Doomsday Dollars: Scaramucci & Roubini Decode Fiat's Fragile Future
Summary
TLDREn este episodio de 'Speak Up' con Anthony Scaramucci, el invitado especial, el Profesor Nouriel Roubini, conocido como 'Dr. Doom' por predecir la crisis financiera de 2008, comparte sus perspectivas sobre la economía global, la inflación y el futuro de las criptomonedas. Roubini critica las monedas estables por replicar los problemas de las monedas fiduciarias y explora la posibilidad de tokenizar activos reales como una mejor alternativa. Además, discute los desafíos y oportunidades que presentan las tecnologías emergentes como la inteligencia artificial frente a las amenazas globales, y reflexiona sobre el impacto de la deuda pública en la economía estadounidense. El episodio también aborda la adopción de criptomonedas en países BRICS y las posibles soluciones para mitigar los riesgos económicos y políticos actuales.
Takeaways
- 💬 Nouriel Roubini critica las criptomonedas por no ser monedas reales en términos de teoría monetaria, destacando su falta de estabilidad y funcionalidad como medio de pago.
- 🌍 Roubini analiza las economías globales, distinguiendo entre tendencias a corto plazo y desafíos a largo plazo, incluidos los impactos tecnológicos y las 'megamenazas' como los cambios geopolíticos y el cambio climático.
- 📉 Discute escenarios económicos para Estados Unidos y Europa, incluyendo posibilidades de aterrizajes suaves y duros y sus efectos políticos y económicos.
- 🔮 Sugiere que las tecnologías futuras como la IA podrían impulsar el crecimiento y mejorar el bienestar humano, pero también advierte sobre sus riesgos potenciales, como el desempleo tecnológico y la desinformación.
- 🏦 Expresa escepticismo sobre el papel de las criptomonedas en la solución de problemas económicos fundamentales y critica las stablecoins por replicar los problemas de las monedas fiduciarias.
- 🌐 Menciona una iniciativa para tokenizar activos reales y financieros como una alternativa más estable a las criptomonedas convencionales, proporcionando un respaldo tangible.
- 💵 Roubini reflexiona sobre la sostenibilidad de la deuda pública de EE.UU., destacando los riesgos a largo plazo de la alta deuda y la posibilidad de recurrir al 'impuesto inflacionario' como solución.
- 📊 Discute el impacto de la inversión pasiva y los índices en las valoraciones del mercado, sugiriendo que, aunque pueden distorsionar los precios a corto plazo, los fundamentos tienden a prevalecer con el tiempo.
- 🌏 Examina el papel y el futuro económico de los países BRICS, cuestionando el optimismo anterior sobre su potencial de crecimiento y su adopción de criptomonedas.
- 🔄 Subraya la dualidad de la tecnología, que puede ser una fuerza tanto para el progreso como para los desafíos, enfatizando la necesidad de manejarla sabiamente para asegurar un futuro positivo.
Q & A
¿Cuáles son los cuatro escenarios principales que se están discutiendo sobre la economía mundial a corto plazo?
-Los cuatro escenarios son: 1) Un aterrizaje suave donde la inflación vuelve al 2%, 2) Un aterrizaje relativamente suave con una recesión corta y poco profunda, 3) Un aterrizaje difícil con una recesión y crisis financiera severa, y 4) Ningún aterrizaje donde la economía sigue creciendo por encima del potencial.
¿Cómo describe la situación económica actual de Europa y el Reino Unido?
-La describe como un aterrizaje difícil pero no una recesión severa, con un crecimiento económico plano pero con bajo desempleo y buena creación de empleos. Espera que el BCE comience a recortar las tasas antes y un poco más que la Reserva Federal este año.
¿Cuál es la perspectiva de crecimiento de China y cómo se compara con la de India?
-China enfrenta una desaceleración estructural, con un crecimiento potencial del 3% como máximo para la próxima década, mientras que India probablemente superará a China, con un crecimiento potencial más cercano al 7% si realiza más reformas.
¿Cuál es su opinión sobre las criptomonedas y las llamadas 'criptomonedas'?
-Es escéptico sobre las criptomonedas y cree que el término 'criptomoneda' es un mal nombre, ya que no cumplen las funciones básicas del dinero. No cree que vayan a reemplazar ampliamente a las monedas fiduciarias en las economías avanzadas.
¿Qué opina sobre los 'stablecoins' y cómo propone abordar la protección contra la inflación?
-Cree que los 'stablecoins' tienen todos los problemas de las monedas fiduciarias y no serán mejores. En su lugar, propone tokenizar una canasta de activos reales y financieros que brinden protección contra la inflación, lo que denomina una 'moneda plana'.
¿Cuál es su perspectiva sobre la deuda pública de EE. UU. de $34 billones y su sostenibilidad?
-Cree que no es sostenible a largo plazo y que eventualmente el mercado disciplinará al gobierno de EE. UU. Pero debido al estatus del dólar como moneda de reserva mundial, EE. UU. puede financiarse más y por más tiempo a un costo más bajo, postergando el 'día del juicio final' pero haciendo que la caída eventualmente sea más severa.
¿Cuál es su opinión sobre el uso de Bitcoin como cobertura contra la inflación?
