Foreign Exchange

Strategies and developments relating to currencies and the foreign exchange markets

Real Vision Apr 16, 2021
The Exponential Age: Crypto's Fast and Furious Rise
Raoul Pal returns in his role as the founder of Global Macro Investor to update Real Vision members on the exponentially large role crypto is playing within his macro framework. Raoul argues that crypto is a "black hole" that is sucking in all of the world's talent and value at a speed that no one can comprehend and that its capacity to generate phenomenal returns for investors is not temporary but rather part of a durable long-term trend that is at the vanguard of what he calls "The Exponential Age." Raoul contends that since central banks have suppressed the volatility of currencies and interest rates, large "macro" on heavy swings in these variables no longer offer the opportunity they once did and that it is in the world of crypto where these outsized returns can be found. Filmed on April 10, 2021. Key learnings: Raoul sees the migration of value to the digital world as an exponential trend that offers opportunities for investment return that are no longer possible in traditional capital markets
Real Vision Apr 13, 2021
Dan Suzuki: A Regime Shift in the Investment Cycle
Dan Suzuki, Deputy CIO at Richard Bernstein Advisors LLC, joins Real Vision managing editor Ed Harrison for a deep dive re-evaluation of portfolio asset allocations as the global economy is poised to recover from the COVID-19 pandemic economic shutdown. Suzuki suggests that what worked in the last decade – growth over value, U.S. exposure over international, large cap stocks over small cap, and investing in tech dominated companies – may not work in the coming cycle, and such allocations need to be rotated. Filmed April 7, 2021. Key Learnings: Coming out of the economic shutdowns, the market is starting to price in a much faster tightening cycle than the Fed is considering, spurring the need to re-analyze portfolio allocations. A suggested portfolio rotation includes more international exposure over U.S., small cap over large cap and mega cap companies, and a smaller allocation to technology and high-growth sectors.
Real Vision Apr 12, 2021
Jens Nordvig: The Death of Fixed Income
Danish-born economist Jens Nordvig, founder of Exante Data, a data and analytics firm for institutional investors that specializes in foreign exchange markets and macroeconomic policy, joins Real Vision co-founder and CEO Raoul Pal for a deep-dive conversation on the global economic outlook; the impact of the vaccine rollout on the U.S., Europe and emerging markets; and the likelihood of multi-year fiscal stimulus. Nordvig sees monetary policy frameworks evolving in ways that are unfriendly toward bonds, like Average Inflation Targeting (AIT), causing a fundamental rethinking among investors for owning fixed income assets. Filmed April 7, 2020. Key Learnings: A multi-decade bull market in fixed income lasted longer than many expected due to negative interest rate policy, and the COVID shock made central banks across the globe max out monetary policy. Interest rates are currently unattractive to many kinds of investors, and the economic outlook is such that risk assets look attractive, including cryptocurrency. Follow @jnordvig @ExanteData. Visit Exante Data (https://www.exantedata.com/).
Real Vision Apr 12, 2021
Jens Nordvig: The Death of Fixed Income
Danish-born economist Jens Nordvig, founder of Exante Data, a data and analytics firm for institutional investors that specializes in foreign exchange markets and macroeconomic policy, joins Real Vision co-founder and CEO Raoul Pal for a deep-dive conversation on the global economic outlook; the impact of the vaccine rollout on the U.S., Europe and emerging markets; and the likelihood of multi-year fiscal stimulus. Nordvig sees monetary policy frameworks evolving in ways that are unfriendly toward bonds, like Average Inflation Targeting (AIT), causing a fundamental rethinking among investors for owning fixed income assets. Filmed April 7, 2020. Key Learnings: A multi-decade bull market in fixed income lasted longer than many expected due to negative interest rate policy, and the COVID shock made central banks across the globe max out monetary policy. Interest rates are currently unattractive to many kinds of investors, and the economic outlook is such that risk assets look attractive, including cryptocurrency. Follow @jnordvig @ExanteData. Visit Exante Data (https://www.exantedata.com/).
