Transcription
This, if the AI bubble bursts, which I think it might burst within one or two months, you see. Because why? It is already showing symptoms in Korea, you see. If it bursts, whenever that is, you see, we will have to guess what the Fed will do. So, I guess the Fed will choose, you see, between raising interest rates, you see, and, uh, tightening the belt, or another way is to just let inflation happen, you see, and manage it along, you see, but then the dollar will weaken, something like that. Because when that bubble bursts, the stock market will fall. The Fed probably cannot accept the stock market falling and ultimately affecting, you see, the retirement funds, you see, of many people in America. It will make spending harsh. No one, you see, who is the chairman of the central bank of the Fed or a central bank governor, will allow the economy to collapse before their very eyes.
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But before this, the professor had warned about a period that was a vacuum period, you see, or a period that might be a hole creating a gap in energy transportation, you see. Now, it seems that ships are gradually coming out through the Strait of Hormuz more, you see. That is, if we don't count the ships that were attacked, there are reports saying that the number of ships that can pass through Hormuz has doubled, you see. Is there still a problem with, uh, this gap or vacuum period?
This, I cannot guess, because, uh, it's like this, uh, if we say that in the past, you see, this vacuum period, it didn't, it relied on reducing, that is, relying on supply, you see, from stock, that is, letting the stock fall continuously, you see. So, it made everyone, you see, in the world, not feel at all that a crisis had occurred in the Middle East, you see. And, uh, global oil consumption was the same, you see, which is strange. Uh, I myself, uh, before this, thought that when, when that, that, that ship, you see, the last one came, you see, before new ones came out, there must be a vacuum period. But coincidentally, there is oil, you see, from other sources, whether from America or elsewhere, coming in, you see, from using the method of reducing that stock, you see. Uh, uh, various countries, including Thailand, you see, might have rushed to buy, you see, this in, so it allowed it to just get by. It, uh, it will depend on whether this stock, you see, which is continuously falling now, will fall to a point where, uh, it, it will cause, uh, a squeeze, forcing refineries worldwide to come back, you see, to compete to buy, you see, how much and in what way. Currently, the pressure might be easing because Iran, you see, is now, uh, allowing many oil ships to come out. Besides this, you see, Iranian oil, it appears that before the war, Iran, you see, used the method of sending oil and having it wait at various points, something like that, you see, a lot around Asia, you see, which I don't know how much there is. And now, you see, when it's opened up, the oil is coming out, you see, that is, passing from Iran again. Therefore, if any country, you see, can negotiate, you see, and can pull Iranian oil, you see, to use it, then that vacuum period might be less. But I am still worried, you see, that if a vacuum period occurs, it will occur because don't forget that a ship's journey, it, it, uh, takes one month, you see. If we have goods to use, you see, continuously, then it means we can find a source to buy from somewhere, which, uh, I can't think of where we buy from. But the world, you see, now, as long as it is content to let the stock, you see, flow, uh, down continuously, continuously, continuously, you see, uh, then, then, then it's called having no vacuum period because the vacuum period that comes from the Middle East is compensated, you see, by using all that, that stock.
Yes, but now it seems that a natural phenomenon is occurring, you see, which might be an unusual disaster, you see. There is a Super El Niño. The conditions in Europe seem unusual, you see. Will it stimulate or have any effect on energy demand, to the point of impacting prices and the timing of transportation connections during this period, Professor?
Regarding energy, you see, it's very hard to guess, uh, uh, because right now, that is, each country, you see, is allowing, that is, it's like this, that stock, you see, which exists as emergency stock worldwide, both government and private, you see. Yes. It's a lot, it's very much. And this, it's stock that they, uh, accumulated, you see, since the crisis, you see, in, in 1970, something around that, you see, '73 and '79, something like that. It took a long time, you see, to accumulate until now, you see. And from what I see now, some places, you see, they feel that they might, might, might let it fall continuously, you see, without having to worry much. For example, America, you see. America, you see, when it had emergency stock, it was because America's oil production was low and it relied heavily on imports. Now it has changed to where oil production in America, you see, from that shale, it's so much that now it is exporting, you see. Therefore, you see, it has become that some people say that this emergency stock, you see, uh, originally, it was kept, uh, because America was an importer, you see. Now it's not necessary. So, it might be that they will allow the government's stock, you see, America's stock, to decrease further continuously.
