저자: Strike · 외국인
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how do you value this market today I think that just the way you said it is going to be a Fool's journey to say here's the stock market and I'm going to time the movement into the market I'm going to time the movement out of the market okay you know what that means you're going to out guess what the next variant move is and what the next other thing is a lot of things depend on a lot of other things and everything readjusts what has to happen I think is investors most importantly have to realize two things first that uh cash is not a safe investment is not a safe place because it will be taxed by inflation there will not be an interest rate that will anywhere near compensate and it seems good because it's not volatile but you're paying a tax of a few perc a year on that so A stay out of that and then B know how to balance a portfolio because the way portfolios work it's almost like for some part something happens um another thing happens in other words what you can see in the markets today is that um let's say when equities go down because growth expectations falter and there's a greater likelihood of easing then you see the bond market go up or you see other markets gold you're seeing watch the market action on every day and you could see those relationships by be wealth is not destroyed as much as it is transferred and if you know how to balance those Investments we do it in a what we call an all weather portfolio but if you know how to balance those Investments that's the most important thing being a safe well balanced portfolio you can reduce your risk without reducing your return and you can you will not Market time this because even if you were a great Market timer you're the things that are happening can change the world so it changes what should be priced into the markets let's go back to sort of basics for every individual for every company for every government over a period of time you have to earn more than you spend and you have a balance sheet there's an income statement and a balance sheet when one becomes a reserve currency others want to save in that and that gives one the exorbitant privilege of being able to borrow in that and to create debt and money because that's the thing and it also gives us powers like lot of our sanctions come from the dollars being a reserve currency and so on however through history it has always happened that currencies are devalued or destroyed and in that cycle when it becomes unattractive to own bonds or debt instruments in that currency there's a supply demand problem because a bond is a promise to receive currency so what you are is when you own a bond you're long a lot of currency because because that's what they promis to give you and they have the printing press and then there are shifts that happen who is accounting for World Trade right now China counts a larger share of World Trade than the United States for example so what we are doing is we are in a Fiat monetary system in which we are running very large deficits that we are monetizing and that those deficits produce bonds that have to be sold when when I look at the supply and demand for those bonds I know who the buyers are you know they're a limited number of really big buyers and so and look at their portfolios and so on calculate what that is there's not going to be enough demand for those bonds and there's going to be a need for more monetization of that debt and so the answer is yes we're producing a change in the storeold of wealth and you've seen it in the markets because just think of it in a mechanistic sense when when there was that stimulation and the buying what the Federal Reserve did in terms of buying that assets there was not only the decline in real interest rates we had you know about 150 basis points decline in real rates and nominal rates down there so the discount rate was lowered you also had a lot of liquidity which came in and the world now has an enormous amount of liquidity bidding for financial assets and so if you increase the supply of bonds and you increase the amount of money bonds are going to be worth less relative to other things and you're seeing a shift in the storeold of wealth and like the 1933 period that when Roosevelt did the same moves in 1933 you then saw assets rise because they're alternative stor holders of the wealth that's what we saw in terms of the liquidity move that we've happened in Market also included in gold and so on and so that's how it looks to me in terms of the comparison uh we're now in a new era we're in a new era we are pressing the limits of that and that money at the end of the day whoever is accepting that Reserve currency's got to believe in it hey Ray one of the things you do right about is China some would argue that you have a a generous or or or more sympathetic view to China than perhaps uh some of the most Hawks uh if you will about China uh but you think that there's sort of an inevitability to the transfer of wealth of sorts well okay two things China transfer of wealth I just know China very well and I come as a perspective uh with a perspective as an investor I've been going there since 1984 I have I know leaders and I know how they're thinking and I know the moves that they're making in a detailed way and I'm just trying to share what that perspective is because I think a lot of people make stereotyp typical uh moves and I think you have to really understand first thing you have to understand because it has been a remarkably successful place since I started going there in 1984 per capita is increased by 26 times and so on so to not understand it or to approach it with a great bias is a great disservice okay in terms of the element of let's say um a transfer of wealth or let's call it common Prosperity yes there's a world in this world right now there is a much there's a move