS
    • NA
      N A.
      13 December 2018 @ 05:47
      When was the last time you spent more than a week in China?
  • WD
    William D.
    1 December 2018 @ 03:03
    Great content. Hard to find a better 1 hour on China. That he doesn’t forecast is intelligent, because as said, the data is published for reasons beyond giving foreign investors a accurate reading on economic activity....
  • KS
    Kathleen S.
    1 December 2018 @ 02:49
    I for one am not buying the Steven Roach China dream story. The rise of China is a globalist banking and corporate engineered event, Henry Kissinger and David Rockefeller have their elite fingerprints all over it. A largely agrarian communist country with a GDP of 300 billion in 1981 does not in 37 years become an industrialized urban country with a GDP of 12 trillion dollars (that is a mind numbing 4000% increase) without the support of the western banking and corporate establishment. In order for China to acheive this growth the US middle class was destroyed, their jobs were sent overseas and they have been sustained for the last four decades on ever increasing government social programs, FED created financial bubbles in housing and stock market and never ending lowering of interest rates which allows them to take on greater and greater amounts of debt without ever receiving an increase in wages. It is all bullshit - and like Kyle Bass said in the Bannon interview, we have had a trade war for decades only the US never bothered to fight back - until Donald Trump. If what Miles Kwok says about the China banking system is true and I know what he says is really hard to believe, but than again if someone told me that Central Banks can print money out of nothing and then can lend it to goverments with interest - I wouldn't believed them (oh, but wait that is true); thus maybe what Miles says is true and in that case buckle up because China might be coming in for that hard landing after all.
    • DS
      David S.
      2 December 2018 @ 02:31
      We are the ones that freely purchased all those TVs, stereos, washing machines, etc. from China at cheaper and cheaper prices while unfair trade practices were building. When we look at the whole story, we need to include worldwide consumers into the equation as part of the problem. DLS
    • KS
      Kathleen S.
      20 January 2019 @ 13:36
      We did not freely purchase ANYTHING, our elite sold US down the river , when it gave our jobs to China. Our government has been hijacked by banking and corporate class that create policy that allows them to get away with this - food stamps and welfare checks to mask the real devastation and keep the masses quiet.
  • MR
    Mathew R.
    1 December 2018 @ 01:11
    Appreciate the alternative view.
  • VS
    Victor S. | Contributor
    30 November 2018 @ 22:04
    NEED MORE FOECASTS ? STEPHEN ALSO TALKS IN A MONOTONE SO WITHOUT A MARKET CALL OR AN EXCITING STORY HE TURNS OUT BORING. A GOOD INTELLIGENT MAN BUT HE DIDNT SHARE MUCH THAT WAS WORTH 63 MINUTES.
    • my
      markettaker y.
      2 December 2018 @ 03:53
      Trader Vic nails it.
    • DS
      David S.
      2 December 2018 @ 23:04
      Trader Vic. - I just listen to the video that I think you contributed. I enjoyed and learned from your video today as much as in 2016 - the macro facts have not changed. Your entire focus is on trading as that is your expertise. Mr. Roach's focus is in economics which is his area of expertise. I enjoyed and learned different things from both of you. Good luck. DLS
  • DD
    David D.
    30 November 2018 @ 19:54
    This made me more bearish on China tbh
  • JL
    Jeffrey L.
    30 November 2018 @ 19:12
    The issue is technology theft. Without tech theft, China wouldn't have 1/100 of the power they think they have. No Prof. Roach, the savings rate in the USA isn't on the radar as an issue.
  • JJ
    Joe J.
    30 November 2018 @ 19:10
    34 min in...The similarity between debt fueled growth and an overleveraged economy of japan and china was discussed....He pointed out that some Chinese "insider" is thinking about it. What am I supposed to do with that? Maybe that is good enough for an academic, but I want to know what they are thinking about and how they plan on solving it. Bernanke was "thinking" about the subprime crisis too, where did that get us. Listening to all the China interviews, this was the weakest IMO. Way to many generalities.
