Bloomberg Audio Studios, podcasts, radio news. Okay, I'm gonna tell a story here. He's gonna love this. So I'm at Michael's like, this is like fifteen seventeen years ago. And then you know, they're giving me an overpriced salad to
my third drink. And it's the art directors for my book and they're like, Tom, we have to have an inside sleeve one of your charts, one hundred and fourteen charts, which chart would be like when you open the book, you see it, you know, inside the book chet and I make the decision, like over the olive on the Martini, I said, it's got to be Malpass. Mail Passes at
bear Stearns. And out of all the people in the book, and these are a heavyweight, Bill Dudley, the former Fed President, Bob the New York Fed President, Malpass had the most amazing chart, which was yen and yen and gold like what Dennis Gartman did joining us now the former head of the World Bank and iconic at bear Stearns, mister David Milpass as well. I just looked at yen in you and credit to Dennis Gartman as well. It's the call of the decade week yen that we saw, whether
it's yen and gold or yen in whatever. How did Japan turn around this train wreck?
Hi? Tom, you you can stabilize your currency by having a good growth plan. So Japan's got to articulate that they're not badly positioned in the world since people are trying to diversify away from China, and Japan has a lot of the things that people want, and so if they can retool the economy, it can work.
It's an experiment of reflation, which is pretty you know, you're in Colorado college and it's like, you know, it's not even in the textbooks. Okay, it's an experiment in reflation, and they want to pull that back. Can they find a middle ground that works versus tripping into deflation again?
They can, but they need to really think about their interest rates. You know, they're pushing up against the one percent limit on the tap. It really doesn't doesn't work to say you're going to limit your bond yield, but you want your currency to stop weakening. So right now they're intervening to try to tide that over. That can work for a little while, but at some point you have to say your interest rates are going to be more similar to the rest of the world interest rate.
Paul wants to jump in one more question and yen. What is your call on Japanese yen? I know you're not doing FX and market economists, but do you see a big figure strengthening in Japanese yen or more of the same.
I think it could settle where it is now and the world would accept that. And that is a little bit what is going on. The world moves through currency realignments and then tries to stabilize after that and reduce the harm from that.
Oh, he's tanned and rested. I notice is left bank and he's exactly hand and rested.
I know, I'm very impressed. David, we've seen come bringing it back to the US. Here my entire career, we've been talking about annual deficits in the national debt and now we even have Jamie Diamond, David Solomon, and gold and Sex talking about the national debt. We've even got that silly thing downtown where they tally of a national debt on a daily basis of everybody to see is it time to care about that stuff? Like I'm sixty, do I care.
I think absolutely it is time to care. It was one thing when the US economy had a fifty percent debt to GDP ratio, you could borrow that and not really not really a tax the world's capital, or take all of the world's capital. We're the biggest economy and we're borrowing so much that it changes capital flows around the world, and I think it's doing it in a harmful way. It's the government gets the first DIBs on all capital, and then if there's any leftover, big corporations
get it through the bond market. And if there's any leftover, which there isn't really, small businesses can borrow to fund their inventory, their working capital, and countries outside the US have a little bit of capital at the end of the line. That's not a workable system for the world. So I think there has to be, both in the US and in the world, an urgency that the US government stopped growing at spending.
And this is a I guess a political issue, and again in my lifetime, i've never seen the political will to address it because it doesn't sound very popular.
That's that's right, and I think there's a big gap in our law. You know, the debt limit law is misnamed. It's really the debt increase law. So every couple of years presidents both parties sign a law to increase the debt limit. I've we have to replace it with something workable, strong, and it has to hurt Washington, not hurt the people of the country when we're when we have too much debt, they shut the national parks rather than reducing the staff hiring in DC, the swamp gets bigger.
World Bank. It's a swamp. Now, it worked in the swamp. What you learned working in the swamp.
Uh, So in this Washington is a swamp. The parts, all the parts work together to make Washington bigger and more profitable. That's that's a risk. And the World Bank is part of that. It's headquartered and uh and centered in Washington. One thing I learned Tom was how hard it is to get any other country to do the right thing. It's just as hard outside the US as in the US. So if you take Nigeria, why is this oil rich country so poor? They've got a huge
extreme poverty rate. Why is that because the government takes all the all the profits from oil and wastes it.
This is such a better Mail pass than the World Bank and eight people standing around looking at every where. David Mail passes public service to the nation in the world with the World Bank and involved in politics as well.