Hello. You're listening to Kobe time, a podcast series on markets and economies from DBS group research. I'm Taimur baig chief economist welcome to our a first episode. So I have just come back from a full month
of travel through the US europe and UK. And if there was one common topic I discussed with family, friends and colleagues during the trip, surprise surprise it was inflation but it was not just inflation, it was also things that stem from it from interest rate increases to recession risks, housing market, currency market volatility and of course the war in Ukraine. So I think it's appropriate to resume our series after my month of being away with a dive in global macro.
I'm very pleased for that to have with us robert deco professor of economics at the University of southern California roberts. Specializations range from international finance to open economy and development as well as economies of Japan and East asia. In addition to academia robert has worked at the International monetary fund and was a visiting scholar at the Federal Reserve Board of Governors. Professor robert Michael, welcome to Kobe time.
Thank you. Thank you. It's a real real pleasure and it's great to meet up with you again.
I know it's been a long long time robert and I hope next time we meet it will be in person.
Great
robert. Normally we start our macro discussions with the U. S. And you were based in L. A. So we have to talk a lot about the U. S. But I would like to turn things around a bit and start with a key area of your interest, Japan. So sitting here in Singapore from the market side of the business, we have been struck by the extraordinary magnitude of depreciation we've seen this year. And as you well know that many financial markets participants have been basically calling the yield
curve control of the bank of Japan unsustainable. But they're holding fast. So let's start with your perspective on Japan,
mm hmm. Um I think they're quite disconnected from in terms of monetary policy from the United States and, and europe. And I think the reason for that is that Their view is that the domestic economies still still weak. Uh the wage increases have not have not, wages haven't risen that much. They're like 1.5, or so. And so the domestic economy is weak and they need to continue their Loose monetary policies to get the domestic economy to recover
some more. And the inflation rates are there. Uh you know, it's not like 0.5 as it was like a couple of years ago, but it's still just a tad above two. So it's not, it's not, it's a bit above there. Their targets at the official target is a little bit of love to I guess. So it's sort of around that level now and uh so it hasn't exceeded it by any kind of margin. So I think the authorities feel that the they're loose monetary policies is still justified, justified
at this point. The only concern there is the weekend, it hasn't been this week since the early nineties and that has resulted in given the high dollar based commodity prices and oil prices and of the input prices. That means that those prices are coming in even higher because of the weaker, weaker yen into Japan, which is um causing they import a lot of their foodstuffs,
for example, food and energy. And that's causing some problems for households which their budgets are stressed quite a bit because of the high food prices and in terms of production, the high energy prices. So, so that's a concern. But there's um there hasn't been intervention and I don't think the exchange
rate intervention has been taken taken very seriously. So um yeah, I think the of course if as if they have to start raising their short term interest rates, they can't maintain their 10 year rate at 100.5% so that's going to have to go. So it's gonna whether they're um they're they're announcement of holding interest rates to interest rates constant would be, or
at least the 10 year rate constant. It's gonna depend on what they're gonna do to the short rates, but they didn't, they haven't raised it and But I think it all depends on the inflation rate as it starts creeping up towards 3%, even if the domestic economy doesn't improve that that much. I think they're gonna have to start raising it and
in terms of the sustainability of the yield curve control. Do you see any physical limits or it is really going to be a bit of an intellectual exercise for the good of the economy? They'll give up. It will not be something that
I think they would have to give up if they start raising their short rates. Yeah, absolutely. No,
I am just talking in terms of the quantitative, you
know,
magnitude.
Well, they, so it's 0.5, so they can say, Okay, we'll make it 2%, 3% I don't, you know, it was all done to um so there's two, there's two things. One is uh it's, was to stimulate the economy kind of keep the long rates low. And the other thing is to have that have a certain gap between the short rates and the long rates to maintain the profitability of the banking system, right? Because they banks make money on the yoke and they're an important part of the japanese stock market and
uh and the economy. So in that sense, I can, you know, they could kind of bump bump both up at a certain point. But um so that's, so that's certainly possible, but it's not as crucial as when they were suffering from near deflation, but that all this kind of came uh, you know, board because of that. So, right,
they finally got what they wanted. But they got a bit too much of it. It seems like very quickly.
