Russell Napier On The Rise And Fall Of The Age Of Debt And China’s Choice Between Deflation and Devaluation
Forward Guidance
Introduction
Exploring historical shifts in monetary policy, from the end of the gold standard to the Bretton Woods agreement, and discussing upcoming potential changes that could reshape the financial landscape.
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Russell Napier, founder of Orlock Advisors and publisher of The Solid Ground Newsletter, returns to Forward Guidance to share how China’s decision to peg its currency the Chinese Yuan in 1994 at an artificially low rate had enormous consequences on world’s monetary system, and why China may be soon be forced to make a monetary policy decision regarding its currency which may have similarly large consequences for the globe. Filmed on March 13, 2024. Russell is the author of two books, “Anatomy of a Bear Market: Lessons from Wall Street's four great bottoms” and “The Asian Financial Crisis 1995-1998 And The Birth Of The Age of Debt.”
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Russell Napier’s newsletter, The Solid Ground: https://russellnapier.co.uk/
Russell’s first book, “Anatomy of a Bear Market: Lessons from Wall Street's four great bottoms”: https://www.amazon.com/Anatomy-Bear-Lessons-Streets-bottoms/dp/0857195220/?_encoding=UTF8&pd_rd_w=JKHqA&content-id=amzn1.sym.cf86ec3a-68a6-43e9-8115-04171136930a&pf_rd_p=cf86ec3a-68a6-43e9-8115-04171136930a&pf_rd_r=144-7804338-9176020&pd_rd_wg=QZHz8&pd_rd_r=bb8adee9-1ab7-4906-bfc2-cf8c13a39d25&ref_=aufs_ap_sc_dsk
Russell Napier’s second book, “The Asian Financial Crisis 1995-1998 And The Birth Of The Age of Debt”: https://www.amazon.com/Asian-Financial-Crisis-1995-98-Birth/dp/0857199145/?_encoding=UTF8&pd_rd_w=JKHqA&content-id=amzn1.sym.cf86ec3a-68a6-43e9-8115-04171136930a&pf_rd_p=cf86ec3a-68a6-43e9-8115-04171136930a&pf_rd_r=144-7804338-9176020&pd_rd_wg=QZHz8&pd_rd_r=bb8adee9-1ab7-4906-bfc2-cf8c13a39d25&ref_=aufs_ap_sc_dsk
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Timestamps:
(00:00) Introduction
(00:52) How To Spot A Change In Monetary Policy
(03:50) Birth Of The Age Of Debt
(08:43) Chinese Surpluses Are Getting Smaller
(14:10) China's Choice Between Deflation Or Devaluation
(18:23) China's Growth Requires Massive Expansion In Narrow Money
(27:10) VanEck Ad
(27:53) Is China The Biggest Real Estate Bubble Ever?
(30:35) PBOC Likely To Move To Flexible Exchange Rate In Order To Achieve Their Goals In Controlling Price And Quantity of Money
(33:53) Is Foreign Lending Contingent Upon U.S. Dollar Reserves?
(36:29) The Origin of The Chinese Stock Market In 1992
(39:11) Valuations of China's Stock Market
(41:33) Buy Cheap Currencies, Not Cheap Companies
(54:11) Napier's Views On Japanese Currency And Stock Market
(58:51) The Lessons Of Quantitative Easing (QE)
(01:01:27) The Future of Japanese Monetary Policy
(01:03:10) The Interest Rate Shock Has Not Broken Something. Why? Will This Continue?
(01:06:16) Are Higher Interest Rates Deflationary Or Inflationary?
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
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