It's Been Difficult to Get Inflation to Move, Soss Says

It's so good, you know, not only the obligatory modern digital copy. Excuse me, you have to pay up Gideon for the thick paper copy as well, with a beautiful, big, readable fund which is the article as you look at the deep State, as you look at Trump in our allies, which the article that's stuck out for you. So we have a great piece by a professor at d C Law School, um that is basically saying the problem with Trump in the deep state is not the deep state,

it's just the state. Just like the administration's attacks on fake news, their problems aren't on fake news, it's just news. So their problems are this is an administration that doesn't really believe in governing the country or running the administrators.

President doesn't believe much in running the US government, and the government is essentially uh returning the favor by resisting, and the the gap between a system set up to run the country run the government actively intervened for the public behalf is now being run by somebody who has us not just a separate agenda, but no real interest in the broader apparatus, and that is creating problems. But the fact is he got elected by a large body

of people who don't want traditional politics. Do we want traditional foreign affairs? Well, so this is basically the kind of look I this ties in Trump and bregs it, right, So what's happening and bregsit. If you get elected on a stupid but popular program that doesn't really have a practical component to it, then when you get into office, you have to figure out what to do to live

up to your promise. Right. That's what the problem with Brexit right now is they got stuck with an agenda and now have to figure out how to make that agenda work when nobody actually wants it to work or thinks it should work, except the people who voted for the people in power. Having to implement it, don't believe it.

So now you have the same thing to a certain extent in the US in which the president got elected on a populist, nationalist agenda that he actually still obviously feels beholden to those constituents, as we saw from the Charlottesville type stuff. Um, and yet that's not really a possible agenda for governing the country. And so what happens when the campaign reality meets the governing reality is something

that basically nobody knows. That's why we're in this weird state now in which nobody actually knows what's going on, because we've never seen anything like this. The exactly the

degree of political this is the first time ever. Kind of stuff cannot be exaggerated, even as the economy seems stable and normal and markets are going up and everything has come So it really is a kind of where you're looking determines how freaked out you are but getting at the same time, you know, Donald Trump, your president was elected on a very clear agenda of policy, right healthcare, tax reform, and infrastructure. When is he going to focus

on the actual policy that he can get through Congress? See, I don't actually think he was elected on those policy agendas. He never actually set out real policies on those things. They were urges, they were emotions. Infrastructure was I'm going to do something for the public. He doesn't actually care about infrastructure, else he would have turned to it. And even on some of the policy issues like healthcare, as

we saw, there was a negative thing. We don't like Obamacare, but there was no actual positive program, which is why they had no actual health care legislation to put in place. I don't think they're going to get any significant legislation going forward. It's possible, but the same problems that bedeviled them with a real agenda and putting together a sort of bipartisan or even a single Republican agenda on major issues is going to continue to bedevil them throughout the fall.

I know we've also is on radio, who does he listen to? Who does the president? First of all, does the president listen to anyone? At this point, Well, that sort of depends on who you talk to. Nobody actually knows, because what you tend to see is the president talking to lots of people and then changing his line to a certain extent depending on who he's talked to, and then finally bending to some reality, but then going back to what he was saying before. At this point, we

do not know who the president listens to. You mentioned that you've said this many times that you know to use the cliche foggy about him is significantly understaffed right now, How does it actually play out? What does it mean for Secretary Tillerson? The there aren't the Richard Hasses beneath that can provide wisdom. What I've heard is that, um, look,

the Secretary of State usually has two different jobs. There's managing the President and running U as far you know, running running the White House and the administration's foreign policy and working up there's also managing the building and the

