Surveillance: Fed Moving Closer to Normalization, Sinche Says

of course on the Bloomberg. Right now, let's bring in Robertson. She's with Amber's Pure Pont Bob. We've been talking through the morning about where we are. Is it a good time to take advantage of the volatility that's coming or is that a risky business? Pros love movement in the market, that's where you make money. Things have been quiet supposedly. Is it going to be more volatile into the end of the year. I think we are going to see

significant increases in volatility as we go forward. I think a couple of things are driving at One is obviously the potential that the FED will finally high rates, and that always tends to create some volatility. Uh. Second is we have not only the election here. We have discussions about Greek fiscal policy coming up later this year with the EU potential there. We have a big referendum in Italy coming up about the future governance there and what

that implies for for reforms going forward. We have ongoing reform processes in a number of places Brazil, around the world. So I think there are some catalyst as we go into the latter part of the year. And of course the central banks, I think is another big one. I think central banks really are beginning to push back against this notion that they can continue to solve all the world's problem. David wants to go big and wide. Let me go you right now. Is there a Monday trade

from Robert Sinch? I mean, is there something that just screams because you know, you do some great obscure stuff. Yen, luony, luoni yen, and that is there something that sticks out right now? You know? We we we talked to a couple of weeks ago about UM the movement down in the pace SO and we thought that that to take out the oil play. UM. You know, we could be um short Canada long pace SO or short Russian Ruble

short pace so. Um, you know, I think we've had a pretty good rebound now in the Mexican pace, so from around twenty down to under nineteen. I think that trade is is played out for now. I still think we're going higher in the dollar, um. And I think we could see you know, dollar yen higher, we could see euro dollar lower. So I do think this is an environment where the dollar is going to you better, and we should look at the dollar versus a basket

of foreign currencies. Right, Tom mentioned this is a Monday, a chance to regroup after what happened last week. Let's talk about the flash crash, what we saw in Sterling a few days hence. Now, what's your reaction to what happened there? What? What? What conclusion should we draw from what happened there? You know, in the foreign exchange world, there is this because it's an over the counter market. Uh. And there is this strange time between the clothes in

New York and the real opening time in Asia. Um. Now, this was twenty years ago when I used to manage money, but we used to leave overnight orders to go into the Asian session. We would specifically limit no transactions between five pm and seven pm New York time, because we knew there was tremendous illiquidity going into this New Zealand Australian marketplace. That's when we had this volatility again the

other night. And uh, you know, I would have thought the markets had grown up from that, but there is still that awkward period between the New York close and the Singapore Hong Kong open when you can off and get these very volatile moves in markets. And I think that's what we saw the other Now, your sense there is it was a liquidity issue, nothing nothing more. I think it was a liquidity issue. We may find out in some earnings reports that there was some errors made

somewhere along the way, um, but clearly it was. It was such a disorderly move that you have to chalk this up to illiquidity and probably an error that somebody will will fess up to at some point in the future. I'm embarrassed, Bob that I didn't bring this up earlier this morning. Let's cover it right now. I noticed obviously weak sterling, but just in the last week week euro as well. It's almost like a little wind shifting here.

Sterling dollar is cable, euro, Sterling is across the channel fuel, which do you look at? Which matters here? Well, I think again this becomes is this a just a move down for sterling or is this a move up for the dollar? You know, we've seen dollar yen back up above one oh three, it held that one hundred level back at one oh three. We've seen euro dollar come below one twelve. We've seen sterling obviously move lower. At what point do we start talking about a stronger dollar

rather than just a weak cable. And I think we're at that point round right now. You know, if you look at at five year interest rate differentials around the world, you know, five year swap rate in the US relative to five year swap rates in in other major countries, and you wait that by the waitings of the Dollar index at d x Y, this is the widest differential in favor of the dollar this year. So quietly, over the last couple of weeks, interest rate differentials really have