I'm not so sure if it's too much yet. That's the surprise of the whole thing that it's a little bit of, it's the mystery continues because as the rest of the world europe, The US have inflation rates approaching 9% still just a little above two there. So, you know, it's still still a mystery there.
Right. So in terms of that mystery, is it because that unlike the european or the US economy's
Japan's
fiscal supporter on the pandemic was not commensurately large, is it? Because they have chronically large output gap and therefore producers still have no power to raise crisis.
Mm hmm. I think it's both the, as you, as you point out that the fiscal response was, was nothing like that in the US given their budget, budgetary situation is quite dire. You know, the the debt GDP ratio is much higher. So they don't have the fiscal space to didn't have the fiscal space to do that. And also the the yeah, the kind of general, um, but I got output gap and the recessed state of the economy going to um, you know, aging of the population and lack of productivity growth, TfB growth.
Things like that. Yeah.
Um, so to that point that,
you know, t.
F. P growth and aging and structural decline in economic growth, you have been, you know, writing about and following Japan through this entire phase, you know, struggles to get out of the nineties crisis through various policies to the arts and the tents, um, what are the broader lessons robert? I mean, sitting in Singapore, I see, you know, Singapore has an asian dynamic and as it sort of hits toward the frontier production, almost certainly, you know, structurally
europe
has the same issue, perhaps even us. So what are your, I
don't know what lessons positive lessons Japan the rest of the world could learn from it. I think the the only lesson is that don't let your economy age some age so drastically. Uh, and that's hard to do with just pro NATO list policies that they like some european countries, Japan tried with, uh, certainly the abe administration with giving, um, essentially very inexpensive childcare and and subsidies for raising the number of Children. But that hasn't really work
that much. And I think what what hurts the country is, is really the lack of lack of immigration and um, I think, I think Japan has a lot to learn from, from Singapore, I think to uh sort of bring in talent, try to bring in talent from all over the world at at various levels like um physical labor and also intellectual labor, but they haven't,
they haven't done that. Um, although abe has tried and I think that's probably the biggest reason why they're suffering from an aging population that's more drastic than other countries and I think um so I mean, what do you do when you have a population is aging is Japan, I mean you have high, you have high debt, I think the policies that they took our sort of appropriate, you're not gonna have a lot of risk capital prices going up in a situation like that, so, but you have deflation and debt
sort of, the JGB prices have been going up, so holding bonds have been a good asset choice and holding money has been a good asset choice. So um that's um so that's why the bonds found a ready market in Japan their debt. So I think, I think they've done about as given, given the aging of the population they've done about as um well as they could. Again, there's things like innovation policies and all that, but it's uh
those things are always very hard to see. Um although this new um Kishida, the Prime Minister is um trying to um promote more innovation by bringing back sort of more of the Japan inc approach where you, you subsidize industries and things like that and that may bear fruit, but I'm, you know, that that era seems to have passed in
the global economy. So, so, so I think, yeah, the only lesson is that try not to get your economy aging and be be more open to the international economy bring people in and but they, and I think europe is going that way and Singapore has as well. And of course the United States has always been very open to mobility of human capital. And I think that's where it's been, it's been very hard for Japan to adapt. And they're kind of at their current current difficulties there robert,
you sort of talked about one of the consequences of aging as debt and deflation. I don't know if you read this book, Charles good heart and Britain wrote this book a couple of years ago called the Great demographic reversal. And they have a sort of a provocative thesis which is we should not look at Japan and take away
that aging and deflation come hand in hand? Japan's deflation is more related to recent market liberalization over the last two decades as well as you know china's exporting of you know, low prices to the tradable sector. And their point is that as U. S. And europe and other countries age, they will actually see inflationary impact because labor force shrinks and which demand will actually pick up. Um you
know, I
mean, I have always been in your camp because even in the I. M. F. When we wrote papers on demographic, the stylist fact common with aging was dissipation of price pressure. So what do you think of this pushback that it may actually be the other way around.
