Capital Allocators – Inside the Institutional Investment Industry Louis-Vincent Gave – Macro Consequences of Government Sanctions (Capital Allocators, EP.247)
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Apr 25, 2022 
Louis-Vincent Gave, Founding Partner and CEO of GaveKal, dives into the complex fallout of sanctions stemming from Russia's invasion of Ukraine. He dissects how freezing financial assets and shifting energy dynamics influence global economies, particularly China. Gave elaborates on investment strategies in a tightening monetary climate and the need for diversified asset management. He also shares insights on the evolving geopolitical implications, especially regarding Taiwan and the historical context shaping these decisions.
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Asian Crisis Impact
- Louis-Vincent Gave's career was heavily influenced by the Asian crisis.
- Witnessing its rapid market unraveling shaped his perspective on emerging markets.
Post-Crisis Strategy
- Emerging markets prioritized accumulating foreign reserves (like U.S. Treasuries) for safety after the Asian crisis.
- This inadvertently enabled Western countries to maintain large budget deficits without immediate consequences.
Rule Change
- Freezing Russian reserves sets a precedent: assets are safe only if countries behave "appropriately."
- This raises concerns for other nations about potential asset seizure.