shifted back in favor of the dollar. And suddenly it's the dollar moving higher rather than sterling moving lower. But then the euro goes with ster What I'm in, what I'm seeing as an amateur, is euros becoming attached to sterling. Is that a wrong assessment. I think it's more than the dollar is moving higher and the euro actually I think is is holding up better um than I would have expected it. And David, this is really important, and

this is the compensating factors of different currency pairs. One of the biggest mistakes I see in for an exchange analysis is we don't look at them as pair traits. And there's a set of pair trades. Of course, David, you had memorized permutations and combinations. I mean, I mean, do you know that David's from Brooklyn and Bob he learned permutations and combinations growing kale on his roof because he knows there's like a hybrid lens, hybrid lens of kale.

It's the same way in foreign exchange. David, I have a modern day Mendel. Let me ask you more about the pace. So, as I mentioned, you had this great note Mexico and oil not connected here. You know, we had the debate last night, we've been tracking the pay so with Donald Trump's pull rings, with Hillary Clinton's pullings, you have sort of a novel look at what we're

seeing there. Yeah, I mean I think that you know there are there are two different time frames to look at, right, And I think that UM, the rebound and oil had not been showing up in the pay so UM primarily

because of this uncertainty about the election outcome. UM. And as we pull that away, you sort of get back to fundamentals and and uh, you know, in the short run, there is so little going on in these markets these days, and so few drivers in the foreign exchange markets that traders are willing to to basically jump on anything that's moving.

And so I think the notion of this um, you know, Trump victory probability and movements in the pace so really caught on in the markets, and it becomes a self fulfilling prophecy, right if people think that other people are going to trade dollar pace so based on the election movements, and they'll start doing it, and it feeds on itself,

and that works until it doesn't. And I have a feeling that you know, obviously over the next three weeks we're gonna find out that there are four weeks that it doesn't work anymore because we've we passed the election. But I think we're starting to do that. And I think that part of what the movement and the big movement up in the Peso in the last a week or so has been a realization that, hey, you know, energy prices have gone up, oil prices have gone up.

We've completely forgot about this relationship with oil and now I think there's a bit of a catch up move going on. Robert Sinch with this amorous Pierpunt updateus on the institution that is this Federal Reserve system. Mr Trump wants to go after this institution and that would President Trump change the FED? You know, I think one of the concerns, you know, I have a couple of concerns

about central banks. One that I think they've played their hands as far as they can and they really are running out of options and anything that's really going to affect the economies and inflation going forward. The second is this little bubbling up of intrusion on central bank independence. We've seen a little bit of it in Japan where people around Prime Minister Abbe have been making comments about how the ee O J needs to continue to take more action. Um, I'm not sure what's really left for

them to do. That's a big demographic problem they're facing in Japan. Uh. We've seen Prime Minister May in the UK make a couple of pretty shocking statements. One of them was about the side effects of central bank actions. I'm not exactly sure what the implication of that was.

And now I think, you know, we we certainly saw last night that that Mr Trump said he would instruct you know, a attorney general, an attorney general to look into Hillary Clinton's I mean, this is kind of unprecedented stuff. You wonder what he would instruct the Treasury secretary to

do about monetary policy. So I think there is this concern that after holding up monetary policy is the real savior for the global economies, that now that they're running on empty uh and fiscal policy is nowhere to be seen, that they start encroaching more on monetary policy. Um, and I think it's a concern about central bank independence going forward.

Had stand Fisher, the vice chairs speak yesterday, Janet Yellen speaking at the Boston FED later this week, do you think that the Yelling Fed could be doing more to emphasize this point that it is not subject to political winds. You you hear it from the outside, you here economists defending it, but um, we haven't heard explicitly from a chair Janet Yellen, at least not not explicitly and not in quantity. A lot here about the independence of the Fed.