-No cree que Bitcoin sea una buena cobertura contra la inflación, ya que en los últimos dos años de alta inflación, Bitcoin tuvo un mal desempeño. Sugiere una canasta que incluya bonos del Tesoro a corto plazo, TIPS, oro y otros metales preciosos, como una mejor cobertura contra la inflación.
¿Qué papel cree que tendrán los países BRICS en la adopción de criptomonedas en los próximos 5 años?
-No espera una adopción masiva de criptomonedas en los países BRICS, ya que la mayoría de ellos han sido escépticos y han desarrollado sus propias soluciones de pago digitales eficientes. Además, actualmente tienen una inflación relativamente baja, donde las criptomonedas suelen ser vistas como un activo defensivo contra la hiperinflación.
¿En qué está trabajando actualmente y qué planes tiene para un próximo libro?
-Actualmente está pensando más profundamente en los problemas de las "megaamenazas" y cómo la tecnología, especialmente la IA, puede usarse tanto para el bien como para el mal. No tiene planes inmediatos para un nuevo libro, pero ese es un tema importante en el que está enfocado para los próximos años.
¿Cuáles son algunas de las tecnologías disruptivas además de la IA que podrían tener un impacto importante en el futuro?
-Menciona la fusión nuclear como una potencial revolución en el sector energético que podría resolver el cambio climático al proporcionar energía ilimitada de cero emisiones a precios bajos, si se logra en la próxima década.
Outlines
😀 Nouriel Roubini analiza la situación económica mundial
Nouriel Roubini, conocido como 'Dr. Doom', analiza la situación económica mundial y las perspectivas a corto y mediano plazo. Considera cuatro posibles escenarios para las economías avanzadas: aterrizaje suave, aterrizaje accidentado, aterrizaje duro y sin aterrizaje. Sugiere que un aterrizaje suave o accidentado es lo más probable para Estados Unidos. En Europa, prevé un aterrizaje accidentado, mientras que en China, un ralentizamiento estructural con un crecimiento potencial del 3% como máximo. Destaca el papel de la India como nuevo motor de crecimiento global.
🤔 Expectativas de crecimiento económico y mercados financieros
Roubini analiza las expectativas de crecimiento económico y la evolución de los mercados financieros. A pesar de las señales de que la Reserva Federal no recortará las tasas de interés tan pronto como esperaba el mercado, las acciones tecnológicas han impulsado al alza los índices bursátiles. Destaca la resiliencia de la economía estadounidense y la divergencia entre el comportamiento del mercado y las expectativas de recortes de tasas. En Europa, espera un aterrizaje accidentado con crecimiento económico plano pero con un desempleo aún bajo.
⚠️ Desafíos y amenazas globales a mediano y largo plazo
Roubini advierte sobre las 'mega amenazas' que pueden afectar el crecimiento económico y aumentar la inflación a mediano y largo plazo. Estas incluyen rivalidades geopolíticas, cambio climático, pandemias, envejecimiento poblacional, migración masiva, desigualdad de ingresos y riqueza, y el retroceso de la democracia liberal y el capitalismo. También menciona riesgos económicos, monetarios y financieros como la desglobalización, la fragmentación de las cadenas de suministro y la estanflación (estancamiento económico con inflación alta).
🌐 Perspectivas sobre las criptomonedas y la tokenización de activos
Roubini expresa su escepticismo sobre las criptomonedas, argumentando que no cumplen las funciones de una moneda real. Sin embargo, reconoce que la tecnología blockchain podría tener algunas aplicaciones útiles, especialmente en la tokenización de activos reales y financieros respaldados por recursos tangibles. Critica las 'stablecoins' por recrear los problemas de las monedas fiduciarias. En su lugar, propone tokenizar una canasta de activos que actúe como cobertura contra la inflación y brinde rendimientos positivos.
⚖️ Deuda pública de Estados Unidos y perspectivas inflacionarias
Roubini analiza la creciente deuda pública de Estados Unidos, que actualmente asciende a $34 billones. Advierte que esta deuda es insostenible a largo plazo y que eventualmente podría desencadenar una crisis. Sugiere que la única salida sería utilizar el 'impuesto inflacionario', es decir, permitir una inflación más alta para reducir el valor real de la deuda. Por lo tanto, Roubini prevé una tasa de inflación promedio superior al 5% en Estados Unidos.
📈 Impacto del 'indexing' y la inversión pasiva en los mercados
Roubini comenta sobre el argumento de que la creciente inversión pasiva en índices de mercado ha desacoplado en cierta medida las valoraciones de las compañías de sus fundamentos. Admite que en el corto plazo, esta tendencia podría distorsionar las valoraciones, pero a mediano y largo plazo, los fundamentos económicos eventualmente se impondrán y corregirán estas distorsiones.
🌍 Papel de los países BRICS en la economía mundial
Roubini analiza el papel de los países BRICS (Brasil, Rusia, India, China y Sudáfrica) en la economía mundial. Destaca que, a pesar de las expectativas iniciales, su crecimiento económico ha sido decepcionante en general, con la excepción de India. No prevé una adopción masiva de criptomonedas en estos países, ya que la mayoría han sido escépticos y han desarrollado sus propias soluciones financieras tecnológicas.
