We Study Billionaires - The Investor’s Podcast Network TIP251: Macro Themes - Summer 2019 w/ Luke Gromen (Business Podcast)
Jul 14, 2019
Join Luke Gromen, a macro investing expert with 25 years of financial experience, as he delves into intriguing market dynamics. He talks about the unusual credit cycle and the compelling bull and bear cases for commodities. Gromen also discusses why bond yields may be misleadingly low and offers insights into big tech investment opportunities. The conversation highlights the importance of Bitcoin and gold as alternative assets amid currency instability, shedding light on the complex interplay of global central banks and emerging economic trends.
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Dollar Vulnerability
- The U.S. dollar's vulnerability stems from the U.S. government's large short position on the dollar.
- This situation is due to decreased foreign demand and increased supply of U.S. Treasuries, ultimately driven by rising deficits.
Market Control over the Fed
- Jeff Gundlach correctly asserts that the fixed-income market currently controls the Fed.
- This control is evident in the Fed funds rate exceeding the interest on excess reserves (IOER), indicating a dollar shortage.
Market Distortions
- Global fixed income markets, especially sovereign debt, are heavily influenced by global collateral needs and FX hedging dynamics.
- These factors, rather than underlying economic fundamentals, significantly distort market behavior.