Important news: this will be Jack’s last episode as the host of Forward Guidance. He is transitioning to host a new podcast called Monetary Matters: https://www.youtube.com/@Monetary-Matters

Felix Jauvin, macro trader and current host of “On The Margin,” will be the new host of Forward Guidance going forward: https://x.com/fejau_inc

Richard Koo, senior adviser at CSIS, chief economist at Nomura Research Institute, and pioneer of the “balance sheet recession” phenomenon, explains why he thinks China’s balance sheet recession has already begun.

Richard Koo’s latest book, “Pursued Economy: Understanding and Overcoming the Challenging New Realities for Advanced Economies”: https://www.amazon.com/Pursued-Economy-Understanding-Overcoming-Challenging/dp/1119984270

Richard Koo’s classic book, “The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession”: https://www.amazon.com/Holy-Grail-Macroeconomics-Lessons-Recession/dp/0470824948

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Timestamps:

(00:00) Introduction

(01:08) What Is A Balance Sheet Recession?

(08:56) Balance Sheet Recession In Europe & U.S. After The Great Financial Crisis of 2008

(15:46) China's Balance Sheet Recession

(25:43) Savings And Bank Credit In China

(33:26) Permissionless Ad

(34:25) China's Trade Surplus

(38:20) China Likely Can't Export Its Way Out Of Its Balance Sheet Recession Because The Rest of the World Won't Let It

(45:33) The Currency Adjustment Mechanism To Correct Trade Imbalances Has Been Severely Impaired, Argues Koo

(01:01:58) Is The U.S. in a Balance Sheet Expansion?

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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.