What’s Driving Global Markets? LIVE AMA with Raoul Pal

foreign [Music] hi everyone Welcome to the Real Vision daily briefing today we are doing an extended AMA with RV co-founder Raul Powell himself hey Ralph hey Maggie how are you I'm doing well I'm doing well it's good to see you I love these so does so does everyone else we got a ton of questions already um just just a couple things just a reminder uh right at the top you need to be a member if you want to stay with us past the half hour so if you're not go ahead and scan the QR code jump on one of the trials and sign up so you can participate in the conversation the whole time and I'm selfishly going to take the first question because we have an inundated with questions from people who got wind of a video you put out about what's coming up on the platform and some of them wondering why they didn't get it what's going on so it is going to roll out to all members tomorrow but you want to give us a little teaser on what the heck is going on yeah you know I think everybody knows by now that our mission has been to kind of help people in their financial journey through life to democratize the kind of information that people need that didn't exist before real Vision um and I've been thinking a lot about this over the last few years and I thought we can do more you know I sit here with my Bloomberg open with all of the charts and all of the data and all of the stuff and I just think that people don't get access not only to stuff like Bloomberg terminals but to each other the network the power of the World Vision Network or or just the kind of information that's available whether it's AI tools to help augment our learning education all of these things and for a long time I thought about okay what can we do about this and I realize more and more that we needed to create an entirely new place for everybody to live their financial lives something that we've been calling internally real Vision 2.0 and people will get a video tomorrow that goes through in more detail again we won't be showing it because it's being built as we speak so um but it's very exciting it's a whole new way of living your financial life within real vision and it will give you access to a lot of the tools that that market professionals get and others get in a way that's quite disruptive and very different so super excited about it all now it's going to roll out slowly so some people will see the first beta test we want to build it with the community you know this came from hundreds of hours of conversations with community members um about what they needed you know where would the you know where how can we give them more confidence in their investing lives how can we get people to kind of realize the vision of their future self where you want to go in life and and to do that you need to make sense of this world we're in now so we thought about how can we do that so everything starts rolling out won't give the exact date but sometime in June um and we'll do it in phases for both cohorts of people so certain membership groups will get it first and we want people to help us give us feedback there'll be stuff that doesn't work there'll be stuff that people don't understand or they want to give us some more input great we have a whole roadmap for the next year of features and stuff that's launching plus what we'll be working with our members to build this exactly how they want it as we go so it's going to be an iterative process what we launch is not where we're going that's the start it's the start of a journey that is going to be really quite extraordinary I hope yeah and the thing that I think most of us have been super Juiced about is um this is something we talk about all the time is that the community as it is at the center of it right you know um so not only is it for them but they're going to be guiding us on on sort of refining it as we go which I think is super cool so we built it from their feedback as well you know what were their pain points what do people want um of their lives you know we found that one of the things is people were just fed up with yeah everyone's trying to manage time right that's the hardest thing we've got it's the currency we can never get more of um but it's the most powerful and most necessary currency of all is time so we started thinking how can we save people time to give them the ability to digest more information also we looked at people's behavior we're all spread across 10 different apps you know you've got your your brokerage app your crypto brokerage app your pricing your charting your news flow your your community tools videos podcasts everything is everywhere right this is nonsense we need to create one place where it could all come together awesome so uh again it's going to be kind of rolling out if you you don't see it or you don't have access to it this is this is an exclusive issue it's not we're leaving you out it's just that it hasn't reached you yet but reach out to us if you really want to be a part of it and participate um and sort of build with the community um and if you haven't seen it or you're not beta testing it um we're going to be providing an email and especially we know there's some regulars there's some regulars in this chat every day um Ralph Beau Phil John