State Department and the organistration administration and running that. Uh I've heard essentially the Tillerson is focused almost entirely on the White House and the President and keeping things sensible on policy, and that the he's not paying much attention to the State Department. And the things they've said about the State Department, the lack of staffing, the budget cuts,

the reorganization are scaring the crap out of everybody. Uh So, the State Department essentially is entirely the calmed uh and the lack of policy advice of people. There's no lack of people who could supply policy advice. The problem is that the people in the White House making the decisions don't well, the top person doesn't seem to care about

that kind of policy advice. Getting do we understand if and Trump is losing a little bit of popularity with his base and actually if he does, does he change does that explain a little bit of what we saw in Charlottesville. Well, so this gets to this question of sort of a chipping point. Right. Clearly, the poll figures have dropped, but they've dropped minuscule le. They've dropped, you know, a point or two a month on the and the

average in aggregate. And the question is if that continues going down from the high the low forties to the high thirties where it is now, If it continues to go from the low high thirties to the low thirties, at what point does the base become a sort of albatross rather than a source of support. And we just we're not there yet. Things have held, but another few months we may be in a different situation. I look, Giddan, where we are and I think it comes back to

the base of its story. We're talking, particularly after Charlottesville, about nationalists. Forget about supremacies. It's not really foreign affairs, but the sense of nationalism. Where is the new conservative nationalism that is that is constructive? Well, this is actually the great question, and I think we're going to be

looking more at this in years to come. There are some actual legitimate thinkers on the right, people like you've all live in or your m Hazzoni or elsewhere, or people like Basbis who are trying to think about what a positive and constructive civic nationalist agenda could be that ties the country together. But that isn't necessarily uh a nationalism directed against somebody, Right, the question is how do

you have an inclusive nationalism. The problem with so much of the agenda of the administration is that it seems designed to provide communal solidarity for its team by creating an opponent or an enemy, whether it's Korea, whether it's illegal immigrants, whether it's Mexicans, whether it's god knows what.

And the real challenge for civic nationalism in the you know, twenty one century is to figure out how you can get the benefits of tying your community together, how you can have social solidarity and a constructive sense of purpose, but in a way that is inclusive and that plays well with other groups, rather than having your solidarity generated simply by opposition in hatred of something else. And that's

what we're still groping for. What is the positive American program that can lead the world, uh and lead the country rather than divide things. Francy Laqua in London. Francy, and we're now going to go to the smartest article I have seen in the last I'm saying seventy two hours, maybe it's four days. Was counting with Gideon Rose. He's

the editor in chief of Foreign Affairs magazine. Another triumph of issue, unthoughtful discussion in different views, the power of Foreign Affairs, the many different views across the political spectrum. Gideon Jeff Greenfield in Politico has just wrote the best article I've seen on what happens if we don't know our history. It is just profound, alludes to the president, and it talks about Earl Butts, which is a name from another time and place. Um, the former Secutor of

Agriculture were resigned in disgrace. How dumb are we Gideon Rose day to day away from the PhDs and the fancy experts, How dumb are we on our international relations? It's not so much that we're dumb. I think that most people are concerned with and follow carefully the things that matter to them in their daily lives, and they have a good sense of that. And most people are

not directly involved in foreign policy and foreign affairs. One of the privileges of being the world's hedgem on the leading power is that our actions affect others more than their actions affect us. So it's kind of rational for Americans not to pay all that much attention. Unfortunately, they what the problem is not their ignorance or lack of knowledge or lack of concern. It's that the things they know that aren't necessarily true right and um, the this

administration right now is increasingly becoming losing all credibility. It's it's becoming either a pariah or laughing stock. And the question that we're now facing is what is connected to what the great question of the day. We're learning tons of things right now about how the world works. The economy,

for example, and markets seem disconnected from politics. We're now having a wonderful test in that, uh we we heard during the Obama administration during the red line with Syria crisis, if you remember, that was all this talk about, oh my god, the terrible negative consequences that are going to flow from the president not living up to his word. Right. So, critics of the Obama administration legitimately and appropriately slammed Obama for making a red line promise on Syria and then

not living up to it. Right, And that was supposedly something that caused other powers elsewhere to uh take advantage of the US do other kinds of things. Academic experts in credibility said, no, you know that's actually not true. Credibility isn't universal. People don't actually look at everything in regard to the last thing you said and and and evaluate that. And I think we're seeing that play out now.