to Common Prosperity not I think that um that that move what does it mean at a technical level that's not take your money away but here I I would say what are called progressives here are much more left than what we would call progressives or or whatever the Chinese policies are doing um but yes worldwide there has to be common Prosperity or let's call it broad prosperity and the question is whether there's that's going to come about by productivity or not it doesn't mean that you're going to have like a communism that's going to take all of that there's going to be a lot of productivity in China and so again diversifying the portfolio um you know you look at the United States elsewhere you have to diversify and there are things that are going on and also uh let's just think about Capital flows China is becoming an effective place to invest money uh something like 40% over 40% of the I posos are going to be Chinese stocks on Chinese markets and so on and capital flows work that way and history has shown us that when there's an Empire an emerging Empire they build the financial markets they build the financial system so Amsterdam was the world's Financial Center during the Empire when there was the um Dutch Gilder London was the financial center in the British Empire us uh we had New York and so we're seeing that merge all of that changes the supply and the demand that is threatening to the reserve currency status just imagine it's a state okay the state of Connecticut the state of Illinois and so on and you can't print the money that means you either have to raise taxes or cut spending and history is shown in these Empires that that causes great conflicts because taxes raising taxes and or cutting spending has been all through these Empires and I've studied I don't know how many over a long period of time the number one reason that you have Civil Wars so yes it's easy to say we have to earn more than we spend and so on but in this environment in this highly fragmented environment how are we going to get there what I decided uh to do I was doing the research for myself in Bridgewater because I what I learned through my life is that all the surprises the big surprises and mistakes I made uh whenever they occurred were things that didn't happen in my lifetime before but happened before my lifetime like in 1971 I was clerking on the floor of the New York Stock Exchange August 15th I remember it very well um Nixon announces that money as we know it is not any longer going to exist and people wouldn't accept money dollar in Europe and I went on the floor of the New York Stock Exchange where I'm clerking the next day and I thought them it was a crisis and I thought the stock market was going to go down a lot and the stock market went up a lot and then I said okay well why and I studied history and I studied devaluations and I studied that the exact same thing happened on March 5th 1933 with Roosevelt's move and I understood when you devalue you reflate and it has this positive effect on that so what's happened recently is that I've observed three big things that are going on that haven't happened in our lifetimes and that they're big big big things and so those three big things led me to want to study them in history and they are what's going on with money and credit as you get the zero interest rate and everybody needs a lot more spending power the uction of a lot of debt that is monetized and directed by the central government to the places they wanted to go because the capital markets won't get them there in that way that phenomenon came loud and clear through coid but it existed before and so that leads me to the supply and demand of money and credit and I realize who gets it and who doesn't get it drives not only the markets it drives our lives so that's why one the second factor is the emergence of populism and the wealth Gap so when Donald Trump got elected and there's a lot of populism around the world that didn't used to happen in developed countries in the same way and I decided to study the distribution the desiles so I took uh the bottom 60% of the population and I looked at those conditions and so on and I realized that the wealth Gap today is the largest since it was in the 30s the monetary policy I'm talking about last time that happened zero interest rates lot of monetization 1930 to 45 period the wealth Gap and the conflicts that we're dealing last time that happened 1930 to 45 period so that factor we're at each other's throats we have conflicts primarily over money and wealth and that defines tax policy so when we look into the new Administration whatever that may be uh we're going to think about those policies I needed to put that in perspective and then the third is the rise of a great power to challenging and existing great power the world order that we're in began in 1945 the United States won the war basically it accounted for 50% of the world's economy had 80% of the gold gold was money and so we built a dollar-based and us-based Order and now we're in a position where the Soviet Union was never economically comparable rival they had nuclear power but not the same and so we're now seeing every day that rivalry and as you know like me me like you go there and we know the people makes decisions and so on and so forth and so by being able to see that we perceive changes pertaining to that so those are the three factors of our lifetime which then said I need to go back and find out what determines a reserve currency and not so I went back 500 years because I needed the cycles that used to be the Dutch Empire the British Empire and the American Empire and that's what I did so the reason I wanted to share it was I'm now at a stage of my life I'm 71 and my notion at this moment and I'll do this for maybe a year or two more is to pass along the things that I found I
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