  • HO
    H2 O.
    30 November 2018 @ 17:56
    He is a good guest to have, but he is a fool where it comes to understanding China's motivations and the means it is employing to those ends. This is not about having the right "lens", this is about properly judging intent. People like this are wholly reliant on their elite contacts in Beijing that they are desperate to maintain to the point that it irredeemably distorts their "analysis" and understanding of what is going on.
    • DR
      David R.
      1 December 2018 @ 00:25
      lol ... Ok please tell us, what are their "motivations and means it is employing to those ends". My guess is their goal is to have a decent home, eat well, have a job that pays the bills, maybe enjoy an occasional holiday or other rare tiny luxury. But please, enlighten us "fools" with our "understanding". of their "intent".
    • KS
      Kathleen S.
      1 December 2018 @ 05:32
      Is Roach a fool or is he a tool of the establishment is the question. Under closer scrutiny eveything Roach says turns out to be nothing but a fallacy. The thing that scares me about this is that he is a professor at Yale and young students will be indoctrinated by the false premises he spews - they will trust in his authority and will not know to question what he says -- this is what makes people like Roach so dangerous. Any professor that questions establishment agenda is not published or given tenure - this is a proven fact. Establishment insists academia follow keynes economic indoctrination and if you question it you are banished- both Michael Hudson and Steve Keen talk about this in prior Real Vision interviews.
    • DR
      David R.
      1 December 2018 @ 13:26
      Kathleen, I agree with you about career academics. But Mr Roach was actually a career brokerage executive - before becoming the Morgan Stanley fellow at Yale, he worked 30 years at Morgan Stanley as its longtime chairman in Asia, and beforehand was the Morgan Stanley Chief Economist in NY for a decade (1990-99). IMHO you're excessively harsh by claiming that everything Roach says is a fallacy. Actually, his conclusions tend to fit with some similar ones in RV Macro Insiders a few months ago by Raoul Pal entitled, "China Is The Clear Winner". Didn't you see that?
    • BM
      Bryan M.
      3 December 2018 @ 06:25
      LOL...I wasn't going to comment because well...I'm out of my depth when it comes to "foreign relations and trade matters" PLUS...I am one of those "quiet" Canadians but really y'all...take a pill already and chill out. Stephen Roach is a legend on Wall St. So, just because some of you don't agree with him; that is no excuse for belitling him. As for Kyle Bass (I too am a fan), please don't think he is not one of the despised "elites" some of you seem to despise. So next time you see someone on RV who, like Mr. Roach, you don't agree with, look in the mirror, turn the volume up and open your ears.
  • JS
    J S.
    30 November 2018 @ 17:52
    It would be nice to know if Prof. Roach has any current personal interest in/from China. Same way Kyle disclosed in his.
    • CP
      Constantine P.
      30 November 2018 @ 23:40
      He admitted he teaches in China. Appears to be captured. .
  • EL
    Elizabeth L.
    30 November 2018 @ 16:02
    Thank you RV for doing your series of interviews on China. We need to be able to understand China to the best of our ability and you are contributing to that effort. Grant so good to have you back doing these in-depth interviews on current critical topics.
  • OT
    Omar T.
    30 November 2018 @ 16:00
    I would just like to point out the difference between the long format interviews with business and investment professionals vs. ones like this one from academic minded professors. Academic professors seem to be trained to develop their ideas over semesters. As a result, I ended up feeling like Grant in the end, not sure if the hour interview changed anything or what exactly to take away from it. I would suggest doing what they do in other interviews at the end, "In 30 seconds, summarize your position of why the China bears are wrong?", or "what are the most important ideas you want the audience to take away from this interview?"
    • DS
      David S.