You know. Knowing some people who have been with the FED, my guess is they're pretty baffled by this. I think they're sitting there going, wait a second, we're the only ones who have been acting here. Um, we are. We are not political in our decision process, although they've been accused of that, UM. And I think that that they get a little surprised at these things even bubble up like this. Um, we'll probably get a bit defensive about it,

circle the wagons as they normally do. UM. But I think part of this is they they brought it on themselves by their rhetoric of talking about about normalizing policy and then not doing it. A whole seg inn of the American population that is wondering why they saved and why they're not getting any return on those savings for retirement. So I think a lot of of of tensions are bubbling up and again because fiscal policy around the world has been so non participatory in this process, what do

people do. They keep focusing back on the monetary authorities around the world. UM as as miracle workers, and I think they need to keep pushing back and saying they've done what they can do. I I wonder as you look ahead, there's so much scuttle but here that Leo Brander might be a Hillary Clinton Treasury search differences this can preclude that from happening. Do you think if if Hillary Clinton would be elected? No, I don't think so.

I think that that, um, you know, there there may be some concern about you used to worry about movements between the Fed and Wall Street, now that they have movements between the Fed and the Treasury. But I think that that once somebody leaves the Fed, um, you know, their I D doesn't work at the doors anymore. Uh, they can't get ready access. So I don't think that's a tremendous issue. I think you know, clearly there was.

It was a very political appointment, uh to the to to have her participating in the in the federal reserve system. So you know, I think that that, you know, that might actually be a little bit healthier in terms of re establishing the the the political nature of the fat Bob same, Thank you so much with the MS pure Pint, greatly appreciate your attendant's unclosed. Good, you have your good to be here here, David. My favorite tweet last night

was from a woman. Well there was the one for Jason over at the Journal who said, my television just threw itself out the window. Let's just go with that thing now as we bringing Greg Greg Horizon Investments. Your your notes have been absolutely fabulous. And to keep the base ball thing going, Mr Vlier, Mr Trump needed a home run and he hit a double. Was it a legit double off the wall or was it a ground rule double in Yankee Stadium? Hi? Tim, good morning. Now.

I think it was a legit double. I think he really energized his bass, which she had to do. They're going to turn out if it's windy and raining in Ohio. They're turning out, and I think you know he spoke to them. Did he add any new support? Well, that's the issue. I'm not sure he did. Let me bring it over to Secretary Clinton. The f T had a great chart the other day of a certain blue collar county in Ohio. She's got to get marginal voters with the weekend she had. Can she do that? Yeah? I

think she can. I think that, uh, I would say the weekend Trump had. You know, I'm not sure he's going to bring a lot of those voters either. You know that if you step back just for a second and look at the forest rather than the trees, I mean, the forest is there's been massive defections among Republicans who were really worried. Now they not only would lose the Senate, but they might even lose the House as well. So you've got a really anxious party. I'm not sure one

pretty good debate performance by Trump is going to change that. Greg, what do you make of the degree to which that tape, which was released on on Friday afternoon published by The Washington Post, played a role in this debate. I look back on what happened last night, you can almost cut the debate into There was the first thirty minutes, which I would say ex very contentious, and it played a

major role there. This isn't something that Secretary Clint came back to though at the end of the debate, a sigh of relief from the Trump campaign that this is now at least in part behind him. What do you make of how it played out in the debate? It's in part behind him, assuming there are no additional disclosures, and I am not willing to make that prediction. I think that there could be more bombshells for both of them,

with her from wiki leaks, with him with taxes. I'm not sure The New York Times has released all that they have, and of course with him and other women. So we've got another month of this cringe inducing campaign to go, and I think there's going to be more disclosures. You mentioned the defections on the Republican side. What was it about this tape, about these comments in particular that were so distasteful? Yes, the vulgarity, for sure. But but there will be those who say this is nothing new.

