Transcription
What about liquidity? And >> nobody knows what it is. In fact, they've concocted some super-clever scheme to rip someone off, to bring down the markets. I don't understand anything that's happening. Hello, dear ladies and gentlemen. This is Dmitry Solodin. You are on a channel dedicated to investments and trading. And today we have a macro talk. Our already traditional guest is Alexander Kubyshkin. Alex, hello. >> Dima, greetings. Happy New Year. >> Yes, Happy New Year to you too. And we are recording after the New Year. And, essentially, today we will talk about macroeconomics. First of all, there will be a few questions. And the first question, let's get straight to it, so that we, uh, immerse ourselves in macroeconomics as much as possible today. Alex is an expert in this, and I'm glad that you periodically come to the channel and explain such complex things that we don't always understand. So, the first question. Markets depend on liquidity. What is happening now with international liquidity? I'm really looking at several sources, and there are different data. Some say that liquidity is faltering, there's not enough. Others show the opposite, that, for example, the same Real Real Vision, yes, I think that's what it's called. They say that everything is fine, liquidity is flowing, it's a cycle. Where should we look for it, what is happening with it? Explain to us a little bit, what's up with liquidity? >> And nobody knows what it is. In fact, >> it's scary. Very scary. We don't know what it is. If we knew what it was, we don't know what it is. >> Everyone knows it exists, but no one has seen it. Because, in fact, no one can give a serious definition of what liquidity is. But I mainly follow Crossborder Capital, and there they are trying to, uh, to put all the factors together. So, they have the actions of central banks, and the actions of the shadow system, everything that happens in the collateral markets. So there's some broader picture. What they are depicting, in principle, is that we are in the last peak value of the liquidity expansion cycle. Now we will be transitioning to some kind of contracting cycle. And at this stage, what they show is that in America, the cycle has most likely reached its peak. And what we see in terms of the Fed's actions, liquidity is being restrained rather than supplied. This can be explained by the same inflation indicators. In China, the picture is the opposite. On the one hand, logically, despite the deflation, it seems they should have injected more liquidity into the system, but according to Crossborder indicators, it is now above it. So, American liquidity is going down, and Chinese liquidity is going up. What to do with this? Uh, I honestly can't tell you either, because, well, uh, it's like in a famous anecdote: "I had an erection, but rather it was experiencing me, because there was nowhere to apply it." This is exactly the case when we can roughly orient ourselves in which direction it is going. But finding real application for it is quite difficult. And it seems to me that this problem we are now facing goes beyond the concept of what liquidity is. There are some completely wild Neanderthals who are still running around and shouting that M2 indicators are liquidity. Although it seems everyone has moved on, saying: "Yes, M2 is completely outdated." It's clear that a large part of the system is in the shadows, no M2 is shown there. And, consequently, you, well, yes, you can draw some conclusions about liquidity from 30% of the total system. In my opinion, this is a rather utopian assumption that we are making if we use the M2 indicator. So, in my opinion, it can be used as a proxy in some cases. And ideally, there is no real indicator of what liquidity is. That is, it is impossible to encompass it. All indicators are some kind of proxies. Some may be better, some may be worse. But it seems to me that the whole problem of this concept of liquidity has now taken on a new turn against the backdrop of what is happening in geopolitics, especially considering that suddenly, after a couple of years, everyone has become a super-expert, and ChatGPT has arrived, and the volume of information and arguments that can be used in both directions is so great, and in principle, any logical explanation can be found. And you'll say, "Well, it seems so, and the numbers seem to add up." And what to do with it? This, on the contrary, complicates things even more. And the amount of information has increased significantly. And therefore, it seems to me that the entire signaling power of what is happening has now very seriously lost some kind of direction. That is, I'm saying now, yes, considering what our red-haired friend is doing around the world, there's no other way to put it, that he is truly a creator. He has actually shuffled all these cards. So, to say that what he will do will cause such and such a reaction is absolutely impossible. That is, we can draw some technical analysis charts, but with a logical chain of conclusions, how certain actions of Mr. Trump will be reflected in certain assets. While everyone claims they don't know, everyone is running around: "He definitely did this, so there will be 1, 2, 3, 4, 5." But it seems to me this is an extremely utopian approach. And I say that for me, this is a period when I don't understand what's happening. The number of variables that have sharply increased since 2020, they have now gained even more speed and interaction is completely impossible to catch. That is, for example, all these correlations that used to work, the same ten-year bonds, gold. Now there will be a good discussion, then we will talk about Japan separately, that it seems the Japanese are raising rates and the spread between American and Japanese bonds is narrowing, and the ten-year yields are falling. Usually it was the opposite, when this spread narrows, we live by interest rate parity, roughly speaking, right, and there's a lower rate, so the yen should strengthen, but the yen is not strengthening. Consequently, we also have a lot of possible theories here as to why this is happening. But we must take into account that all these correlations that we knew, that worked, may not be working now. And what we are discussing, why, how, where, I don't know. Do I understand correctly that we've ended up in a shell game, right? They've already started mixing this ball, and we'll never guess which cup this ball will end up in. >> I don't really like these conversations, that someone is controlling someone, that someone, you know, concocted some super-clever scheme to rip someone off, to bring down the markets, to raise the exchange rate. It seems to me that this is more like conspiracy theory, but they also talk about banking conspiracies, right? In banks, people who work together, one department doesn't know what another department is doing, let alone that the total number of banks, even let's take the 20 largest banks, they not only hate each other and compete with each other, but they certainly don't communicate with each other through different departments. So the idea that one or three people sat down, agreed on something, and are doing something coordinated, seems like nonsense to me. This is easily explained because we need some logic, right? Post-factum, what happened, and then the explanations follow. So, why didn't Bitcoin grow, say, at the end of the year? Because the Japanese market or the Japanese central bank broke the entire cryptocurrency market. I read all this nonsense throughout December. Nobody can explain how the yen suddenly transfers to the Bitcoin market and how they all say: "There's cheap currency, they borrowed something, threw it in quickly, made a lot of money, and everyone is super." But there's no confirmation of any volumes either. And so, essentially, it's like this: something happened, it needs an explanation. You pick up a newspaper, take the first three big headlines and say, "Wow, this looks good." Yes, according to my logic, it fits. Then you take it, write it into ChatGPT, it confirms it for you, and all this nonsense spreads. And that's why, it seems to me, this flow of information, and most importantly, what has become very alarming for me over the past year, is that the speed of market narrative change has sharply decreased. If you remember, we used to chew on some topic for a couple of months, like Silicon Valley banks in 2023, they chewed on it five times, then something new started, then it shifted to the labor market or something else, then some inflation, but now you have the feeling that everything is happening