So so they're arguing that wages are going to be increasing with with
shrinking of the labor force,
a shortage of shortage of the working age population and that yeah, I mean those um I think what's the Japanese lesson is that it's indeed true. The working age population has has has gone down, but again, that's been augmented by by imports from china and um china and the rest of the world. What what what's heard is that the demand for japanese products has
has gone down like globally, right? Because of the competition in Korea and china and other Southeast asian countries and domestic still a large domestic economy, but the demand for um Japanese consumption goods such as um cars and also since it's the population, so aging, there's very little new household formation, so when you buy a house, there's all the stuff that goes into them and build
a house material, but that demands just collapsed. So home electronics and materials to build housing, furniture, clothing because you're not working, people aren't working as much those. So domestic consumption demand um is growing miserably has been growing miserably and and that's contributed to the lack of domestic market growth and low investment because companies can't find markets for their products and so therefore low, low GDP and and deflation as a consequence.
Um So yes, I I know Charles's arguments, I've heard other people comment on his book and it doesn't seem to be, had received a very widespread um widespread positive or widespread agreement and and I don't particularly agree agree with. I mean I think they need to argue that the which which they are charges arguing that the globalization, internationalization has ended. So that deflationary forces there and then all you have is this kind of high wages right?
That's gonna cause that's gonna cause inflation. But you know it like I think the counter argument has been, well you're gonna still have globalized India is coming. Huh? The south south asian economies are coming on board and certainly Philippines and South East Asia have a young demographic. They're producing a lot. So that's that's going to continue. And that the um it's the and the robots are gonna robots are
gonna come in and replace the labor anyway. So you may not need to need that much demand any of immigration. So it's a it's um it's it's an interesting it's an interesting hypothesis. Um But I'm not I'm not too I'm not too sure if it's gonna be right. Yeah.
Very good. Now that's that's a very
you know
nuanced response. I appreciate that robert. All right, so let's cross the pacific back to your short. Um So during my visit to the U. S. Last month I heard nothing but stories of you know, soaring gas prices and soaring cost of hiring labor. So let's get a sense of your take on the inflation situation.
Yeah. So when people are forecasting right? It's like 8 8.5 9 and um you know people have been forecasting a turn into lower inflation for the last three or three months or so and it hasn't happened yet. Um But if oil prices are declining somewhat and so I think simply by what people are saying what the I don't know the technical term of it but the since the level last year was was high, you know the growth, relatively speaking the growth, I was not going to raise the inflation as much.
So that's gonna kind of mechanically bring it down. Um But kind of more more broadly thinking about the thinking about the economics. Um It's clearly this uh administration and um the central bank was it was very much very much behind the curve. And they're not even I mean the raising rates at a fairly rapid rapid clip but because of concerns about the financial markets and I think also about the labor markets they it's not the real rates are still
quite negative. Yeah you have like 6% negative real real interest rates. So you can take overall, you know people think positive real interest rates are um less stimulative than negative real interest rates and you kind of still have negative real interest rates. So the stimulus today is it's less than before but it's it's still stimulate it's still a stimulative situation given the
expected given the actual inflation. Right? So and and I can't really imagine this Central bank being like the Volcker central bank and you know and also we don't have a history of the entire seventies of having high inflation where Volker had the
background and the support to do that. So this central bank I don't think it's going to do that and therefore you're going to kind of continue to have longer negative real interest rates and Therefore more stimulative than otherwise and inflation could um continue longer.
