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next week we're expected to get details on the tax plan we're expected to see some progress in terms of health care do you believe new policies now and these are based on principles new policies will move the needle on economic growth and does that create a better backdrop for investing I think if you're looking at the magnitudes of those changes they're unlikely to be game changers okay I think the real question is more what is the environment as a business friendly hospitable friendly environment to increase productivity and I really do believe that there's a lot of potential to have this sort of changes in coding because because it was a much better business environment it's because we have a pro-business environment do we do we have an environment in which it's okay to make new things and be innovative of that but it has to include the population as a whole that's why as I say you're sort of in a situation where you'll either be able to write code or you're going to be unemployed by those who write code to make algorithms and so the potential of thinking about how do you educate people to speak that new language and then to have them employed working next to people like myself who doesn't know how to route write code for yourself right and think about how you can convert your thinking into algorithms so that this could be pervasive around the country this could be a great potential there are things many things that could be done so I would be excited about those things but I think that the actual changes give you an example what the feds tightening for the balance sheet is is about two and a half percent of GDP okay that's that's taking a lot of money essentially out of the economy okay now if we have an increase in the deficit which is fiscally stimulative it also means that that increase I would think my dad about another two and a half percent that has to be sold in bonds so part of what you're having in stimulus in fiscal is being taken away by monetary so now imagine 5% of GDP something like that could be taken away in the form of selling more bonds that has an implication and of inant itself so monetary policy is going to be an important consideration I think at this time I think you make a really good point because we are right now at a moment in time where the economic story is gaining traction we saw a pretty good GDP the other day we're looking at businesses trying to create more jobs is the Federal Reserve going to stop that recovery just when it starts to get traction I think that the Federal Reserve has got to be extremely cautious the risks are asymmetric in other words the risk of a downturn is much worse than the risk of not being able to fight inflation and that's for a lot of reasons first of all there's a limitation as to how much interest rates can be cut there's a limitation of the marginal effectiveness of new quantitative easing okay and if you have a downturn now you're gonna have a social economic split we have asset prices that are much more sensitive the durations of those assets have lengthened and if I take the price the price is all built into the curve the interest rate curve so if you take the the curve the short-term rates the bond yields and so on and you take expected returns of equities and you drive that curve that's that curve is very sensitive throughout the curve all assets on what that yield is if you rise and raise interest rates faster than is discounted in that curve all asset prices suffer as a result of that so we have asymmetric risks we don't have much of a risk of inflation the Federal Reserve has demonstrated for the last year-and-a-half that everything that it is said about the rate of tightening it didn't pursue the refuge at how they would said they would raise rates they didn't raise those rates because the economy as a whole didn't operate in a way that warranted that when you look at inflation and you hear their conversations on inflation they can't explain why the inflation rate hasn't risen that they have theoretically said should rise well there is a conundrum in this country right now we're seeing job growth we're seeing economic growth little more than maybe the last eight years but wages aren't moving well I think it's it's largely because you could see it when you look at the nitty-gritty level and what we're defining it as a relationship between labor and and inflation whereas the workforce it's a new workforce that's if you think if you're thinking about this part of the workforce are essentially the robotics or the technology of coding that are now competing with other people that's right and so it's changing the nature of those jobs so if if you're the Federal Reserve and you're not sure you understand that and you don't yet have inflation much expectations and you and besides don't get too precise about that inflation number and you have the other downside I think that you have to wait as this start to see you go right the whites of inflation or at least understand why it is that you're gonna be doing that so I'm I'm concerned about the the the feds rate of tiny I don't think that they will actually be able to tighten at that rate that they're telling you
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