within a two-week corridor. Bitcoin, then some pre-New Year's Santa rally, then our red-haired friend appeared. Now we're going to discuss Venezuela. After Venezuela, Greenland will be next, now it's likely Iran, they will probably cause some trouble there. And what to do with all this? Everyone has their own opinion, everyone expresses it, you look at it, it seems logical. And what to do with it, nobody knows. >> Listen, I had an idea about what you're saying. We are now living in an era of deglobalization, probably since 2008 at least. And possibly, deglobalization is now reaching its peak, right? We have a division of zones, China, the US, the US is also separating itself from its satellites, right? From the Europeans, and so on, and so on. So, we see this in supply chains, and so on. Don't you think that before, when everything was globalized, these actors created these correlations and these, well, patterns that worked, because they acted very, uh, unidirectionally? And now, because of deglobalization, there are too many actors, too many variables, and this whole system has simply, well, de-geared and starts moving left and right, and we don't understand anything. And all the old canons have sunk into oblivion, so to speak. Do you have this feeling or not? >> Basically, that's how it is. Well, look, for example, if we talk about, yes, what happened after 2008, for the last, say, 15 years, we lived in a phase of a growing dollar. That is, it's as if the global economy broke down because the banking system broke down. Consequently, you need to somehow support it locally, no matter what state it is, you try to support the economy. As a rule, this led to the fact that these same Chinese or Japanese artificially lowered the exchange rate of their currencies. That is, if you look at the real exchange rate of the yen, it is now somewhere around 70% lower than it should be, if we were guided by all these economic theories. So, it's a seriously undervalued currency. All this was at the expense of, well, obviously, the Americans paid for it, everyone was fine. In 2020, these blankets started to unravel, more and more conflicts began. The COVID people arrived. All this surfaced, and suddenly they scratched their heads and said, "Guys, what's the concept? All production assets are in China, in America, only the dollar remained, and confrontation continues to grow. Resource bases, if we are talking specifically about the point of confrontation, they need to be moved back, and at such a dollar exchange rate, it's impossible to move them. And, consequently, you need to break this system anyway. And not in the sense that they say, "The dollar system will collapse," you just need to lower the dollar exchange rate very, very significantly to make your own industry relatively competitive again. I'm not saying whether it's possible or not, but this is a plan that must be implemented for there to be at least a chance to implement it. Consequently, what Trump is doing now, he says, "Go to hell, all of you." We will now show everyone who is hanging around in our neighborhood who's the boss. We will create problems and chaos for everyone else. And you have this kind of tough, uh, tough stratification of this deglobalization process. It's entering a rather tough phase. And considering that, you can say: "Well, yes, how will these effects be?" We need to consider that almost all the capital in the world is in America. Because over the last 15 years, where does it come from that 70% of all global capitalization, of all markets, are American stocks. Even if you buy some thematic ETF, almost automatically, if it's not ex USA, you'll have about 30-40% American stocks anyway. Simply because these markets and the risk that they are doing now, this capital will flee from there, and it will flee. And what will they do? Well, they will monetize it. They will keep the market for a long time. Consequently, if they keep the market for a long time, they will need to introduce capital controls and crash the stock market. When this will happen, no one knows. In what form it will happen, no one knows. Will they want to do it deliberately? I think there will always be plenty of people who will say it was done deliberately, some Masons invented it. It seems to me, as usual, someone will enter the wrong booth and then it turns out that a chain reaction has started. But this concept, what you're talking about, deglobalization, it has undoubtedly started. And the problem is that if we talk about global trade, right, what the Americans are doing now, what about Iran and Venezuela, it's essentially that they are trying to severely limit China's opportunities for global trade, because the Chinese economy now exclusively lives and survives on the huge trade surplus, which is $1 trillion. If you remove it, then the internal stability of China's entire economic model is very, very questionable. And it's quite possible, quite possible, I'm not holding a candle over Ruby or whoever is in charge there, it's quite possible they are pursuing this goal too. Undoubtedly, >> the share of America, the US, the share of Japan and Germany in manufacturing is decreasing, right, in global production, right, while China's share is growing. I think, probably, the same Ruby or Trump, they look at this picture and see a trend, right? They see that, damn, if we don't do anything, well, China will eventually reach a 50% share, and our share will drop to some niche 10, 8-7%. Currently, China's share alone is larger than Germany, Japan, and the US combined. The question immediately arises: yes, I understand that something needs to be done, and Trump is doing it, but is it possible to do anything here at all? Because, if we talk about trade, America trades in goods that are almost certainly produced in China. If China starts to reduce its share, it really means that conditions in Japan, Germany, and the US, well, Americans primarily look at the US, must be better than in China. How to do that? Well, you have to leave the Johns without pants, so to speak. That is, you need to devalue their capital, their property, their money very strongly. Will the population tolerate it? Will it be able to endure such a decline in living standards? Because devaluation also has negative consequences. That you can't buy goods at the moment. >> Well, that's a big question, of course. Well, considering that there are still 300 million barrels in the population, and comrades won't reach for words, but will reach for a pistol, and the risks are present. But on the other hand, what is their alternative, right? America's problem now is precisely that having washed away the entire industrial base, I think the last factory closed last year. Now, for some concentrated magnesium or manganese. In general, there was one factory in the country. This material they produced was needed for titanium processing. For example, the wings of all airplanes, everything that is needed. There was only one factory, they closed it. Well, because it's unprofitable, everything, all processing and all mining is in China. They simply dumped prices. And so, now that you've closed this factory, you can't just reopen it. But you also need people. The whole problem of industrialization. Not that you can throw money around, but that you don't have engineers, you don't have specialists, you don't have chains that have fallen apart, it takes a very long time to restore them. And the question is, when you are completely dependent on China's supplies, the question is, who is actually holding whom by the balls? It seems to me that they simply won't give up. And we must take into account the experience of Western civilization, to carry out such, uh, not very pleasant upheavals and other things. That is, they have a rather serious arsenal of, say, sabotage at the state level. It will undoubtedly be used. And from the point of view of the production base, it cannot be returned in such quantities as necessary, because all, for example, defense sector products, right? Trump said from a trillion to one and a half, they won't be able to do it. They can give money, but they have nothing to spend it on, because all critical, essentially all critical materials, right, all these small rare elements, processing is 95% in China. China is now openly sabotaging, prohibiting exports. Everything related not only to America but also to Japan. And it should be taken into account that the Japanese already tried to quarrel with China once in 2014. And as a result, China imposed export restrictions on these materials. They are used in electronics quite a lot. 10 