We we we knew at least what Donald Trump was like, if not what he is like. Why why did this happen now? Well, I say two things. Number one, what do you describe doing as a felony? Last time I checked? Number Two, I think that a lot of Republicans you said, oh my god, he's talked about growing women. I think they're real concern, as I said earlier, is that they could lose Congress. I mean they're looking at potentially a really ugly election. I think that motivated a lot of

the defections. Help me here, Greg, with with all that we've observed in the in the final twenty days of the election. There was a whisper of a moment last night where Secretary Clinton shifted from the dance over to I will represent all Americans. And I turned to someone who was watching the debate with and said, that's the first moment where she's speaking to all the voters and not just the usual constituencies. Did you sense that or

does that wit? October nine? Yeah, yeah, I think Tom that in the last week or two, when you make your closing pitch, the candidates usually get a lot more bipartisan tiid and cue the music. Better Angels, We're not We're not there yet. I think we got a waste to go before we hear that kind of talk. David to put it in the tweet I love last night as Mr Velier speaks to the Better Angels. Was the

woman who said, look, it's like Game of Thrones. You tell the kids go do something, you close the door, you turn a volume down, and you have your thumb the revote control if the kids come in the room. That's what the beginning of the debate was like last night. Wondering, wondering what was going to happen. Greg talk about the undecided nous in the room, I mean, it's it's it seems this campaign has gone on for so long, many many months. Now you have a room of undecided voters.

I'd say that the voters who were on stage with the two candidates didn't actually ask many questions. I think that the two candidates took a lot of care of a lot of the back and forth themselves here. But how real is the undecided factor right now? I don't think it's that big anymore. Maybe there's still five of the electorate that could be swayed, but it's dwindling and I'm not sure. You know, one of the big takeaways from last night is that I'm not sure they moved

the needle that much. You know, Trump again really rallied his base. They're motivated to vote for him. But I think among these undecided there's one issue, if I might, there's one issue that still has to be addressed, and that's pro growth. I've been harping on this for a long time. I think that her agenda more regulations and you know, more higher taxes, is not pro growth. I think if Trump realized that he could make some inroads there. Does he have a campaign staff? I say this, folks,

I mean you know, full disclosure. I was outside the Trump Tower yesterday and Greg, it was such a zoo with a naked cowboy and the rest of it. We we went across the street and around it because we didn't want aerrabs to see it and and help me here. Does he have a cane pick campaign staff? Well, you look at some of the key states and you have to talk about the ground game. It's kind of our cane.

But those of us who are really into this wouldn't tell you that in a lot of key states like Florida, he had a bunch of amateurs working for him, poorly funded, have never really worked on campaigns. Her ground game is really good and in a close election that could be worth half a point half half a half point, yeah,

half a points important in a close state. There was a moment during the debate when my jaw dropped Martha rat It's asking about Syria, and what emerged was a real disconnect between one Donald Trump and one Mike Pence. She pointed out that they've said two different things about what the course of action should be in that country

with regard to to Russia's participation. Uh. And Donald Trump allowed that it was something that he and Mike Pence had had not discussed this, I said, last hour, five days in here, these two have been running mates and and is it how surprising is it to you here that this isn't something that's come up. I think it's a big deal, David. I mean, first of all, I think over the weekend Pence was a gassed over that

tape and the sexual stuff. He's a conservative Christian and I think that Trump threw him under the bus last night on Syria very dismissively. And currently so there's not a lot a lot of love between the two. There's been rumoring and Pence might leave the ticket. I don't think he's going anywhere because if he endures this for another month, he becomes one of the front runners. Well that's right where I wanted to go. In the final question, we have Mr Villiers, is Mr Pence and Mr Ryan

and the others. Are they just positioning themselves for Greg Villiers New Hampshire primary to come. I think if you gave most of them truth sir, and they would tell you that They're all already thinking past the selection. They're thinking about the next one. Pence is going to be a player, Ryan Rubio, maybe Cruise. A big cast of characters I think are secretly rooting for Trump to lose. Great briefing, and I'm sure we'll have much more. Greg Villier,

your notes are more than valuable. Folks. Again, we got many emails, Mr. Vliers, paperwork we do. We protect the copyright of all of our guests. Please contact Arizing Investments for the uh, the the chiseled granite slabs that Mr puts out every moment. Who you put your trust in matters. Investors have put their trust in independent registered investment advisors to the tune of four trillion dollars. Why they see

their role is to serve, not sell. That's why all schwab is committed to the success of over seven thousand independent financial advisors who passionately dedicate themselves to helping people achieve their financial goals. Learn more and find your independent advisor dot com. It is wonderful to pause now after the dropeth in gold of a week or so ago.

