Hey everyone! I hope you enjoy this episode featuring the "Fed guy" Joseph Wang. Please keep your feedback and guest suggestions coming. I am working on many of the names you submitted, so stay tuned! Also, please hit that subscribe button so I can continue to bring these long-form discussions. Thanks again. 💙Julia
30:45 minutes of the video: As a gen X I just have to laugh when Joseph defines 5% interest rates as "high interest rates". I remember when interest rates were 18%, 16%. Even when I graduated college in 2000 my student loans were 10%.
My understanding is that taking over the dollar is not an important objective of the Chinese government (may not be an objective at all). Chinese government wants to avoid what they see as the fundamental flaw of the US system, that is letting capital power to control the government. There are two aspects, 1, when certain companies grow too big, they can team up to dictate government policy. 2, when the currency is too widely traded with financial tools, capital power as a whole (with leverage) will be able to dictate the policy of the central bank. So, domestically, while the Chinese government welcomes market force, they are very careful to make sure that no company can be big enough to interfere government policy. Internationally, while they want to increase the use of Chinese RMB, they want to make sure that international RMB can only be used to invest on real economy (such as local belt-and-road-related projects). They particularly do not want Chinese RMB to expand too quickly to get involved into leveraged financial vehicles.
Julia, I am so impressed that you have the humility to say to your guests, when you ask them probing questions..."I just want to Understand" ...then, when they try to explain their position, you DON'T interrupt them and you let them speak at length on their position. When they have exhausted their explanation, you either ask for more clarification on a point or then follow up with another probing question which they happily expound on. This talent of yours, to ask amazing questions and then, just letting your guests answer at length, will take you far deeper into their thoughts and reasoning than many of those other interviewers, who want to appear intelligent and confuse the audience with their own view points. We watch these shows to learn from the guests not the interviewer. Your approach allows your guest to feel safe in taking their time to answer your questions in depth. I have heard many long pauses before a Guest answers a question which proves to me that I am hearing quality, well thought out answers and not rushed one liners. This type of interview gives us the most value for the time spent watching your interviews. Don't change anything. You have a winning formula here and I think that is why so many of your famous guests are willing to come to the Julia La Roche Show because they know they will be heard fully. You will also notice many of your guests apologizing for going on so long and you reassure them that there are no limits on the length of their answers. Bright people want to be heard, they have an important message and you allow them that freedom and it shows in how comfortable you make your guests feel. GREAT job Julia. 10k Subs here we come...then 50k followed by 100k. Exponential growth in viewership. "Enquiring minds need to know". 🙏🙏
@laed3520, I'm sorry for the delay in responding to your comment. I just saw it today and it's made my day! Thank you for your kind words and for acknowledging my interview style. I believe that the guest should be the focus of the conversation, not the host. I value active listening and appreciate your recognition of its importance. Your note was incredibly kind and I'm so grateful.
I wish I had seen this video sooner. Wang uses a kind of logical legerdemain to argue that money printing by the Fed under their quantitave easing program was not inflationary. He does so by saying that the Fed merely swapped newly "printed" dollars for treasuries. Since both dollars and treasuries are really just a form of money, swapping one for the other is not inflationary. He also says that the Fed's action did not change the amount of money held by the private sector. This is true---initially. When the governmnet issues treasuries, they get purchased by primary dealers because, apparently, the Fed is not allowed to purchase treasuries directly from the government. But the Fed can print the money that the primary dealers use to purchase the treasuries. If a newly issued treasury is purchased with existing money from the private sector, then the money supply does not increase because that is indeed a swap of cash for IOUs. But if the Fed prints new money that is to be used to purchase treasuries, they are certainly increasing the money supply. By creating new money to lend to the government, in effect the Fed is doing the very same thing when a commercial bank creates new money for a loan to a consumer. There are two main ways the money supply can grow (and it needs to grow or the system collapses): 1) banks lend money to private borrowers, 2) the Fed lends money to the government. In our current insane system, you need both mechanisms, because if bank lending slows down for economic reasons (i.e. credit risk), then the Fed picks up the slack by buying treasuries or other agency bonds. But come hell or high water the money supply must keep growing. The government simply issues as many treasuries as needed. Regarding his point about the Fed's action not changing the amount of money held by the private sector: that's only true initially. However, the money the government borrows by issuing treasuries purchased by the Fed will of course make it's way into the private sector. So the money held by the private sector increases, it's just one degree away from the initial monetary creation mechanism. Now, regarding his derision of those who predicted hyperinflation, that's not because those people don't know what money is, necessarily. It's really just that they were wrong (for now) about how much money creation would be needed to cause the point of no return where the government is forced to accelerate money creation because from their point of view, there is a shortage of money. From what I see, we are on the path to hyperinflation and they know it. What can stop it? War? CBDCs? Pandemic? Depopulation? We will likely need some kind of major catastrophe to if not avoid hyperinflation, but at least make it so bad that when hyperinflation does take place, it won't matter because the system will have already been reset. However, regarding whether or not QE is inflationary, all you need to know is: whenever any bank (central or commercial) creates new money, regardless of what that money will be used for, it's inflationary by defintion. And no matter the legal process by which the Fed purchases treasuries, when it does so it's monetizing the debt because when the Fed creates money, there's no obligation of a private entity to create the real wealth through economic production to back the money up. It is in fact just a form or counterfitting and thus it dilutes the value of every other dollar already in existence.