Colin we're talking to you just email us and we'll make sure that you participate in the journey so it's going to be really exciting so dot dot dot dot stay tuned but the video will drop tomorrow yeah it's look it's the biggest thing to happen in the history of Revolution since its launch so you know this is not a small thing where we're attempting here you know we've we've in the background been hiring a lot of products and Engineering Talent amazing people you know um Andy batt our chief experience officer in Canal Charles CTO amazing people who've really really done some special stuff here but this again don't expect everything on day one yeah and and again there are always bumps when you're beta testing right and when you're sort of you're rolling out so that's what we can do to everybody because we couldn't have tens of thousands of members all coming on in one day yeah just we couldn't even process everybody's feedback at that point which is why we need to throttle it so we can get feedback hey look at this what do you think hey you got a problem here this isn't quite working um then we can keep fixing going so then we can roll it out to more and more people so it will be it will be phased but everybody will get it it's been it's been stressful but now everyone's getting super jazzed about it I think one of our one of our um one of our users said so exciting um go slow do it right and so we're gonna try to do that it's hard when we're excited about we're gonna try to do that all right great stuff so um now uh a lot going on we have so many questions about different things but before we dive in just sort of give you and I haven't talked in a couple weeks you've been traveling around you've been meeting with all sorts of people you had a round table yourself give me give me a give us an idea of where what you're thinking in terms of what we've seen what we're seeing on the global uh the macro front and and with these markets really interesting because I had the global macro investor Roundtable so that's you know my super exclusive research service and that was in a beautiful hotel in Majorca we all got there to talk macro um and drink some wine and I knew the drink some Spanish wine was going to come up in that yeah we had the club Divan guys doing wine tasting for us which was amazing um what's interesting is we ask everybody for their trade ideas and yes there's a few there was a few around um that were kind of in line with where a lot of people thinking but what was interesting is there was very few big macro calls a lot of people looking at specific sectors like shipping or whatever and that tells you that people even that group which is there's some pretty well-known hedge fund managers and big family offices and asset managers aren't exactly sure what to think now I've had a very strong view for a while which was that liquidity was everything and I wrote all of this up in that everything code that I've talked a bit about that interview with Nathaniel whittingmore I went through quite a lot of what the everything code is but that's still kind of exclusive to GMI but liquidity is everything all of my forward-looking indicates have been suggesting that liquidity is going to keep Rising and that it would drive crypto and Tech more than anything else and that's basically been the story of the year so far um and I think that that continues and that's confused a lot of people the one trade that's confused me is the bond trade and that's confused a lot of people bond yield should have fallen by now and they still haven't but I think this is to do with the debt ceiling issue which is the other confusing thing because the debt ceiling issue has some real risks around it and we don't really know how to price them all we do know is people are pretty bearish around it um and I think that's reasonable too to have hedged around it because we don't know what can happen but the chances are that anything that causes a paralysis of financial markets will lead to that that expression I always use more cowbell more stimulus to come so I'm going to run through a couple of charts very quickly just to show some of the things that are on my radar screen so people can think about so I'm going to start with my liquidity index so this is the global macro investment weekly liquidity index that's basically around the G5 central bank balance sheets that we have our financial conditions index which is based around the dollar rates um and a whole bunch of other stuff which leads this as does ISM and it suggests that liquidity is going to keep Rising all the way through this year and the everything code suggests that actually keeps Rising all the way through to the end of 2025. so yes we might have some stumbling blocks yes we might have some hurdles but liquidity going forwards as the economy slows down and the central banks start increasing their activity that will drive asset prices higher so that's the first chart I wanted to show you so that's the liquidity chart why liquidity matters is this chart this is the chart of the NASDAQ against that same liquidity index that's the tightest correlation I've ever seen and it explains 97 and a half percent of all the movements in the NASDAQ is liquidity and this is around this currency debasement idea the more the