years have passed, even more. And still, Japan gets 60% of all these rare earth metals from China. They haven't been able to diversify for 10 years. If we are now talking about America, and we are saying that even the head of Ration said that there are some crazy thousands and thousands of materials that they can only get in China. So, essentially, China supplies critical elements for the US defense industry, which wants to hit China hard. There's not much logic in that either. And so, China actually has a big, big leverage here precisely because of its production base, but due to the rather complex economic dynamics, they have quite serious deflation. Production is growing because there is severe overproduction. Again, considering that China is also advancing very strongly in artificial intelligence, not in the sense of, you know, writing marketing programs or sales agents, they are really, in the industrial phase, a huge number of factories that already operate without people, purely automatically, are created by one platform, thanks to the fact that there are several platforms, they are all open source, they allow the creation of a huge network, so you will have networks. And they have programs that include 60 different cities, super-fast internet, and common capacities for the same artificial intelligence base, which is used in different cities, in different industries, which are interconnected. Amazing things are happening there. But all this is at the expense of, again, a rather serious unstable situation from a social point of view, because this deflationary dynamic is maintained exclusively artificially. And all the layoffs, essentially, the state supports this production now. >> Well, actually, as I understand it, this is the trick of China's dominance. China, through the government, in every sector they have chosen as their priority, they essentially stimulate through the budget, right? That is, they provide subsidies, they provide grants, some preferential loans. And as a result, these industries can maintain prices much lower than their competitors can survive. And thus, they drive these competitors out. This is the usual scheme that Amazon has used for a long time. Yes, it was in a loss-making state, but at the same time, it kicked out competitor after competitor from the market, because no one could compete with it. Nightmare of American Business. And, uh, now China is essentially doing the same. And how to counter this? You mentioned magnesium, right? The problem is that this factory is in an open market, and as soon as you start launching a factory, you again end up in an open market, and there are the Chinese, who are on subsidies, on some donations, subsidies, and their prices are much lower. And these subsidies, it seems, are going nowhere. I understand this is the model. And perhaps, we don't fully understand what this will lead to, because I have my own point of view on this. It seems to me that China is capable of transitioning to a new form of economic relations, well, let's say, to early socialism or something else. And such a hybrid system can not only continue but also strengthen. That is, the Chinese government can start subsidizing even more, and at some point, it will simply change the conditions for resource allocation in the system. And what you are saying, that their technological development is increasing, and we immediately start thinking: "Ah, they are having economic problems, obviously, right, as a consequence of these chains." But if we assume that in the end, it will be a different economic system, maybe different laws work there, and this economic crisis will not happen, because so far, China has been going on like this without significant crises since the nineties. What do you think? >> Well, it's an assumption that China will be able to isolate itself from everyone and live on its own. I think it's impossible. The system, first of all, China now, again, lives on the basis of this dumping, this overproduction that they do, which, at low prices, is then transferred to foreign markets to receive a stable amount of dollars into its system. China, just like everyone else, is hanging on the dollar needle. You can't just get off it. Consequently, from China's perspective, the problem is that at some point this overproduction works, but you will also see that Europeans start complaining, Japanese start complaining, everyone starts complaining and will protect their markets. Consequently, at some point, it will take a serious reverse dynamic. And what will China rely on then? If you look at its domestic market indicators, then the same Retail Sales are extremely weak. For the first time, I think, in 20 years, household credit has fallen. And in general, if you look at PMI indicators from the labor market perspective, they are also very weak, and your domestic consumption is not recovering at all. The real estate market remains in decline as it was. Yes, you have these banks, this is the second one, it has already started defaulting on domestic bonds, on yuan bonds. And we don't know how much of this trash is actually hidden in these bank balances, really hidden, which is definitely hidden there. All this is swept under the rug and not visible from the outside, but we cannot assess the real situation of what is there. So, your domestic market is incapacitated, it is not driving this entire dynamic, although they have tried to stimulate it. They launched programs, like buy a new smartphone, get a trade-in for your old one, and all these laptops. It worked for two months, then it all collapsed, and consequently, these programs don't work. External markets will sooner or later come under attack, especially if you are in this geopolitical component. And so, if trade also goes down sharply and is restricted, then the internal political pressure on China's leadership will only increase significantly. It's not super great right now either, but problems will undoubtedly grow. Therefore, I wouldn't say that they will simply find a new model, leave on their own, and everything will be fine for them. They may find a new model, but I am sure that China's transition to a new model will be as painful as the transition to a new model in Europe or the US or the whole world. So, the next stage of this dark century, dark ages, as they call it, we will all go through the changes, yes, >> era of change, yes, so we must all go through it, how we will separate from each other in the end, time will tell. A slightly off-topic question. Nevertheless, to my listeners, do you recommend paying attention to China as an investment product, i.e., the Chinese stock market, or are there so many hidden risks that one needs to approach this market very carefully and be a little wary of it? >> Well, a healthy allocation. I have China, I hold it, I increased it a bit at the end of the year. It seems to me that China will perform super this year. To this there are >> what are the main criteria? Why? Why do you think so? >> Well, again, if we are talking specifically about Hong Kong, right? We are not talking about the domestic market of China, but what we see, what we see is active, >> financialization of Hong Kong as a center, an alternative center to the West. So, they are now creating their own Hong Kong stock exchange. Essentially, all trade with China in yuan will go through Hong Kong. With the help of, your settlement will be made in gold, which will be on either the Shanghai or Hong Kong stock exchange. Undoubtedly, the main money that China receives from trade, well, let's say, not all, but privately, is mainly redirected to Hong Kong. Through Hong Kong, financing and refinancing of loans for African and South Asian countries is carried out. What we saw in Kenya, when China simply closed the loan to Kenya in dollars and issued it in yuan. They can do this. So, they have enough liquidity for this. And from the point of view, if we look at technological progress, it seems to me, the West extremely underestimates how much China has advanced in technology, how much, how developed China's production base is. This is a unique structure that no one can even remotely compare to. The efficiency of production of all these things is enormous. And what needs to be understood from the point of view, in my opinion, the main theme of this year will be energy. For me, this is, uh, The Main Investment The of 2026. And it should be understood that if we look at the utilization of energy capacities, right, then China's peak load, safety margin, well, roughly speaking, if we talk about 100% load, then China currently has installed capacity of 180%. In America, this figure is somewhere around, I think, 110, something like that. We are entering the artificial intelligence race, where energy decides everything. And no one has such a reserve of electricity as China. China is now, in principle, I think, installing the same amount of solar panels in a month as America does in a year. The number of green energy sources being introduced, windmills or panels, >> it exceeds everything that the whole world together is restoring. 