Joseph’s view that an extended period of inflation might prove to be correct but with the 10-year at only 3.5%, the bond market strongly disagrees - probably based on the assumption that besides Fed actions, a recession at some point would kill off inflation.
Higher intrust rates couse inflation becouse it raises cost of production and that is put on the end price of product and then they sell less and that is what hurts the economy
@@issenvan1050 Other than pointing out that they got set up to have their collateral tank in value (when the rates changed) and later to owe BTFP interest on what amounts to loans against that devalued collateral, no, I'm not versed enough to explain further.
It's quite puzzling to hear a number of time in the interview that most of us don't understand how the Fed works. Two banking crisis in 15 years. What is it that the Fed itself don't understand?
The reserve requirement is zero. How is the financial system liquid? & the deposits have been tanking downwards big time. Also, with these high rates, who keeps “money” in a bank?
Do the central mis-planners play a range-bound crypto against gold? Did China ban crypto, in part because they had been accumulating gold (which they still are)?
He certainly is a stooge for the banking community...! After all, he may be working for the banks as a former employee of the most deceptive bank of them all the FED...! As he put it he's confident the banks are solvent....!
Hey everyone! I hope you enjoy this episode featuring the "Fed guy" Joseph Wang. Please keep your feedback and guest suggestions coming. I am working on many of the names you submitted, so stay tuned! Also, please hit that subscribe button so I can continue to bring these long-form discussions. Thanks again. 💙Julia
30:45 minutes of the video: As a gen X I just have to laugh when Joseph defines 5% interest rates as "high interest rates". I remember when interest rates were 18%, 16%. Even when I graduated college in 2000 my student loans were 10%.
Joseph Wang/Russell Napier vs. Jeff Snider/Lacy Hunt. Choose your fighter 😅
Dr. Lacy Hunt is going to come on the show at some point. I'll ask Russell too!
Very interesting
My understanding is that taking over the dollar is not an important objective of the Chinese government (may not be an objective at all). Chinese government wants to avoid what they see as the fundamental flaw of the US system, that is letting capital power to control the government. There are two aspects, 1, when certain companies grow too big, they can team up to dictate government policy. 2, when the currency is too widely traded with financial tools, capital power as a whole (with leverage) will be able to dictate the policy of the central bank. So, domestically, while the Chinese government welcomes market force, they are very careful to make sure that no company can be big enough to interfere government policy. Internationally, while they want to increase the use of Chinese RMB, they want to make sure that international RMB can only be used to invest on real economy (such as local belt-and-road-related projects). They particularly do not want Chinese RMB to expand too quickly to get involved into leveraged financial vehicles.
Julia, I am so impressed that you have the humility to say to your guests, when you ask them probing questions..."I just want to Understand" ...then, when they try to explain their position, you DON'T interrupt them and you let them speak at length on their position. When they have exhausted their explanation, you either ask for more clarification on a point or then follow up with another probing question which they happily expound on.
This talent of yours, to ask amazing questions and then, just letting your guests answer at length, will take you far deeper into their thoughts and reasoning than many of those other interviewers, who want to appear intelligent and confuse the audience with their own view points.
We watch these shows to learn from the guests not the interviewer. Your approach allows your guest to feel safe in taking their time to answer your questions in depth. I have heard many long pauses before a Guest answers a question which proves to me that I am hearing quality, well thought out answers and not rushed one liners. This type of interview gives us the most value for the time spent watching your interviews.
Don't change anything. You have a winning formula here and I think that is why so many of your famous guests are willing to come to the Julia La Roche Show because they know they will be heard fully.
You will also notice many of your guests apologizing for going on so long and you reassure them that there are no limits on the length of their answers.
Bright people want to be heard, they have an important message and you allow them that freedom and it shows in how comfortable you make your guests feel.
GREAT job Julia. 10k Subs here we come...then 50k followed by 100k. Exponential growth in viewership.
"Enquiring minds need to know". 🙏🙏
@laed3520, I'm sorry for the delay in responding to your comment. I just saw it today and it's made my day! Thank you for your kind words and for acknowledging my interview style. I believe that the guest should be the focus of the conversation, not the host. I value active listening and appreciate your recognition of its importance. Your note was incredibly kind and I'm so grateful.
Good guest.
Thank you!
Jamie Dimon says the bsnking crisis is not over.
Another great guest. 🎉🎉🎉
Thanks Marco!