Another country that, right now, uh, people don't understand is China. Suddenly, China's purchase volume decreased, you see. Uh, I, I guess China will probably use its stock again too, you see, only that, uh, there is no data. But right now, Iranian ships that can go out, you see, will mainly go to China. So, it has become that China's purchases, you see, it, it was out of the market for a while. In summary, oil prices, you see, uh, I think when the time comes for it to adjust up, it will adjust up, but it probably won't reach the level of 150, something like what people are worried about, you see. But the problem now, I, I think it, it occurs with that, that, that, uh, other components. Because don't forget that besides oil, you see, uh, that, that, that LNG gas, that liquefied natural gas, passing through, that is, the Middle East, uh, uh, is a source of 20% of the world's supply, and it's been missing for 3 months. Oh, this is a big deal, you see. And when it's opened, you see, it will take time to open it properly. That's another month, so 4 months already. And after that, you see, ships going out will take, suppose, another 1 month to come to Thailand, and then they will have to compete, because when it starts, you see, uh, when goods come out, who will get it first, who will get it later, something like that. This is a big shortage, you see. And don't forget that it might also affect petrochemical products, affect fertilizer production, you see, in many places. Fertilizer itself, you see, don't forget that fertilizer, uh, especially urea fertilizer, you see, passes through the Strait of Hormuz, about 1/3 of the world's supply, and it's been missing for 3 months, uh, now, you see. And as mentioned, you see, uh, it will take 4-5 months to export and get ships. And it's missing at a time when there is planting, you see, in, uh, the world, uh, north of the equator. And now, it depends on whether the goods that will go, you see, for planting in countries in the south, like Brazil and Argentina, will be in time or not. This needs to be watched. But what is happening is it will push up prices, you see, of, uh, both, uh, fertilizer prices and agricultural product prices. It will, uh, affect, as, uh, uh, those industrial products like metals and so on that are produced, you see, uh, in the Middle East, because these need to use cheap energy, such as aluminum, you see. Ah, a lot is missing, you see. Uh, if I remember the numbers correctly, it's about 10% of the world market, you see, produced in, uh, the Middle East. Ah, that, that, uh, sulfur, sulfur is a key component in making copper, you see. Therefore, uh, both aluminum and sulfur, these, they will be components, you see, in all electronic products. Besides that, there is also helium gas. Helium gas, you see, uh, about 20% of the world's supply is produced here, you see. And it's a gas that is necessary for producing computer chips, you see. If it goes like this, it will have an impact on prices, you see. Uh, it, it will make prices, you see, move up across the board for many products, not just oil prices.
Yes, besides oil, besides gas, you see, it seems that now another thing that might trigger inflation is, uh, electronic devices, you see, from semiconductors, which are in high demand and are still a bottleneck right now, you see. Recently, there is information from Apple, announcing a price increase for its products, Professor, giving the reason that they cannot bear the high cost of chips alone anymore and must pass it on to consumers. This has led to the phenomenon that people talk about, "chipflation" or "AIflation" or inflation coming from AI, inflation coming from these AI systems. Professor, how do you see this? How scary is this point compared to the inflation we used to fear that came from energy or consumer goods?