Real Vision Apr 07, 2021
Is the Reflation Trade Turning Now?
Keith Dicker, founder and chief investment officer of IceCap Asset Management, returns to Real Vision to explain why he disagrees with the "reflation" narrative that has buoyed commodity prices and emerging market currencies. Dicker argues that rising yields will draw capital into the U.S. from regions whose capital had not fully recovered from the 2008 Great Financial Crisis and was further impaired by the COVID-19 recession. Key learnings: Dicker sees signs that the reflation trade is grinding to a halt and argues that renewed strength in the U.S. dollar could emerge. He is constructive on dollar-denominated assets and thinks a melt-up in U.S. equities is possible. Dicker thinks emerging market currencies and commodity prices such as copper and oil could encounter weakness as global growth slows down.
Real Vision Mar 31, 2021
Preston Pysh: Understanding Bitcoin from a Macro Perspective
Preston Pysh, founder of The Investors Podcast Network, joins Real Vision managing editor Ed Harrison to discuss value and valuation in the context of central bank policy at its limit. Pysh shares his journey from U.S. Army veteran to value investor and Buffettologist to crypto and Bitcoin advocate. As a value investor, he found it hard to continue looking narrowly at 'value' when he had serious doubts about the entire currency regime, given today's aggressive monetary policies. Eventually, that led Pysh to Bitcoin as an alternative store of value—and he believes Bitcoin is going to make markets free and open again. Filmed March 26, 2020. Key Learnings: Pysh explains some valuation metrics of Bitcoin and why he looks at it in four-year cycles given the supply halving schedule, which he calls the quantitative tightening cycle. He highlights that a long-term chart of the price of Bitcoin looks similar to Metcalfe's Law, which he uses as a Bitcoin price projection metric.
Real Vision Mar 30, 2021
Is The Dollar Headed Higher?
Veteran macro investor Michael Nicoletos returns to Real Vision to share the opportunities and risk he sees across a wide array of assets including currencies, equities, interest rates, commodities, and crypto. He shares with Real Vision's Jack Farley his view that central bank balance sheet expansion will likely continue to result in skyrocketing asset inflation and that the United States dollar is poised to benefit from rising interest rates. He argues that emerging markets face serious challenges in this potentially bullish-dollar regime and analyzes the recent chaos in Turkey. He compares the burgeoning fiscal and monetary stimulus in the United States with the shortcomings of the European Union’s efforts to implement fiscal stimulus. Linking macro to crypto, Nicoletos explains his views on Bitcoin, Ethereum, Cardano, and several other altcoins. Filmed on March 24, 2021. Key learnings: Nicoletos' view on central bank liquidity leads him to be very bullish on dollar-denominated assets as well as Bitcoin. Since the U.S. stimulus efforts will accelerate economic recovery, Nicoletos sees the U.S. dollar poised to outperform the Euro and the currencies of emerging markets.
Real Vision Mar 26, 2021
Kevin O'Leary: Digging into Mr. Wonderful's Investment Philosophy
Famed investor Kevin O'Leary, aka Shark Tank’s Mr. Wonderful, joins Real Vision’s Raoul Pal to discuss his investment philosophy and why he rebalanced his portfolio to include 70% equities and 30% fixed income. He increased his weighting in gold to 5%, took a position in Bitcoin for the first time, and stresses the importance of ethical mining and why investors need to know where their Bitcoin is mined. When it comes to private market investments, O'Leary looks for direct-to-consumer companies as he has seen a digital pivot in America during the coronavirus pandemic, and he aims to find companies that have figured out social media and customer acquisition costs. Filmed March 22, 2021. Key Learnings: O'Leary builds his own index as chairman of O'Shares ETFs and shares his balance of U.S. and European stocks: O'Shares U.S. Quality Dividend (OUSAX), O'Shares U.S. Small-Cap Quality Dividend ETF (OUSMX), O’Shares Global Internet Giants (OGIGX) and O'Shares Europe Quality Dividend ETF (OEURX). He has studied throughout history how equities provide a bit of protection in the beginning of inflationary times because they have pricing power when
Real Vision Mar 15, 2021
Get Ready for the Return of Secular Stagnation
Narratives around the reflation trade and asset prices are currently pointing towards a full recovery and a period of extended growth as the world exits lockdowns. In this interview with Real Vision managing editor Ed Harrison, Daniel Lacalle, chief economist and CIO at Tressis, argues that this is being fueled by nothing more than hope and that, although this is a recovery, the world will return to the same state of secular stagnation and low growth that existed pre-COVID. Lacalle explains why fiscal and monetary policies, which have not generated inflation, will only make this situation worse, why he thinks there is only a few months left in the reflation trade, and the resulting asset allocation based on his outlook. They also discuss current pockets of value and the sectors that Lacalle considers to be value traps like energy and financials as well as Lacalle’s outlook for the dollar. Filmed on March 10, 2021. Key Learnings: Sectors like energy and financials, which have been benefiting from reflation narratives and trade at low multiples, should not be considered "value". Current negative views on the US and the dollar remind Lacalle of the GFC, but the reality is that the US and the dollar are still the cleanest dirty shirt.