Like you can't. So looking at this history in 1982 you know we had to start to have these very rapid interest rate increases and the economy started growing again in 84 85 you like around the mid eighties combined with the collapse of Opec and the falling oil prices you started to have low and stable inflation in the like 85 85 86. And I think the decline in inflation is going to be a little more little more tamed and you know we may not reach 2% by 2024. We might I think I think it will be
higher than that uh higher than that for longer. So if I were I the tips spread I mean let's say it's between two up 2.5 around 2.5 And I think if I I would bet on something higher than 2.5 over the next five years on average. Yeah so that's mainly because of the more accommodating um more accommodating um not not a not a draconian monetary tightening sort of more accommodating. Being aware of the labor markets and the financial markets.
Very interesting
thing. So
so robert you're basically saying that the demand side impulse is not going to go away even if we have some favorable developments on the supply side. So you know all production gets wrapped up the war in Ukraine ends even then you don't think the demands that impulse will go and therefore inflation net net will remain
substantially
above target.
Yeah. Above target. That's right. I think I think there's two you know economists here kind of on both both sides of this like there's one group who say its supply side stuff temporary and you know the china's covid and um and the other group says yeah but it's it's a combination and uh um the like someone like Larry summers for example would say that it's you know it's um you gotta unless you tighten money or have a have a crank have a deep recession you're not gonna get the inflation rate down
and I'm a little bit more towards the summer's camp on this that you need to you need to really you need to have a recession um Like not again it's very divided people people so you don't need a recession. We really need a recession to bring the inflation rate down to target and I don't think this
um the demand side. Both, both the fiscal side and the monetary side because we're talking about even another some more money from more spending coming on before the health care and the prescription which I think are necessary things for the U. S. But we're not talking about fiscal tax tax increases or you know we're still, the debate is still on increasing government spending. So um for those reasons. Um Yes I I guess I agree with what you're saying. Yeah that I
suppose you know
so
extending that summer's Dicle argument that you need substantial rise in unemployment or a deep recession to bring prices under control that desirable. I mean what would you rather have live with inflation or lose your job? I think most people will say the former.
I think that's right. I think that that's there in there in lies the political conundrum that's exactly right that I'm a tenured professor so I'd rather have low prices so summers but that's not good for your for the for the lovely baristas and charming waiters and you know the very helpful um Production workers. It's and it's not a good thing so that that's the and the it's it's a little bit different.
Again the 80s was a different different thing that the political sort of composition of the electorate was different from today. So I think now it's less it's more diverse and younger. The younger people have much the U. S. One of the interesting compared to Japan is that the millennium population fraction of the voting public is now larger
than the baby boom generation. Whereas Japan you have so many old people that the old people still kind of have political power but here the power is shifting to more people thirties, twenties thirties and they you know this inflation is actually good for them better for them than for us. So I think that's the there's a shift and politicians are rationally responding to that so there is going to be an inflationary more of an inflation of
bias today than in the 19. And this other people have kind of commented on this but I think that's I can't I agree with that. Yeah.
Right. But but that's about the political imperative
I would like to
think the Federal reserve is above that.
Okay. Yeah probably. That's right. But Well if the Feds interested in 2% inflation what? Right. I mean fed has a dual mandate but uh which makes which makes it more complicated. But yeah it wasn't You know, they didn't even have a mandate in the 1980s. So it was and they still kept still lowered it to um um I think inflation was thought to be evil number one today. It's today it's not and I think um some inflation is beneficial for the U. S. Debt as well.