🔮 Reflexiones sobre el futuro y los próximos proyectos
Roubini comparte sus reflexiones sobre el futuro y los desafíos que enfrenta la humanidad. Reconoce el potencial de la tecnología, especialmente la inteligencia artificial y otras industrias emergentes, para impulsar el crecimiento económico y mejorar el bienestar humano. Sin embargo, también advierte sobre los riesgos asociados con un mal uso de la tecnología, como el desempleo tecnológico, la desigualdad y los conflictos. Su enfoque se centra en analizar cómo la tecnología y las 'mega amenazas' interactuarán en el futuro.
🙏 Palabras finales y agradecimiento
En esta última sección, el entrevistador agradece a Nouriel Roubini por compartir sus valiosas perspectivas y análisis sobre la economía global, las criptomonedas y los desafíos futuros. Anuncia que el próximo invitado será Dan Morehead de Pantera Capital para discutir sobre criptomonedas y la situación macroeconómica de cara a las elecciones de 2024 en Estados Unidos.
Mindmap
Keywords
💡Crecimiento económico
💡Inflación
💡Deuda
💡Criptomonedas
💡Inteligencia Artificial (IA)
💡Amenazas globales
💡Aterrizaje suave (soft landing)
💡Reserva de valor
💡Fintech
💡Tokenización
Highlights
Norel Roubini discusses four possible scenarios for the U.S. economy: soft landing, softish/bumpy landing with a short recession, hard landing recession and financial crisis, and no landing where inflation remains high.
For Europe and the UK, Roubini sees a bumpy landing but not a severe recession thanks to resilience in finding alternative energy sources.
Roubini views China's slowdown as structural due to demographics, state capitalism, lack of social welfare, and policies bashing the private sector, with potential growth at best 3% for the rest of the decade.
Roubini is skeptical about cryptocurrencies, arguing they are not real currencies or a scalable means of payment, and most have already crashed in value.
Roubini believes the financial services revolution will come from fintech based on AI, machine learning, big data, and 5G/6G, rather than blockchain.
Roubini is involved in an initiative to tokenize real and financial assets as an inflation hedge, creating a "flatcoin" backed by assets rather than a stablecoin tied to fiat currency.
Roubini expresses concern about the $34 trillion U.S. debt, which is higher than during the Great Depression or World War II, and sees eventual surprise inflation as the only way to monetize and reduce the debt burden.
On the BRICS nations (Brazil, Russia, India, China, South Africa), Roubini is skeptical about their economic growth potential and widespread adoption of cryptocurrencies.
Roubini believes AI and other future technologies have the potential for both positive impacts like productivity growth and negative impacts like job losses, inequality, and development of powerful weapons.
Roubini is thinking deeply about the tension between technological progress and "mega threats" like geopolitical rivalries, climate change, pandemics, and populism, which could determine the future of the world.
Transcripts
stable coins are there but if stable
coins are the killer up of crypto what
have you done you complained about Fiat
currencies and you have recreated Fiat
and stable coins have all the problems
of Fiat if there be the basement of fiat
currency stable coins are not going to
do any better than Fiat so I don't think
that Fiat is the way to go I think that
something provides you a stable back by
real Financial assets hedge against
inflation is a useful asset to tokenize
that's what we're
[Music]
[Applause]
doing joining us today on speak up with
Anthony scaramucci is Professor norel
Rini he is a renowned Economist uh from
NYU he's a now Professor ameritus I hate
saying that norio because it implies
you're old and you and I know how very
young you actually are uh he spent on
the time I have a great hand right well
that's you're doing better than me with
the gray hair category but I get always
introduce you to my colorist but but you
you've been on the time 100 list you
write for the financial times Forbes
you're a winner of the coindesk top M
Awards you you've served in the White
House and Treasury Department your most
recent book which I'd like to talk a
little bit about which is an awesome
book called Mega threats uh you also
wrote a a book about the economic crisis
in 2008 which I uh greatly enjoyed uh
you've been called Dr Doom in the past
because you correctly assess the global
financial crisis in in
2008 uh but aside from all those things
you're just a really amazing friend uh I
brought you on because uh you possess
Shaman like Powers when it comes to
predicting markets and I want you to do
some of that for us today so tell us
what you see happening in the world give
us the sense for where you think the
economy is right now and some of the
things you're worried about and some of
the things you're optimistic
about yes uh always a good pleasure to
be with you uh you're also a great
friend and I have a great respect for
all the great things you've done and
your success um when we talk about the
global economy and the various regions I
think that we have to separate the short
the cyclical kind of cycle uh from the
medium longterm Trends um in the short
term of course the debate is soft
Landing softish landing hard Landing no
Landing what's going to happen to
inflation to growth to central banks and
the stock market and you have to
differentiate between us Europe Japan
China and energy Market over the medium
long term we have to think about what
are going to be on the positive side
impacts of Technologies in the future
starting with AI on the positive and on
the negative on what in my most recent
book I called Mega threats there are
some trends that are more medium long
term they're going to lead to lower
growth and higher inflation so let me
Focus for now on the short term I would
say there are four scenarios that people
have been discussing one was the one of
the soft Landing where Us and other
major Advanced economy has reached back
inflation of 2% not this year but say by
the end of next year uh without having
any recession that will be the
Goldilocks Immaculate disinflation
scenario second one will be one of a
softish or bumpy Landing where you do
achieve that goal but with a narrow
short and narrow recession short and
shallow I say two quarters of negative
economic growth might not make a big
difference between the two with us in
two aspects if you have a bumpy Landing