central banks print the more you're changing the denominator not the actual value of the asset themselves so again the only assets that have really gone up in balance sheet terms are technology the NASDAQ and other like the exponential age stocks and crypto also actually interesting enough so as luxury goods that there's a reason Bernardino is the richest man in the world is because what does he sell he sells scarcity right in a world where you're devaluing the denominator scarce things go up more in price so Bernardino's balance sheet um his um bank account goes up every week so that's another chart for you to show and then we can look at this which is the chart of speculative positioning let me change that one and change to this one now this is speculative positioning in the S P 500 I have literally never seen anything like it so the market is insanely bearish which is why we the nasdaq's up 1.8 today because people just don't want to believe it they're angry they want the market to go down they want their bear market and they want their Justice and it's not happening and the reason being is everybody's ridiculously ludicrously short on the flip side of the equation we're going into this and that's obviously driven by the debt ceiling the other side of the debt ceiling is this chart which is the speculative positioning in bonds now bonds as I mentioned before have not been playing ball I thought yield should be falling but they haven't yet but look what's going on here this is the largest speculative short positioning in the history of the bond market so if anything changes at the margin here we're going to see a gigantic rally in bonds which I'm still expecting but this whole debt sailing Dynamic is getting in the way inflation Dynamics on the mean on the um on the other hand are falling very fast things like the trueflation index which is a real-time calculation on chain of millions of prices suggests that U.S CPI as of today is 2.2 or 3.2 percent I think it still goes to Zero by June or July which Alex guravich has been talking about both on real vision and also on Twitter as well we're very in a small camp of that we're also seeing wage growth coming down we're seeing rents at rent rents and wages are the most lagging of all um so they're all still to come down so generally speaking economy slowing we've got this whole debt ceiling stuff that's getting people very nervous the resolution of that one way or the other ends up being ongoing liquidity as the economy slows the banking issues have slowed down for the time being but doesn't mean it's gone away these things tend to come in phases um and so technology and crypto tend to have perform crypto's been consolidating for a while but it's still up 50 60 on the year still the best performing asset but again it's likely to pick up as liquidity comes forward as shown by our forward-looking liquidity indicators and we've probably got 20 or 30 different things we could show you to say that liquidity is going up so I remain massively bullish there will be a correction at some point in all of this as people start throwing in the towel in the short positions then we might get a correction before we continue to move higher um later on in the summer so overall super bullish the only one that's puzzling me is the bond market sell us and play ball but I think we need to get through this debt ceiling thing and then a lot of Hedges get Unwound bond market hasn't had all is it's a timing issue isn't it could you see send bonds both rallying or or are they going to move an inverse I think stocks and bonds will both rally eventually um that's that's what the big call is that's what I think happens so I think stocks and bonds rally as I said uh um technology crypto rallied the most if I just look down my Bloomberg right now you know the s p is up eight percent the nasdaq's up 25 I've been you know I've been saying this since last year and everyone thought was crazy the exponential age basket that I talked about on real Vision that everyone thought was a complete idiot for that's up about 40 this year um and um you know crypto which everybody thought was completely dead is up 50 60 70 depending what you're looking at stuff like Solana's up 120 so it's a it's this I'm gonna totally let you get away with that brag because you took an enormous amount of shirt so I will let you I will let you have your I'll I'll let you have your brag moment Ralph but um it is true it's puzzle people and you know it's funny because I think the last time you did a macro update uh somebody to your point about the NASDAQ and and there is some sort of emotion in this um somebody said I it's so hard to pull the trigger on the NASDAQ at these prices I mean this was even a month ago so this is percentages back those who didn't for do it four to six months ago missed the boat have they missed the boat it's that sentiment like I just can't believe it could go up from here that's really a knife and the pushback you're getting but also it's held people back from exposure right I've been in that track basically basically since 2012. it's but like you you know valuations keep going up the market goes up you don't really understand it you don't want to get involved so you stay out of it you start to look for smaller opportunities and