Michael Pettis is someone who I have followed closely over my career and he is one of the most widely followed China experts in the investor community. He is currently based in Beijing and is Professor of Finance at Guanghua School of Management at Peking University and is the co-author of the recently published book “Trade Wars Are Class Wars”. In this podcast we discuss:

How economists don’t understand debt
Understanding when high savings rates work for countries
How advanced economies investment needs changed since 1970s
How trade surplus countries like China and Germany suppress the household wages and income
Why China’s high savings rates will now only lead to higher debt, rather than growth
How Spanish workers are harder working than German workers
How the US and UK are forced recipients of excess savings
Why high debt levels lead to low rates
The problem with official Chinese GDP data
The importance of the US dollar as reserve currency
Why the Chinese yuan will not collapse
Recommended books: the works of Kindleberger, Adam Tooze’s The Deluge, Eichengreen’s Golden Fetters, Mark Nelson’s Jumping the Abyss: Marriner S. Eccles and the New Deal, 1933-1940

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