Real Vision Mar 09, 2021
How Taxes Will Shape the Future
Even before COVID, global deficits had already expanded—but in the last year, they have exploded to levels that almost guarantee increases in taxes. We can already see the effects as high-net-worth individuals and businesses leave high tax areas like California for lower tax areas like Florida, Texas, and the Cayman Islands. Dominic Frisby, author of "Daylight Robbery: How Tax Shaped Our Past and Will Change Our Future," sits down with Real Vision CEO and co-founder Raoul Pal to discuss the history of taxes, sinister invisible taxes in the form of targeted inflation and monetary debasement, and the future of taxes considering the trends outlined above. Pal and Frisby also discuss the inevitability and virtues of some level of tax and cooperation and the potential for better tax structures to emerge from this crisis. Filmed on March 2, 2021. Key Learnings: Increased taxes, new taxes, and monetary debasement are almost an inevitability considering massive global deficits post-COVID. Immigration and migration patterns have already emerged, and geographies that recognize these trends and adjust their taxation and monetary system in a fair way will attract both human and traditional capital.
Real Vision Mar 04, 2021
Short Tech, Long Energy
Teddy Vallee, founder and CIO of Pervalle Global, returns to Real Vision to share his latest views on economic growth, interest rates, commodities, and tech stocks. Citing everything from soaring retail sales figures to elevated levels of personal savings, Vallee projects that economic growth for U.S. GDP could be as high as 12%. In this reflationary environment, Vallee expects that bonds will continue to sell-off and that energy stocks will thrive while technology stocks will fare poorly. Filmed on March 1, 2021. Key learnings: Due to his lofty projections for economic growth (around 12%), Vallee estimates that U.S. nominal and real 10 year Treasury yields are likely to rise 100-150 basis points over the following 12-14 months. Accordingly, he expects tech multiples compression 20-30%, and energy equities, particularly those in Latin America, performing well. Because energy comprises a small percentage of the S&P 500 relative to tech, this period of reflationary growth could actually result in negative returns for the broad index.
Real Vision Mar 01, 2021
Jim Rogers: Identifying Opportunities While Markets Are Up to A Fever Pitch
Legendary independent investor Jim Rogers joins Real Vision CEO and co-founder Raoul Pal to share his outlook on markets and the lessons he learned on his storied career. Rogers tells Pal that this current market environment, marked by record-low mutual fund cash levels and high levels of investing on margin, reminds him somewhat of the conditions prior to the "Black Monday" sell-off on October 19, 1987, which actually occurred on Rogers’ birthday. Rogers stresses the importance of thinking for oneself and argues that China is well-positioned to be the future engine of economic growth and technological progress. Filmed on February 23, 2021. Key learnings: Rogers is very constructive on commodities such as silver, oil, sugar, and various other agricultural opportunities. He notes speculative fervor in the current market, particularly in SPACs, but sees opportunities in China and Russia in addition to commodities.