80% of all supply chains and production are located in China. >> This is a monstrous advantage, right? Precisely production. >> This is, well, this is becoming, well, and they are not just mindlessly, like in Spain, Portugal, they installed windmills, switched 80% of generation to green sources, but there are no balancing mechanisms. And then the power went out in the spring last year. I was there in April. >> Yes. Now in Germany, the windmills have frozen and it's icy. We're not talking about that. We have a substation that was blown up somewhere here, where there were some cables. We have terrorists, left-wing terrorists, that is, it's like in the eighties, there was a terrorist group RAF, which arose as a result of the security of the Iranian Shah, fleeing from the Ayatollah regime, beating up, killing, I think, a couple of students. After that, the students got angry at the government. Of course, nothing was done to them, they got angry at the government and terrorized all of West Germany for decades. And now there have been several terrorist acts at generation facilities. And for a week, 45,000 people were without power not far from me in the western part. At night, in the minus. It's kind of cool. And they couldn't do anything. Despite the fact that everyone knew that there was just a small bridge over the river, and it was not protected, and no one cared. >> A total vulnerability, right? >> Absolutely. And the Chinese, in this regard, are investing huge amounts of money precisely in batteries, where this energy can be stored. And if you have the right, uh, ability to redistribute and store electrical energy, then you are super. China also has huge 1,000 km transmission lines laid, ultra-fast transmission lines, which sharply reduce losses during transmission. They are ahead of the planet in terms of electricity generation, right? They are, in principle, 40 years ahead of the planet. That is, if in Europe the average electricity generation, there the electricity generation networks are 40 years old, in America also 40-50. If you want to invest now, invest in companies that produce anything related to power transmission networks. Copper, insulation, some bushings, and so on, and so on. This will definitely fly in the next 3-4 years, because we cannot abandon artificial intelligence. The amount of energy needed is huge. If you look in Europe now or in America, the average time to connect a new park, say, turbines or solar energy, can reach 8 years. You install this park, you wait 8 years to connect to the grid, because there are not enough grids, there is not enough distribution, and this is the biggest problem. You can build a data center, but what will you do with it if you simply cannot power it from a power plant? >> Do you think this is a killer feature for China in terms of the AI race compared to the US? That is, it's directly >> I think that I think that they have more or less developed the technology, like ASML, right? This ultraviolet for chips. They have created an analogue, let it be worse, but it is also capable of making super, five-nanometer chips. And the fact that they, in principle, have made artificial intelligence DeepSeek as open source, and that all this infrastructure has been put in place, primarily for production, precisely for production moments. That is, all their production is optimized for artificial intelligence. And from this, you have electric cars that are 50% cheaper than all others in America or Germany. And from this, you have an advantage in all basic, rather complex technologies. Because if earlier China exported flip-flops, now China is the largest exporter of electric cars. The largest manufacturer of electric cars is BYD. We can argue about whether it's a good or bad car, but the facts are there. Facts are facts. >> They are building a huge number, eight out of ten largest shipbuilding companies are Chinese. That is, they are really, along the chain, by the way, Germany imports more Chinese machine tools than it exports. That is, the main base of European prosperity has already begun to be replaced. This is heavy industry. This machine tool industry, what they could do, mechanical engineering, >> Kuka, these German robots, they belong to the Chinese. Essentially, the reason for the huge scandal in Next Netherlands, in Holland, when the Dutch tried to fire the Chinese and take away their enterprise, the entire European automotive industry stopped in two weeks. That is, essentially, what the Chinese have done, is incredibly cool. I say that in this regard, if you look at it that way, then super bullish on them. And considering, especially considering that, uh, American valuations are very high, most likely, this entire program from the point of view of reindustrialization, no matter how they spin it, we don't see anything happening. Because if you looked at the ESM indices, right, new orders, then all these business activity indices, if reindustrialization were actually taking place, we would see these indicators somewhere around sixty. Well, it seems to me that in the US it's very simple. 95%, I think, of all investments are capex. And this is mostly the same thing, it's, well, yes, some connecting networks, maybe they are also doing it, but mostly it's data centers and so on. That is, such a narrow, narrow thing, and this is clearly not a broad economy. >> No, but they need a broad economy. That's
It's not that they think, "Now we will build all these data centers, everything will be wonderful." And it seems to me that, well, uh, despite the fact that I am quite bullish on China, it seems to me that the very fact you touched upon makes me quite bullish on the American economy as well. That is, it seems to me that this, "Now we are all sitting and shouting: 'God, when will this collapse?'" And private markets of private credit. And this is undoubtedly true. This "balol" and what is happening there with all the oracles and tricolors is undoubtedly cracking at the seams. And the artificial intelligence bubble, and we all see what volumes it has grown to and what is happening with it. And stocks at their highs, and comrade Trump, all of this should collapse. It should collapse. But structurally, what we have seen, yes, the labor market, the labor market is awful, I must say, yes, it is a huge problem by all indicators. Mmm, no matter how you twist it, uh, it's a real problem. For me, this is an indicator that the rates, especially now this month, Paul should change. The question is who they will appoint, but it seems to me they will appoint a candidate who will very, very sharply lower rates. And a candidate who, and it seems to me, it's not for nothing that Trump started talking about attracting these GSC oridi FM and Freddie Mac for refinancing housing loans. Because, despite the fact that the rate has decreased, your mortgage rate is still hovering around 6%. That is, capitalists will not just give away what is theirs. It's not for nothing that Trump came and said that we will limit credit card rates to 10%. This is really a subsidy program for the consumer, so that he feels more or less calm. And in essence, in the logic of Americans, well, if one can say so, in general, if you want your people to be happy and not riot in the streets, give them cheap housing, and you will have demographics too, and everything will be in order. Cheap housing. What happened after 2020 led to such imbalances that this problem needs to be solved. It will likely be solved in unconventional ways. It seems to me, >> to have cheap housing, you also need cheap mortgages without >> Well, that's what I'm talking about. The rate will be lowered very sharply, Friendy Mac and FN May instruments for cheap credit will be introduced again, and mortgages will be issued at 1%. Of course, this will affect overall prices somewhere, but banks can be easily limited by the maximum. Well, such a scenario, of course, will launch the broad economy, because real estate is 30% of GDP, I think. >> Yes, they will do it, they need to do it anyway. So that's one thing. Secondly, whether we want it or not, uh, even if, say, Trump