the stock market will have a correction
for a while and secondly that's going to
affect the political outcome and we have
a big election coming this year and
whether Biden or Trump is going to win
assuming that these are going to be the
two candidate likely it's going to
depend how well how poorly the economy
is going to be doing so those are the
two main scenarios there are another one
of a real hard Landing recession and
financial crisis that when there was a
spike in all energy and commodity prices
after the Russian invasion of Ukraine
Luke POS I and when there was the
problem last spring with the US Banks
and then some European also look like a
risk as of now that risk of a real hard
Landing is out of the picture there's
another scenario especially for the US
no Landing where in spite of the FED
hiking rat uh the economy could still
grow uh above potential inflation would
then not fall as fast as the FED wants
and in that scenario uh interest rates
will not be cut at all this here and
that will be a negative for the stock
market now I would say hard landing and
no Landing probably are not very likely
and therefore we are left with a soft
landing and a bumpy Landing uh for the
US uh the surprising thing for the US
has been how resilient the economy has
been and how resilient even the stock
market has been in spite of now the FED
saying that uh rates are not going to be
cut anytime sooner remember a few months
ago uh the markets were saying the FED
could cut up to 162 basis points uh this
year the Fed was telling us no there'll
be only three rate cuts and then uh the
results about the economy strong growth
the latest results about inflation have
dashed the market expectations about
rate Cuts right now rate cuts for this
year are being priced around maybe 80
basis points for the year there not very
different from what the FED is telling
us and the market were expecting the FED
would start cutting rate in March but
instead now the market expectation have
aligned with something that the FED is
signaling that they're not going to see
Cuts until June at the earliest now the
interesting thing about it is that you
would have expected maybe that this uh
uh expectation that the FED will not cut
as much and not so soon would hurt the
stock market even if of course a a soft
Landing is good overall for the market
and so we are for the US for now in a
baseline of a soft Landing uh what has
happened is that in spite of rate Cuts
being postponed to further out and less
than what Market wanted the market has
actually rallied further significantly
because of course of the uh of what has
happened to the magnifi and 7 if you
exclude those seven stocks from the S&P
500 uh the rest of the market is done
fine but of course not as good as the
magnificant seven so what has been
driving essentially the market higher in
spite of rates Cuts being uh later and
smaller has been the outperformance of
these of this tax stock because of all
the reasons uh we know about so that's
for the US in Europe and the Euro Zone
and the United Kingdom economic growth
for the last few quarter has been
between Epsilon positive and Epsilon
negative uh it is effectively bumpy
Landing is not a severe recession like
the one would have occurred after the
shock to Energy prices because there's
been resilience and the Europeans have
found the ways of finding reasonably
cheap energy from other parts of the
world when the energy Supply from Russia
uh was cut off so the bad news was the
economy is weak the good news that
compared to a severe recession with that
occurred otherwise you know the economic
growth in the Eur zone is flat but
unemployment rate so far is still low
and job creation has been good uh of
course the Euro has underperformed
relative to the dollar and European
stocks have been underperforming
relative to American stocks because of
the tech stuff and um and most likely at
this point given the weakness of Europe
uh the ECB is going to start cutting
rate sooner and slightly more than the F
this year and that shows up in the
current weakness of the Euro but we are
essentially in a bumpy Landing but not
not really a severe
contraction um finally China China is
more of an structural uh slowdown
potential growth in China is at best for
the rest of this decade 3% might be
lower for reasons I could discuss this
is not cyclical structural because
demographic because of State capitalist
because of the lack of social welfare
state because of the policies bashing
the of the private sector by shoing pin
and so on and so on uh but that means
that China is not going to be a main
engine of global growth if anything the
country is going to be well and
outperforming China for the rest of the
decade is going to be India where
potential growth is closer to 7%
potentially higher if they do more
reform so for the last 30 years uh uh
China
uh has been the the rabbit and the uh
and India was lagging behind the air
those roles have been reversed but of
course the baseland from which India is
starting is much smaller and therefore
the impact of stronger economic growth
by India on the global economy is not as
significant as the slow down of China so
so we're in a soft land for the for the
us we're in a bumpy Landing for Europe
and UK we are in a bumpy Landing from
China China and the rest of the Emerging
Markets depend some of them better
fundamentals are doing well some of them
are actually very fragile and they'll
have severe debt and financial crisis
but none of the major ones will have a
severe financial
crisis well it's a it's an amazing
summary I want to I'm talking to you
from H beautiful Abu Dhabi so behind me
is the Arabian or the Persian Gulf
whatever you like to call depending on
where you live call it something
different uh you're getting the
67% growth here as
well uh and I'm I guess what I'm
wondering is about the west and the
sustainability of Economic Opportunity
and growth in the west relative to other
parts of the world like some of the
parts that you've mentioned uh India so
so are we up against it in the west
because we just have too much devast
sending are we up against it
demographically
uh or is there an opportunity in the
west perhaps that uh I'm not exactly
seeing relative to places like the one
I'm talking to you from
noral yes you're right uh you know the
gulf is doing well because there are all
lots of natural resources and in places
like Abu Dhabi and Dubai they've
actually invested it intelligently to
diversify growth in other sectors Saudi