you miss the big thing and it's only until I started to understand what was driving it that it was driven by a this massive technological Revolution going on but also the FED balance sheets and the global central bank balance sheets once I understood it became much easier to just buy it and also I also did a lot of work in the everything codes to figure out that P ratios and being driven actually by the balance sheet and Global M2 it's all monetary phenomena and it's not about it's not about earnings anymore everything is driven by one thing and is this in the post UFC environment is that why it's so hard for people just because the models that everyone was brought up on using are just not they just don't function in that in that world where central banks when I was just reading the Ft just before we came on and Carl icann is talking about how he lost 9 billion hedging since 2012. since later than that because he's been expecting the crash but I keep saying this 50 correction in equities can't happen because simply they just expand the balance sheet and the denominator takes care of the Fall and they rise so it just simply can't happen the only way that it can happen is if we see massive quantitative tightening but then the economy goes down the toilet and they've got the unemployment side of the equation the inflation site so it just can't happen right now now let's not mean this will stay forever but it's a situation that quantitative easing is used as a way to pay the debts uh and particularly the interest payments on the government debt and that was Again part of this everything code that everybody reset their interest rates to zero in 2009 everybody every country it was like a global reset I only realized it recently that that was the global reset and so everybody's now in this debt cycle of every three to five years of having to roll the debt the interest payments get monetized and that is the increase in the balance sheets it it almost exactly works out for the US the UK Japan Europe Etc they're all just the monetization of the interest payments yeah it's it's uh we we sat together in New York when you did that sort of Master Class for some of our members on that with with uh Julian and Andreas interesting question and it's it's somewhere on one of our tiers and if not we will we will sort of get it back on there because that is the defining sort of framework that you're working from right now uh we have a couple questions about this issue of of deflation but just sticking on the liquidity issue for a moment um a couple different people are saying do you think that we'll see a decrease the markets will fall after the debt ceiling gets resolved because liquidity will fall I think having to do with some of the mechanics yeah and Andrea says you know been covering this really close to no signals there is a possibility and we saw this in 2011. the s p fell 20 now what it did was correct 76 of the rally that it had could we see a similar move here as the shenanigans around the debt ceiling mean that the TGA gets rebuilt yes which is why I said listen there's got to be a correction here at some point but it may be from higher than here because the Market's in this short squeeze because everybody's heads for this thing and so it just squeezes everybody up and then yes I think that there's a very decent likelihood of that and in fact I put out a trade recommendation for for um um Pro macro around the ideas of this which is that listen there's there's a risk of this causing a sharp pullback but the outcome will be more liquidity so there's actually two ways of playing this in the end so yes I think it's a it's a potential issue and I think there is a potential correction but probably not yet yeah and and it's it thank you for that question because that's a short-term question and a lot of times when you're talking real on your framework you're a little bit longer term you're not talking day trading this or even the next month you're talking your framework is always longer so that is a very short-term issue that that you should be aware of any of you who have a short-term framework it's very important we don't really know 2011 is the only historical pattern that we can use it did shake up markets bonds rallied like crazy equities sold off sharply then rebounded really hard uh and then we went into the European crisis and QE coming out of our eyeballs yeah yeah okay so uh I want to get this question in from Twitter because believe it or not we're already getting to the to the bottom of the half hour but um because Grist got it on there very early is it possible that we are approaching a deflationary cliff with AI at the same time we're filled with inflation fear isn't the fear of deflation more powerful to a central bank than inflation they aim at for two percent inflation a little bit inflation okay not so with deflation so sort of two-part question I left again I'm very out of consensus on this I think inflation headline CPI gets to zero or even negative over by the summer it then picks up again um and what we will then see is the slow effects of owner's equivalent rents Services inflation which is mainly owned as equivalent rents and wages that usually lags on for 18 months so that keeps inflation low coming out of a recession and I