gets away with Venezuela, it's clear that they still need to calm down these Mexicans at the border. They still need to give Denmark a hard time. I think he will take Greenland anyway. There can be no talk about it, because >> Yes. But what is rarely discussed, what I read, is rarely discussed, what is the whole point of this Greenland. That is, everyone says that, like, uh, they are limiting Chinese shipping, catching Russian submarines. But if you look at the Arctic map, the main disputes about who owns what are happening precisely between Russia and Greenland, because the Lomonosov Ridge runs through the Arctic, and Russia, the first country, in 2001, submitted, well, they have some kind of council where all these Arctic countries are, how it will be distributed. And Russia was the first to submit and said that we are taking half of the Lomonosov Ridge, and the rest don't need it. Then Denmark came and in 2006 submitted and said: "No, the whole ridge is ours, and you all can go away." That is, in essence, the dispute is, in essence, over half of all this Arctic ice, or whatever you call it, right? Accordingly, by annexing Greenland, Americans get, not only do we get a serious mess in the Arctic precisely between Russia and the USA, but simultaneously, if you look at all these programs about Ukraine that were discussed, Trump clearly outlined joint projects in the Arctic. M, how long can you negotiate with such comrades is another question. But, undoubtedly, the Arctic, in my opinion, will now be the next epicenter of such fuss, such real geopolitical tension. And Trump will take Greenland no matter what. Now let's look at Iran. Well, if the Americans want to control oil, then Venezuela is out of the equation, you can argue how quickly or not quickly they will extract it. The de facto fact is that no one will get oil from Venezuela anymore. Now we are beating up Iran. The question is whether they can or cannot. And Israel really wants it. And in principle, the Americans would not be against it. >> Theoretically, they can, because the military potential of the Americans is enormous. And plus Israel, yes, with its intelligence, with all of it, >> yes, but you also have defense treaties with China and Russia starting simultaneously. China will not surrender under any circumstances, because then it will become completely dependent on Russian oil, and it will not be enough. Plus, everyone who is not lazy anymore is hitting Russia's shadow fleet. That is, in essence, you have a complete separation of China from access to oil. They will clearly resist somewhere. Again, whether it will work or not, I don't know, or if it's a plan, I don't know either. But if you look at it this way, you understand that from this point of view, uh, if we translate this into an investment plane, right, we get a dynamic where, it seems, uh, we have a bad economy, and it's declining, if you look at the indicators, both in Japan and in China, business activity is declining. The oil market tells us this, when the oil price falls, because, well, you have an oversupply, that is, you don't have such real demand at the moment for oil prices to rise. Undoubtedly, even if we look at what happened in the last 2 years, when there were geopolitical issues, even with Iran, there were always some geopolitical problems when you didn't know that oil supply chains could be disrupted, but the markets reacted relatively so. Well, okay, forget it. The question now is, when, if we understand that the Americans have seriously taken up this mess, the risks of some chains are sharply increasing. And they are increasing for absolutely everyone. Accordingly, you have, on the one hand, it seems, an oversupply of oil now, on the other hand, everyone understands that if something happens now, it would be better to have some reserves for a year. Yes, plus the chains will break, so they can be blocked. >> This applies to absolutely all materials. Absolutely to all materials. The same copper, the same nickel. And copper has already taken off. The oil industry, at least, is just catching up, it seems to me. Exactly everything related to energy, and gas, and everything. Like >> so you also believe in a commodity supercycle? >> I, I have believed in it for a long time. >> Yes. Well, it seems to me it started in 2020 at all. That is, this 2022 was the first wave, after which there was a rollback. And now a fifteen to fifteen-year trend for all commodities may begin. >> The question is, will it happen or not? But again, if we start shooting rockets at each other now, there will be no supercycle. So the probability here, >> or maybe, on the contrary, prices will rise on a shock scenario, as in 2022. You block somewhere in Peru at the main copper mine, or Trump says: "That's it, Peru's copper, we're not selling to anyone." And that's it. >> How do you, well, how do you do that? Where will you be? For example, you're sitting in China, you can't trade in such a case. You're unlikely to be able to trade any commodity prices on American exchanges. You might be able to do it in Europe, but not necessarily all over the world. That is, in any case, the price will become much more expensive, this market mechanism will disappear. >> Well, that's true. That is, what the Americans said, >> yes. Well, that is, that is, the trade, as the Americans said, that Uranium is now a strategic asset. We don't care how much it costs to extract. You will extract it. So you don't have a market price. That is, if a company draws for you and says: "We don't need, like, $30 per ounce, right?" So, they will draw it for you and say, $30 and $20 for good behavior. You will be, and you will be, in chocolate, in principle. And how will this affect the market for others? No one knows where it will be traded, who will buy what from whom, how this price will be formed, >> free markets have broken down, >> yes, but it seems to me that in this next phase, at least, uh, undoubtedly, this volatility, until we reach this extreme scenario, commodities will show very good returns, especially from the point of view that the Americans are determined to sharply devalue their dollar, and automatically emerging markets and commodities should play. Again, considering that these are historical analogies that may not work in this scenario. But, in my opinion, there are still two phases: a weak economy, which is now slightly suppressing prices in the short term, and a long-term scenario when you simply have a structural shortage of supply. And these two scenarios, for example, let's look at silver, right, what do you think is happening in the silver market? >> Some kind of corner, it seems to me, because the growth looks like a corner specifically. That is, possibly, someone sold a position and cannot fulfill it. >> Well, maybe, well, the market is small there, but gold is performing similarly. That is, you can't say that it's purely silver. Gold before >> silver, I think, has grown by 3 in 3 months. This is some kind of abnormal volatility. Right. Yes, I expected, I expected silver to rise. I bought it around 32, 33. But I didn't expect it to go so fast. That kind of speed, of course, is unlikely anyone expected. And this looks very much like some technical moment. There have been many corners in silver, actually. Such a specific product, where it often arises. Well, such rumors, at least, are circulating in the market that a corner has been set up. Well, it seems, at least, that a speculative wave has caught on against any background, so, it seems to me, gold is also playing out this scenario. Everyone is watching the news and is in a complete state of shock from what is happening, and scratching their heads, saying: "What, what should I do with this now? What should I buy in the end? I'll probably buy gold just in case. It's expensive, but it seems like I need to." And again, central banks, seeing this dynamic, are strengthening their purchases even more, because they understand that real gold can now decide whether your state or your regime will survive or not survive. That is, it seems to me, this also supports it. So, in the short term, it seems to me, both gold and silver will experience a good correction. Well, actually, the story with Russia has taught everyone well. When sanctions were imposed on Russia, they are actually now periodically selling their tons of gold to someone, literally bringing it in Kamaz trucks. Well, that's an option, because it's a liquid commodity. >> Absolutely. Well, and plus, I also think that somewhere in the short term, all this will be reflected back somewhere. The dynamics are abnormal, but