Arabia is trying to do the same thing
all of them have a vision to 2030 or so
plan to move away gradually from natural
resources and fossil fuels to use that
oil weal for investment in other things
uh to different degree of success but
positive um you know uh most Emerging
Markets are fragile but none of them is
going to have a severe financial crash
uh about the West I would say uh there
are two forces one is uh more positive
and the other one is more negative I
recently wrote actually an oped that was
titled uh artificial intelligence versus
human stupidity because I said we are in
some sense in the best of all world
because Ai and a number of other
Technologies of the future are going to
imply stronger potential growth stronger
productivity growth and greater human
well living longer and healthier and
that it's going to be actually those
Innovation are going to start mostly in
the west especially the US and only in
part in Emerging Market say China uh so
we are in this best of all worlds
because technology like in the past can
increase uh human welfare per capita
income economic activity but we are also
in the worst of all worlds uh because of
what they call human stupidity but is
bad policies and that bad policies are
the type of Mega threats that I've
discussed in my recent book uh there are
geopolitical rivalries that can discuss
that might slow down economic growth and
fragment the world uh there is of course
climate change that can be eventually
damaging of economic growth and raise
cost of production unfortunately
covid-19 is not going to be the last
pandemics there is aging of population
on one side and migration massively from
potentially from south to North and P to
rich in part because of climate refugees
in part because economic and social and
political collapse in some fragile
States uh we have this backlash against
liberal democracy and Democratic
capitalism because of rising income and
wealth
inequality uh and that leads to populism
of either extreme right in many parts of
the world or extreme left like we've
seen recently in Latin America and we
have another range of of economic
monetary and Financial Risk the risk of
high inflation and lower growth St
inflation the risk of De globalization
the risking decoupling
fragmentation uh of U having vulcanized
Global Supply chains as we
emphasize Economic Security over
economic efficiency and that protection
is is going to be negative for economic
growth and it's going to cause higher
inflation so there are on one side St
inflationary forces
that are this Mega TR to imply lower
growth High Cost of production call it
stock flation and other for technology
that imply lower sorry uh higher
economic growth and lower inflation but
a good this inflation a good deflation
deflation is coming not from lack of
demand but rather by increased supply of
goods and services I would say over the
short term the next 10 years I worri
that these Mega threats are going to be
more important important but if you can
face these threats and resolve them
probably 10 years from now the impact of
technological innovation is going to
imply another productivity Revolution so
there is hope in spite of demographics
politics geopolitics environment Health
you name it that this may be a better
world and actually technology if is used
intelligently because technology can be
used for damaging purposes could help us
to resolve some of these Mega threats
yeah no it's it's interesting because we
we set up a whole slew of worries and
then the good news is the forces of
Technology improve the society right you
and I grew up with peak oil Theory and
many thought we were going to run out of
oil but then look at all the Great Tech
that led to fracking and all the
innovation in terms of
exploration um I want to switch to
something that we both know a lot about
and I think we differ on know and this
is something something that uh uh one of
the reasons why I love talking to you
because I think we are at in
intellectual sympatico often but
sometimes we're at intellectual odds
with each other we very famously debated
each other on crypto at the FI
conference here in the Gulf in Riad a
few years back what are what are your
thoughts now on bitcoin
cryptocurrencies um do you see wider
adoption do you think that this is as
Jamie d believes it is a pat rock or
Ponzi scheme and then tell us a little
bit about the blockchain ini initiative
that you have going in your business
yeah you know as you know um I've been
skeptical you know of crypto and we have
respectfully disagreed on it I think
that even those that believe in
crypto uh agree that certainly in
advanced economies but also most
Emerging Markets uh these are not be
real currencies and so calling them
cryptocurrency is a misn they're not a
unit of account they're not a scalable
means of the payment they're not really
a stable store of value they're not a
single numer so if you know anything
about monetary Theory calling them uh
you know currencies and is no and
they're not going to be widely used for
means of payment frankly unless you have
really high inflation advanced economies
and even somebody pessimist like me
think inflation might go from 2 to five
but you need very high inflation for
having a process of replacing Fiat
currencies with something else now some
of them imply that there may be some
store of value function for it uh people
say Bitcoin is limited in Supply and
that's may lead to eventually higher
price that's fine I'm skeptical of that
but if it happens so what uh you know
there are hundred trillion dollars of uh
of asset real Financial real estate
whatever in the world suppose one of
them is that uh suppose that for some
blockchain related Technologies people
are going to use ethereum fine but you
know there were
20,000
iOS uh about 80% of them were scam to
start with and another 17% already gone
to zero of the remaining 600 even the
top 10 from their Peak Fallen uh 20 30
in some cases 60 70% so you know
compared to the
internet people said this is going to be
like the internet doesn't look like the
internet and while I believe there'll be
a financial services Revolution because
traditional Legacy system have the
problems we know I'm much more of a
believer that the revolution financial
service is going to come from fintech
that is not really based on blockchain
it's based on AI machine learning Big
Data collected by sensors internet of
things and using then 5G and and 6G in