think the AI thing as I've talked about is a deflationary nuclear bomb in all of this so I think the probability is that unemployment is sticky coming out of this stickier than expected and inflation is not as rampant so even if commodity prices and understand there's some tightness in commodity markets but everybody's trying to take that trade has been taken out in shots right now by the market and Dwight Anderson warned us about this on realvision he's like yeah they're tight but there's no demand and if you keep looking at the supply side of the equation you'll get carried out because the demand equation will kill it he said it you know the next time we come into the upside of the business cycle we are going to get some commodity inflation but that can be easily offset by deflation of AI much like we saw in the mid 2000s with China coming in um they caused a massive spike in in commodity prices but inflation was relatively sanguine because of the effect of China and the WTO meant the goods were coming out cheaper globalization this side we've got AI which is hugely disruptive balancing against the commodity inflation that can come so I I think inflation is slower than the market expects so that is a contrarian View and I love the fact that we have loads of people on the platform that will give the give their other view a different one from you and that's why we do it we we want you all to hear all sides of the argument so that you can figure out what makes more sense to you and use some of the tools that we have in the academy session so you can plug it in um and and I I we just did daily briefings with like three people this week wow who said Commodities inflation is sticky instructional and commodities coming back but that's right I love this that is the biggest narrative I think I've ever heard um in markets outside of the narrative from about 2012 to 2000 2019 which is the market is going to crash those two narratives have been that that market was going to crash narrative when we none of us understood the printing of money was incredibly pervasive I was wrapped up in it everybody has been wrapped up in it the other one is now this sticky inflation I've never seen people so vociferously believing in something and when I asked them to show where they get that from it's just a hunch because I think commodity prices go up or you know there's I'm finding very little evidence of it yeah well the evidence is different some of them think deglobalization has got you know it's there they have a sort of litany of theories about what is going to drive it but it's it kind of fits into that you know um it's more forward forecasting and it's not clear it's so hard because of all the cross currents to know whether that's going to stick or not and it's very not numbers LED I mean there are some people who put some some real work inside thesis and I'm not saying that thesis is definitely wrong and everybody's an idiot I'm just thinking listen I think my thesis has a higher probability and it gives me more Comfort when I see the massive pushback doesn't mean I'm right you know nobody has a monopoly on the ability to be right in markets um and just because the crowd is all one way it doesn't mean they they're all going to be wrong either yeah yeah and again and again a timing thing because there are going to be short-term swings but I think the way you look at it is in a longer term channel right and that sometimes why it seems like people are at odds because we get questions a lot how come someone said one thing and someone said the other time Horizon is so crucial are you enjoy you and Julian uh go back and forth about bring didn't but go back and forth the process right yeah because my time Horizon is usually the full cycle yeah and Julian's is probably three months so we just always at different odds duking it out on macro insiders if if you guys haven't checked out that show yet um okay so we're up at the half hour so those of you who are on YouTube um join us if you can scan the QR code if you can um so that you can hop over and not only enjoy the second half of this conversation but a lot of the different shows that we're mentioning on the Fly here are things that you can dig into with your questions on the platform and then you can be included in rv2o as we build that out also if you don't join real Vision you're never going to see what real Vision 2.0 is [Laughter] exactly you want to see that trust me or or possibly get Raul's wine recommendations at the end of this program we'll see we'll see where it goes but anyway we hope you do if not uh we'll be back tomorrow as usual um for a regular Daily Briefing so we'll see you then

Channel: Real Vision Finance

Views: 28,938

Keywords: real vision finance, real vision tv, chinese, stocks, bitcoin, equity, equities, nasdaq, consumer sentiment, consumer prices, inflation, chinese tech, chinese tech stocks, china's tech crackdown, fed, federal reserve, the fed, taper, fed tapering, fed hikes, rate hikes, interest rates, bonds, treasuries, investing in bonds, raoul pal, 2023 markets, 2023 recession, 2023 inflation, realvision, ral pal, raoulpal, portfolio management, AMa Raoul Pal, Raoul Pal 2023, raul paul, raoul paul

Id: GThgQ4adSSw

Length: 30min 57sec (1857 seconds)

Published: Thu May 18 2023