The administration has no credibility. The pro rather, the president has no credibility, and even his advisors are seen as people trying to control him rather than actually speak independently. But the question of whether that affects anything real, why really in policy is something we've never seen before, right, But getting you could argue that this is why we have elections. Right, It's not up to me or Tom

or anyone else to look at foreign policy. We elect people that know best and actually, you know, try and protect our our interests. If the president cannot do this is how does the GOP or the Republican Party keep that in line? Well, that's that's what we're watching, right, And you're right, this is ultimately a political thing. The American people, just like the British people chose Brexit, the American people chose Donald Trump in a free, unfair election,

and uh, they're now getting the consequences. And the ultimate remedy will be a political one, right, in the sense that the administration has an agenda or it doesn't, It has a legislative track record or it doesn't. And eventually there will be new elections, both at the congressional level for Congress and then the presidential level, and life will go on. The American system will hold. This is not Venezuela. We don't just have Donald Trump. We have Donald Trump

and James Madison. So we do have a constructive framework in which to keep politics going. The question is what the policy substance of that will be. And what you're saying with the Republicans. Nobody knows. And I would point out, as you mentioned Venezuela, one reason Foreign Affairs gets it done, a ship and O'Neil on Mexico and some of the challenges of Latin America as well. Gideon Rose, thank you so much for starting this one's issue of Foreign Affairs

with Bloomberg surveillance. Bonus round, folks, it's uncommonly September thicker. It's got It's like it's like Hell or Vogue or Harper's Bizarre. It's it's it's it's it's that September autumnal issue fran scene. That's just thicker. No, no, not the swims No, no, We're not going to go there, Mr Tucker. It's not the swimsuit issue. It's like for Foreign Affairs is like Harper's Bazarre in September. They do more. And

he was Gideon Rose, thank you, Neil sauce Ware. This was never boring and provided incredible perspective for its important perspective. In August of two thousand uh seven, and you know we have done this before, but in the tenth anniversary here of where we are in the in the trenches of credits, we see economics. You came up with this idea of ring fence. What are we ring fencing today? Is it the balance sheets of the central bank? Or are we ring fencing disinflation? Are we ring fencing the

desire or investment by corporations? What is it? I think the answer is volatility. The most volatile financial instruments, Let's say in the US financial markets would include mortgages. Well, the Federal Reserve owns a fair amount of them. There at the threshold of reducing that holding. But while they were holding it, obviously that took volatility out of the

markets and sequestered it, so to speak. Similarly with a longer term coupon holdings, bond holdings of treasuries in Europe, the peripheral debt, the corporate debt that the ECB has put onto its balance sheet in Japan, similar kinds of developments. It's one of the forces I think that has given rise to give the change your language, that has made a change of tense. It's given rise to the fall of volatility, I mean, the full of volatility is there.

There seems to be a clearing call, whether in England or in the United States worldwide for further investment is one of the reasons why we're not getting investment, why things are dampened, why we're a lack of volatility, is just too much stuff out there. I mean, that's that's been a cliche that you and I have avoided for decades. But are we in an age of oversupply? Oh? I think the evidence with respect to how difficult it is

to get inflation to move is suggestive of that. You know, when there was a time when monitorists told us that inflation came from large central bank balance sheets, Well we've but we've been doing that for quite some time, and the evidence is that the inflation hasn't manifested itself. Then there were others who told us, well, if you get

to near full employment, you're going to get inflation. Well, unemployment rates have been falling in the US for quite some time to relatively low levels, Similarly in the UK, similarly in Japan, remarkably in Japan, even in kind natal Europe unemployment at least and now down down to single digits. And there's no evidence in particular of of wage pressures anywhere.