James Steele writes brilliant notes for HSBC on the bigger picture on gold nut, the minutia of companies and all that, but just the bigger view, James, it's Golden Week in China and then China comes back. You notice a pulse of demand in India with all the ballet of China. Is there a pulse to acquire gold in China? I think yes, There's been a considerable decline between when they

went on Golden Week and now. So merchants and traders as they have come back to their desks, uh, and back to their businesses this morning, will have been greeted with a substantially lower gold price. And definitely those reacting to the consumer demand will, I suspect, seek to purchase bullion around these prices. That's not to say that the washout is over, but I definitely think that the physical demand in the Far East will will react to this. James,

what's the biggest driver of gold right now? Is it? Is it speculation about Fed policy? Is it the election? Where where are you seeing drivers of growth? Yes? I would say it's the Fed policy angle, um, and that feeds through into the currencies. A secondary but important one is uh, the election, and I think as we run up closer to the election that will be increasingly important. Uh. It's interesting to note that gold has been relatively a new or two changes in the polls between Trump closing

on Hillary or Hillary opening up against Mr Trump. Gold doesn't seem to have reacted much to that. It's been much more sensitive, however, to UH comments from officials at the Federal Reserve. I was looking at when Hillary Clinton gains in the polls. It seems like one month gold volatility has fallen a little bit. What why do you think that is? When when when you see the lack of volatility, when you see the lack of movement with

regards is that surprising to you? I think any gain in the polls um for for for the leader would probably tend to reduce the volatility because that would be one less thing the market would would would be uncertain about. So UM, I don't think. I think if it were much closer, the vault would probably would probably be higher.

James Steele, when I look at the chart, I know you're not a technical analyst, but UM, do you have the sense that gold has broken through support or is the rally still intact which nicely started the end of two thousand fifteen. That's a good question. Um, it's taken a real dent. There's absolutely no doubt about that. We had quite significant technical selling when we got down to and then again down around twelve fifty nine, the more

recent low. If you look at a rough retracement from the beginning of the move around, say if you put it at ten in December, as you highlighted up to, say twelve thirteen seventy five, then that would be around twelve ten. And I think the market will hold well well above that because yep, I don't mean I don't mean it erupt, but I mean we go through to twelve fifty or twelve sixty in support is ten sixty?

Do you look at this as a pullback and a break of the James Steele rally, is it's known worldwide? Or do you look at this as we may we may test that ten sixty level and as a gloom and doom crusee we migrate back to eight nine ounce. Uh No, I don't think we will break down to those levels, uh at all. I think monetary policy still remains to loose. We have negative interest rates outside of the US and no real sign that that's going to

that's going to reverse. UM and Also, you know, the fan rate rises are clearly well telegraphed, and uh, we're only looking for very modest ones. So I think that might be already somewhat digested into the absorb absorbed into the price. So no, I don't see a major um decline of that of that magnitude. I see it's staying

well north of James. I look at the growth of gold backed e t f s inflows, I think north of twenty seven billion dollars, and I wonder what effect that's having on the on the marketplace, how much that's changed the the the contours of the gold marketplace right now. It's been one of the most bullish. It's probably the most bullish development on market wise that we've seen, um

in years. Uh. It's absorbed a great deal of gold. Uh, you know, without going into the merits of of of an e t F necessarily, but it gives you a good way to hold in store gold. But before people would tend to go to coins and small bars or or equities, and this gives them, you know, an an alternative this day if they choose to do so. And