in the long term, if we talk about gold, well, I'm sticking my neck out far, 17-20,000 for me >> maybe. Why not? The dollar is a piece of paper, and gold is gold. >> And I think that's what will happen. Now they will drive gold higher and higher, and then the Americans will revalue their reserves. In order to get additional money for something, to spend from their own TG, >> if these reserves exist. >> Well, who will check it? >> Rumors are circulating. >> Well, what will we write, that Kaja Kallas will write a statement to Trump, that let's conduct an audit, or who, who can force them to show anything? They will say: "It exists, believe it or not, your problem." >> Well, it seems to me that the Germans tried several times and never got what they wanted. >> Well, yes, the Germans are no longer the same, let's say, no longer the same. The Germans are no longer the same. You mentioned Japan in your reasoning. How dangerous is the situation now, what is happening in Japan? Because, as far as I understand, I'll explain a little to my readers, Japan occupies a special place not just in the world economy, although it is also a sufficiently large economy there, but primarily in the financial system, because for a long time it was at zero rates and became literally a funding currency for many operations. And, accordingly, many perceive what is happening there now in the currency market, in the market with rates, as something happening to them. This can all affect the carry trade, which, in essence, can affect the financial system in different ways, but probably at least strongly, yes, because the valuations, I also read somewhere, I think, from some large bank, from 2 trillion to 20 trillion, yes, no one can even calculate how much of this carry trade is in the shadow sector. How do you assess the danger, first of all, of the situation in Japan? What is happening there and how dangerous is it for the world system? What could be the consequences? >> In Japan, uh, everything is very amusing. In the sense that when we talk about carry, if we are with Tema in Japan, it's like this. Japan, a year and a half ago, when they had the old finance minister Ueda, well, I don't know, I don't remember the name, it was clearly stated in all conversations. All Japanese banks were clearly told: "Guys, we want to bring capital back. The rate will be raised to 2.5%. This is a political decision." This was announced. Everyone ignored it, saying: "Why do this? Well, screw it, no need, no need." As a result, we are now in a situation where the rate is being raised. Which is political. Understandable. This causes a huge discussion in all markets that they have raised the rate, carry trades are breaking. An extremely debatable assertion. Well, okay, let's assume that's the case, yes. If we look at the political desire of the Japanese to repatriate capital, then they need to raise the rate, in essence. It's clear that their economy was mainly held up by, as I told you, yes, by artificially lowering the yen, by export potential. Now they are falling into reverse dependence, because this imbalance has led to the fact that the import base and the weak yen constantly lead to rather high inflation figures. That is, if you look at all countries, yes, it's, roughly speaking, the European Union and America, Japan and China. China's inflation is negative, Switzerland's is negative, in the European Union it's okay, somewhere around 2%. In America today, the figures came out, they were 2.26-2.27. We can discuss whether it's high or not. For me, it's normal. You can live with it too. And if you look historically, there's nothing terrible about it. And in Japan, it's around 3% that it's hovering. And, accordingly, this, of course, hits them, they already have a fairly large problem with the fact that the economy is not working, the population is also not consuming. And in this regard, they, as it were, need to strengthen the yen a little. And the Americans are also pressing for the yen to strengthen. But when you raise the rate and what should lead to the strengthening of the yen, you encounter structural problems with servicing your own debt. Well, in theory, yes, because they have 250 government, if you add everything up, I think, there are 370 in total debt. But this is the main debt held within the country. So this is also a relative dynamic that can be controlled, in fact. Accordingly, you have such problems that they need to solve. And to solve them, like, okay, and what do we do with this now? But when they get fixated on Japanese debt, they always forget that there is such a concept as Net International Investment Position. This is the amount of assets a state owns outside the country, and the amount of assets foreigners own within the country. So, Japan has over 5 trillion of these funds. This is the very carry trade, in essence, if they issued a bond and bought assets in other markets. >> Well, it basically worked like this: a Japanese bank goes and buys Japanese JGBs at zero percent, pledges it to American banks as collateral, gets dollars for it, and, accordingly, then invests in America. All the money they have is mostly in America. 50% of all the money the Japanese hold is in American assets. Accordingly, we get a dynamic where, imagine that the Japanese implement this 2.5% scenario. Sooner or later, you get a real wave of capital repatriation, because, well, it's more profitable for banks, your currency is strengthening, you have positive interest rates, why would you sit in this America, which is devaluing the dollar, it makes no sense. You have an inflow of capital. Moreover, it happens in such a way that it causes a second-level effect. This is when all the speculators who scratch their heads say: "Damn, I need to go to Japan too." Because, firstly, money goes into the economy, which means your stocks are growing, and plus your yen is strengthening. This is exactly the mirror situation. What was observed in America from, say, 2010 to 2020, yes, when capital went to America, the dollar strengthened, markets grew, everyone was super. This is the scenario that can now be drawn for Japan. This doesn't mean it will happen immediately, but in principle, over the decade, it will likely happen at some pace. The second problem that is for Japan, that is, in principle, I am bullish, you can take 2% in Japan in your portfolio, it's okay. They, in principle, companies >> Buffett also, I think, bought Japanese companies. >> He has already exited most of them, but he invested very actively in Japan. In Japan, companies have no debt at all. They are all sitting on cash. And, in fact, the Japanese are now trying very hard to reform their culture, where they have interconnected holdings, so that they pay dividends, so that they do more IPOs, buybacks, so that the population receives money, then spends it, and this wealth effect, which will supposedly launch the Japanese economy. I don't know if it will work or not, I think it's utopian, but okay. But now we get a situation when the Japanese are returning capital. Where are they returning it from? First of all, it's America. And, accordingly, you have about a trillion that they hold in Treasuries, and everything else. Well, let's say they won't sell Treasuries because they need them for operations. And everything else, you have pressure that about a trillion and a half of capital is leaving your market somewhere. You need to compensate for this somehow, considering that the Americans cannot afford their market to fall by more than 20% today, because the main budget revenues that regulate the budget deficit rely precisely on the growth of the capitalization of the S&P, because a large part of the revenues comes from people paying taxes on income from the growth of the stock market. >> Yes, yes, I hear you. >> So, and accordingly, you will have to regulate this somehow. Either you spit on this market and say: "You have other problems, I need to save the bond market." But the second part that we need to watch is, undoubtedly, the French, and this is the risk of a complete collapse of the European Union, because the French are the fourth largest debtor in absolute terms in the world. A large part of all bonds, both corporate and government, is held by foreigners. And if you start withdrawing money from there, I think many in the EU will have the question, do we want to save the French economy at the expense of our taxpayers, considering the overall situation with the war and the overall situation with Greenland and the overall situation of how they are all biting each other here. Accordingly, you have a