But but you know, you think about the technological change that was fracking for example, and yes we have more oil supply at any price than we used to have. That's a good thing, not a bad thing. Let's come back with Neil Sauce. Are gonna run of the time here and I went Fenstine to dive into the next block with us as well. For instance, you really wonder about the ring fence. What is the ring fence fend scene of Brexit? What is Prime Minister May trying to

ring fence right now? Well, it's unclear at this moment. We have a lot of business leaders tom that have gone to see the Prime Minister saying please ring fence services financial services because they're so important. But as negotiation starts then for the moment we're not really clear on the rights also of your nationals living here. So it's very difficult to see, you know, her bargaining chips what they are and what she absolutely wants to preserve for

the moment. We don't have an answer for that yet. But it's a very good question. Deal. One quick question. If I could the date calendar September twenty November one December, do you just assume a rate increase? Is that a dangerous assumption? Right now? I don't I don't think the market is expecting anything in September with respect to the rates. The markets expecting that September will begin the process of

unwinding the Fed's balance sheet. Then thereafter you have a you know, quite a number of economic reports, including inflation reports, which will adjust the probability of an action in December. I think that's pretty much the open moment for this year that Bill Dudley and others at the FED have been alluding to, Neil, what happens to interest rates once

they start normalizing. There's a line of thought saying that actually, because we're due a correction or you know, some kind of recession soon, then they need to either hurry up and high rates, or that they'll go further into negative Oh. I think that, uh, the structure of interest rates is likely to be much lower than in the past episodes for a long time yet into the future. Uh and uh. I think it's also the case that the central banks don't want to get too far out ahead with respect

to interest rates. They don't want to provoke the need for a new easing cycle, and so their main adjustment is going to be the balance sheet over time. And I think it's quite remarkable that they haven't articulated a rationale for why they want to shrink their balance sheet, what harm has it done? But nonetheless they seem intent upon it here in the States. Of course, they've already

said relatively soon for commencement. There's almost the universal expectation that draw from the e c B will speak to that at Jackson Hole and or announce it in the autumn. Uh So, I think it's the balance sheet that's going to be the main focus of this, and that gives rise to open questions about what does that due to the shape of the yield curve, what's priced in at

the moment. Well, my own view is that, um well, let me say my own sense of the market's view is that balance sheet reduction will steep in the yiel curve. That is to say, longer term interest rates would tend to be under upward pressure. I'm not so sure that that's going to turn out to be the case. If you recall during the uh QE episodes in the past, interest rates actually tended to rise while the central bank

was buying securities. We might get an episode here where interest rates would actually come down a bit as the FED is feeding the market these new security or refeeding the market these same securities, Sonia, What does it mean that the FED needs to watch out for? Is it in the communication? Do they need to have careful you know, telegrafication of this or how do they telegraph it to

the market so that they don't freak out? Well, there are number of open questions that the Fed has not yet articulated anything about we have with respect to their interest rate expectations, for example, the so called dot plot, which tells you where they think interest rates would eventually get to. They haven't articulated anything like that. With respect to what size balance sheet they expect to have down the road. They said they're gonna cut it. It's gonna

be bigger than it used to be. But how far? Where? Who? Who buys this stuff? I mean, I've I brought this up with a Swiss gentleman from Credit Sweez yesterday writing trendship notes. The name excapes you right now. I'm so sorry for that, folks, But the basic ideal, Neil sauce it. If SNB has a lot of apple stock, I guess at some point we understand other people will buy it. Who buys the stuff on the US balance sheet when

they decide to unload it. Yeah, and let's think about the scale of that, because in round numbers, they fed uh reduction of its holding of mortgages would more or less double the amount of mortgages available to the market, and the FEDS reduction of its treasury holdings would be sort of the equivalent of asking the market to absorb four years worth of budget deficits over the next three years. How does that, brilliant brilliantly said, how does that happen

in reality? And the answers, we don't know, right, that's correct, And there are a lot of details about this with respect to what the FED will let go of and sequence and so forth, I mean, freensy and I think this is absolutely critical. And this is something we've heard from Robert Kaplan of the Dallas FED and James Buller

