when you look at it and say where do you

want to own a 60/40 portfolio? I see

lots of options that are a hell of a lot

better than the United States at this

point. That's been my biggest call for

the year. I've been getting out of US

assets for a long time. In fact, today I

will have gotten out of 100% of my US

assets. If you look at relative value of

the US asset portfolio versus the rest

of the globe right now, it's just lousy.

Do we have a economic slowdown as

promises that have been made become too

expensive to finance? And that's when

you get a sort of cascading slowdown and

that's I guess what I'd be concerned

about at this stage.

>> I'm joined by Andy Constant of

Dampspring Advisors. Andy, it's great to

see you. Tell us about this thesis you

have about the demands of investment

that the world is going to have o over

the next five years and just where that

money is going to come from and your

your relative concern about where where

that money is going to come from. I

think the issue is that you know for the

last five years most of the the money

creation

and investment has been driven by

deficits by the public sector financed

initially by QE then QT didn't really

quite withdraw it because it really was

done with bills

that money creation and so we're left

with a fair amount of public sector

money creation that's slloshing through

the economy and that was obviously I

think key to any edge I had at least

over the last 5 years is understanding

those flows

and the transference of risk from one

party to another and the changes in the

Fed's

balance sheet and I think those had

meaningful impacts on risk premium this

is a new phase while the governments

broadly speaking are continuing to run

high deficits to GDP, something around

6% in the US and growing in the rest of

the developed market, developed world,

particularly to deal with things like

defense. Those aren't going away.

They're not being financed by any

meaningful balance sheet increase. And

so they have to trickle through the

private economy and get financed by the

private economy while at the same time

the private economy is making massive

capex investments particularly in AI and

AI infrastructure

roughly at a trillion dollars a year.

And on top of that, we have this other

form of transfer that's going on in

which

foreign nations to avoid tariffs are

being asked to make investments in real

property, factories, car plants,

whatever it might be. That is an

onshoring flow. That's been a very key

postcoid desire is to onshore

manufacturing. Biden did it with the

chips act. It is what it is. Trump is

doing it with using tariffs to negotiate

productive investment. Now

the big thing about that is all of these

promises are extremely important to

deliver the type of growth that the

economy expects and that is priced into

markets. And it needs to have financing

And so that whole dynamic to me is the

most important dynamic over the next

five years which is by and large when

the private sector does a financing they

create credit whether it's along with

money meaning a bank creates credit or

just the selling of corporate bonds

things of that nature where one where

savers lend to to private sector

individuals to invest in the real

economy.

And that self finances

eventually in that when Oracle borrowed

a whole bunch of money this this fall to

build data centers,

investors

gave them the money.

Now Oracle has the money and needs to

invest it. They buy a bunch of stuff.

They pay construction workers. They buy

micro they buy semiconductors. They buy

energy. They buy energy production. They

buy all these things and all that income

becomes so all that spending becomes

somebody else's income which ultimately

becomes savings which loops around and

finances this debt. So you can you can

this can all work but right now we're in

the period of time in which the

borrowing is happening and the spending

will take time before it recycles into

savings. And that generally

is bad for asset prices.

And that speaks to whether

asset prices will can finance today the

sort of promises that are needed for the

future because if the price the rate at

which the financing occurs is too

expensive, people will stop doing the

investment. And so that dynamic is

really important. And I'm not I don't

have concerns. For instance, if the

Treasury market can absorb all of the

issuances from the deficit,

if the corporate bond and equity market

can absorb all of the financings that

corporations are doing for spending, and

if the foreign investment, which is

likely to come from the selling of

treasuries to raise dollars, to buy

factories, can be absorbed by the

Treasury market without any price

concern. recession, we're going to have

a very strong run it hot style economy.

And so that dynamic is very important.

If you want run it hot, you need

accommodative

issuance,

absorbed issuance. If you don't, if you

can't get that, you can't run it hot.

And so that dynamic is the thing that

I'm focused on right now. And the

numbers are large.

>> What what powered the economy last year

was investment. And you're saying that

in order to have robust growth, which is

what market prices are expecting, that

we we need to have very large

investments. And you have some questions

about how that money is going to be

raised. Is it going to be through the

bank channel? Is it going to be through

the the capital markets, which requires

the investors who invest in those new

assets to sell sell their old assets?

How are you thinking about the the the

change in asset prices that is going to

be impacted by all of this uh uh money

raising? You know, why can't it be the

case that, you know, easy half a

trillion dollars of hyperscaler debt is

is issued and the market can absorb it

super easily? Why why isn't that going

to happen?

>> It could. I'm not I'm not saying it

can't. I'm saying that that is the thing

to watch and we saw it with Oracle and

we saw it with the hyperscalers this

fall. What I think is important to

notice is that is what's changing. For

one, the consumer continues to do well.

It's maybe a K-shaped economy, but by

and large the consumer has continued to

consume and you're growing at around a

3% real rate just from consumption. So

the rest of it's investment and

obviously government that determines

whether the GDP is going to do well. Of

course net exports matter too, but those

are the four four components of the

economy. We can get to the consumer

later, but I'm focused on the investment

bit. And so it's possible that we could

get all this issuance absorbed and it's

but I think you have to notice some

changes. And the big change that I've

noticed is that the investments from

last year, which were sizable, were

largely financed out of free cash flow.

The hyperscalers didn't need to raise

debt and they certainly didn't need to

raise equity. And that's because they've

absorbed through the last five years,

they've locked in extremely low

financing that they were able to lock

in. And this includes homeowners in the

2021

2020 2021 period. And that still is

providing large margins for what is

otherwise an inflating economy. They

haven't had much need to finance because

the government injected this large bolus

of the ability for individuals to

consume by spending and the national

debt rising significantly. And so free

cash flow has been the way that all of

this AI capex has been funded. That's

changing so far and I expect this will

change further at so far what happened

is that the amount of capex relative to

free cash flow has gotten to a point

where it's close to all free cash flow

is being used for investment. What's

next? Well, what's next typically is

where are you spending other free cash

flow? And in Microsoft and Google and

Nvidia's case, less so with Amazon.

Apple's not really part of that cohort,

but Apple certainly, they buy back a

tremendous amount of shares with their

free cash flow. They could stop.

That should have an impact on equity

prices. If the major share buyback

entities stop buying back shares and

start spending it in the real economy,

that should have a stimulative effect on

the real economy and a negative impact

on the equity price.

Obviously, they can also issue corporate

debt and they also can issue bank debt.

They can borrow from the bank. And so to

notice that change from a free cash flow

generated investment channel, financing

channel to something that's not that is

I think the key thing to watch. And I

think what we saw in the fourth quarter

in the in the second half of last year

is there's some you know with credit

spreads where they are

there's just not much juice to convince

investors to buy those types of assets.

And that applies to corporate bonds and

it applies to equities.