the future is going to provide the means
of payment credit allocation Asset
Management insure Tech and un name it
and so on and there are thousands our
firms are fintech have nothing to do
with blockchain uh that provide you know
Financial Services with revenue and with
profits so I'm more believ in that being
disruptive in the long term now the
block chain technology
itself may have actually some validity
there may be uses uh it might be useful
I don't think it's going to completely
change the world people believe that
everything is going to be on the
blockchain frankly again that's not
happening and unlikely it's going to
happen but that for some usages might be
actually useful you know I've been
involved into an initiative that is
based on
essentially uh providing a tokenization
of real and financial assets my critique
of most of uh crypto is that is backed
by nothing and if it's backed by nothing
you cannot say what's his fundamental
value but suppose that we worry as I do
about Rising inflation and we find a
sets of assets that are protecting you
against inflation and the traditional
defensive asset as you know was
long-term treasuries but in a world of
higher inflation a long-term treasur is
a defensive asset when equities are
poorly is going to do poorly like it did
when rates went higher and two years ago
and bond prices fell 20% when the S&P
fell only 15% so you need an alternative
to long-term treasury is a combination
of gold short-term treasury tips and
very types of sustainable real estate
take this bundle of assets create an ETF
create an index create whatever and then
tokenize it so you have an asset that is
backed by real and financial assets it
provides much better returns than
traditional fixed income is a hedge
against inflation the basement of Fiat
currencies against political and
geopolitical risk and again against even
environmental risk and do well in good
times and there is convexity when there
are bad times that thing that is
tokenized has a value you know every day
and every moment because these are all
liquid assets is backed fully by that is
not a stable coin because its value
fluctuates daily but is what people like
Armstrong and other have spoken about is
a uh is a flat coin something that
actually provides you a return that is
positive aligned with inflation so I
believe that that's something that
actually is useful to have and to
tokenize stable coins are there but if
stable coins are the killer up of crypto
what have you done you complained about
Fiat currencies and you have recreated
Fiat and stable coins have all the
problems of Fiat if there'll be de
basement of fiat currency stable coins
are not going to do any better than Fiat
so I don't think that Fiat is the way to
go I think that something provides you a
stable back by real and financial assets
hedge against inflation is a useful
asset to tokenize that's what we're
doing
okay well listen I love I love your
strategy which is why I wanted to bring
it up and you are using the blockchain
technology as part of the strategy and
uh and you know it's fluctuating but
it's a it's a core group of great assets
that would would would hedge against
inflation and so before I turn it over
to questions from our audience I I want
to ask you about our $34 trillion of
debt and the growth of that debt it
looks like the CB CBO is saying the
Congressional budget officer is saying
whether it's a democrat or a republican
the spending is not going to stop and it
looks like the deficit will be roughly
five and a half to
6% of the
GDP uh for the next three to 10 years if
not longer and uh is that sustainable
noral and if it isn't sustainable as an
investor what would you it's a very
valid point and and on top of um public
debt in the US also you have a large
stocks of private debt actually the sum
of private plus public debt today in the
US is about 420 per of GDP it's higher
than it was during the Great Depression
and higher than it was at the end of
World War II and today we're not in a
great depression and we're not at the
end of a major global war when in those
cases of course course that goes much
higher uh it's huge it's eventually not
sustainable I think on that one people
agree and you're right on the politics
when Democrats in power they tend to
spend more but uh they're not able to
raise taxes uh to pay for it when
Republicans are in power they love to
cut taxes they say they're going to cut
spending but they're unable or willing
and therefore you all you always
deficits um now uh why has not yet
become
unsustainable it's not become
unsustainable because in an Emerging
Market when you have a lack of fiscal
discipline there is Market discipline
you punish by having your currency
falling in value your Sovereign spreads
going higher and then you have to adjust
same thing even in advanced economies
like Greece Italy even United Kingdom
when fiscal policy goes in the wrong
direction you're beaten up and you're
forced to change policy the problem with
the US is that paradoxically our benefit
this exorbitant privilege of being the
global Reserve currency that is used the
dollar still as a major Global Reserve
currency it's a benefit because on one
side allows us to finance ourselves
cheaper and longer not only our fiscal
deficit but also our current account our
trade and external deficit we can
Finance them bigger and for longer and
for cheaper but the problem with it is
that exactly because there is no Market
discipline for the US dollar then the
market is going to give us even more
rope to hang ourselves and eventually
when these things and will eventually
become unsustainable the crash is going
to be even more severe so we're
postponing the the Doomsday but
eventually that's going to be occurring
what's going to be trigger we don't know
but it could be that in the next decade
the trust funds of Social Security run
out of money and then we have a crisis
because because we cannot pay uh the
benefits with the current uh payal taxes
that could be the trigger or it could be
like last year people starting to worry
about the deficit being unsustainable
then then you start to see some Market
discipline when for a short period of
time 10e treasury yields went towards 5%
and they could go even Above So you need
something of a trigger now in other
countries that borrow in a foreign
currency like Emerging
Markets or even a Eurozone country that
uh cannot print money by themselves
because the ECB does it for them then
the only option if your debt is