potentially very large time bomb laid here for Europe. And the Japanese will undoubtedly play a significant role in this dynamic. But when they talk about carry trade, you need to realize one thing. Carry is killed not by the fact that the rate is 0.5 or 0.7. It doesn't depend on that at all. Carry trade is killed by one simple dynamic. Capital repatriation, when it happens, it leads to an automatic appreciation of the currency, right? So the yen will rise. Accordingly, what happens in this case? On the one hand, inflation is decreasing, on the other hand, it hits your export sector. And when you want to play carry trade, you need, at least on the funding side, clear stability of what will happen. It has been for the last 20 years, and now you are entering a period when you will constantly have a latent risk of a political decision, that no, the yen has strengthened too much, we will lower it somewhere from 140 to 160 again. That is, this small latent risk of devaluation, let's call it that, let it not be devaluation, but a sharp decrease in the exchange rate by political decision, it kills the entire carry trade system. It's not the percentage ratio, it's precisely this decision that politically this funding side becomes practically unpredictable. >> So, in principle, this is a potential black swan, >> yes? I would already say a white swan, because it may not be discussed in the general public, but I think the banking system is aware of this. Although who knows. We all thought that, like, tricolor financed something for everyone, banks. Now, in private credit in America, things are emerging where they slept through about 10 billion just because one guy in Excel was fiddling with something, manually entering some numbers. For 3 years, no one saw it. And this is, like, the biggest players. All the largest banks that are supposed to understand all this, monitor all this. No one did it. You just understand, if this didn't work, then what else could be there? These are the questions. And, accordingly, it is quite possible that someone realizes it, and it is quite possible that someone will be able to play on it. And it is quite possible that there is no broad understanding of this. Again, in the same understanding, that we can understand this, analyze it, tomorrow something will happen, tomorrow the red-haired guy will wake up on the wrong foot, say something stupid again, and this whole dynamic can change. And, well, some kind of pictures like this, some thoughts like this. So, Japan, in principle, looks good in the long term too. >> Well, Japan scares me precisely because of its volume. This carry trade is just something that can work in the other direction. That is, the business that has been forming there for decades, yes, for ten, really for decades, this carry trade has been happening, and it is obvious that the volume has grown enormously. And if all this goes in the other direction, it will be a big wave. In fact, I think this risk, in this format, as it is discussed, is exaggerated, because in the past, well, already in 2024, when in August the carry trade really collapsed, then you can really say that it was like that. And it was preceded by similar problems in the debt market. They have some Konicheva bank or some Neni, in general, some corporate bank, which in June went up in smoke quite strongly and revealed some huge multi-million dollar problems precisely in its American investments. And I think that in a year and a half, the Japanese have realized that they need to reduce this topic a bit. >> And I think that, I think they are not making any sharp moves there. I think that the risk is much, much lower in the shadows than it is being portrayed now. Well, and again, the concept of carry trade has now turned into the same thing as the concept of liquidity. And here I can advise, there is an interesting book, it is called exactly that: The Rise of Carry Trade. And the whole logic of this book is that everything that happens in our financial world, in essence, is in one form or another a carry trade. That is, in essence, Turkey is the same carry trade, the question is just that we are focusing on Japan as a clear example, when it is clear that there is zero money there, you take it, you use it >> It seems to me that the volume is just huge. That is, in Turkey, of course, yes, but >> well, plus, you must take into account that the Japanese are not the main center for redistributing dollar liquidity throughout Asia. That is, they are not just speculating there, they are really using these instruments for funding all banking and business flows throughout the Asian region, including China. China is also tied to Japan in terms of obtaining dollars. Therefore, things are not so simple there, that you take money and run, invest in Nvidia, and everything is fine. It's more about interbank funding and dollar distribution in the system. >> There is a cool book by Michael Lewis, I think, if I'm not mistaken, Boomerang. Have you read it about the crisis in the Eurozone? Well, I recommend reading it, it's really cool. It shows the situation from the inside. And it described the situation with Ireland there, and the thought that a whole country is a huge hedge fund. The same thought comes to my mind about Japan. Japan has turned into a huge hedge fund. Only not just a hedge fund, but some kind of global fund, with trillions of assets. And this can greatly affect the financial system. >> And, by the way, the most interesting thing is that all this only accelerated after 1998, when LTCM, that famous fund, blew up with two Nobel laureates. The basic problem was that when this fund was saved, it was like, it had one dollar of capital trading for a trillion, roughly speaking, you know, such insane leverage. And when this fund was saved, in essence, it gave a signal to the whole system that there is no downside risk, the bigger you become, and this, by the way, is a very interesting dynamic now. Returning to artificial intelligence, this is what it seems to me these comrades Sam Altman and others are doing. That is, there was such a, like, a curiosity happened. The CFO of OpenAI at some point was speaking somewhere and stated that our task is to become so big that we are "too big to fail." Then, in essence, no matter what happens to you, the state is obliged to save you, like banks in 2008. And it's quite possible that Larry Ellison of Oracle is watching us from his yacht and says: "We need to add more fuel, because if I go down, then nothing will remain, and we need to save our homeland. For the homeland, you can do anything, give us money." That is, they are actually pursuing this technology. And the Japanese, simply after 1998, understood that, well, okay, let's make this center so that if something happens, we will have such a key in our hands, a factor in our hands, that will keep us in any case. >> Logical. Well, I think that, uh, it's probably worth summing up some conclusions, or rather, forecasts. I would like to know the forecasts. What are the main macroeconomic trends you predict for 2026? We are at the beginning of the year. What will dominate? You mentioned energy. Tell me a little about which commodities you are considering. And plus the macroeconomic situation itself, how will it change in the coming year? >> Good question. Short answer: I don't know. That is, I have, like, bipolarity tormenting me now. What I see in the indicators and what I see, and what the base scenario is, right, we proceed from the fact that inflation continues to slow down. It may slow down much slower than we think, and we may not like it, but the base peak has been passed. And when I say, I sit and say: "I am a deflationist to everyone, and they look at me like an idiot." I say: "Yes, from the point of view of short-term cycles, it is so." But if you look at the long-term cycle, the deflationary cycle cannot end just like that, in my opinion, in my sick head. That is, what is happening now, the rise in prices in the absence of economic growth leads to the fact that consumption is sharply declining. That is, this deflationary spiral, which was already there before, has simply shifted and will now proceed with accelerated force. Well, what we see, yes, if you look at all the economic indicators, production is not growing, consumer sentiment is terrible, retail sales are slowing down everywhere, that is, you see that the uncertainty in the economy is huge, that everyone, artificial intelligence is putting pressure on the labor market. That is, as a consumer, you know that you have problems finding a new job, you won't go and buy yourself