So and maybe we're not gonna talk about emerging markets but the um I think the U. S. Would like to have the dollar with a weaker than than it is currently for the U. S. Economy but you know, but still foreigners who hold dollars such as uh the chinese japanese and the Germans. I mean they're the the inflation is not not helpful for they're gonna have capital losses there too. So I think I think it's um yeah so so for those various reasons um I think
inflation is gonna be a little elevated. I I do think being an old old sort of an older economist. Um I do think that this credibility of the Fed in the 1980s was gained at great cost of inflation and the unemployment. And uh I'm I'm a little bit um have mixed feelings that you know, the credibility of the Fed as an inflation fighter is is sort of quite a little bit less today than than it used to be. And it's kind of incredible is being dissipated
a little bit. Um You know, looks at financial markets and that's a very good thing. So so for those reasons I think inflation will be will be um more elevated but but who knows, you know, we might actually have a have a recession for regardless of what the Fed. Um I don't know it might not be from over tightening but recessions start from all unexpected reasons and you have one and then the problem is solved so. Right
and you
know so
you know we're talking we're recording this on friday morning on thursday we had the second quarter GDP data which showed the US economy contracting on the back of the first quarter contraction. So I suppose it would have to start with housing. So what's your local observation the red hot southern California housing market? Is it getting dented by the higher interest rates? Yeah.
Yeah the the the mo higher mortgage rates certainly dented like in my neighborhood um you know you have Maybe two or 3% prices have fallen since its peak in peak. You look at so all over southern California the higher end form higher end houses are selling less and yes indeed I think for the time being housing prices have peaked and they started falling So they've fallen maybe like 2% over the last two months. Yeah. Around here.
Right. And what about that component in the C. P. I. Owners equivalent for rent? Yeah.
So that that would help kind mechanically that would help. And also rents if the economy is a little weak or landlords can't hike rents as quickly. Right? So that so actual rents are not going to be rising as much and certainly the imputed rents as housing prices fall are going to be um um lower so that that will bring down and the housing components a large component of the CPI I so that's gonna bring it down and you have energy and energy and energy coming down. Foods are concerned that we
haven't seen declining food prices yet. So but
right. You know actually that's probably even a graver concern for emerging markets. We will talk about that uh momentarily. So one upshot from this higher interest rate has been this is amazing you know, strength of the U. S. Dollar on the at the expense of the rest of the world. So I was in London I mean 1 $19 for a pound. I don't remember that ever. Uh And and similarly, you know your dollar going towards parity and of course more importantly emerging market currencies coming under pressure.
Um So to the point of
discussing
About recession and perhaps the Fed not being inclined to engineer a massive recession meaning sooner or later they will relent from taking interest rates a past 4% or something. What is the market began to price that out? Is the dollar peaking or you see further and if you do see further dollar strength, what does it mean for?
I'm sort of I thought it was. Yeah, I mean I think it's um I follow the dollar rate and I think it's peak there 130. You know 33 or so. So I think you've seen, I mean inflation should you know you and I are specialists like inflation should depreciate the US currency. You have the interest rate stuff but that's the cap brings in capital flows but also simply by purchasing power parity, the monetarist argument that should help push the inflation. Right?
So the the and which is the desire of the Fed as well to some extent to a large extent. So I think the yeah, I mean I think it's a good the dollar has reached a peak or close to its peak and that's why we're sort of upset. We didn't travel this summer because it wouldn't be it would have been the time to go to europe or Japan or where?
Right. Right. But I guess, you know, there are two ends of this argument. So one and the dollar across the basket of currencies may have peaked. But the sort of narrative that we're seeing out of europe and elsewhere, they are also falling into, you know, major recessionary dynamics.
Yeah.
You'll still find europe rather reasonably priced. Uh
the
dollar substantially weaker
like a week. You're right, The U. S. Economy, why the dollar stronger is partly the high interest rates but also the the real economy stronger than Japan and europe. And that's that certainly helps in strengthening the strengthening the currency. So yeah,
so robert you and I both as students as well as professionals through our carriers have seen every single rate hike cycle out of the US being accompanied by some sort of an E. M. Crisis some deeper than others.