      2 December 2018 @ 18:52
      This interview is not a trade idea. Raoul repeatedly stresses that macro investing is much more than placing a trade. Limiting your sources may eliminate the one factor that would change the structure and/or timing of a great trade. Most agree with Mr. Bass's financial analysis of the Chinese debt crisis except for timing. With 20/20 hindsight, we learned a lot about how powerful politicians can maneuver for years. This would include Mr. Draghi also. This is pertinent information for timing and scaling future trades. DLS
    • DR
      David R.
      2 December 2018 @ 21:30
      David S, good points again. Japan is another example of being a "widow maker" of the bears for many years due to government & policymaker intervention, maneuvering far longer than most imagined possible. As for Mr Bass, if you get the timing wrong on a trade (especially for years), then you got the trade wrong, period.
    • AC
      Andrew C.
      3 December 2018 @ 17:19
      David R. Interesting. After how long, are you wrong? I bought 5 shipping stocks in 2016. Most have gone "nowhere". Not down, nor up. Am I wrong yet? When do I close out? If they start to move at what return do I take my profits? Hmmmmm. Perhaps Bass is wrong if he goes broke? Dunno. This is something I need to learn
    • DS
      David S.
      4 December 2018 @ 07:42
      Andrew C. - You would need to see the assumptions of the trade as written at the time. If you placed your trade with the assumption that it may play out over years, then you were prepared. I believe that Mr. Bass agrees that he thought that his trade would not last this long. DLS
  • SU
    Shakeel U.
    30 November 2018 @ 15:58
    Raoul can you please create a video, to explain the dangers of the Fed printing too many dollars, increasing the money supply and the effect on inflation. It feels like this topic is widely misunderstood.
    • DS
      David S.
      2 December 2018 @ 02:13
      I think the printing too many dollars is well understood, but ignored even by the market. It is always good to hear Raoul's point of view. He looks at it from a trader's perspective. It was good to hear this interview also from Mr. Roach's point of view. DLS
  • SU
    Shakeel U.
    30 November 2018 @ 15:38
    It was good to get a different perspective on China, many thanks Real Vision. Request, can you please bring Peter Schiff to Real Vision? Peter Schiff has a unique view on China and the US that we've not heard on RV before.
    • DR
      David R.
      30 November 2018 @ 19:26
      In a nutshell, interested what is it?
    • MZ
      Martin Z.
      1 December 2018 @ 05:29
      David: Schiff's main point is that tariffs are an involuntary tax on American consumers. The Chinese don't pay for tariffs on imported Chinese goods; the burden falls on the U.S. consumer through higher prices and/or substitution of higher priced U.S. or European-made products. Tariffs are popular with the public only because people are economically illiterate and (as with monetary inflation) the effects of tariffs on prices are not immediately apparent. Trump can convince them the U.S. is winning winning winning, when in the reality (at least according to Schiff) is that no one wins in a trade war - except perhaps the politicians.
    • DR
      David R.
      1 December 2018 @ 13:49
      Thank u, Martin. BTW i wonder what jerk thumbs-downed me for asking? lol Mr Schiff is correct IMHO. But nobody wants to hear it. Watch US GDP tumble the next quarter. There's a reason the Fed panicked recently and abruptly made an about face. They've peaked-out on interest rates even while it's still below the inflation rate, OMG. What a sham!
    • DS
      David S.
      2 December 2018 @ 02:17
      David R: It is always best to ignore thumbs down with a comment. They do not add to the conversation. DLS
    • DR
      David R.
      2 December 2018 @ 05:41
      DavidS, yes yur right (I just thought it was odd). Btw I didn't thumb your post, lol. If I was site admin, I'd consider removing thumbs down like some sites have. Same for the videos because what does thumbs-down mean? Someone disliked the contributor or the presentation or disagreed? I often disagree with a video but I don't thumbs down it for that, if it's well presented or argued, cuz it's good to consider a viewpoint different from your own if it's well thought out.
  • AD
    Anne-Marie D.
