From Wedlock to Deadlock: The East-West Divorce – with Brent Johnson and Louis Gave
In this thrilling discussion, Louis Gave and Brent Johnson informally debate the fate of the US dollar in the years to come.
The US dollar has been the big bully on the playground since 1971, but a new challenger has emerged in the form of China. Through a range of geopolitical maneuvers and various strategic alliances, including BRICS and the Belt and Road Initiative, China is offering emerging market countries an alternative to the dollar in the form of the yuan. Dethroning a bully, however, is not easy.
The US dollar is thoroughly entrenched in the global financial system, and moving away from it could be akin to divorce, in which all parties involved are worse off after the fact.
Brent and Louis are both highly regarded in the macro community and are considered the foremost experts on de-dollarization. They are joined by Ronnie Stoeferle and Niko Jilch.
Biography’s of our guests:
Louis-Vincent Gave ist he CEO of Gavekal, a Hong Kong based company he co-founded over twenty years ago with his father Charles and Anatole Kaletsky. Gavekal has grown to become one of the world’s leading independent research providers to institutional investors around the globe. Louis has written seven books, the latest being Avoiding the Punch: Investing in Uncertain Times with reviews how to build a portfolio at a time of rising geostrategic strife, and when very low interest rates and strecthed valuations on most assets announce constrained returns on most assets over the next decade.
https://web.gavekal.com
Brent Johnson brings twenty five years of experience in the financial markets to his position as CEO of Santiago Capital. He has a long career in finance, having also been Managing Director at BakerAvenue, a USD 2bn Asset Manager and Wealth Management firm. Before joining BakerAvenue, Brent spent nine years at Credit Suisse in their private client group. He got his start as part of the training program at Donaldson, Lufkin & Jenrette (DLJ). He joined Credit Suisse in the fall of 2000 when the bank purchased DLJ.
https://santiagocapital.com
Get the full transcript of this conversation here:
Debate Brent Johnson Louis-Vincent Gave – From Wedlock to Deadlock: The East-West Divorce
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0:00 Introduction and opening remarks
7:18 Louis’s opening remarks
11:00 Brent’s opening remarks
14:48 US’s comparative advantage and the rise of China
20:33 Will China be successful?
25:00 How is the Dollar Milkshake Theory Playing out?
27:20 What does “winning” look like?
35:42 Let’s talk about gold
44:09 Brent’s take on gold
49:47 China’s plans for a gold backed RMB system
52:25 Who do you trust when you trust China?
54:40 What about Europe?
58:15 Europe outplayed in geopolitics
1:04:16 Everyone will take a hit!
1:07:48 All debt is not equal
1:17:47 Oil and energy in RMB?
1:21:34 Eurodollar market development
1:30:35 What Louis and Brent really disagree upon
1:34:50 The Euro and Bitcoin
by In Gold We Trust [EN]
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This was easily the best video I've watched on YT in months. Fantastic questions and fantastic guests. You guys should do this quarterly.
Both guests hit it out of the park! Great China perspective from Mr. Gave… ❤
Wow. A great debate. Good points brought on by both Brent n Louis.
My belief is if CCP was replaced by a logic bot, they would easily win over next 10 years. Bc the US is over-financialized n over-leveraged n is vulnerable. But u need to be able to put together a credible geopolitical alliance for that – something chna has not been able to do. Its their weakest point. Because of chnas extreme short-sightedness in international policies nobody trusts them for even a penny.
So their grade in playing the game is a D.
All we (the west) need to win is to not play at F grade. The way the USG has been making decisions recently I m not sure.
Louis Vincent-Gave wins this debate IMO.
Well done !
1:00:59
Japanese economy is contracting with yen at 155. How is that happening?
Brent, Who is starting and perpetuating the wars? I think people worldwide will eventually get totally fed up with the insanity we've seen in the last few years. The rates of mental illness and criminality in the US is insane. Read history. We know why, don't we. While China absolutely has faults but do we want someone who is a bit dictatorial or do we want the mentally ill? The decision is not hard. The unfortunate thing for the US, with all its faults–is that people who care about their kids and themselves will move away from the insane. The US insist on continuously showing the world, "Yes, we're crazy, yes, we're insane". This is both freaky and frightening.
My impression is Brent get his information only from western propaganda
Always enjoy listening to Louis
I've generally agreed with Brent in the past, but I'm starting to have doubts. Louis presented a compelling argument that's got me reconsidering. Right now, I'm kinda on the fence. Great conversation guys.
I thimk everyone in the west needs to mention Australia in this debate…being a massive mining country who has an abundance of natural resources and will be on the west side in this BRICS /China debate ! China purchase massive amounts of natural resources off Oz!
We could ask Professor Michael Hudson about what is real growth…
All the real growth in the world is coming from the US????
Louis was making some sense earlier in the talk, but has shown his lack of understanding of the financial world as soon as he mentions bitcoin. He is also wrong in saying Mexico/India outperformed the US. In fact even the best EM countries like India and Mex has massively underperformed. At the end Brent was trying to be as polite as possible… I would have said this Louis guy is an idiot lol.
Milkshake's guy devirtuated the discussion, sounded more like a teenager in the school discussing "my father is strong than yours"… Louis trying to discuss structural changes and he bulshitting about we are gonna win, "apple"may the the evil guys, we are the good they are bad, europe is a vassal state from us, etc, etc… like a teenager interfering in an adults conversation
Useless blubbering. If it was the USA bombed and destroyed, Brent will be begging to confiscate Russian assets to compensate for his destroyed house.
If we take on the analogy of Apple vs MS in operating system, if you remember, Apple OS(Mac, iOS) really take over windows starts not in PCs but in mobile phones. Windows tried to compete in mobile platforms with windows Phone, but failed miserably. Microsoft failed because they think they use the same tricks in the mobile platforms, which proved horribly wrong. So, to date, Microsoft has not meaningful presence on mobile platforms.
It’s the same with US dollar system. RMB is not replacing US, why would China want to do that? RMB is facilitating international trade and investment, as long as RMB achieve that, it’s already winning.
Also, in the past 3 decades, the world growth is mostly from China, not US. US may have a gigantic share market, which is accumulated wealth from the western world.
China only sells their cars (electric or not) in yuan only to bring the cars from China. Russia, formar USSR, Africa, Asia and LatAm have to convert dollar to yuan before paying for the cars exported. The world trade is getting more and more into yuan than Americans think. You can't transfer dollars directly to the seller in dollars.
Great discussion, Gentleman,!
only thing you need to watch to see what will happen with US Dollar is, which central bank will cut interest rates last and keep interest rates highest?
Louis is going to wake up when the communists take everything he has and lock him in a cage if he is lucky . China currency will fall before dollar.
I'm only an hour in but do they ever get in to demographics? Half of china is gone in 75 years. How do they keep the economy growing?