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well the president says it's the greatest economy of all time but it's really kind of an average economy right now if you look at where we've been over the past host global financial crisis Great Recession period we're about on average where we've been so I don't know why should the Fed for most that time period the Fed the Fed has been in a do-nothing mode then they tighten rates about nine times and now they're cutting them a little bit I don't exactly see what the what the real urgency is for cutting interest rates left alone well you laid out more QE more cuts uh this could be music to the person's ears that you just mentioned the president I'm that's what he wants he wants more QE he wants rates to be cut he would be fine with negative interest rates what do you make of the whole you know dynamic that we've seen over the last several months well it's a it's obvious that President Trump wants the dollar to be lower and the way to get there is to cut interest rates very dramatically so that you eliminate the interest rate differential that exists between United States and the negative yielding areas of Japan and Europe he wants that to happen he sees the president seems to want as much debt as possible and as much borrowing as possible and he's want zero interest base native interface to facilitate an open-ended debt binge and obviously the Democratic Party is running on immense spending programs so I suppose that they though they don't talk about the Fed the way the president does I suppose they would want lower lower interest rates too so we're in this place of extreme it's Bond supply coming at us in the next recession and I think that's a fundamental starting point to think about portfolio allocations looking forward multiple years is that when the next recession comes it's going to be a real issue as to how we deal with the amount of bonds are going to be flooding the market we saw this week again with the repo emergency if the Fed had to enact yesterday that was brought on because we had a match in terms of maturities of bonds and cash payments for income tax and the like and a small amount of maturing bonds and issuance is that was about fifty four billion dollars it was fifty four billion dollars that caused this kind of a hiccup in the short-term interest rate funding market just imagine what would happen if we had three trillion dollars of long-term bonds floated in the in the wake of a recession that's coming and I think that's really important so I think as the deficit explodes we should expect the dollar to be falling we should expect the dollar to fall in the next recession I think that is fundamental in the way we think about how we allocate assets with my favorite chart of the year and I use it in my webcast yesterday which will be up on replay at double I'm calm pretty sure Lee is I went back and I looked at the four major regions of the global stock market going back to the 1980s and what happened is that the Japanese market was the world-beater in the late 80s it was perceived to be invincible the Japanese the Nikkei outperformed every market ever of the region the eurozone the United States and the emerging markets by a huge amount in the late 80s and then the the recession came in the early 90s and completely kneecapped the Nikkei and interestingly the Nikkei has never made it back to that level ever again in spite of the fact you know it's 30 years later then with the advent of the euro there was a lot of I think misplaced optimism about the euro zone's possibilities and Europe massively outperformed the rest of the world going into the OO period the dot-com bust right and then the European market completely collapsed after that and it's never made it back all this time 20 years it's never made it back to where it was in the advent of the euro and then the emerging markets were absolute world beaters from into the global recession the great financial crisis they crushed every other market in the world and interestingly in that recession the Great Recession emerging markets got decimated and they've never made it back right Geoffrey peak that they were at elderly have less than 30 seconds left this time goes way too fast let me to finish by poi let me fish my point so going into this this coming whenever it comes the United States has clearly been the world beater and has massively outperformed everybody else I think in the next recession we'll see the same pattern repeat where the u.s.
gets kneecap and ends up underperforming the rest of the world with the dollar weakening and I think for that reason as you look forward six or eight months six or eight years long-term planning here you should be allocating incrementally gradualist eclis to non dollar investments and non US stock market we'll leave it with that thought although I wanted to ask you whether you think J pals gonna finish his term he will he's job is safe according to Jeffrey gun lock Jeff we appreciate it as always Issei all right it's okay secret I'm with you that's Jeffrey gun lock from DoubleLine you
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