That is, uh, it makes, uh, the prices I just mentioned, aluminum, sulfur, which affects copper, you see, and, uh, plastic products that come from that gas, uh, and also helium, which affects the production of that, uh, computer chip, directly, you see. It affects electrical products, uh, electronic products, completely, you see. Therefore, you see, it will make the process related to green initiatives, you see, related to solar, and related to, uh, all expenses related to digital, something like that, you see, it will move higher, you see. Now, in the past, you see, we would feel that we must pay attention, you see, to, uh, uh, food and necessities, you see. That is, in terms of food, uh, and oil for movement, uh, transportation, something like this, was primary. But nowadays, you see, we wake up, we pick up our mobile phones already, right, you see? And, uh, like AI, you see, I, now, uh, go and ask AI, you see, many times a day, you see. But I use the free version, I use the free version.
Uh, this itself is what has become, uh, human behavior, you see, it has become deeply intertwined with digital activities, activities related to, uh, those electronic products, you see, a lot. Therefore, you see, the rising prices of these things, now, I think it affects the livelihood of people worldwide not a little.
But will it lead to a state of high inflation, hyperinflation, like what happened from the root cause of oil prices? Is that possible, Professor? It's like this, uh, if you ask me to guess, I think right now, that, that AI bubble, because AI is over-invested, you see. And so, some people analyze that in the use of new technology, you see, in the past, it will happen like this, a bubble will occur, and it will burst, and some people will be damaged. But that technology, you see, will continue. The first one, you see, was a technology in the world that came out and clearly caused a bubble problem, that is, uh, rail, that is, the railway system. Yes, which at that time, oh wow, there was money from Europe, you see, and it was invested, you see, in South America, in North America, a lot, and in the end, it was over, more than the demand. After that, they said the next one was about building the electricity system in America. After it was built, you see, in the end, many companies involved ultimately failed. Uh, the next clearest one was the internet, at that time, right, you see? Do you remember the internet, when it's with us and we use it every day, you see, but many companies in it, when the bubble burst, you see, they failed. This time, the same thing will happen. Now, if the AI bubble bursts, which I think might burst within one or two months, you see. Because why? It is already showing symptoms in Korea, you see. Uh, and, uh, that carry trade, you see, is now tightening continuously. If it bursts, whenever that is, you see, we will have to guess what the Fed will do. I'm good at guessing this. This, this, uh, guessing as if forced to guess, I, I fear that the Fed will, uh, do QE, that is, inject money, you see. But injecting, that is, to sustain, that is, they might go in, you see, in a way that they buy long-end US government bonds, like 10-year, 30-year, something like that, directly, to sustain it, you see. Because when that bubble bursts, the stock market will fall. The Fed probably cannot accept the stock market falling and ultimately affecting, you see, that, that, that, uh, the retirement funds, you see, of many people in America. It will make spending contract. So, I guess the Fed will choose, you see, between raising interest rates, you see, and, uh, tightening the belt.
With another option being to just let inflation happen, you see, and, uh, manage it along, but then the dollar will weaken, something like that, you see. I guess they will choose the latter approach more.
If that happens, you see, then, uh, uh, the financial situation, you see, in, in, uh, in the phase after the market has fallen and then comes back up, you see, it will become a phase, uh, of, of, uh, what, pumping, you see, a huge amount of money into the system, you see.
Yes, but looking at the stance of Mr. Kevin Warsh, the new Fed Chairman, he doesn't seem to agree with doing QE much, you see, Professor. And he seems to have an opportunity to use measures that even absorb liquidity. Correct. His stance, in the past, you see, he would come out, you see, in a manner like a hawk. Yes. But this, uh, but I emphasize again, what I see, what I guess, you see, might be wrong, and I have guessed wrong on many matters. Therefore, listeners, you see, take it and weigh it and consider other factors. But I, I, having gone through work in, uh, organizational management, monetary policy management, you see, I, I, uh, see that no one, you see, who is, uh, the chairman of the central bank of the Fed or a central bank governor, will allow the economy to collapse before their very eyes. No way. Therefore, when the situation, when the event...
The situation changes, it, it, it will change. Someone uses this analogy, you see, saying, uh, in English, "where you stand," you see, meaning your stance. "Where you stand depends on where you sit." It depends on where you are sitting. If you are sitting in this chair, you see, for which you are responsible, look, the stance changes.
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