unsustainable is to default you seen it
an Emerging Market you've seen it in the
case of Greece the advantage of us and
other advanced economies who borrow in
their own currency is you don't have to
formally default if you have an increase
in inflation like it happened in the
last couple of years the real value of
long duration fixed income goes lower
and therefore your debt to GDP ratio
Falls so you can always use What's
called the inflation tax to get yourself
out of your problem and I think that's
more likely you're not going to see the
as defaulting that's why I am actually
pessimistic and I believe that the
average inflation rate is not going to
be two% it's going to be more five plus
in the US because eventually the stock
of private and public debt is going to
imply we're not able to cut spending or
raise Reven and taxes then the only
Leist resistance means to monetize it
and to have surprise unexpected
inflation wiping out that debt it is
still a tax B said the inflation tax a
more sneaky tax because it's not even
legislated by
Congress it's also current it's creating
a lot of political dissention though too
because people feel a lower standard of
living in the middle class or the lower
middle class because their dollars being
devalued as they monetize debt and so in
some ways it's of a regressive tax um
and and so this this is worrisome and I
think it's going to have a a worse than
expected impact on the political
landscape we're going to get more
Firebrand oriented politicians and you
know more nastiness as a result of this
but we're GNA we're going to take some
questions now if you don't mind and uh
the first one I'm going to hand over
because this is more of a military
question it's about the th savings plans
uh what I be correct to believe that the
G fund and the F fund will be more
inversely to each other and the answer
to that Michael uh and this is Luke Air
Force based on firefighter the answer to
that is correct and so we like the G
fund after our team examine that uh more
than the fund in a scenario like that we
do appreciate the question let's take
another
question this is a little bit more for
you norel uh for years the market has
been affected by the tactic of indexing
and a shift to growth as this decoupled
the market from Capital flow valuation
structures to its own addictive
racetrack it's interesting because we
talk about the Magnificent 7 the 493 lag
the Magnificent 7 what do you say to
David from New York
norio I think that is a validity to that
argument that since a lot of the
investing has become passive investing
following indices as opposed to active
investment that requires to do some
valuation analysis uh it's possible that
at least over the short run even uh poor
performing company uh may be actually
lifted or not fall as much because of
they are part of passive passive IND so
people say in order to have proper both
Market discipline and proper valuation
you need to have active investors that
are stock peers rather than being
passive investing so I think that that's
true but of course over time where there
is a significant gap between those
valuation driven just by passive
investing and the underlying fundamental
the market cors itself so I think in the
short term might be true but I don't
think that passive investing implies
that uh uh valuation can be totally
decoupled by Fun from the fundamentals
over the medium long
term all right let's take another
question worried about the decline of
the dollar okay this is appr propo to
what I was talking about this is Thomas
from Florida 34 trillion dollar$ 34
trillion doll of debt researching
Bitcoin uh thinking about putting some
of his money there okay so I'm a pro
bitcoiner noral is against Bitcoin what
would you say to
talas um I would say that um if you're
asking yourselves at least in the last
few years whether Bitcoin has been a
hedge against inflation I'm not sure
that that's the right hedge because in
the two years when inflation was Rising
sharply Bitcoin actually was doing
poorly it went from a pick of 69 to 15
now that inflation is
falling uh Bitcoin is going higher so
Bitcoin to me looks like not an
uncorrelated asset uh to say equities
but is actually even more
correlated uh than uh than equities to
the economic cycle you know when go much
higher Bitcoin that tends to do even
better especially in times where the FED
is either cutting rates or expect to cut
rates while in times where the market is
going down either because there is risk
off or there's a risk of recession or
the FED is tightening rates the stock
market Falls but Bitcoin Falls even more
so so it's more volatile than the market
is not be proven that is a hedge against
inflation it might be some broader
diversification asset I don't fully
understand it but if you're really
worried about the basement of Fiat
currenc and inflation as I said a basket
that includes uh short-term treasury
tips gold maybe some other precious
metals maybe even food and some of the
uh transition
decarbonization metals the green metals
and maybe types of uh real estate that
may be a basket that provides you
greater hedge against inflation than
Bitcoin
itself okay okay well listen it's a this
the show is about our guests and our
fans and so I'm goingon to let you have
the last word on that noral although I
tried not to let you have that last word
in Saudi Arabia a few years back let's
go to the next question I I know your
views on bitcoin and I respect you're
very smart and Bitcoin right now is
closer to 60 again so you know yeah I
mean that but to your point sir it is a
bable asset and so I tell people if
they're using it very very small
allocations of Bitcoin until it until it
matures and becomes more adapted I'll go
to the next
question that is someone learning about
crypto where does one invest the first
500 if one has a 50,000 or more
traditional investing so I'll take this
it's a I would just go into IIT it's
dollar sign
ibit which is the Black Rock Bitcoin
trust but I uh you know this is generic
Financial advice not specific Mary from
Illinois and so I would just C caution
people as I always do very small
allocations of this sort of stuff let's
go to the next
question your opinion about
cryptocurrency how much influence do you
believe bricks will have over the next
five years so you've already shared your
opinion on cryptocurrency but tell us
about the Brick Nations and their
currency situations uh relative to the
us and whether or not they'll be more