a bag or whatever, simply because you know that if you lose your job tomorrow, >> Accordingly, this is slowly continuing. And finding a new job where you can say: "They will pay me 20% more," you understand now, it's simply unrealistic. And, accordingly, at some point, you cannot pass on these constantly rising prices to the consumer. Well, let's look at restaurants. If you go to restaurants now, not only has the quality deteriorated, but the price has become such that, well, sometimes you say, "Well, understandable, maybe." Yes, yes. By the way, we recently discussed this with friends. The price has really noticeably increased. >> Noticeably. And, moreover, the experience has become much worse. That is, you come, like, you pay some absolutely insane money, and the service is, like, okay, for what? For what? Ah, and this can be said about everything, about almost all goods, and insurance, and all this, that the price increase is huge in itself. Accordingly, you have a very small share left for consumption. And at some point, these companies, what starts to close, you again, where do companies start? Companies always optimize personnel first. That is, they fire the very workers who, by logic, should consume. And, accordingly, your labor market is breaking down, there is no consumption, and corporations that cannot pass on these constantly rising prices along the supply chain. And at some point, this dynamic will collapse, and the only thing corporations can do, well, you can't turn minced meat back. That is, it's impossible to lower prices like this, you know, I lowered them, although along the supply chain, they have already stabilized. Accordingly, either they will go bankrupt, or they will have to somehow reduce, reduce employees, reduce prices, and this whole spiral will continue to tighten. So, in my opinion, this should end in a rather shameful crisis, precisely from the point of view of the labor market. If we consider it in this logic, in this logic, then this year bonds should outperform. In this logic, gold should feel relatively good. Yes, and in essence, that's all. Well, maybe some topics, you know, like, if we talk about, yes, these infrastructure topics, road construction, like, >> yes, well, some topics that exist, that need to work in these, in these times, this whole thing. On the other hand, if we look now and this scenario, which I cannot assess how likely it is, because I don't believe that we are at the peak now. It seems to me that we haven't seen the last rally yet. Let me be wrong, I clearly admit that to myself. I have hedged my portfolio. That is, if I turn out to be wrong, I'm okay with that. But now it seems to me that we haven't passed the last peak. And the logic that I'm trying to find, what could justify this peak. Now we are all talking about liquidity, as we discussed. I don't know how liquidity can be. What will we create liquidity with now? Will we print money, hand it out like Trump, possibly. Are there political prerequisites for this right now? I don't know. It seems to me that this will cause a huge wave of discontent and so on, and so on. That is, you can't just hand out checks under such a sauce. You need to construct something in this case. Accordingly, uh, if we are talking
Regarding Trump's actions, regarding all his rhetoric, that it needs to be restored, this whole program that the world is now entering an extremely tense phase, of confrontation, from this point of view, one can say: "Yes, we will now support our economy, no matter what, go ahead, let's produce, let's do it, no matter what, inflation, to hell with it, go ahead." Emission. And against this backdrop, you will undoubtedly have good growth indicators, and good indicators of productivity, and risk assets will feel good. And by and large, gold should then be sold off. Rate cuts to zero, full control over the bond market. That is, you say, we need to finance this economy, we need to increase the deficit by three times. increase. Accordingly, you need to, you need to somehow keep your market. You introduce control over the curve, you invite the Fed, which will buy all this up again, you introduce capital controls, you completely open up all sorts of loopholes for the banking sector. This, by the way, was done. That is, in December, Americans gave banks certain relaxations. And now, when you talk about problems in the banking sector, repo markets are crashing, there's nothing like that there. Now they have prepared everything very well, we'll see if it works or not. But what they have done in the last 4 months, in principle, funding stability for all these debt operations is ready, and they can calmly inject 2-3 trillion there with relatively minor changes in banking regulation. Well, Netflix started to grow precisely after the decision to reduce quantitative tightening. I understood that this took place. I, for one, am very calm about these quantitative tightenings. And it seems to me that this is more of an emotional factor, when people say: "Oh, so there will be liquidity, let's run." Rather than something real? what they did and what the potential risk is, that, uh, exists, yes, so they closed QT, okay, but it wasn't important that they now started, they introduced not QE, but they have Reserve Management Operations, that is, they are now willing to buy short-term bonds up to 40 billion dollars. But all, all American debt is now going through the short end. That is, accordingly, all these bills, on the one hand, allow the system to function, because they are liquid instruments, on the other hand, they increase the burden, this needs to be constantly refinanced. And this is the reason why your TGA cash is so high. That is, in principle, there is no point in chasing it up to almost a trillion. Uh, but they reached it, because your debt is constantly growing, and you need to constantly refinance more and more volumes in the short term. Accordingly, you need to have more cash for emergencies. And they did that. But you have a problem that if you now remove these short-term bonds from the market, yes, this is an extremely negative effect from the point of view of liquidity. This is what happened in 2019, when the repo market collapsed in September 2019. Similar measures began to lead to a shortage of reserves, we will provide reserves and take short-term bonds. They took, took, took, and in the end got what they got in March. The collapse of 2020, it was like that. And no amount of whining, no operations of the Federal Reserve, nothing worked. Only when Janet Yellen injected 2 trillion bills into the system did it work. And then these chains were restored more or less. And then they also removed the restriction on the number of repos that banks could hold. This system calmed down. And we are now moving along the same scenario. That is, short-term >> short-term is a month or two and then everything will recover. >> In theory, yes, but again, one must take into account that we still have Trump on top, that is, he can concoct something at any moment, he won't think, he will just blurt something out. >> When Trump started talking, everyone thought: "Damn, what an idiot." But when he started to act, to bring it to life, we thought that he was a dangerous [ __ ] who could be considered. Well, as I listen to a podcast today, they were discussing comrade Trump, and an interesting observation was made. They say that Trump, in terms of consistency of actions, is one of, I think, over the last 50 years, they consider him almost the only president who actually does what he says. Roughly speaking. That is, if Obama promised to change everything, but in the end changed nothing, and went down in history as the first black president, not some, you know, innovator, then Trump, at least, he may talk nonsense, but he does a lot. And so he directly said: "We will be America, that's it, everyone is our enemy, yes, activity." And so this activity, it may be liked or disliked, but that's how it is, as it were, what >> we will have to live with. >> Alex, I think we'll probably finish today. Thank you for coming to our little gathering, for explaining very complex things that indeed, and probably we, you and I, understand little, because the best economists do not fully understand what is happening. But we, at least, tried to try to look at it. And thank you for having your expertise, you share it. I remind you that Alex has his own channel. You can go to it. There is a lot about macro and a lot of useful information. Thank you, and I look forward to seeing you next time. >> Dima, thank you. With pleasure. >> That's all, bye everyone.