St Louis. There's a huge mystery at every central bank of what happens when they when they hurt the switch, right, And this is something that of course the you know, the ECB is probably more at risk of even you know, compared to the FED. Is is we have an economy here that's quite fragile. What is the biggest common policy mistake at this point for the FED? Would it be to keep interest rates lower for longer or to rise

too quickly? Oh. I think the evidence of the last fifteen twenty years is that no central bank has actually succeeded at exiting from zero interest rates and then not having to go back to it in that direction. So I don't think going too too slow is a risk here. I think the risky prospect would be if they went too fast. Do you worry more about the ECB than

you do the FED? Are not? Really um I think the ECB has a special challenge in the sense that they're dealing with with a number of different sovereigns, whereas the US and has the advantage, if you will, it's dealing with only one. But I think the FED. I think the FED is more central in this respect than the ECB. Why are companies not investing? I don't think they need to. The profit share is doing just fine

all by itself. We live in a time when the benefits of economic activity seemed to flood disproportionately to capital and and maybe that's the answer enough. Niel Sauce, thank you so much so, Vice Chairman, of credit. Sweez, He's been a you know, on behalf of all of us at surveillance, at Bloomberg. On the economy, thank you for ten years of crisis, uh service to economics and to our global audience. James Trevidis joining us on our phone lines.

And Saint James Trevidis barely describes the author of my book of the summer, The Leader's Workshop, another book out Sea Power as well, and the author of an exceptionally important essay for Bloomberg View uh angst written, Oh let me see eight. I can do the math, James seven days ago. The key to countering North Korea lies off shore EDIALD. Stevidus, Welcome back to the program. I am reading John Keegan The Face of Battle, and it is a very difficult read for people not steeped the duty

of the U. S. Naval Academy. If President Trump was to read Keegan's The Face of Battle, what would should be or what would be? Is takeaway? Well two things. Tom One is The Face of Battle by Keegan is a is a book about great leaders in times of crisis. And I think the two big takeaways that the president ought to absorb is Number one, keep your cool, don't hyperboleized, don't shout out, don't try to trash talk your opponents. Stay cool, be less George Patton, more cool hand Luke.

And the second thing that comes out from the face of battle is be prepared for the unexpected, because things will go wrong. And I think if he takes those two lessons into account, it would be better positioned to face what's coming with North Korea. But what is critical here and I featured over this ankst ridden weekend the sacrifice of General Maurice Rose in World War Two, who

was under patent in the third Armored Division. Um, I think that the patent that others perceive, including perhaps the president, is a George C. Scott Patton. It's a Hollywood pattent. Patton wasn't his patenting perhaps, as would like to think. Am I right on that? You are absolutely correct? Patton was an intellectual, He was a reader, He was a

fine strategist. Where he failed, and I fear our president is on the verge of making these same mistakes is over emotionalizing, as it says in The Godfather, that marvelous book on leadership by Mario Puzo, don't make the mistake of hating your enemies at clouds your judgment. We need leaders who stay calm, Tom, Can the president change Admiral?

I don't think so. I think what we are probably going to have to count on, as we've all been saying for some months now, is a coterie of smart, stable generals at the moment around And maybe he should have a few admirals. Who knows, but uh, I think that people like General John Kelly, the Chief of Staff, General Jomatis, Secretary of Defense, Lieutenant General hr McMaster. I know him all well. I've known Kelly for forty years,

