Reality Roundtable 12
(Conversation recorded on October 16th, 2024)
Show Summary
Ahead of the U.S. Presidential Election between Kamala Harris and Donald Trump, both of whom have distinct monetary and fiscal policies, there is much debate on the potential systemic consequences for the global economy. What is the current status of the United States in the socio-political landscape, and how might trends in energy, commodities, and geopolitical tension affect the actions and capabilities of the next U.S. presidential administration? In turn, how could this affect the global economy?
In this roundtable discussion, Nate is joined by financial analysts Luke Gromen and Michael Every to explore the precarious nature of current fiscal practices, the relationship between military power and economic stability, and the potential need for radical policy shifts worldwide. They also delve into the future of the U.S. dollar as the global reserve currency and the importance of price, availability, and stability of energy resources for thinking about future economic strategies.
What are the implications of NATO’s actions in Ukraine for global financial relationships, and what are the resulting strategic dilemmas for Europe? How is China potentially using gold to prepare for a fundamentally different economy with fewer resources? Most of all, how can we begin to steward our economic systems in a more sustainable direction if we don’t have a shared understanding of the values and goals that underpin everything we’re doing, regardless of who the next U.S. President may be?
About Michael Every
Michael Every is Global Strategist at Rabobank Singapore analyzing major developments and key thematic trends, especially on the intersection of geopolitics, economics, and markets. He is frequently published and quoted in financial media, is a regular conference keynote speaker, and was invited to present to the 2022 G-20 on the current global crisis. Michael has lived and worked in 9 countries and been in the industry for nearly 25 years, with previous roles at Silk Road Associates, the Royal Bank of Canada, and Dun & Bradstreet. He holds a BA from Lancaster University, and a master’s degree from University College London.
About Luke Gromen
Luke Gromen is the Founder and President of research firm Forest For The Trees, LLC, whose goal is to aggregate a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for clients. Luke founded FFTT to apply what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America. Luke has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.
Show Notes & Links to Learn More
00:00 – Micheal Every works + info, TGS Episode; Luke Gromen info, Forest for the Trees LLC, TGS Episode
02:30 – Helen Thompson + TGS Episode
04:05 – US Federal Spending: Entitlements + Interest; US Federal Revenue: Tax Receipts
04:42 – The US is spending more on interest payments than on defense
05:04 – US deficit to GDP over time
05:15 – US budget and economic outlook 2024-2034
06:00 – Trump vs Harris policy comparison
06:13 – Yield Curve Control
09:50 – Supply-sided credit expansion in China
11:42 – Alexander Hamilton, Report on Manufactures
11:55 – History of tariffs in US
14:34 – Modern Monetary Theory
15:40 – Dollar reserve status + more info
16:18 – US Treasury Securities
17:42 – Kamala Harris’ Economic Proposal + national stockpile of critical minerals
19:33 – Mercantilism
20:00 – Germany’s trade surplus in 2014
20:32 – China is world’s sole manufacturing superpower
22:58 – US imports vs exports
23:27 – Jelle Zijlstra
24:52 – The US oil deal with Saudi Arabia + more info on the rise of the US dollar hegemony
25:08 – Peak Oil, China’s oil imports over time
25:40 – US Shale Oil + more data
26:12 – Triffin’s Dilemma
30:00 – Every on Mercantilism and why Bretton Woods 3 won’t work
31:20 – Trump’s criticism of the Fed
31:41 – US use of Strategic Petroleum Reserve to get oil prices down
31:53 – The relationship between interest rates and oil prices
31:58 – ‘The Line’ city in Saudi Arabia
32:21 – BTFP
33:02 – Chinese subsidies to help favored companies
34:26 – Joseph Schumpeter, Creative Destruction, Instability of Capitalism thesis
36:38 – New Deal
37:27 – Shale oil is responsible for 90% of global production growth
37:40 – US debt
38:00 – US budget sensitivity to interest rates
38:13 – The divergence of gold from real interest rates
39:53 – Capital controls, capital controls in China
40:39 – Saudi Arabia buying gold
42:30 – The Great Game of Global Trade
45:15 – Israel’s Iron Beam
48:03 – European debt
48:28 – Poland defense spending
48:40 – France’s nuclear capacities
48:50 – EU to sanction countries with excessive deficits
49:37 – Paper on Europe’s quest for strategic autonomy
50:27 – Mario Draghi, European Competitiveness Report
52:55 – Nord Stream pipeline sabotage
53:49 – The far right in Europe
54:50 – Nuclear phase out in Germany
55:00 – Iraq selling oil in euros
59:16 – Europe’s sustainable food strategy
1:00:43 – Bret Weinstein
1:02:05 – Soaring housing prices across the world
1:02:14 – Falling home prices in China, Chinese people are saving in gold
1:04:09 – Hong Kong aims to become global center for gold trading
1:04:41 – Price of gold in CNY over time
1:05:29 – China buys Russian oil in yuan
1:06:08 – Renminbi usage in cross-border payments
1:07:53 – Eurodollar
1:09:21 – If Iran is attacked by Israel it will attack Saudi oil
1:09:36 – BRICS and global trade