involved with crypto like the country of
El
Salvador um uh you know there was a lot
of hype about a decade ago about the
bricks combination of Brazil Russia
India China and South Africa there may
maybe other country added now to the
bricks they can talk about brick Plus on
the economic side actually
things have been disappointing people
said they're going to grow so much
faster than advanced economies that
they're going to unquote become a much
larger share of global GDP but think of
this country uh China has gone from a
growth rate of 10 to five to now
potential of
three Russian growth even before the war
was at best potentially one and a half%
now probably is barely above zero
because of the consequence of a growth
potential growth as opposed to what's
happening this year uh Brazil has always
been the country of the future people
said they have all the resources all the
potential investment but the average
growth for the last decade has been
between two or 3% it doesn't seem like
it's breaking out of that one South
Africa same problem there is a meanful
amount of political instability it has
natural resources but has lots of
bottlenecks of infrastructure starting
with electric GD uh barely growing 2%
per year and the only really success
story has been India growth has gone
from five to seven but the share of
global GDP of India it's uh it's a very
small now so probably and by the way
this country are very different
economically some producer of services
some Commodities some manufacturing some
democracy some autocracies some export
oriented some not export oriented some
close to us and some of them being raval
of us so there's not going to be common
economic policy by the it's very non
over genus group and China India
strategic rival within this group I
don't think that these countries are
going to massively adopt crypto in China
is forbidden even if there ways to have
access to it India has been also
skeptical and has really developed
fisticated finx Solutions where they
their payment system actually used by
over a billion Indians and allows you to
do payment very very cheaply and very
very
efficiently uh they the amount of
adoption of Crypt and the other bricks
has been really modest and all of these
bricks by the way for now have
relatively low inflation they've been
actually quite successful in keeping
inflation low and crypto usually
probably is a defensive asset when you
have really run away inflation you know
not 5% not 10 but we go to 30 50 100 uh
you know like in places like tur like in
some Latin American countries and so on
and so on so I would say among the
bricks I don't see any of them being a
high inflation country anytime soon
while some of the weaker and less
credible Emerging Markets uh uh maybe
but even the country where people say
they have adopted crypto yeah they have
adopted This legal tender as Salvador
but if you look at the adoption of
crypto for actual means of payment and
transaction it's really tiny so yes
never crypto on top of their own
currency but uh it's not as if crypto is
a significant means of payment it's not
at all and that in a country that
actually has made a crypto legal tender
so if you are a store and somebody wants
to pay you in crypto you cannot say no
that option is really minimal all right
so so so noral I always love talking to
you because you have such a Balan view
of everything I'm going to finish this
up with my last question if you don't
mind uh what are you working on now uh
two bestselling books you've got this
great new product do we have another
book coming are we gonna see another
book from you before the World Cup comes
to New York what well usually I write uh
one book every decade was Crisis
economics around 2010 now uh Mega
threats because if you want to say
something big and important uh I think
that um you have to wait you cannot do
it every year and so on so you know I
follow the economy I follow the market I
would say that you know in my meat
thread books there was only one chapter
about a utopian future so there was a
happy ending but it was only seven pages
in a world in which everything could go
wrong I now recognize that uh technology
can change the world for the better uh
but it's not just about the ey I think
there are about 12 or 14 industries of
the future and some of them are AI
related some of them may not be like you
know the big revolution say in energy is
not going to be
renewable uh because it's too slow it
might be Fusion if Fusion does occur we
resolve climate change because we have
unlimited amount of zero emissions
energy at cheap prices it's a new
technology that is not yet there but 10
years from now may be really the the
killer Revolution that saves us from
climate change so there lots of other
things happen that are positive the
covered about technology is you can use
it in a good way or in a bad way and the
risk of AI are one misinformation
disinformation deep fake electoral
manipulation and I worry we're going to
see some of that already this year two
there's a risk of permanent
technological unemployment three there's
a risk of increas in income and wealth
inequality rather than reduction and
four uh there's a risk that actually it
makes even our own species over time
sometimes Obsolete and also the risk at
uh that AI is going to be used to build
bigger weapon to find bigger Wars so we
have to control that uses it to make it
successful so I'm trying to think uh
deeper on these issues that's why I
wrote this piece on artificial
intelligence versus human stupidity and
I think there going to be a tension
between technology and mega threats is
going to be the one that you have to
think about deeper to see what has going
to happen to the world I don't have yet
a book but that's a big issue that I'm
thinking about for the next few
years okay well I I really appreciate
you coming on and these are phenomenal
thoughts for our viewers and listeners
and guys please go to won.com
backp speakup if you have questions
comments we're obviously always looking
to improve the show uh our next guest is
going to be the legendary Dan Morad from
panta who obviously has one of the
larger crypto Edge funds we'll be
discussing crypto but also the macro
situation which I think is super
important leading into the
2024 election uh we appreciate you
joining us uh here on speakup Professor
norel rabini thank you you and I'm
looking forward to seeing you live at
some point noell it's been too
long
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