Matters for twenty. These are stable actors who will put some kind of speed break on the president's more adventurous tendency. Fantsy don't want you to jump in here, but I've got to ask the news question. Have you spoken to General Kelly? And would you serve the president? Um? I would not choose to enter this administration, Tom. I don't think I'm a good policy fit. I disagree with many of the policies, and I'm not a particularly good personality

fit either. I do email with John Kelly frequently, and I have the highest regard for him well, but I don't know, what would it takes for you to change him mind on that? And this is a critical question, right, There's still vacancies that need to be filled. So how does this administration and how does the White House specifically get good people on board? I think it will depend on the degree to which General Kelly can impose a sense of order and bring order out of the chaos

that is in the White House. The other cabinet departments, particularly Department of Defense, I think are running along reasonably well. State is a little behind in terms of getting online because of those vacancies, Francine, But I think it's we need the trains to run a little closer to the schedule, if not on time, and that will not happen unless General Kelly has given real authority. And I think the jury is out on how that's going to play out.

Will the President ever be on prompts? You know? Can people? Actually? I think that I think that's highly, highly unlikely. And you saw that play out in domestic politics of course, over the last three days, where he went off prompt um, blended himself in a extremely messy set of arguments and then had to walk it back. So that's I think what we're looking at. I doubt that will change, but you can still modulate the policies and make them more orderly, and I think that will be the task of those

around him. I want you to help us, Admiral, with the people that are in the f in the Fletcher School classroom. They're like Ken Frasier, like Kevin Plank, They're like Brian Krasss. Folks, these are the CEOs of Mark under Armour and Intel. They've said goodbye to the president. It's a tough call, I mean, a given company. And Jeff m. L I thought was quite articulate on this was general elector. Of course Mr mL exiting Mr Flaherty takes over. What is your advice to CEOs? They're not

wearing a uniform. They've each got their individual story, including the magnificent Ken Fraser starting on his father was a janitor and Philadelphia got independent state, got into Harvard Law and made a go of it. And there's another story. We got our own stories. What's your advice two CEOs who've got to make that decision on rights individual and

bigotry and hatred versus what's good for the company. I'll give you two reactions to that Tom and they both sort of stem for my days as Supreme Alley Commander at NATO um A. And this is obvious. You have to follow your heart. You have to know where you're emotional and your absolute ethical personal redlines are, and that

in the end has to trump everything. But then secondly, for a CEO or for a commander who's representing an enormous command, you have to as well look at how you're playing in the world and the impact you're having. In the case of a CEO, share price in a public company, and that matters. So getting at balance right for leaders is maybe the hardest thing. If I were going to name a book, it might surprise you, but

it's To Kill a Mockingbird by Harper Lee. It's a book about taking the hard but correct course, not the easy row course. And I think those CEOs did the right thing, both for themselves and ultimately for their company. And Francine I sort of thought Kevin Planky sort of looks like Gregory Peck, so I think it's sort of yeah, I'm not sure Francine is old enough to have seen that that's true. I am, I am, I'm a film buff. Admiral Francine, jump in here, please, Well, what will change?

You know, I've been thinking about the North Korean crisis, and actually I was thinking about how the reaction of the world would have been different had it been another administration talking about fire and fury. Are we not taking the presidents seriously enough when it comes to geopolitics? Now?

This is an absolutely correct observation, Francine. And increasingly as I travel around the world doing events for sending the Fletcher School, what I hear from Europeans, from Asians, from Latin Americans, from Africans is well, we're learning just not to listen to what the president says, but instead to watch the actions of the US government. That takes away

a powerful tool from the US government. If you cannot reliably depend on the chief executive to transmit a coherent message, you are handicapped severely globally, and I think we will pay the price for that going forward. We're going to rip up the strip and script rather income back with James DAVIDUS of the United States Navy. I want to speak to him about our sailors and our officers at

seat here in the Northern Asia Pacific Ocean. We will do that here in a bit off of his wonderful essay Bloomberg View, including that ship accident that we had a number of weeks uh ago. James davidis with US Admiral of course, at the UH the Fletcher School at Tufts University, Amerals davidus, you open Sea our your wonderful new book about our oceans, and there you are freshly scrubbed out of I believe Annapolis on the USS Jewet.