    30 November 2018 @ 13:35
    "...but we need China to buy treasuries because we have these massive budget deficits." WRONG. The Chinese do not fund US budget deficits and the US Federal Govt is not in debt to China. The US Govt is the monopolist issuer of US dollars and it can create as many US dollars as it likes to fund whatever policy goals it likes (which seem to be mostly military). Because it has a sovereign, free-floating, non-pegged, non-convertable fiat currency (just like Australia, Japan, Canada, the UK, etc.) it can issue as many treasuries as required for Fed to defend whatever interest rate it decides to set. Here's what happens with China. 1) US and China do a trade deal. 2) US buys stuff from China. 3) China gets paid in US dollars and the Chinese Govt has an account at the Fed (basically a checking account). 4) China swaps its US dollars (one type of financial instrument) for US treasuries (another type of financial instrument) to earn some interest (basically a savings account at the Fed). 5) At maturity, the Fed puts the dollars plus whatever interest is owed (which can be created by the US Govt with a few keystrokes at anytime) back into the China's "checking" account and says "what do you want to do now?" Economists need to stop teaching students and the general public, old, wrong information that is based on national curriencies being pegged to the gold standard when govts DID have to go into debt by selling bonds to raise money. This was so they didn't break the peg. Today, there is no peg. National govts that control their own currencies do not have to borrow money (from the public or other foreign govts) in order to spend. They can create as much money as they need to fund whatever policies they want. The US (or any other currecny issuing govt) can never default on "debt" in their own currency since they control how and when money is created. Here's Alan Greenspan saying as much: https://www.youtube.com/watch?v=Ck3FuTzZvhI
    • DR
      David R.
      30 November 2018 @ 21:40
      Ann-Marie, yes you can monetize or print money instead of borrowing via bonds, and that's been done and partly why the dollar has been so weak so long, not just over the last 2 years (the "strong dollar" is in FACT down 7% in 2 years). And down 90% in purchasing power since when Nixon took the buck off the gold standard. Likewise, USD is down 90% against the Swiss Franc (the buck used to buy 10 CHF, now they're at par) and the Dollar Index has fallen from 168 to 97. That's the consequence of money printing and soft money policies in US over time.
    • BM
      Bryan M.
      3 December 2018 @ 06:43
      Oh-My-Gawd Ann Marie!! Where did you learn your economics??? When you make more, or too much, of anything, including dollars, they become worth less. For a bit of a lesson, read Art Cashin's short history of the Deutche-Mark before and after WWI. America is in the same boat. It's a larger boat, to be sure but - a boat nonetheless and...it IS starting to leak.
  • PD
    Peter D.
    30 November 2018 @ 13:17
    Ironically, far from countering Bass, Roach reinforces much of what he says. Roach cites high debts, bad demographics, pollution and questionable economic data as problems, but provides no positives that are in any way commensurate with those challenges. A devastating presentation, from a credible source. Grant, as usual, was great in drawing out the arguments.
    • DR
      David R.
      30 November 2018 @ 22:00
      No, Mr Roach was just being balanced, unlike Bass who talks up his position (which lost money for 17 consecutive years). And I don't know what you watched but Roach concludes, "China has the upper hand here" and, "I'm pretty optimistic on the broad parameters of what they're trying to achieve" and ,"They're tackling a lot of tough issues that are going to leave them I think in surprisingly good shape long term, and we are squandering ours by refusing to address our savings problem". Roach's long-term optimism here is more than reinforced by Raoul Pal's deep dive research piece in Macro Insiders recently, a "Meeting of the Minds" issue subtitled, "The Big Shift - China Is The Clear Winner" (unless you didn't get it). A topnotch issue covering India too. There's absolutely no doubt, the 21st century (and later) will be dominated by China and what Raoul is coining, "The Monsoon Empire" (incl India). Read it, study it.
    • DR
      David R.