It could,

but so but we've transitioned from a

period of time in which the government

part we're still running $2 trillion

deficits, $1.7 trillion deficits. So

it's not like they're not continuing to

increase the size of of the national

debt, but they're not growing the

increase. And so, you know, that's a

change.

QE QT is basically flatlined. So that's

change. And so when I look at all those

things, I said, yeah, it's a pretty much

of a transition year in 2025 and 2026

and the future. These promises need to

get funded. And the big trick

is and so every promise gets funded if

there's a good return available for it.

And when you lend money to or either

give by by buying their equity or buying

their corporate debt or if you're a bank

by lending them money, you want a return

and your return is dependent on whether

that was a good whether the company is

making a good investment. And so just I

want to characterize the investment

types. We know AI is one of the

investment types. And I think there's a

we've seen this over the last few months

now. There's a certain regurgitation of

whether these for whether whether it's

energy, human capital

that are tight that don't allow these

companies to scale up their effort or

the business model of selling AI related

services which includes cloud but it

also includes the AI models etc just

aren't paying much. And so you look at

that and say, well, okay, you know, one

day there's going to be a business model

where all this compute is profitable.

It's possible that it becomes

profitable. I'm not and I'm not going to

bet my in in my world on whether AI is

going to work or not work. I'm just

going to watch to see if it is working

and to see if there's hope that it does

work. And that will inform whether these

are good financings or bad financings.

The other financings, the roughly $2

trillion of promises that have been made

to the Trump administration regarding

deficits, those are bad spends. There's

just no possible way that

building factories in the US

is an economically intelligent thing to

do.

Now, there's other reasons to do it and

those are very important reasons.

None of us want to go through the supply

chain disruptions we had in during

COVID. We'd prefer not to. We'd also

prefer to have strong national security

and have critical industries built in

places that we think are allies.

The best ally being our own home.

Those are important reasons to national

security. And there's this other one

that seems to think that manufacturing

jobs are somehow better jobs than

equally paying service jobs. So there's

this sort of populist

reason to bring jobs home that doesn't

have much economic rationale but does

have a psychological rationale. And it

sure seems like that's the direction

we're going and have been going for a

number of years. But now we have all

these promises.

The effect of the tariffs has created $2

trillion of promises to invest in the

US.

I think it's really important that those

investments occur because if they don't

occur, you're not you're going to get

poor growth. But also having them occur

creates excess capacity at a high price,

which is a bad investment. So the people

that are making the investment

are going to be on a very short leash, I

suspect, on whether they're going to

actually commit to these investments.

And certainly if prices start the price

of financing

starts rising I think those promises

fall away relatively rapidly. And so

those are the sort of things that to me

are the the big case. Do we have a

economic slowdown as promises that have

been made become too were never

particularly great to begin with and

become too expensive to finance. And

that's when you get a sort of cascading

slowdown. And that's I guess what I'd be

concerned about at this stage

>> to define just a term hyperscaler is uh

building data centers at scale and uh

the these are Microsoft, Amazon, Oracle,

Meta, Google uh as well. The end

customers aren't that the hyperscalers

but the the end customers are a lot of

these AI companies.

>> Yeah, exactly. I don't I don't honestly

know how I mean I lived and worked at a

senior very senior level during the

internet bubble. It's different but and

I've looked through centuries of major

productivity enhancing technology in

innovation. I don't know how this one's

going to turn out, but we do know that

at some point the investment needs a

return

and

the timing of that return when it comes,

how big it is, and what it does to the

rest of the GDP. Like one of the big

questions I have in life right now is

whether where does the

return for AI

come from?

Does it come from is it a does does AI

actually grow the GDP

or does AI steal shares from other share

from the GDP? That dynamic is extremely

important. If it steals share, there's

going to be winners and losers

>> if it just takes people's jobs is what

you're saying. Yeah.

>> Yeah.

>> I mean, they're gonna be winners and

losers, but that's not that's not

necessarily healthy.

>> Andy, this this issue we we've been

talking about now. I I think that your

view on assets, risk assets, and risk

premia basically how how much investors

demand to be compensated. So, as risk

premia go up, asset prices go down.

how your view on risk premia is hinges

on the degree to which the increase in

supply equity issuance debt issuance is

going to impact prices and I want you to

share your view on that but first to

start out could you talk about what over

the course of your you you know long

successful career you you've seen that

play out because you know you you were

at Bridgewwater as you write in your

damn spring memos you have a

Bridgewwater framework which is you know

quite rationalist list uh quite a

implies b implies c imp implies d. Um,

and that's one school of thought. And

then the the other school of thought uh

is kind of a little maybe a little more

psychological of activity begets

activity. Liquidity begets liquidity.

And you know when you were in uh in your

senior role in 97 and 98, I'm sure there

were a lot of horrible deals that were

coming to market to to fund telecom

expansion. And you know, did that huge

surge in issuance of of debt and debt

creation, did that cause risk premiers

to expand or was it kind of everyone got

paid on that deal and then they brought

the next deal and then that deal caused,

you know, you know, these companies to

spend more money and it was super

exciting and obviously it, you know,

blew up in 2000.

>> Yeah. I mean, the answer to that is

it was volatile. Looking back,

a lot of money was invested

that was destroyed in rapidly rapidly

destroyed. And that's very typical of

what people talk about as a bubble. But

generally the business cycle is

literally caused by animal spirits

bidding up financing and that money

getting spent in the real economy in

unproductive

assets in assets that net of the funding

costs can't make a profit and so I think

it's true and as it looks to and as you

think about extreme extremes. Certainly

2000 was an extreme and then the housing

boom was certainly another extreme where

there were periods of so you know 2005

67 that was there was some great stuff

getting created and people were bidding

it up 98 99 2000 same all the way into

2000 with and one with credit that's a

regular course of business the question

becomes does

pay off rapidly? Does the high financing

cost investors paying up for equities

which are yielding negative have

negative yields relative to treasuries

that continues until it doesn't. And so

we know how it's going to play out. It's

just going to where it's going to play

out at what and what's going to be the

catalyst to do that. And so again, I'm

looking at are the promises going to

occur.

So there, you know, they may not

that for many reasons. Trump loses

leverage, for instance, on tariffs that

may reduce investment. Trump gets a

bunch of tariffs, which causes the need

for U for the deficit funding to drop.

That could be have an impact. the

promises simply could have been

misunderstood that the negotiation

doesn't pay off and then there's the

returns whether it's AI or any other

form of significant investment that's

planned right now they have to generate

returns and returns can be are are

affected by the cost of financing and

are affected by the way the real economy

works and as I said for as I I think

it's true that for the promise of the

one trillion of AI to pay off in returns

and have those returns im be imminent

growth has to be very high because if

it's just taking share

that doesn't create high growth and

doesn't create high returns doesn't

allow the people that are selling the AI

to compute to

you and me you and me can't afford it

because we're out of jobs so that that

I'm just focused on. So I don't believe

that there's an obvious turn that's

occurred. Like I'm not pounding the

table on on much right now. I'm watching

how the promises are going to evolve,

how the cost of financing has changed,

who's providing the financing through

what vehicles, and what's the future

supply look like. And you know for me if

if Microsoft decides to well Microsoft

already has if Google decides to and

Meta decide to reduce instead of

reducing their share count every year

stop reducing their share count that's a

signal to me. So that's the type of

thing I'm looking for.

>> And how do you think this AI expansion

is going to impact growth? You have a

lot of of of charts and data. I mean

there are people who think you know 5%

nominal growth or you know 3 4% real

growth because we're going to live in

this golden age of if not you know an AI

golden age and AI data center

development golden age that is going to

make the numbers look ridiculously good.

Where are you on this?

>> So I mean I think you

the promises are substantial like these

promises get delivered growth is going

to be hot as hell. There's just and the

promises are, you know, they're

promises, but they're also in contract.

Like the money's coming. You know, that

trillion, if you told me a year from now

that the trillion dollars didn't show up

in 2026, these trillion dollars of AI

capex, I'd be shocked. Like that money

is coming. And so that's going to be

very strong short-term growth

without a doubt. But the way this

happens is all these promises just stop.

They don't fund in 2027 or they just

reduce funding a little bit and that's

enough to cause a economic slowdown. So

what I would say is that yeah I mean you

look at the I mean I look out at the

next quarter if you want to be so short

term and say all these companies are

going to report big capex. They're all

all the receipts the recipients of capex

the semiconductors are going to show

spectacular cash flow spectacular

earnings. The OBBB impact on on

individuals tax returns is going to be

significant in terms of who's going to

get refunds, who's going to pay less

when they actually write the check.

Quarter one looks pretty darn good. And

it'd be surprising to me that quarter

two would turn over like that. So you

look at that and say,

are you getting much what you deserve

for bonds?

I don't think so. And you look at the

bond market generally. We're in the

midst of this episode's being recorded

in the midst of a pretty meaningful bond

selloff around the globe because of all

these financing needs.

Not because of growth and inflation, but

just you look out and you say, "Who's

going to buy all these bonds?" And

somebody's going to buy them. Don't get

me wrong. All bond markets clear all the

time. When anybody says, "Who's going to

buy these bonds?" I say, "The same

people that always buy bonds." It's just

going to be price. And so, right now,

we're in the midst of repricing. And

that's causing all interest rates to

rise. It's causing all discount rates to

rise. And it should because we're going

to have a run it hot economy

in the near term.

>> Yeah, the Japanese bond market is is

melting as we record. I mean, it's

amazing. The Japanese 40-year Treasury

yield was at what 15 basis points in

2019 and now it's over 4%. That was a

nice short owned the I looked at the

half% of 59 which was issued in 2019 and

that thing was issued at par and it's

trading at 40 today. So yeah, it's been

rough for the long end of the Japanese

market. Now, the fact is nobody owns

those things. I mean, somebody does.

It's small. They're small in total. Like

the total amount of 40-year bonds, even

30-year bonds in Japan, it's very, very

low. It's very, very low everywhere, but

it's particularly low in Japan.

>> And and you point out that the majority

owner is the Bank of Japan, but that has

ceased to be the a net marginal buyer,

right?

>> Yeah. So yeah, the the important thing

is that what's happening is they're

searching for a bid. It's not like all

the people that own these things are

underwater and getting killed. That was

the story of who the people who own TLT

and the US bond market in 2021 and 2022

and SVB banks all you know we we talked

about that years ago. Banks owned a

bunch of duration. That doesn't that's

not what's happening in Japan. There

isn't a forced seller. there's just no

bids.

And so you ask yourself, they the Bank

of Japan is shrinking its balance sheet,

not pursuing QE anymore, and they're

doing it by reinvesting less proceeds

than they get from maturities,

which means that the BO the the Ministry

of Finance, the Treasury there has to

issue more bonds to the public just like

normal QT mechanism.

and there are no bids. And so where this

where's the bid going to come from?

Well, one thing is Japan is a massive

saver. Like there's they are they've

been a surplus country for as long as

I've lived and they are they have

massive savings and

but they're overinvested in US bonds and

US stocks. So you look at that and say,

"Huh,

are they going to start buying these

things?" And you know, right now it's

we're in the rericing phase, but the

steepness of the Japanese curve is

becoming extremely compelling. And for

for long only global beta investors, the

combination of relatively high

relatively low Japanese equity

valuation, hey, the market's done great,

but the valuation remains quite low

relative to the US. and a very steep

yield curve in Japan

to me is really attractive from a beta

standpoint

unlike the US where you know risk

premiums are a little wider than they

were during QE but they're still

extremely tight and equity any sort of

equity measure you know these these

aren't things you can trade markets on

but any sort of equity measure whether

it's PE level or earnings yield minus

treasury bond yields

are

rich valuations. That combination of

things to me means that there is going

to be a bid for Japanese bonds. It may

not be tomorrow, but there is going to

be a bid and it's going to have a

capital flight that's going to drive

people who are already overweight, US

stocks in particular, but US assets in

general home

or US folks are going to say, hey,

there's good opportunity to diversify in

your in the rest of the world. And

that's been my biggest call for the

year. I've been getting out of US assets

for a long time. In fact, today I will

have gotten out of 100% of my US assets.

I'll still be long beta,

but a year ago today, I was 100% long US

assets, US stocks and bonds.

>> For your alpha portfolio, beta never

changes. But for your alpha portfolio,

>> this is beta.

>> Okay,

>> this is beta. My alpha portfolio, I got

to tell you, I don't have big strong

views right now. I'll tell you why in a

second. But just looking at beta,

the American exceptionalism story, the

over deficit

spending that the US did relative to

everybody else during COVID, the very

high monetary action that happened

during QE, relative to any other

country, you had to be in US assets.

And so my portfolio in terms of beta is

stocks and bonds, inflation bonds,

commodities, and gold. And I'm I've

always been as a Bridgewater person, you

can't not be long gold. And so I'm

always long gold, long 10%. And it's

been a lifesaver. I mean, it's just been

unbelievable for good reason we can come

back to. But if you take gold and

commodities are sort of global assets

and so what's left is really a bond

stock portfolio.

And I was 100% in US stocks and bonds

until the beginning of this year,

beginning of 2025, middle of 2025, early

thankfully, I got out of half of my US

assets and went to a developed market

basket that was about 50/50, which by

the way, that's the way most investors

should be. diversified in currency,

diversified by country, long stocks and

bonds of both of many countries. That's

sort of the Bridgewater

and most funds global beta portfolio. I

was massively overweight

today.