it's built up considerably. UM. One of the things that's interesting I'm glad you mentioned the e T s because although the net comics positions then net long COMICX positions have come down considerably with this, with this drop since the high of twelve, the ETFs have been very firm. James Steele with us and we've been getting tons of mail. Is always on his gold call. James, you have to live within the milieu of a major shop HSBC. And

it's not that you love to make outlier calls. It just happens to be where you guys are in Sterling now. And on the duration of low yields, How does Steve Major's bond call low yields out to two thousand and twenty one as far as I can see, how does it fold into your work on gold? Are you and Mr Major not in speaking terms? Oh? No, we certainly are. Now Now we try to be aware, well we are,

we are, we are aware of of of everybody's views. UM. We discuss things and his view about low rates going further out, which have been you're gracious enough to say, have been UH correct of for for many, many many quarters. Now UM is supportive of of the gold price, UH without without doubt it lowers opportunity cost of owning gold. It makes it easier to UH to own gold as

a comparatively safe safe haven. UM. There's many positives that low interest rate environment have for gold going forward, so it helps secure and gives us an economic and good rationale for for our views on bullion. There's a looking at at at the dollar, the strength of the dollar, and I wanted the degree to which that's a that's effecting gold will continue to affect goal. What's your forecast

there in terms of how the dollar relates to go on? Well, UM, we do have the dollar weakening slightly to the euro UH by year end. Recently it's it's it's been stronger. So our currency view is usual to slightly supportive of of gold. UM. The big issue, of course has been the reaction of the pound, which has been down sharply. And and I think there's two ways to look at

that for gold. Actually, because when you when we first got the vote on Brexit, UM, the gold market jumped a jumped, not necessarily because of currency moves, but more because of the geopolitical risk associated with the the the UK leaving the U. So in this case, although generally speaking a weaker pound would be a big negative for gold, it might not be so much the case this time.

That's that's the interesting thing about the gold market is you have to balance many other things out, and although currencies generally have the dominant impact on gold, you have to look at why the currency is moving as well. When you look at Brexit, when you look at the uncertainty over when that might take place, how how much of a complicating factor is that? Well? I think as far as gold has concerned, a lot of it has already been priced in. It was priced in very quickly

with the rally. When when the vote, when the vote came through, We'll have to see how how things progress. But right now I think it's mostly in the gold market, and the gold market will tend now to look towards fed E c B Bank of Japan policy frameforce elasticity or responsiveness of jewelry. Two, the price of gold, I mean an ounce of gold. How how tight is that? That's where again this is very interesting because it is

split pretty much in two halves. UM. Jewelry demand in the West does not appear to be incredibly price responsive UM, mostly because it's a function of income. Higher incomes mean more spending on luxury goods, and you don't tend to see a big movement in jewelry demand either way. Because of price movements, it tends to be more related to income and also to employment levels. Now in the Far East, where a margin on jewelry is much much lower UM

and there's less discretionary income, it's much more sensitive. And I think that's why, alluding back to earlier conversation, why we're probably going to see a nice physical response from the Chinese merchants when they as they as they get going again after after Golden Weeks, they'll they'll be greeted

with a substantially lower lower price. And the lower price now is finally beginning to kick in and encourage Indian demand, which has been off the radar for many months, but it's going to come back, you suggesting, I do think so moderately, um more more. I think the more of the growth will be in China, um the but the

Indian demand I think will be up as well. The month soon was good this uh this year, which might sound an odd thing to say, but a lot of gold is bought in the northern tribal belt and is dependent upon rural incomes and rule incomes in turn or depend upon the harvest and the months soon go to harvest. How maybe is this a naive question, James, when you talk about gold sales in China, how open a marketplace is that? How much government intervention is there in the

gold market in China? It's quite open. There have been reforms that have taken the government out of that stemming back years now. So it's a relatively open as far as as far as that's concerned, James, to congratulations again and killing the gold call here in the number of months, and certainly the shift there is very important, as she steals with HSBC is surveillance. I'm David Gurrow with Tom Keene.

Bank of Japan Governor Rohiko Kuroda sat down for an interview with Bloomberg over the weekend and gave the clearest signal yet that it may take longer than initially forecast for the BOJ to hit its two percent inflation target. We don't I intend to exit from extremely accommodative expansion

already at this stage. We will continue or even strengthen our monitor easing in coming months and years to achieve the presentive phrase one and the four the time being, as I said eighteen US this podcast would would continue. Croda also made it clear he'll continue to support a strong stimulus program, responding to the idea of curbing monetary easing with a laugh. We're joined now by Takatoshio, Professor

of International Public Ferries at Columbia University. Professor, you know, let me ask you, first of all, just about what we heard from Governor Coroda over the weekend, both the Brookings and in this speech. You've read a note about the the inflation overshooting commitment, calling it epic making. Why

is that the case? Yes, this, obviously in commitment is amount to the what we call the price level anything in the little journ, which means that the Banqua commits to offset any dested in the price levels not achieving two percent in the years after they tugged hit the two percent targets. The two percent is now not the goal, but the average of the two percent over the medium term is two is the target. So this is very

strong commitment that the easing will continue. So by delaying the forecast of achieving two percent target dates, they supplemented it. It was a very strong commitment on the afterwards, after hitting two percent, it's going to breaks to u to upwards maybe three percent, maybe four percent. Professor, you know, we have another delay, seemingly from the governor saying that this would not take effect until two wasn't eighteen. This is the fifth delay that we've seen. What do you

what do you make of the near constancy of these delays. Well, it's um a combinations factors. Some of them are beyond that US control. Mainly oil prices continue to be low and the domestic labor they're not demanding the wage increase, so consumption is so those are the miscalculations on miss podcast. But now we are seeing that oil prices are going up and uh finally that I think a labor market in depend is almost full employment. So they they have

been a good post. Professor Rito. I'm sorry to remind you that it's been twenty six years since you crafted your must read book The Japanese Economy that at the time all of us read cover to cover. You then went on with Barry Ike Green and Charles White plots to look at international econom mix. Please explain to our global audience as you were shortlisted for Mr Kuroda's job please explain the independence of the Bank of Japan in modern deflationary Japan. How independent is uh, mr Kuroda, It

is very independent. I think um boj is as independent as whether reserve or easy bo of boe UM. I think all those four major central banks are now under pressure, and uh the kewe and your interest rate or native interest rate, all of them seemed to have failed at even to present very quickly. So now people are talking about the coordination between multiples and fiscal policy, which to some people sounds like loosing independence. But I do not

think that losing independence. I think it is uh, you know, coordination all the equal to You took your doctorate at Harvard with Professor Blanchard Olivier Blanchard. He has been critical of modern macro economics and how we're going to do economics forward. What would you like to see from the Bank of Japan in terms of a new strategy given the assault on so called dynamics stochastic general equilibrium theory, what would what would you like to see out of

your Japan economics? Is your professor is critical of modern macro Well, I'm sorry, I just got quotes from Yemen, not Olivia. About jobs. But data side, UM, I think the dynamics stochastic generic libum macro UH had not proved that they are relevant in analyzing the current situation, especially for the analyzing global financial crisis of or eight or nine.

I think the DSc model that central banks do have but as one of three or four macro models so UM UH DSD is very useful in amazing how the individual sectors like helphold and corporations who the act to a policy changes UM that's more deep paramid long term effect and they failed to analyze um, you know, very short terms domino like h implement or under utilization of

the resources and professortail. Thank you so much, taka Ito, Columbia University from more Sina Heights of this morning here of course visited in the studio before a real honor to have him in after Friends and Laquas interview with Mr Coroda. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. I'm out on Twitter at Tom Keene, David Gura is at David Gura. Before the podcast, you

can always catch US worldwide. I'm Bloomberg Radio. Who you put your trust in matters. Investors have put their trust in independent registered investment advisors to the tune of four trillion dollars. Why learn more and find your independent advisor dot com.