T-Bill Chill Pills Are INTOXICATING Global Capital

just have a a superstar walk into the radio studio now you guys Superstar this is a moment this is a moment uh Hugh Henry which if you don't know him you should definitely follow him on Twitter and we love it because he'll pretty much say anything that he wants something that we definitely want welcome here um Hugh Henry is a writer a risk taker a thought leader on global Capital markets he founded uh eclectica Asset Management that's a hedge fund that uh delivered uncorrelated returns to clients for about over a decade um he resides in St Barts and sometimes he'll take a plane into New York and sometimes to London and sometimes he'll talk to us H how you doing I'll talk to you any day at any time Hi how are you so he used to come on all the time with that guy and I um on TV how's it going really well thank you that just flew in last night excellent um we brought the rain for you uh here in New York City um okay T Bill and chill we've been talking about it for the last couple hours uh there was a nice article on the terminal that talked about treasury paying $2 million a minute when it comes to t- bills is this a strategy that that works for you Hugh it's a strategy that works for asset prices actually because the the monetary system at its core at its heart has us treasuries and it but it was never conceived uh under the scenario where the US was the locomotive it was the engine of economic growth as we know just now there's some local problems in the China and in the Europe and elsewhere and growth I know the last few statistics were a little bit kind of uh funky but the growth here just now is baked in we we've only spent 50% of the you know the infrastructure the building the semiconductors and stuff so it's bed in for the next two years we ain't going to see inflation at two for two years and so the carry us rates really really high and money from the rest of the world is being drawn here yes some of it's going into the chill it's taking the chill pill and the treasuries but it's bidding asset prices because with reflexivity the expectations you're going to make 15 to 20% taking risk so everything's coming into the US that sounds very trfic except it has a parel and enormous kind of feeling to like terrible times from like 1928 when again all of the world's Capital was drawn and US asset prices lifted and of course we know it's wonderful but trees don't grow to the sky so I guess some people refer to that as us exceptionalism from an economic perspective when you look at better growth here versus say Europe versus say China um do you buy into that exceptionalism type of argument these days no I no I do not I mean it's just it's just um exceptionally rare again I mean you know I'm a I'm a man from the past seeking the future yeah and you we were in that kind of the the state of condition that Soros described the Imperial Circle 82 to 87 again what happened then we had we had almost like 20% raise we were at 16 on the 10 year we were peaked inflation was coming down um we're not at 16 here but our debt levels are like three and a half times GDP multiply that by the five and a half and you're kind of 1982 and Peaks rates have peaked elevated infrastructure is now coming through fiscal policy is finally working tax cuts don't work but actually subsidizing the private sector to bring skill to bring technology to bring the future and to and onore it is underwriting growth fantastic except the Monet monetary order monetary stability was never conceived of the us being the locomotive H so when you take a look at that all of that sort of leading to higher asset prices like you said is that what's going on with something like gold or Bitcoin is it more of just a a rush into assets and hard assets or is there something else going on between those two okay so like from like you know so gold is not an agent of chaos um gold is the Alchemy of chaos the world is world is becoming chaotic yeah um and and Bitcoin I like to call it Bobby Digital you know it's the digital equivalent of the Alchemy of chaos now why are they wait is it really the is the digital Alchemy of chaos uh I think so yeah I think so I mean who knows I'm making this I'm just in a flow State we like it but where's the Chaos okay I mean how many times do you mention you don't mention it enough can I just repeat we've had an almost 40% devaluation in the Japanese Yen that's why these things are moving because again let me let me repeat the US is not meant to be the economic load of motive the US is not meant to be running 5 and a half% rates and imposing that on a on a fragile rest of the world and the fragility we can see fragility now coming through the crosses in The Exchange Market so what when you this in this fluid chaotic world where do you see the best opportunities these days well I mean so everything Rises until it doesn't okay and so you have to people are say oh my God you're so bearish not boring B bearish saying everything's lifting okay everything's lifting it's a question of how much you allocate okay and I speak to kind of wealthy folk okay and so I always say well how how much should you have in Risk assets let's start there right so you take your net worth typically is your house right and then you take off your mortgage that's what you're worth okay allocate 10% no more more than 10% of that sum and where I am just now because I think we're in the last blowoff I want to be invested but of my of of using that parameter I'm like 25 30% invested but where am I I'm in technology stocks I'm in Bobby Digital sorry Bitcoin I'm in Gold yeah um and I'm long the dollar and then I've just got I've always got a I can't see a gun in the back of my pocket I've always got something to protect me yeah I'm always like looking like different ways and I own the leaps on the TLT because when the fed's here when rates are elevated you know when you know when the FED will cut the FED won't cut because like they got it right okay that's not what they're not in that business the FED will cut because something will break and again the Yen's breaking but you wait until something in the financial Arena breaks then you get cuts and so I want TLT I have the audacity to believe that the greatest boom Market in treasuries will end with a double top in price price is like sitting on his ass just now and I think it's going rise like at Phoenix ain't going to make a new High um but I can I can only own options on that just now because it is an ugly ugly chart all right Hugh good to see you we got to leave it there we got the opening BT coming up in just a few minutes Hugh Henry always outspoken you can follow him on Twitter too love getting you here a former founding partner at eclectica Asset Management um on all his thoughts on the market good to see you nice hat he has sunglasses on in the radio Studio obviously which we all wish we could also do uh we're opening Buck com up soon I mean it looks like it's going to be a nice start to the week

Channel: Hugh Hendry Official

Views: 28,909

Keywords: Hugh Hendry, Eclectica, hedge fund, global hedge fund, macro hedge fund, hedge fund manager, hedge fund management, investor, investing, stock market, bull market, assets, stocks, gold price, dollar, fed, federal reserve, podcast, finance, finances, economy, financial news, treasury, inflation, money, European Central Bank, equities

Id: fFD5ThpBwaw

Length: 6min 59sec (419 seconds)

Published: Tue May 07 2024