I wish I had seen this video sooner. Wang uses a kind of logical legerdemain to argue that money printing by the Fed under their quantitave easing program was not inflationary. He does so by saying that the Fed merely swapped newly "printed" dollars for treasuries. Since both dollars and treasuries are really just a form of money, swapping one for the other is not inflationary. He also says that the Fed's action did not change the amount of money held by the private sector. This is true---initially.
When the governmnet issues treasuries, they get purchased by primary dealers because, apparently, the Fed is not allowed to purchase treasuries directly from the government. But the Fed can print the money that the primary dealers use to purchase the treasuries.
If a newly issued treasury is purchased with existing money from the private sector, then the money supply does not increase because that is indeed a swap of cash for IOUs. But if the Fed prints new money that is to be used to purchase treasuries, they are certainly increasing the money supply.
By creating new money to lend to the government, in effect the Fed is doing the very same thing when a commercial bank creates new money for a loan to a consumer. There are two main ways the money supply can grow (and it needs to grow or the system collapses): 1) banks lend money to private borrowers, 2) the Fed lends money to the government.
In our current insane system, you need both mechanisms, because if bank lending slows down for economic reasons (i.e. credit risk), then the Fed picks up the slack by buying treasuries or other agency bonds. But come hell or high water the money supply must keep growing. The government simply issues as many treasuries as needed.
Regarding his point about the Fed's action not changing the amount of money held by the private sector: that's only true initially. However, the money the government borrows by issuing treasuries purchased by the Fed will of course make it's way into the private sector. So the money held by the private sector increases, it's just one degree away from the initial monetary creation mechanism.
Now, regarding his derision of those who predicted hyperinflation, that's not because those people don't know what money is, necessarily. It's really just that they were wrong (for now) about how much money creation would be needed to cause the point of no return where the government is forced to accelerate money creation because from their point of view, there is a shortage of money. From what I see, we are on the path to hyperinflation and they know it. What can stop it? War? CBDCs? Pandemic? Depopulation? We will likely need some kind of major catastrophe to if not avoid hyperinflation, but at least make it so bad that when hyperinflation does take place, it won't matter because the system will have already been reset.
However, regarding whether or not QE is inflationary, all you need to know is: whenever any bank (central or commercial) creates new money, regardless of what that money will be used for, it's inflationary by defintion. And no matter the legal process by which the Fed purchases treasuries, when it does so it's monetizing the debt because when the Fed creates money, there's no obligation of a private entity to create the real wealth through economic production to back the money up. It is in fact just a form or counterfitting and thus it dilutes the value of every other dollar already in existence.
Joseph’s view that an extended period of inflation might prove to be correct but with the 10-year at only 3.5%, the bond market strongly disagrees - probably based on the assumption that besides Fed actions, a recession at some point would kill off inflation.
Thanks Julia.❤
Of course! Thank you, Tim!
Excellent episode.
Thank you, Lane!
Interesting interview...thank you Julia.
Thank you!
Excellent interview. Great questions and very informative
Thank you, N.A.!
Higher intrust rates couse inflation becouse it raises cost of production and that is put on the end price of product and then they sell less and that is what hurts the economy
Have seen him numerous times. Always a great interview. U continue to hit home runs with your guests
Thank you so much, Jeffrey!
probably a good idea to link guests socials in show notes as well
This is a great interview. Thank you!
If the FED wanted to fight inflation, they would increase the reserve requirement.
and remove the mandate that has banks overinvested in treasury instruments.
@@tactileslut Can you elaborate?
@@issenvan1050 Other than pointing out that they got set up to have their collateral tank in value (when the rates changed) and later to owe BTFP interest on what amounts to loans against that devalued collateral, no, I'm not versed enough to explain further.
@@tactileslut BTFD! 😎
It's quite puzzling to hear a number of time in the interview that most of us don't understand how the Fed works. Two banking crisis in 15 years. What is it that the Fed itself don't understand?
Check " Monetary Policy Financial Conditions and Financial Stabilities. Adrian and Liang. "
Joseph is the Man😊
BS
The reserve requirement is zero. How is the financial system liquid? & the deposits have been tanking downwards big time. Also, with these high rates, who keeps “money” in a bank?
The average lifetime of a reserve currency is about 300 years. We have a long way to go! I’d rather consider USD a unit of account.
Do the central mis-planners play a range-bound crypto against gold? Did China ban crypto, in part because they had been accumulating gold (which they still are)?
Inflation is dead. Only a few months left. For the time being…
First
YAY!! 😀
Stole the Russian assets.
@@timferguson593 ?
How about the SPR refill?
What about the money supply?
How about SLR?
He certainly is a stooge for the banking community...! After all, he may be working for the banks as a former employee of the most deceptive bank of them all the FED...! As he put it he's confident the banks are solvent....!
The same FED guys said “no liftoff by 2024!” No credibility there.
FED propaganda