I'm going to be completely out of US

assets

because it's not and it's nothing to do

with the politics. The politics are what

they are. I saw today uh the the Danish

a Danish pension fund is getting out of

all their treasuries. Hate selling is

not a strategy.

But if you look at relative value of the

US asset portfolio, 60/40 portfolio

versus the rest of the globe right now,

it's just lousy.

And so I've

>> sorry, performance or valuation or what

was the metric you just said? a future

expected returns is the or risk premium

if you want to use my my lingo the risk

premium available in US stocks and bonds

relative to any other 6040 construct is

just awful

>> but wasn't that true a year ago or two

years ago as well

>> no not really and the real reason is

because

until very recently until this year

basically

European

UK

and Japanese bond long-end bonds were

uninvestable

and the real

>> well because the yields were so and what

does that mean the yields are so low

that means when you have an anti-growth

outcome meaning growth doesn't meet

expectations stocks are down and bonds

are up but if the yields are so low

already bonds don't protect a stock

portfolio

the US has had it great for beta for a

while because as early as 2022, our long

end was quite elevated. And so that

provided a hedge for anybody who wanted

to own equities, but outside of our

outside of the US, that portfolio just

didn't exist.

And so, not surprisingly, when that

portfolio doesn't exist, nobody wants

euro assets, no one wants Japanese

assets. What happens? The currencies

fall. And so, they did. Now, Europe

bottomed sooner than Japan, but Japan is

in the process, I think, of a meaningful

bottom. It's not there yet. And the and

listen, the government bond market is in

freef fall. I see see that it's a knife

cut catching knives. But when you look

at it and say, where do you want to own

a 6040 portfolio?

I see lots of options that are a hell of

a lot better than the United States at

this point. And so that's the that's the

beta portfolio I have always long long

assets just not US assets in the at the

moment

>> and there's the assets US assets

European assets and then there's the

currency US dollar euro and within

assets we could say stocks or bonds so

are you bearish on US stocks US bonds or

are you bearish on the dollar or are you

bearish on both and the positive way

asking the question is what are you

bullish on in terms of the countries in

terms of their assets, stocks and bonds

and as well as the currency.

>> Right? So currencies are tricky. What

I'm what I'm isolating is not whether

I'm alpha long or short the currencies.

What I'm isolating is that there is

significant pressure for the US dollar

to depreciate due to the newfound

attractiveness

of non US assets.

So that's that's the big picture now.

That can change rapidly and the US

dollar has been terrible for a while.

>> Like a little over a year, right?

>> Yeah. About a year.

>> Yeah.

>> Yeah. I mean, can it bounce 3 4%? Of

course it can. But does that change what

I think is a secular flow out of US

dollar assets? No. Now, of course,

relative to hard money,

gold, silver,

and currencies that are closer to hard

money than others like Swiss Frank and

things like that.

US dollar and the yen and the yuan and

the pound and the euro have all been

trash. So, it's still a dirty shirt sort

of thing. But right now for me, the US

has the most dirty shirt instead of the

least dirty shirt because asset prices

are just less attractive.

>> And a lot of people look at the US

dollar index, but the the dollar index,

a decent chunk of it is the yen. So the

yen has been like the only currency

that's weaker than the dollar. So it's

like the the low the low yielding

currencies have been doing worse and

it's been the carry currencies that have

been doing really well as well as the

euro,

>> right? Yeah. I mean, from a short-term

standpoint, the yen hasn't really is is

weak relative to the dollar for a while

now, but really hasn't done much in the

last few few years. It's sort of in the

140 to 160 range, closer to 160 now. But

also, we're still in this transition

phase. It's not like people are rushing

to buy Japanese bonds right now. They're

doing the opposite. They're not buying

Japanese bonds, and the Japanese bonds

are in freef fall. So the question is

what do you think a year from now? Are

the B is the Japanese bond market going

to continue to underperform the global

bond market or is it going to recover

relative to the global bond market and

my view is it's going to recover

relative to the global bond market and

that's going to generate positive flows

into the yen strengthening the yen. It

may not it may not happen this week.

Yeah, I I understand your uh extreme

lack of enthusiasm towards US investment

grade corporate bonds. I I definitely do

not share uh I didn't have any

enthusiasm and I think probably a lot of

our viewers don't as well. I mean the

the spreads are just so low. But just

because you know we probably have a

maybe a hurdle rate that's a little bit

higher than that doesn't mean that the

spreads could widen. I mean I' I would

have thought that they they would have

widened more and uh

>> I've traded corporate bonds for 38

years.

I'm not a bear on corporate bonds.

They have no return,

>> but they're better than stocks and or

they're bet. So, a corporate bond is

simply a put on the assets of the

company. And stock puts are puts on the

assets of the company. a corporate if I

was going to be betting against

corporate bonds, I would be better off

buying equity puts right now than being

betting corporate bonds. The, you know,

you you get these things on Twitter and

around the world about this financing

wall

of corporate bonds.

Corporations are flush.

They have incredible financing. Now, not

every corporation and there is this pro

these promises that are going to create

supply,

but existing credits are just in great

shape. I'm not I'm not I'm not super

bearish on corporate credits except to

the extent that I think they will slowly

repric. To make money on alpha on

corporate credits,

you need bankruptcies. You need it's not

just financing pressures that are gonna

it's people failing to get deals done

>> or an extreme change in expected

bankruptcy like a shock.

>> Sure. Yeah. Yeah. Exactly. And and

you're not going to get that without

equities cascading down. And even if

equities cascade down, it's not clear to

me that the higher tier corporations are

going to face any near-term problem in

the next five years. Of course, there's

going to be bankruptcies every day.

There are bankruptcies every day, but

the by and large I wouldn't pound the

except I wouldn't own corporate bonds in

the US because of the supply issue and

there's no serious return, but I don't

hate them like thinking that their the

credit spreads are going to explode. I'd

much I think equities fall first.

>> Okay, thank you for for clearing that

up. Yeah, I I I have been tricked many

times before by this this corporate

credit wall and all it always looks as

if there's a corporate credit wall, but

surprise surprise refinanced. You know

the you know four years ago the

corporate credit wall of 2025 it got

refinanced and it got refinanced at

probably lower spreads than uh when

whenever I saw that chart. The funny

thing about that chart is it's very easy

to take the maturities of all companies

and total them up by m by maturity

bucket. You can do it on Bloomberg. It's

trivial to do. And then you got these

bars, these refinancing bars.

And I worked with corporations for

corporate issuance for half my career.

There's a whole team of people

that's sole job

is to know what financing they're going

to need when and to plan for it. These

things don't just show up on people's

radar and say, "Oh,

we better refinance today."

They're well planned. Um

and so for me it's always been about

what are the characteristics of the

credit market. Is there a credit market

explosion likely to occur? They have

happened. Is there an equitydriven

stress that might cause credit exposure?

But by and large

you have to be so right and we saw this

for decades now. You have to be so right

to win being short high-rade credit.

It's just it's so far out of the money

put.

>> You better be otherwise you're just

going to bleed and bleed and bleed. And

I don't see any reason why that's going

to change in the near term. Where it

changes is when deals can't get done.

And so just watch the deal flow. You

know, I think it's just as simple as

that. And watch the economy. And for

now, there's no sign of the economy

turning over. The economy is doing fine.

I think it should turn over.

>> Why?

>> But well, I don't know how the tariff

thing is going to play out. So, let's

call that a wild card. I don't know if

tariffs are deemed illegal and money is

paid out into the economy, the economy

is going to roar. Now, Trump thinks it's

going to get crushed, so I don't know

how the hell it's going to react to a

tariff being declared illegal. But what

I do know is that the

fiscal side

is essentially in gridlock. That there

is just no lever meaningful lever for

the administration to pull to increase

or decrease the deficit. And so

generally growth is something that

benefits from an increasing deficit. And

that's mostly in gridlock. We're going

to get something. We're going to get the

OBB2

come late probably the the summer again.

Though there's no debt ceiling to cause

it to have to happen, so it's hard to

say. But that reconciliation could be

show a tax reduction. And that's a

little bit, but even the Trump

administration

is going to struggle with its own party

to get a meaningful deficit increase.

Now, if they get to keep tariffs, maybe

they can get they can pass some of that

money back and it's just this circle

where we tax our citizens and then we

pay them back. And that could be a small

impact, but there's no pound the table

impact.

And I'm suspicious about the ability for

the promises to get financed and the

companies that are responsible for this

promises to actually execute in 2026.

And then we get down to consumers.

The job market needs to reacelerate. And

I don't see the drivers for that

reaceleration. In fact, I see the

opposite.

So, but is my view extreme? No. You

know, people get on these shows and want

to pound the table on a recession or a

massive boom. And

>> true. I'm more of like 50 basis points

less than expectation,

not 300 basis points less than

expectation type of guy. And

expectations are pretty lofty. So even

if I'm right and it's 50 basis points

lower than expectations, equities can

sell off, bonds can bear steepen,

maybe even bull steepen depending on who

the Fed chair is, etc.

But we're not having a recession.

That's not that's not on my crystal ball

for the next year.

>> So you you like steepeners of of both

flavors.

Why do then you know did did you write

admittedly a few weeks ago that you

think easing more than is priced in is

justified for the Fed? No. If there's no

recession, how come the Fed should ease?

>> Let's talk about what we're talking

about which is there's 25 basis points

of cuts priced in to the next four

meetings. really only 10. If you look at

some forms of pricing, terminal rate is

like three and a quarter.

>> Three and a quarter is what

40 basis points away. So the whole

cutting cycle that's priced into markets

is another 40 basis points. I think

it'll be more

>> because it's merited or because

>> because putting pressure

>> I think it's because it's merited. Now,

there are others that think, "Oh gosh,

you know, inflation staying high."

Again, I think we're going to be 50

basis points lower than market

expectations for than sort of consensus

expectations for both inflation and

growth. And that's enough to cut an

extra 25 to 50 basis points from here

versus what's priced. That's all I'm at.

>> So, you think inflation's headed lower,

too?

>> Yeah. Yeah. I mean, there's no there's

limited fiscal. It's whatever fiscal is.

Everybody on the planet knows that

there's going to be a positive and I

mentioned at the beginning there's going

to be a positive flow from OBBB.

Everyone knows this. Like people have

spent that money perhaps. They know it.

That said, it'll still be an influence

and so keeps expectations and the actual

economy stronger. But then that's over.

And so that's the fiscal side.

And the tariff side remains

disinflationary because unless Trump

gets

tariffs are completely legal like a

complete validation of his pro policy.

Tariffs aren't going up this year and if

tariffs aren't going up that's

disinflationary.

>> Why?

>> Tariffs have to go up. like staying the

same is not is zero inflation due to

tariffs.

>> Yes. But that so that's that would be

neither disinflationary nor

inflationary, right?

>> No, it would be well

>> disinflationary relative% target. It's

disinflationary. It's zero inflation.

>> Yes. Yes. Yes.

>> And we're running at 2.7ish%

inflation.

>> Energy prices. The Trump administration

has done a good job maintaining low

energy prices. I expect that to

continue. It's a big voter issue.

And so, you know, asset prices have been

stimulative

through the wealth effect. If you

believe in that, I believe in it a

little bit. Not not not pounding the

table. It's all there is. A little bit.

>> Asset prices have been flat for a while.

Unless you're in gold.

Unless you're in gold.

Equ NASDAQ is you know is down for the

last three months. S&P is flat for the

year for the you know the la from its

it's below its highs. So there isn't

this sort of new wealth effect going on

and bonds have sold off. So there isn't

a you know a big stimulus coming from

that.

Yeah. So I think we're going to slow

we're going to slow a little bit. I'm

not pounding the table. We're going for

a recession. We're just, you know,

expectations are very, very high and I

think they can be disappointed modestly.

>> And because of that, the Fed's going to

cut. Now, I've also done a very clear

outlook for what the Fed is likely to be

composed of. I don't think it matters

whether it's Waller Worsh writer right

reader or

a lot of people care a lot about that.

What it what it matters is who's the guy

and will Pal stick around past

May as a governor. If he does and Cook

survives her trials,

two of the other middle ground people

are going to have to be convinced to

cut. And I think they can be. So, you

know, I think the and I guess the real

question I have regarding So, I think

there's upside for cuts partly because

of Trump's desire to get rates lower and

his ability to do that. That's not why I

want to be long steepeners and why I'm

long sofur, but it doesn't hurt. What

would hurt is if the Trump

administration said, "No, no, you've

been right all along, pal.

rates are too hot. Too low.

We don't want rate cuts.

Now, that would be a hell of a thing.

>> That would Yeah, that's pretty low

probability, right?

>> It'd be a hell of a thing. You've got

Myron who is 100% we need to cut 150

basis points immediately still and has

said that recently.

And every other thing we're reading is

that Trump wants rates lower. But I

guess it's possible that they could

pivot and say, you know, inflation's a

problem now.

But I don't see it. So, you know, I

think it could be pretty. And right now,

twos are free. You know, twos are

yielding essentially Fed funds.

>> They're not yielding not lower than Fed

funds, which they had been. And so,

yeah, I think he can I think he can own

the front pretty easily. And then the

question is does the back come down with

it

or does it underperform? And I think the

odds are that it needs to underperform

given what the rest of the world looks

like. So yeah, that's a a steepener is

one of my alpha trades right now.

>> You like and you like little painful the

last like middle of last week when

Waller sorry when Worsh became the the

front runner, but that's all reversed in

the last 24 hours.

