Sucked me in today and I subscribed to listen to the second half of the above pod. A couple points caught my attention.
He refers to the changes happening as a regime change in the global financial system. It’s happening against the backdrop of an emerging Cold War between us and China. Investment wise a lot of the old losers will become winners. Companies that reshore capabilities will do better. He cited shipbuilding, manufacturing, chemicals etc.
He also believes there will be outperformance by value investors. This really makes sense to me. When do you typically see bottoms in markets? When there’s total apathy and nothing could be worse. That’s value investing after 20 years of getting whipped by growth. Value funds shut down. This would’ve been hard to reverse, but the shock to the system that Putin and the sanctions have caused could be the catalyst.
The second thing I found very interesting and is more relevant to this thread is his idea of what the second big tipping point would be, the first being Russia invading Ukraine. He’s looking for when China finally lets their currency float. At that point he sees countries having to decide who they want to link up with. He feels pretty strongly that most will stick with the US. I’m less confident. I believe that a country with harder money will be more trustworthy to a lot of nations.
Tin foil hat sidebar here. This would be the perfect time for China to announce they own X tons of gold. They’ve been known acquirers, but haven’t update their holdings in years. If they come out with a monster number that dwarfs us could cause some waves. Something to think about.
Also he sees these Chinese moves happening sooner than others. The fact that Xi and Putin met before the invasion and Xi presumably signed off on the invasion meant he’s ready to escalate things. They had to know the significance of what Putin was going to do.