      1 December 2018 @ 13:35
      I'm guessing my thumbs down don't have that Real vision Macro Insiders.
  • Nv
    Nick v.
    30 November 2018 @ 12:24
    Most intelligent China on Real Vision interview yet. Fantastic to hear detailed arguments on both sides of the issue. Well done RV
  • CM
    Carlos M.
    30 November 2018 @ 11:05
    great interview and a breath of fresh air( would be interesting to put him and kyle bass in a room), I was a bit disappointed on his reply on currencies though.
  • PJ
    Peter J.
    30 November 2018 @ 11:03
    Terrific interview, combined with what are in IMO the more narrow perspectives from the Kyle Bass interviews, together they give a good view of where the China / US relationship is and food for thought of where they may go from here.
  • PU
    Peter U.
    30 November 2018 @ 10:26
    Classic RV! Excellent!
  • DR
    David R.
    30 November 2018 @ 10:07
    A much better, refreshing perspective from someone who actually lived & worked in the region for awhile as have I, unlike the myriad of bears on RV who frankly seem rather clueless and have been repeatedly wrong for years about this matter (and will be wrong again). Frankly, as the great Sir John Templeton and others have shown, you earn can make a windfall and take comfort going against a large majority who are poorly informed and all on the same side of the boat, as it eventually bodes for large losses for them and huge out-sized gains for the minority on the other side, an asymmetric investment opportunity - among the best setups one can hope for.
    • DS
      David S.
      2 December 2018 @ 02:23
      I think the thumbs down here are investors that have lost money on betting against China. DLS
    • NI
      Nate I.
      3 December 2018 @ 05:36
      Nah. I don't have one penny invested in the China long or short and I found Roach to be just another academic who's main strength is to say absolutely nothing in a long winded format. Pretty much pure sophistry from someone willing to overlook the awful things the Chicom leadership has done. Whether it's the Buddhist monks setting themselves on fire to protest the Chicoms or the Orwellian digital dictatorship the Chicoms have constructed to control their people, China is no friend of humanity. People often puzzle over how Germany, the pinnacle of culture and science in its day, could have embraced the Nazis. Watch this interview and it should be plain as day. Roach seems oblivious to the horrifying human rights violations, the fact that communism is diametrically opposed to human nature, and that Communism has the 100% failure rate you would expect from a simple thought experiment. Roach should listen to the speech Vice President Mike Pence gave at Hudson. Maybe that would open his eyes a little. I wouldn't be surprised if Yale is getting money from China and Roach is simply towing the party line. Grant was the perfect gentlemen who did his usual best to extract a good interview, but I don't think anyone could have made this chat with Roach very compelling. So I'll say the things here that perhaps Grant couldn't say.
    • BM
      Bryan M.
      3 December 2018 @ 06:50
      LOL David S, The other China remark that has stayed with me is that China never shows you its "good" face, or its strong position. It only shows you its "bad" face and its weak position..
    • BM
      Bryan M.
      3 December 2018 @ 07:00
      Nate baby...From your remarks I will assume you an American so hey...look inward my friend. Why is it that what...25% of the folks in your prisons are black or other people of colour? Why is it that there are tent cities just outside of L.A and other large American cities. Why is it that your country is careening towards a civil war? Why is it that your government uses it's currency as a weapon so freely? I could go on but, you get my point I am sure. Oh yeah...here's a good one...why is it that your "freedom loving" government so freely embraces a "country" that unabashedly murders those whom it disagrees with?
    • DS
      David S.
      5 December 2018 @ 18:26
      Nate I. Thank you for establishing your positions. For me it is much better than a thumbs down. DLS
    • DS
      David S.
      5 December 2018 @ 18:32
      Nate I. and Bryan M. It appears that no political system can protect its citizens from other citizens harming them. Even Plato's Republic was based on lying to the citizens and discrimination by the brightest. That is why it was named Utopia or Nowhere. DLS