So, we're recording at at noon on

January 20th. So, Andy, tell us about

gold. It's threequarters of the way to

to $5,000. Just a, you know, over the

past year, just a 65% return. Silver's

been flirting with, you know, $96.

What's going on?

>> Yeah, I don't trade silver. Just not my

thing. I don't trade natural gas. There

just some stuff things I don't trade

mostly because they're hard to figure

out. But gold is a great asset and it's

been a great asset for as long as I can

remember and it's proving it's exactly

what it it's doing exactly what it

should do which is it's dealing with

fiats that are borrowing too much,

spending too much relative to their the

the economic conditions that they have

and essentially debasing at a fairly

rapid rate. back in the back in the

Ukraine war when Biden seized the

Russian assets. That was a big signal.

Didn't actually pay off till this year

though, right? Gold's done did fine

during since then. But certainly this

idea that central banks are the drivers

of gold because of the weaponization of

the reserve currency.

Sure, they've bought, but I don't think

that's the principal driver. I think

it's a portfolio rebalancing that's

happening on a relatively small asset

>> where portfolio rebalancing everywhere

or or in Asia, Europe, US

>> lately. I think it's primarily the US.

>> Okay. Lately, yeah.

>> But it's but it's the whole portfolio

rebalancing has been a ongoing thing

that's just accelerated to an

unsustainable level. Like

today, as I said, I got out of I I twe

tweaked my beta portfolio today to no

longer own any US assets and have no

exposure to US dollars, which is unusual

because I'm a US person. But I also

reduced my gold. I had been overweight

for a while and in particular got very

overweight in early December when the

Fed decided to buy a lot of tea bills.

That was a signal to me. should have

bought silver, but gold has done fine. I

lightened. I got back to equal weight,

which is my sort of 10% of my a in beta

is in gold, and I'm back down to that.

It's gone a long, long way. But

fundamentally,

it's a small market.

Those portfolio rebalancing flows can

continue for far longer than you might

expect. And so I would wouldn't short it

on a dare, but I'm happy to take some

profits at this stage. Silver

talk. Have you did you recently talk to

Alex Campbell?

>> I I uh I haven't. I I've looked into

silver a little bit.

>> Yeah. So, Alex work on it.

>> Alex is my guru on silver. Focus on what

he has to say. the industrial bit I

think it's probably overdone but the

monetary bit is and the momentum bit is

you know hard to hard to go against. I

I'm desperate to want to trade silver

and be be short it. But I've learned

that you just don't do things that

you're not any good at. And I've never

been good I've never traded silver. I'm

not going to jump in today. But gun to

my head I'd have to short it.

Yeah,

I I I see what you mean. Gold though I

is it is so you think it's not the

central banks that are the dominant

driver of the price because for a while

central banks were seller and maybe 10

years ago they they became a net buyer

maybe a little bit longer than that and

that just seems like an anchor because

you know they're they're not going to

sell whereas if someone you know

watching this podcast buys gold like

they could sell it the next day where

they just seems central bank just seems

so sticky.

>> Yeah, I've done a lot of work. I have

it's probably on my website free. I did

a DSR when I actually did a short gold

into this rally. Got super lucky and got

out of it before it ripped my face off.

Made some money. But I did one that

really did an analysis of what the

central banks have done over the c over

the decades.

I think central banks are on pause.

They don't sell. So I think that point

is right. But when central banks are on

pause,

the

direction is not as bullish. And so take

a look at

>> they started going on pause. Sorry.

>> When do I think they went on pause? I

had it for early 2025.

>> Okay.

>> Like there was just no reason to buy

more gold into what was happening in 20

toward the end of middle of 2025. Just

no reason.

We are in negot every central bank was

in negotiation with Trump regarding the

tariffs. Trump was giving

after

liberation day. It's been give give give

taco taco taco. That's not a time where

you need to worry about your Trump

weaponizing the currency. He's doing the

opposite. And so I think they paused

around then and have and are still on

pause. But that's not what's been

driving gold. I mean that central the

funny thing about central banks

particularly the big ones

and sovereign wealth funds particularly

the big ones like Norway like

Switzerland and certainly the Middle

East

is they care about price.

They have a mandate to increase their

gold holdings perhaps but they don't pay

every price. They're not inelastic. And

I think that's the big misunderstanding

of central bank flows is that they are

somehow inelastic.

And for that reason, I think they're

paused.

>> Okay. Interesting. I I I totally would

have agreed with you that sovereign

wealth funds care about the price. But I

actually I was of the view that central

banks are reasonably price inelastic.

You know, I mean, just because looking

at the chart, I mean, they were selling

it at $200 in 1999 and now and now

they're buying it, you know, at $4,000.

>> No, I think take a look at my glittery

DSR. I I've had some experience with

that

from knowing exactly when people paused

and didn't pause, how they bought, what

they were thinking about when they

decided to pause their buying.

You have to have some experience with

the actual central bankers that are

actually doing it and how they think.

Now, I think the big problem is the

central bankers change. Like the central

bankers that I that my firm dealt with

during the 2015 pause or 2013 pause are

different folks

than the current central bankers.

And so, it's possible that I could be

wrong and that these guys have become

dopey monkeys buying at any price. But

my experience was they're pretty

sophisticated investors with a real

mandate to manage their reserve

portfolio for the optimal outcome of the

state.

>> By the way, just a little How's your

How's your Labrador?

>> How's my

>> Labrador?

>> Oh, she's great. Daisy is she's a

Labrador and so you put her in this the

the ocean and

she's very very happy. Great dog.

>> That's right. I I asked cuz I I know you

have one and my Labrador, she's black.

She actually she woke me up at 3:50 in

the morning, you know, hungry

>> today.

>> Yeah. Yeah.

>> Sorry to hear that.

>> Andy,

how do you track and what are you seeing

in the non- central bank flows of gold?

The only real visibility that I have is

just looking at the inflows into US

ETFs. And for a while, even though gold

was skyrocketing,

inflows into those ETFs were flat to

down. They admittedly have started to go

up, but I'm not seeing anywhere close to

like everyone and their, you know,

everyone's grandpa is flooding into ETFs

and there being some sort of huge gold

fervor. Maybe it's in the early stages,

but I'm curious when you look at the ETF

data that I just referenced as well as

globally as well as other private sector

sources, what are you you you seeing and

in your analysis when you said that you

thought there was a rebalancing,

>> right? So you have to think about all

the ways you can own gold. And the one

thing I can't track very well, though

there's data on it, it's just very slowm

moving, very poorly reported, is the

ownership of physical gold. That's

tricky. I look at it, but you know, it's

mostly modeled by sort of interpolating

price with data and trying to figure out

how gold physical gold holdings change.