So if the US S Jewet was off Korea, off off off Japan and the water is a little choppy, how does sailors not fall off the ship? What's the safety mechanism of our sailors and officers at sea around Korea? Now? So there's just something basic like they don't fall off the ship. Amazingly, we still have sailors occasionally fall off ships, and tragically we just lost a lieutenant just a week ago. Um.

The safety measures are pretty obvious. We have railings that go all the way around that come up to about a bit above your waist. We have lookouts posted up above the decks to observe in case someone does fall overboard when the seas are especially unruly, will make an announcement will bring people inside tom what we call the skin of the ship. And finally we operate the ship. We sail it through the water in a way that minimizes turbulence heading into the seas, not off access and

so on, so we take care about that. It is a real concern and occasionally happens, but we're well prepared. We're honored to Bloomberg surveillance of your attendance. Admiral Mullin was with us the other day. Let me ask you the same question I asked Mike. The idea here that we can shoot a missile out of the air. Is that science fiction? Is it something on TV? How do you guys actually shoot a missile out of the air? Um, It is not science fiction. We do this quite a bit.

We practice it. As a younger officer, I commanded a guided missile destroyer that steamed around with a couple of hundred missiles that would do exactly that. And the way you do it is you have a radar that looks out two hundred and fifty miles. It can track something as small as a beer can floating through the air. We lock it up with a adar. We then alert the fire control team, We open up a hatch in the ship and the missile pops up vertically. It moves

that many times the speed of sound. And yes, we can knock down incoming missiles. I have done it personally on many occasions, and it's something we practice and are quite capable of doing. Well. Can the US try a surgical strike on North Korea? We could do one, Francine, But if we did, Kim Jong un would interpret it

as an attack on his regime. He would believe that we were coming to kill him and his family, and I believe he would respond aggressively against South Korea and in the process kill hundreds of thousands, if not millions of people. That's why even a surgical strike has deep, deep consequences and is probably not the option for which the president should reach at this point, right And this is because of the North Korean artillery installations right along it is it is, it is exactly, and they are

on a here trigger. If you will a dead man switch, if signals simply stop coming from Pyunyang, you will see those artillery shells starting to land in the whole almost immediately. So it is a very dangerous situation for which UH, an initial military strike from the United States is not warranted, right. UH. One final question is you as you salvage your voice

here and we thank you for your time today. If the President was the parachute into Annapolis one oh one and enjoyed eb Ned Potter in teaching the basics of our navy history, what's the number one thing President Trump needs to know from Ned Potter? He needs to understand that so many times in history it's a naval encounter, a maritime battle that truly changes the course of history.

And this goes back to the Battle of Solemnus between the Greeks and the Persians, through the Battle of Actium, which decided to fade of the Roman Empire, to the Battle of Trafalgar, which saves the British Empire and pulls forward into our history tom in the Battle of Midway in World War two. Big doors swing on small hinges, and so often those small hinges are maritime and character. James Vidas, thank you so much. He's the author of

Sea Power, which we've been talking about. Fabulous UH. Sprawl across the oceans of the world, including the South China Sea, which is where a lot of the tension is right now. And of course Tevitas has my book of this summer, the Leader's Bookshelf. I can't say enough about it. This is fifty maybe sixty books on leadership, and it's not what you think it includes. Is the add wible mentioned to Kill a mocking Bird? It includes Connecticut Yankee and

King Arthur Court fancying. That was by an author from the Mississippi River from a few years years ago. We learn it here as well. Oh we do. Yeah, absolutely, it's good to know that it's actually what I gotta reread it, and I did that. I reread Talent Two Cities a couple of years ago, and that was a whole different take than when you were seven. Team we continue. Francie Naquat and Tom Keene thrilled you with this on economics, finance, investment,

on international relations in Brexit. This is Bloomberg. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio,