Surveillance: Trump's Tweet Policy Is Dangerous, Gartman Says

of course, on the Bloomberg. Rob Carnell joins us now he's e's chief International Commist. Joinings year in Bloomberg's European headquarters in London. And let's just take stock of where things that stand right now. The swoon that we've seen about the prospects for new economic policy coming from President elect Donald Trump. Are we seeing the markets treat that more soberly and now there were such wild enthusiasm after

the elections. Are we seeing some reevaluation or taking stock of the fact that may not happen as people would like it to happen, or may not happen as quickly, but we certainly don't think it will happen quite as quickly, or quite to the extent that I think people thought in the immediate aftermath of the election result. However, we will over the next couple of weeks get the president's budget, you know, which is you know, kind of Christmas president

wish list, which will have everything in it. I mean, you know how these were you ask for everything on the assumption that you'll only get some of it. So I think that could provide another boost. But I think in the in the very short term, we have seen a bit of a not so much a reevaluation. Just we've gone a bit too far. Let's just take stock a little bit and wait and see what happens. Now.

You mentioned that Christmas list, and I just think of the fact that we haven't really had a traditional budget process in Washington, dcver so long. Now that regular order seems like a thing of the past. Do you expect that we'll see a return to it? Will have Republicans controlling both Houses of Congress and the White Houses, Well, do you expect to return to was traditionally the process

in Washington regular order? Getting a budget from the White House, getting a budget from Congress, Not having all of these continuing resolutions and staff gaps. Yeah, I think that that seems to be the most likely way of it. I mean, I dare say that Donald Trump won't be totally delighted with everything that Congress suggests he can have in the end, but I think he's got room to be optimistic that at least on the tax cutting front, they'll give him something.

Maybe not as much and not as quickly, and maybe it'll be more staged, but there's certainly room for improvement on taxes. And let's place it. What's not to like about lower taxes? Everybody loves that. There is so much uncertancy right now here in the UK, here in the US, especially when it comes to trade policy. We were looking at the remarks from Trees and made the Prime Minister over the weekend looking for some guidance on what trade policy in the in the UK might look like going forward.

We're certainly doing that in the U S as well. You've seen the tweets is as we all have here. Do we have a better sense of what Donald Trump's trade policy is going to be going forward? What what do you look to for for evidence of that? Yeah? Well, I think we've been looking at this really long and hard over the last couple of weeks to try and

get a sense of this. This is the really crucial fact that the fiscal side is interesting and it's important, and it does make it perence to domestic domestic growth, But trades the really big one, that's the one he can really mess up on um And with the appointments of four very key trade members of his his cabinet and his team, all of whom have been extremely outspoken and negative about China and Chinese trade, that the rumors that there is going to be a sort of blanket

import tariff going in that is beginning to make us think or maybe it is going to be a tougher trade Trump than we thought initially, and that could also have an impact on market sentiment. I was talking with that Michael from in the US Trade Representative yesterdays of an exit interview with him as he prepares to leave that office. He's had a tough go of it, trying to push through the Trains Pacific partnership to to no avail, maybe shaking his fist at the heavens as the ship

went down. And one thing we talked about was the way that his office looks to be reconfigured at going forward. You mentioned the role of commerce in the new term. It seems like Wilbur Ross might take a larger role in negotiating trade deals. There is this Trade Council chaired by Peter Navarro. Is there a risk to that and in not having it as centralized as it as it has been the negotiation of four trade deals? The person bringing about enforcement actions the w t O. Yeah, I'm

not sure. I think the era of big multilateral trade deals really is pretty much over. I think a lot of countries have realized that they can actually make much quicker progress and much more more sort of substantial progress on individual, smarter bilateral trade deals. I think there's gonna be a lot more of that going on, and for

that you don't need such a centralized mechanism. You look at the balance that you have to strike between free trade and security, and that's certainly in acute focus here in the UK and in Europe. When you're making that balance, is security always going to win out? How do you? How do you tew that line? And that's that's a

really tough one. I mean, I think security is often an excuse that the policymakers will just fall back on for anything they don't particularly like, or anything that they don't think it's going to go down particularly well with the with the general public. I mean, it has to be a fact that you bear in mind, in particular when you're talking about energy. It's of those crucial factors that has to be taken into account. But I'm not sure.

I think it is a bit of a scapegoat at times, so when they want to do what they want to do. I know Tom wants to talk a bit about FED policy. He was hearing on your knowledge of the Rob rob Is is, I consider the major London acts on actual FED policy, and you have a huge advantage of that of being distant. There's something about we've learned that over the years. It's something about an American economist in Minnesota or North Carolina's Dennis Cartman is you have a big

advantage being in London too. To our American listeners. What is the major distinction between the Washington Central Bank and the London Central Bank. I would say that the FED is is a much more political animal. I think the Bank of England is is also political. But of all the central banks, I think the all the independent central banks I'd say the FED is possibly the least independent. I think it's much more a tune that it's not driven by it's not not forced by or cajoled by.

But I think it's certainly influenced far more by politics than than the most of the other central banks around the G seven. Which goes to Mr Trump in the House Financial Services Committee, etcetera. Which will you watch? Will you watch Executive Bridge or the Republicans on the Hill to see a change in tone towards our central bank? Yeah, I'm not I'm not sure what the answer to that one is. I mean, I think that there's there's very definitely a sense from Donald Trump that he would like

to have more control over the FED. Um. I mean, there's been the talk about auditing the FED. I mean, of course, the FED is already audited as a as a financial institution, but it's it's monetary policy decisions have not been audited. I'm interested to know how that's going to go. I mean that that clearly makes the FED a less and even less independent at central I love this David being in London and talking about Richmond, Virginia.

Mr Whacker retires and there's a character to Albrons, Richmond fed. It has a certain tone. Is there a Carnels shortlist? Who will darken the door in Richmond? Marvin Goodfriends always on the list at Carnegie Mellon that there isn't. I'm

I'm always fascinated whoever comes in. I mean, you go through this this ritual process where where the new b has to be evaluated, and they typically tow the line and behaving very much a sort of neutral fashion at least the first three meetings as they get their their toe under the table and work out exactly where they sit and how the process works. And then you start to see the see them throw their their weight around, and of course they are reflecting the the regional reality

of of where they're coming from. And so you know, very different economist on all around the US. They're all original folks. And you really wonder how our new president will, how everyone will adapt and adjust to the demands of a new executive branch. From London, David gurn Tim Keene Bloomberg surveillance here in the United Kingdom, around the world,

across America. David, you do a data check and you just migrate immediately LA to pay so and lear the emerging market stories are really something on that depreciation seemingly continuing there. You've talked about Jeff Lackard. Think he's a guy who started out at the Richmond Fed, was an economist in the research department at the Richmond Fed. That will be something that'll be difficult to replace as well as someone with that much institutional knowledge of the place.

But you're right looking at currencies this morning, Sterling as well. I've been looking at that, seeing that weekend at eighteen right now in Turkish earlier. With a new leg up, it's going to go through the recent weakness that we've seen. Uh this morning, Rob Carnell with us with the I n G. As we look at the Central Bank of

the United States. We're talking in the break about Bullard, a lot laquer retireant Richmond Bullard of St. Louis has had a unique impact St. Louis known as a research house with decades and of course they're great statistical and chart base that they have, But the splash last year was a short paper, a little paper. Even Bullard admitted that about the X axis and that guys like you, Rob will always look at the Y axis, the up and down or whatever the chart is, and the time

function is usually ignored. Bullard says, don't ignore the chime time function. And where we're heading is regime change. We get somewhere, things change, the FED changes. Do you believe that's feasible we ever implement Bullard regime change? I think it's I think it is feasible. I think it's a very accurate description of the world we live in. We you know that the US and much of the developed world, Europe, the UK has been in this low growth, low productivity

environment for a very long period now. I think Bullard's point was was along the lines of it's difficult to see how that's going to change anytime soon, but at some point it actually will, and when it does, it will happen in a fairly step like fashion. That's the point of which the FED or whatever central bank is involved will have to react very very rapidly or find itself massively behind the curve, whether or not central banks can do that in reality. As another question, I have

my doubts. How do you process what what FED presidents say, what they think, what they're believing it at this point, how are you are you reading? Every speech? Is very particular present, you don't hear enough from that you'd like to hear more from. Tom and I were talking a few weeks back about how there can be a cacophony here where you're just trying to figure out if there's some consensus among all of these participants in the films of a system, how do you how do you process all?

I do sometimes wonder whether it's it's worth the effort, partly because you know, I always felt that the way that the FED was structured, they're the insiders in effect, rule the roost what they want to have with the governors, the governors, the New York President, New York Fed Vice chair, etcetera. Um, they basically set policy and if the regional FED president come alongside, all well and good, because it makes it

look as if everybody is unanimous. But I'm not sure that on their own, those those four rotating regional FED members can never really change policy unless it had already been agreed by by the insiders. And you know, typically just just awaiting means that's very unlikely to happen. Interesting for the debate, and often, I think in Bullard's case, gives you a sense of where the debates going, but doesn't necessarily give you any sense of exactly what's going

to happen next. Tom mentioned that the politics that the Fired is having to deal with your looking ahead to to this year and beyond. How are we going to strike a balance here between what the FED wants to do, what the FED is doing, what Congress wants the FED to be doing, and the White House. I mean, it seems like this is going to be particularly thorny field for for all of these participants to have to navigate here. How difficult is it going to be? Very difficult? In short?

I mean, I wouldn't want to be cheering the FED right now. You're not going to please all the people all the time. In fact, you're probably likely to upset most of the people most of the time. With FED policy this year, they are going to be at least attempting to hike rates um. If they respond to the to the macro data um, they're going to be seen as taking the punch bowl away from the party, et cetera. You know, the usual cliches. If they don't, they're going

to be criticized for being behind the curve. Um. You know, they've they've been criticized in the past producing the stock market supporting politicians. Does that change under under President elector Trump wants he gets inaugurated, will he like them to choose the stock market? It's a very difficult one. How how can you how can you operate in those environments? Well, that's the unexpected that maybe we'll begin to hear about today, this press cars. When was the last press curds of

David Girl? Was it her fifty days ago? D sixty seven? I believe seven? Yeah, I mean maybe it begins to do with press conference. What's Rob Colonel's unexpected for Janet Yellen and for our economics that underpins all that we do well? Her unexpected? I think it's it's it's what they deliver in the in the next couple of months. I don't think anyone's really expecting them to move in March. I'm struggling to think why they wouldn't. Can you mentioned earlier?

I believe in Bloomberg Television wage growth is just the mystery. This is the one that's that's it's the dog that's finally barking. We are now beginning to see wages growth picking up and picking up in a reasonable fashion. What happens if the core rate of inflation, we know the headline headline rate of inflation is going to pay up in the next two months and push us it into the mid twos, into into sort of levels where you wouldn't expect to see rates as low as they are.

If the wages continue to rise. If we start to see the core eight moving with that, and wages of course for a big factor in service sector inflation that's likely to be pushing up, then it looks as if the Fed's left it too late and they have to then respond to that with with faster responses, more tightening their three dops. We're not forecasting that ourselves, but that's not looking totally out of the realms of possibility if these things continue moving in that direction. For quickly, here

help me with Paulling. How are you regarding polling now as we look ahead the political risk and in Europe going forward to tell you what's going on in France there with the Netherlands where you're gonna pay less attention to it in light of what we've seen. Ah, the politics in Europe's really really interesting right now. You've got you've got an incredibly busy political calendar. The one that everybody has really been focusing on, I think maybe inappropriately

has been France. I think that's actually much less of an issue than anybody is made out. Thank you so much in a studios here in London, brought you by Bank of America Mary Lynch. Dedicated to bringing our clients insights and solutions to meet the challenges of a transforming world. That's the power of global connections, Mary Lynch, Pierce fennerin Smith Incorporated, Member s I p C. What are bringing up, Francisco Anzaga. She is a lead economist at the World

Bank based here in London. The World Bank out with its latest Global Economic Prospects Report outlook for the new year. Great to have you with us here in London and Bluebrig's at European headquarters. And I just want to pick up on a quotation from your boss from Jim Came, the President of the World Bank, talking about the momentum we're seeing right now speaking of the need to increase investments in infrastructure and people looking ahead to two thousand seventeen.

What's going to catalyze that and who's going to be doing that? Do you think? Yes? Thank you for having me, Thank you for sload on the emerging markets is a is a real challenge. Investment growth in emerging markets has dropped from ten percent in two thousand ten to three point four percent in two thousand and fifteen and probably below based on partial data, and that that is something

that can undermine long term growth potential. For example, it is highly correlated with productivity growth, and that undermines the potential of future growth prospect, which in turn is required to live people out of poverty. What can be done? Any number of policies is available and really depends on the countries. Some can implement public investment stimulus, which we estimate does have at least over two years and benefits

for private investment as well. For example, a one percentage point increase in public investment growth might lift private investment by point three percentage points. Others don't have that option because of lack of fiscal space. They might want to reallocate expenditures towards higher yielding investment, or they might want to increase tax spaces to raise the revenue it And of course all of this works most when it's a

complemented with structure reforms to improve business climates. We're talking awful lot about the the uncertainty that certainly overlaid the US and the United Kingdom. You're focused on emerging markets. There's the same sort of political uncertainty persists there as well. It's the broad brush I suppose the same emerging markets. Yes, two points on this one. Yes, Global policy uncertainty is at a record high, and it is driven by all the major most of the major economies, and it is

something that affects investment. We estimate, for example, if you just look back in history, if you take the pier in twenty ten to twelve to your area crisis, the policy uncertainty in the in Europe at the time may have reduced investment growth in the eco region Eastern Europe by point six to one point three percentage points. That's global uncertainty. In addition with that document in our report, a clear increase in political risk across emerging markets, which

further than weighs on investment growth in them. In Washington, there's that street between in the World Bank in the I m F. I saw you once out on that street breaking up a fist fight, and you know there's this contention between the World Bank and the International Monetary Fund, where you guys don't talk that much about foreign exchange,

about the dollar and dynamics. The fact is you're putting out your wonderful report on something everyone's focusing on, which is a dearth of investment amid the beginning of emerging market foreign exchange adjustment, foreign exchange weekend rates go up, growth goes down, is an investment the first order condition affected by that growth coming down. That's our concern. So we are interested in advanced economies like the US mainly

because of the impact on emerging markets. So I think what you're referring to is that the potential for dollar appreciation. And it's true that foreign currency borrowing has increased a lot in emerging markets over since the crisis. However, the bulk of borrowing by corporates in emerging markets modern remains domestic currency and remains by domestic banks. So their main

vulnerability is to arise in global financing condition. The only reason I'm gonna be nice to you is Dr Kim once gave me a Dartmouth bow tag, so which was which I still treasure. It was great, but but I don't want to get you in trouble with Dr Kim. You can't mention the dreaded T word, Mr Trump. I get the idea that the World Bank can't talk about them, but come on, it's a Trump reflation, call it the U S reflation in that How does that impinge on

the body of your important report? The answer is it's a huge deal, right, it's the US is a big part of the global a quarter of global TODP, a tenth of global trade. So what happens what in the US, of course, does not stay in the US. It has global implications. But that said, the new administration's policies there have been there has been much discussion about them. We simply do not have enough detailed to incorporate them into

our focusts. So when we say that we expect growth in the US to rise from one point six to two point two percent in t seventeen, it is excluding all these policies that are currently being promoted. This is important, David, because within the report there's more talk about the US than I've ever seen. Absolutely, let me ask you about China and you project a slowdown in growth there, Where will we see growth? Where's the most growth going to come? From is it in South Asia in the next year.

Where where do you see the bright spots in the global economy right now? Clearly China is slowing gradually, just as expected. We expect six and a half percent growth in twenty seventeen, six point three in twenty eighteen and nineteen, and the authorities are conducting a careful balancing act between reducing vulnerabilities financial vulnerabilities and steering activity with the occasional stimulus.

Now surprisingly there are there. There's actually a whole group of emerging markets that is doing that has done fairly well since the crisis, and those are the commodity ex in port US. It's only one third of emerging markets. Emerging market which is just Poland is done really well. Poland is one, but the others that have perhaps done best are the ones in East Africa West Africa. It's

the Rwanda and the sending guys. And one of the reasons they've done well is yes, they've benefited from law and oil prices, but also they have implemented a lot of public investment to support grows. The United Kingdom and its way to becoming an emerging market under your definition, we have revised our focus downwards for the UK to one in seventeen, in line with the Treasury, but that has you have to take into account that we publish

our last Focust long before the Brexit vote. The phrase new normal is probably overused, but when you look at investment, to circle back to investment, you see where it is now. Is there a risk that we're at a level that we're going to stay at that we're not going to see as high investments we've seen? Those are certainly the expectations of long term expectations of the consensus, and that that is our concern that really the the investment growth is not going to pick up absent a big policy

push that is a whole package of measures. No single measure will really there's no said bullet, no single measure we lift investment. I'm interested just in the particular difficulties of putting together an outlook like this amid so much uncertainty. You write about Europe and I'm asked about poland you write about Europe, and there is the sense there that things could change radically depending on what happens in certain elections, what happens with the European Union, whether or not things

stay as cohesive as they as they have. How tricky was it to assemble something like this? There's many hundreds of page long report during this particular climate. Yeah, we do try to measure risk and uncertainty in a fan chart. So we do estimate that the uncertainty around our baseline forecast has increased since the last time we published. But the way we try to get at it is by scenario analysis. For example, we do do a scenario. We estimate a scenario of what would happen if the US

cut taxes the way it has been proposed. That would be Mr Trump, that would be the new administration. Yes, very good, as the new administrations suggest what would happen. So we estimate, and we're using the defens own models, So we estimate that that may raise growth in the US two up to two seventeen and up to two point nine and eighteen. But that's under many assumptions. First, that this is actually implemented as proposed, both corporate and income tax cuts, and that would be a large revenue

laws sizeable revenue laws. Second, that there are no offsetting other expenditure for example extend pendision measures. Third, that the US FED does not behave in any different way as the model projects. For example, it raises interest rates faster than expected. And fourth, it does not take into account possible trade policies, and these trade policies would matter for

the way that US growth feeds into global growth. Within the zeitgeist of the World Bank, very quickly here is there just an understanding that the age of multilateralism is over within the vast bureaucracy of Dr Kim's World Bank? Is it? Is it adjusting to a bilateral World Bank. So we certainly flag the risk of rising protectionism as one of the keyst The first risk actually were mentioned to global growth, but that goes beyond any individual country.

If you look at the G twenty countries, the number of new trade restrictive measures in a record high. And again yet another year more trade restrictive measures implemented and liberalizing ones. That's all the time. This has been absolutely fantastic for Francesca answer Gay, thank you so much. Is with the World Bank, David Gern, Tom Keene in London worldwide,

this is Bloomberg. It is a good day, if any day is a good day to speak to that gartment, but it's a particularly good day today, Mr Gartman writes a newsletter. He is one of the brave and foolish who actually put his track record at the back of the newsletter. Forced a gartment to be one of the great Pinata's business news and undeserved, I might point out,

because we are all wrong it numerous and frequent moments. Dennis, let me migrate to the politics first, what would be your first question to Mr Trump this morning at the press conference? Why are you so incredibly attuned or in favor of some sort of trade protection? If you understand the history of of the modern World War, tariffs and trade protection always give way to weaker economic environ's domestically

and politically. Why are you pushing ahead with that? That would be my very first question, Tom, Do you well said, do you perceive that there are adults in the room or at least budding within the administration that will amend a just adapt the Trumpian message. No, I'm fearful that there are no adults in the room. I have not seen anybody yet other than the gentleman who have been professing or promoting even greater trade protection. So I'm afraid that there are no adults in the room. And that

is right, A truly a great fear on my part. Hopefully, hopefully cooler minds will prevail, hopefully adults will show up. Um, But right now I have not seen that, and that is disconcerting to me. How do you read the tweets about Ford and GM and Boeing and Lockheed. Do you see these as as one office, as uh things under themselves, not representative of some sort of larger industrial policy. What's your read on his targeting of individual companies. I think

it's dangerous. I wish he wouldn't do that. In in the first edition of the Gartment Letter this year, I put out my surprises for the year, and my one hope surprise was that the president would stop tweeting. For a couple of days. It appeared that he had, But now he seems to be tweeting even more aggressively than he had in the past. I find this dangerous. Making opinion by tweets is something that simply should not be It shouldn't be done. That's like you get whips on

way Olderness. I had to say. I just had to get that in there. Dennis. At least, at least you haven't said anything about my beloved wolf Pack losing by are almost two to one on a snowy night at the Dando. It was a tough loss for you. We didn't we didn't want to go there, Dennis Garment seriously, though, this has to do with stability, and there's any ways to go here. But I just put out a chart on Twitter off the Bloomberg terminal folks of Turkish lira,

and as Dennis would say, it's an elegant chart. There is a persistency here. Dennis, I am dismayed by people who dismiss this oddities of Bloomberg chit chat. They're not. They're really linked in in their own unknowable way into all that we do. When you see Mexico and Turkey unraveled, well, I think take a look also what's happened to bitcoin in the past week and a half or two weeks. I mean, it's just it's astonishing what it's taking place

in the foreign exchange market. Not enough people pay attention to for exchange. Thankfully this audience does, but when you get to the broad public, they pay very little attention and and and they should be paying a great good deal more. What happens in the in the lira is important. What happens uh in in in the Mexican pay so is important, what happens in bitcoin is important. What happens in goal is important, and it's not paid attention to enough.

So what's going through Dennis Gartner's mind as you watch the depreciation of the lear? We had the central bank intervening yesterday trying to do something about it. Doesn't seem like that worked out that well. What are you thinking as you watch this depreciation? You know, it's not just the central bank there that has that has failed. Take a look at at probably the the one central bank that people have had a great deal of confidence in, the Swiss National Bank that has been trying to keep

its own currency down and can't do that. Normally, a central bank, if they want to do anything, can always keep their currency lower, and they can't. So what we have learned from this is that central bank powers are being diminished in the modern world. I think that's the lesson to be taken away from here. You know. Uh, we're talking to Bill Dunkelberg yesterday about his n f IB Small Business Optimists Report is something that the President

elect clearly took an interest in. He tweeted it out three times yesterday, flagging this is as a good sign for the economy. What's your read of that data that we got from the n f I B yesterday. Is the message from that simply the economy. Economy is doing pretty well here, don't screw it up. I think what it tells us is in the flyover States, things are doing actually quite a good deal better. The deplorables, as Mrs Clinton would have called us, seemed to be doing okay.

There was a great deal of enthusiasm that has been engendered by the the the arrival or the soon to be arrival of the Trump administration. And I think that the coasts have missed, have not understood what has really taken place. I thought that was a very important bit of economic data that came out yesterday showing the the n FIB number up as dramatically as it was. That was a very impressive rise in that in that index, and I think it shows that that animal spirits, according

to Mr Kean's, are in fact rising out there. I know he wants to talk about red wheat as well. He was calling that out yesterday. Before we get that. You brought up coin and I know that you haven't been a big enthusiast for a bitcoin. What's it gonna take for you to to get more interested in in cybercurrencies? Or do you think this is really a flash in the pan. I'll be at a you know, a year's

long flash in the pan. At sixty six years old, I think I'm a bit too old to understand what bitcoin really is, and and and and I simply won't excuse me, I won't be able to put that a great good deal of trust in it, especially with the volatility that has been incumbent in that one currency. It's it's astonishing you cannot move a currency in a in a week and expect to see that become a usable instrument for the purchase of goods and services. Is it

a currency, Dennis Gartment? Well, they call it that. What is the terminology a cryptocurrency? It's your crypto, it's a it's a thing. It's it's something to be traded right now. And that's about all it is. Thank you. We would do trading theory and Red Wheat here with Dennis Gartment, but I want to stay in theme. Dennis, Dennis, there's everyone agrees, massive and original uncertainty here, you just happen

to mention your age. I put out a photo of my favorite photo of the president, which is him sitting on the Rosa Parks bus, of the history of this president and all that he stands for. I want you to speak to our listeners who are overwhelmed by the uncertainty of the times. How do you stay invested? How do you have confidence in your little pot of money given the uncertainty that we face. We always have faced uncertainty. We're going to face uncertainty tomorrow. We will face uncertainty

next month, will face uncertainty next year. We've always faced it. We've always done better. That's just been the trend. There were some of my friends who were who were Clinton supporters, were obviously greatly dismayed. The country will be fine no matter who had become the president, the country will become or will be fine. My wife was very despondent thinking that Mrs Clinton was going to win, and I had to tell her, sweetheart, Margaret, it's going to be okay.

Have a drink, You'll be fine. You okay with their girl? Just you know, I'm getting your Garment's got a book coming up. Have a drinking fine as a title. With that, Dennis, let's switch to uh your trading. We'll do this internet section. But to go out your Dennis, give me the why of the look back of two thousand and sixteen? Why was it so hard to take a prudent trading stance, whether it was a three month trade or or a nine month trade? Why was it so darn hard? You know?

Golly day, I wish I could understand that I got stopped out of good trade so many times last year. It was terribly disconcerting. To get the major trend right and to be taken out on on on small interim corrections is the most debilitating, disturbing, soul destroying circumstance that one can go through. I wish I had the answer. If I did, I wouldn't be talking to you to I'd be out in I'd be in Monaco, or I'd

be down in uh In Bali enjoying myself. It would be that that is the great that is the great uncertainty that that investors and traders have to deal with. TORTI in south of your Virginia. I know Clemson is going to Disneyland. Wasn't that a good thing to see, I mean just for the sport. Was that a good thing to see Alabama defeated? Oh? Absolutely, it was wonderful as as an Atlantic Coast conference devotee to see Clemson a land Grant university. I might here we go, we

could agree, we could agree on that. Do you know that the Gartment last year made so much money in his speaking fezy about a forty eight foot Grant grand Banks and he called the puppy land Graph Just people, you're going, Dennis Gartment with us? My David, why don't you uh jump in here with that? I know you want to get into commodities. Let me stick with currencies

for one minute more. We're here in London. We were wrapped with attention watching the Prime Minister Treason May speaking to Sky News this weekend writing for The Telegraph about the Brexit process. What have you learn, Dennis Gartment, about where this is headed? What have you learned about the contries of a UK EU trade policy and what that means for Sterling. I think when all of this has run its course, England will, in fact the UK will in fact leave. There will be a British removal from

the continent, from the political circumstances. That's going to happen. The voters have made it clear they will accommodate or will be accommodated by Germany and France. There will be some reconciliation. Cooler heads, adult minds will prevail and all will this will all resolve itself. Will Will the pound Sterling be under pressure until that resolution comes to to to effect later sometime this year, Yes, probably Sterling shall be.

But in the end, as almost all of these events avail themselves, there will be decency and good nature that will finally come to the surface. That's That's the way it always is resolved, the way it always is. Dennis and commodities, is there just a presumed chronic deflation or disinflation of price. I don't know much about red wheat. It's a reddish grain major classification of the United States hard red winter wheat as opposed to soft dread winter wheat.

And I have no idea if I can tell that in my gluten free bread here in London, or yes, folks, I did eat gluten free bread last night. Dennis helped me here with the price erosion in the sauce and particularly in wheat. Is it back to the pre China disinflation for commodities, I think it's simply the fact that we are so good at producing crops around the world, whether it's whether it's wheat, whether it's soybeans, whether it's corn,

whether it's cotton. If you take a look at the history of the last forty years, every time you look at how much production per acre of any of the major grains or any of the major commodities has been, it's always been higher drought in, flood out. Yes, you have problems that that can be that can occur because of weather, but on balance, we're just simply better at producing amounts of of commodities on the same amount of

acreage than we were forty years ago. In fact, in the case of corn, were probably tripled what we can do what a good farmer fifty years ago would grow. We're probably producing triple that now and that's not going to stop anytime soon thanks to the Penn States, the Ohio States, Texas, Texas, A and M. Dennis. You want to get back on scriptures hoping the the the China commodity boom, then do you perceive that globally and domestically

as a one off, No, I do. I think that the Chinese circumstances of the last ten years fifteen years, as China has leaped from the fourteenth century into the twenty second century, and they're not going to go back. Uh. Chinese consumers are going to be demanding carpets and rugs, and and brass plumbing fixtures, and and and wooden furniture

and and and better housing. There are still some of what eight hundred million people in the Western province is that have to move to the eastern provinces and shell and that will have to be accommodated as we as they As the world gets wealthier, and the world is getting wealthier, that's going to continue. But what well, what I think shall end up happening is that as demand continues to grow, the ability to produce more will will keep track with it, and in fact, if anything, will

outpace it. That's been the history of the last hundred years and I don't see that changing anytime soon. Down it's in a limited time we have left here. Let me ask you about oil. I know you've been looking at the correlation between w T I and brand at this point. What does that tell you? What does that correlation tell you about the energy market. Well, I think what's most important is that is the relationship between front month to back month w t I and front month

to back month Brent. We're continuing to watch the contango the carrying charge widen, even as prices have risen. The contango has widen, which tells you that crude, as I like to say, is bidding for storage. Crude is fine, is forcing itself, or the the abundance of crude, and there is an abundance of crude is forcing back months to be stronger than front months. It's telling you that

there's an oversupply. And when in a contangled market, it's very difficult to be bullish of crude oil under any circumstance. There's just simply more of it. We find more of it. We're better at producing it, we're better at finding it. And that's not gonna that's not gonna end anytime soon

either quickly. Donnis if you amended your gold stance given the Trump reflation, Actually, if if anything, I have become more amenable to owning golden not in dollar terms, because I'm really quite bullish of the US dollar and a in long golden dollar terms is an implied bet against the dollar, and I'm not willing to make that. However, if you take a look at what gold did last year in terms of the euro uh and I think

this is an important statistic. The stock market, the S and P was up what nine percent last year, but golden in euro terms was up much more than that. People don't understand that fact. I want to be bullish of gold, but only in terms of currencies that I think will continue to diminish in value, and I think that's primarily the Euro first and the end second. Thank you so much. The Gartman letter always interesting. I just put out on Twitter the Wikipedia and land Grant schools.

I grew up in a house of land grant excellence. Is Mr Gartman has a good one. Cornell, your Cornell. They have like a split school. You got schools school, you got the architect school, engineering school plenty, so each of them with their own character. 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

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