It's not great. And it's just not it's

not a short-term signal. But there's

millions of there's millions of public

vehicles a handful of of public vehicles

for owning gold, owning commodities in

general. There's miners which have a

inventory of gold and I just basically

track them all. And then you have to

also adjust for the fact that they're

futures on gold, paper gold of many

different sorts. And so

I add that up to say the marginal buyer

is a US person. Does that mean they're

the only buyer? No. Does that mean some

of them are sellers? Of course. But as

over the course of this year, that's how

I add it up

>> over the past one year.

>> Yeah.

>> Okay. Interesting. And so again data

doesn't pro prove this yet because all

data is lagging

and flows data some are fastm moving

like ETF outstandings is fairly fast

moving you get it with a one to two day

lag

>> but all data lags and so

you have to have a model to say well

what's happening if you want to look

forward and I would say based on what I

look at

the last few months

have also been US speculating.

That doesn't mean I'm right, but that's

the odds are.

And so you can't prove it. I And what

I'll do is I'll look back six months

from now. I'll look at my data and say,

"Was I right with that that model of

what flows were?" I could be wrong. And

then I'll say, "Why was I wrong?" And

then look at ways to do it better. But

right now, my signal would be US

Speculative re portfolio rebalancing

broadly speaking is the principal driver

of gold and silver.

>> But as as gold goes up, wouldn't that

cause people to sell their gold

to rebalance out of it?

>> No. Okay. So that's a different thing.

That's like indexing.

>> Yeah.

>> Rebalancing.

That's a different topic. I think it was

it's particularly relevant because a lot

of people were talking about gold being

size to sell in the Bloomberg commodity

index rebalancing

>> and that never manifested

or undoubtedly it did manifest but the

those who are hard benchmarked just

simply were small relative to the

overall flows.

So that's always a flow though, like

every month indexes rebalance. People

look at their statements and say, "Oh,

I'm out of balance. Let me lighten up

the things that are doing well and cover

the things that are doing badly." Those

all interact with CTA flows, momentum

traders, all of those sort of things.

So, you know,

every flow has an opposite side.

And so I can make the case that

retail might have been the principal

driver of the gold rally,

but what's US retail? But what's

important is somebody else sold it,

right? Why did they sell it? And what I

would say is that it doesn't matter

who's selling or buying. What matters is

how elastic they are.

And so the rebalancing into gold from

the from other assets has been inelastic

buying relative to the selling. Every

trade was a buy and a sell. So the price

went up. This is not a thing that has a

lot of value. The price went up. Clearly

demand increased relative to supply.

Okay, so the demand curve moved and the

elasticity was significantly less

elastic buying relative to selling. So

the sellers just said, "Come and get me.

I'm going to just keep walking away from

you. You come and get me." And the

aggressors came and bought. And that's

the way markets work. But you know, so

it doesn't matter just who. It matters

why. And it matters why are they acting

in an ill inelastic way.

>> What do you think about US stocks here,

Andy? And who is inelast who is elastic

the the buyers or the sellers?

>> Right? What I said is I think that rest

of world stock as I said I've been

getting out of rest of world out of US

assets into rest of world assets for a

while. Still the same still the same

view.

Shortterm

I own some out-of-the money calls and I

sold out of the money puts that are

closer to the money today. But I'm not

taking a big bet either way. I think

rest of world stocks are better deal

than US stocks and that's the big

takeaway and

as it relates to US positioning. I think

I do a little bit better if we sell off

5% than if we rally 5%.

And I do a little worse if we just sit

here.

But I don't have a big bet right now.

I'd like to have a big bet, but the

Supreme Court decision to me is a

unhedgeable

uncertainty.

The Fed chairman, though I don't think

it matters a lot, is unhedgable and

uncertain.

And so, I'd like a real opportunity,

whether it's to buy stocks or to sell

stocks. Right now, it's just not that

interesting to me. And so, I don't know

how anybody can be particularly certain

today. And at the same time, V is pretty

elevated. You know, we're running a sort

of three-month VIX at around 18, 19 to

20 sort of sticking around there. The

front can dive when you have the holiday

week and short-term views and then it

can rip when you have a day like today,

but multimo

month V pretty rich given realized like

>> Yeah. Yeah. Like so 20 is pricing in

slightly more than a 1% move every day

and we had a 1% move today and it felt

like a huge wave.

>> OH MY GOD, IT'S A STOCK MARKET CRASH

today and we're we're we're down 1.3%.

>> The Bloomberg headline was like a

blizzard of selling as Japan and

Greenland shock investors.

>> Nothing's nothing's happening. So that

tells me geez, everyone expects

uncertainty

positioning.

We know uncertainty is coming and

uncertainty is priced.

I I think it's time to sit on your

hands.

>> Andy, what do you think about this

Greenland thing and particular the asset

implications I suppose that are being

implied are that the rest of the world

should be so angry they're going to sell

their dollar assets which is basically

the redux 2.0 argument of the liberation

day argument which I believe to be

honest which is that these tariffs are

going to cause foreign investors to sell

their dollar assets. I think you foreign

investors have been and domestic

investors have been leaving US assets

and going to rest of world assets and

gold and silver for since the Trump

administration took office and it has

nothing to do with Trump. It has to do

with the value of these assets relative

to each other and

the existing positioning in which the US

investor who's always underinvested

versus the rest of the world was

particularly underinvested and the rest

of the world was too heavily invested in

the US and that's the big picture and

that's not changing and the rebalance

hasn't even come close to concluding.

So

you know I own this ETF called VA which

is a is an index of rest do de developed

market world MS I think it's MCI anyway

developed market world XUS

and it's denominated in the do domestic

currency that thing's up 30 40% over the

last year and massively outperforming

the US market

those flows are happening and they're

not going to stop happening. Now, could

they stop tomorrow for a little bit?

Could we bounce on the dollar? Of

course, we could, but

I I don't think it has anything to do

with Trump or

loss of the reserve currency. Those are

things that could matter, but right now

it's just why would you own US? You you

already own every all you're already

levered to the gills in US assets. Why

would you own more?

>> But hasn't hasn't the rest of the world

and US investors just been extremely

long US assets for 10 years? And all of

those arguments you said were true. And

you know,

>> well, that's not true. All the arguments

were not true. When Japanese bonds were

yielding 15 basis points, you couldn't

own Japanese stocks because you couldn't

diversify. when the euro when the

European bonds were at 1% and the US

bonds were two two and a half% you

couldn't own European equities. Now

global risk par

is balanced. You can own more of the

rest of the world simply because it's

less risky than it used to be.

Owning Japanese stocks with interest

rates at 1%. How do you hedge that?

There's no hedge.

you can't diversify away growth away

from the J Japanese equity investment

and that no longer is true and it has

become less and less true mostly over

the course of the last year

in which the global bond market has

adjusted to a point where it actually

provides diversification benefit versus

their domestic stock markets and that's

a big thing that makes That's a big

difference

also. But I think the other part of that

is while that was true and so Japan and

Europe were uninvestable from that

standpoint and the US was investable,

the US was also flooding the market with

spending and QE.

Like

how can you not? I owned 100% US assets

during that until just this a year ago

because that was true. And things have

changed

>> because now yields are sufficiently

high. It's interesting. Mo most people a

lot of people think of low yields on

bond yields as a catalyst for oh my god

compared to these ridiculous overvalued

bonds stocks are so cheap. You're saying

that for institutional allocators, you

need bonds to be at a sufficiently non

ridiculous over level in order to

attract diversified portfolios

>> to attract net invest to

>> Yeah. Yeah.

>> It's just

regardless of the price, an equity

investment that can be hedged with

bonds, you can be bigger in than an

equity investment that can't be hedged

with bonds.

And so that's what we have now and we

haven't had that in years. And the

stimulative impact of spending has that

the as my friend Lynn likes to say the

train is not

what is it? What's her saying?

>> Nothing stops this train.

>> Nothing stopped this train. The train is

stopped.

Fiscal is not

generating growth anymore. It's stopped.

and everybody else's train has just

gotten started.

>> What what's a beautiful bill? You're

saying fiscal the fiscal deficits is

still going to be big, but it's not

going to be as big.

>> The growth of government expenditures,

the growth of expenditures, not the

level of expenditures, the growth of

expenditures has flatlined

>> expend. So the deficit is actually going

to go is going down in 2026.

>> Slight that's the OBB thing. slight

increase. If you look at the any any

projections of the impact of OBB, it

said a slight stimulus in '05 in 2025

and a slight stimulus in 2026, but not

anything like the stimulus from 20 to 25

that we've the stimulus is still

positive. It's just not as big and isn't

as big as trend. Like it's not running

at 3% GDP. If G real GDP is running at

3% and government is only increasing at

1 and a.5%.

That's a drag.

>> Government's only increasing the nominal

deficit by one and a half. Even though

the debt as deficit as a percentage

>> G if the G

GDP is

consumption plus government plus

investment plus net exports

if the G portion is growing less than

the total it's drag.

>> And to me that's the train has stopped

not the train keeps going. And my point

is forget Let's just talk about the

relative speeds of the various trains.

>> Sure.

>> Every train.

>> Yeah.

>> Elsewhere is going faster than the US

train. That's bullish assets, bullish

growth, and you're compensated for

owning bonds now where you hadn't been.

And so to me, that just lays the case

for

non-American

exceptionalism. Not because we're worse

people or we have a worse president or a

better president. It has nothing to do

with that. It has to do with the flows

that Gflows are positive elsewhere and

they're not in the US. that monetary

policy is done tight easing and is

leaning toward tightening everywhere

else and US is no longer easing through

QE

versus others that are have eased a lot

but frankly monetary in all cases pretty

neutral

but not like it was in 2012. 20 to 2025

where US monetary was way easier than

everybody else.

And so to me that says

okay it's been a nice run.

>> It has

>> it's been a nice run. I again own my

beta had 100% US assets. It's been

great.

Now it doesn't.

So you you have a pretty high confidence

that the rest of the world international

assets are going to outperform US

assets.

>> I do in in again when brought back to

home currency.

>> So it's a combination of the assets

outperforming and their local currency

outperforming.

>> That that makes sense. Yeah. You

mentioned one ETF. Actually, a new

sponsor of ours is PICE. And so they

have an international ETF that the

ticker is PQNT, which is international,

but using AI to to attempt to to

outperform. And that is that is very

interesting. Andy, let's let's end where

we began. So this massive investments

binge that the the US is on, how it's

going to be financed,

we we we talked for at length about the

significance of of that to growth, but

push comes to shove in simple terms, in

layman's terms, what are the asset

implications of the fact that trillions

and trillions are going to need to be

borrowed to fund AI expenditure as well

as foreign direct investment from the

rest of the world that President Trump

has secured in these agreements, not not

formal deals, but agreements.

>> Yeah. So, it's a headwind for assets,

long-term assets, a headwind for

corporate bound prices, a headwind for

equity prices, a headwind for treasury

prices, long-term treasury prices, and

that's all it is. And I mean that from a

standpoint of it's a headwind now while

the financing is being done. And then

once the financing has been completed,

it actually becomes a tailwind as the

spending that is financed rolls into the

economy. And so for now, progrowth

is created by the the eventually created

by this the borrowing, but the borrowing

is anti-asset.

That makes sense. Andy, thanks thanks

for joining us. People can find you on

Twitter at dampedspring. Your your

research at Dampspring is excellent.

Tell us about the work you do there. And

tell us about Two Gay Beards and how it

it differs.

>> Well, I'm really playing the part on

Two,

>> which I need to get a trim. It's

complete. I I have a Rick Rubin vibe

that I'm trying to work on. I don't know

if you know who that is.

>> Oh, yeah. Oh, yeah.

>> That would be my direction, but it's

getting ridiculous. And my family is

saying, "You got to do something about

this." So, I'm that's going to come it's

going to get trimmed. Anyway, my other

grow beard is Nick Giovanic who is a an

Old Solomon fixed income trader and we

provide weekly videos for our clients

subscription model who just need help

understanding what's going on in the

world and can't spend a lot of time

are misinformed broadly by the the the

mainstream media, CNBC, etc. don't have

time to or skills enough to understand a

podcast and just want a quick 20inut

view of what's important in the world

and how does it affect their portfolio.

So that we provide it's at

twogybeards.com and then damp spring is

principally designed for institutional

investors or high netw worth or other

for investment advisors or other

sophisticated do-it-yourselfers who want

to understand sort of institutional

investment hedge fund quality

understanding of what's going on in the

world and is a hightouch thing where me

and my team interact daily with clients

to try to meet them on their personal

learning curve to understand what's

going on in the world and to rapidly

move up that learning curve so that they

can understand what we've learned over

our careers. And my goal is to just pay

that forward. It's a limited I don't

want a lot of subscriptions for that

because I want to retain the ability to

have a hands-on thing and it's not

scalable. It's not a substack. I'm not

looking to get a million subscribers on

my Substack. I'm looking to interact

with people and pay forward my

understanding. And so that's available

at dampspring.com.

>> Although you say you also have a

Substack which is completely free,

right?

>> I do have a Substack because sometimes

things just need to be said and that

will always be free. It's got, you know,

quite a bit of subscribers. Occasionally

I'll jump in the chat and talk about

things, but that's mostly just to be

what I think Substack is, which is a

blog, not a something to monetize.

>> Makes sense. Thank you everyone for

watching. Please leave a rating and

review for Monetary Matters on Apple

Podcast and Spotify. It really helps the

show. Until next time.

>> Thanks, Jack.

>> Thank you. Just close the door.