Yeah. Are
we going to see ways of default and and major crisis
now, capitals, capitals flowing out. Right. So if that if that continues to accelerate, then you're gonna have investment investment declining. And these countries have to start raising interest
rates to defend their currencies. And uh so it's not um it's not a it's not a it's not a particular positive outlook, but one should also, I think, look at emerging markets um sort of country by country, I think we first sort of, you and I first connected because we were working on a similar topic, interest rate, interest rate,
defense of currencies. And and these are these are countries and um these are and so we looked at, I think you and I you work with the I guess he he became the governor of the Bank of brazil,
who's now the head of the western hemisphere department of the I m f
Okay, there you go, you and that's a that was a great paper. And so I think, I think ultimately it depends on the on the fundamental kind of strengths of these emerging markets. Like if they're if they're fundamentals are really strong, this is they can they're going to be able to withstand, withstand this capital outflows, higher us interest rates. And um but I think in in in those cases of these emerging lands also during the Latin american crisis of
the 1919 eighties. Each country, it was not just simply driven by um the high interest rates during the Volcker era. These countries really had domestic, they borrowed too much during the oil surplus of the 19 seventies and their investments were not good, right? They were investing in kind of crappy projects and that's when the interest rates rose. That that's why they heard similarly the situation
the asian countries right during the 1919 1919 nineties. So I feel that it's not, it's not saying oh the U. S. Interest rates have risen, capital is going to be more or less, it's gonna not gonna be floating as much to our countries, they're gonna go back. Well if you have um if you have a fundamental like Singapore is not going to have any problem. If you have fundamentally strong economy, it's going to it's going to be um you're gonna
be able to withstand it fine. And most of these cases, you know, we we study individual countries or regions and they have flaws. They're severely flawed in some way and this capital outflow just exacerbates. And I think um I mean as far as I I follow asia much more, much more carefully than anywhere else. And I feel that, I mean certainly, you know Korea is no longer emerging market, that's fine, they're fine, Japan basically is fine, china's Singapore
is fine. Yeah, I feel generally it seems very strong in that in that region. So um I'm not I'm not that I'm not that concerned um concerned about it. And yeah, but again, I don't know, I don't know the individual countries in latin America for example, as well. So,
robert when you were talking in the context of talking with the US earlier that food prices have not come down. So I suppose my worry is that energy food mix. I mean, there are manifestations of various supply side developments around the world, but the extent of they can create distress for particularly commodity in important economies.
I think that's right, like Vietnam for example, but
that's that's where the worries are that even this year's high energy prices will feed into higher food prices next year, fertilizing other channels. Um so, so in some ways,
just
Like the 70s, it really ends and begins and ends with oil, if you can get some oil under control. I think a lot of the discussions were happening having will probably start to fade. So, so let's let's hope for that
oil prices come under. Um but
but see even on that issue, robert, I have a lot of, you know, conflicting thoughts in my head because on one hand, the the desire now to pump more oil more coal, because we have high energy prices, I worry that that will undermine the climate change agenda. And I also feel that, you know, basic economic sort of dictates that you do want the relative prices of fossil fuel products to be high otherwise, why would anybody start investing or using alternative fuel. What
are your thoughts on this? Well,
it's the usual the argument that the market will solve the energy shortage problem and promote it's it's clearly that clearly that case. And um but it's it's it's the pace if you secular early expect as we do, you have eventually oil running up out and oil prices rising over 50 years. And also you have a climate climate problem where the in that case, the government needs to subsidize because it's kind of a public good. Right. In those cases,
you can have this increase. Um um and what price was secular, the increasing that promote conservation and conservation and moving towards um more energy efficient types of transportation systems, I think, I think that will that will continue. But I think it's just the pace, the rapid rise over the last year of of commodity prices. That's um um that's difficult to deal with. And and that's not a it's not a long term um structural change kind of argument. You know, that's that's
more of a more of a shock. That, um is, um these disturbances are maybe hard to manage in the in the in the short room because um they're not they're not insured against these shocks. A lot of these countries that for the reasons you mentioned inflation, food prices going up sharply, they don't have the stuff stored and, you know, they're not hedged with against these, um these food and oil prices and that that's that's going to create a problem.
So yeah in the short run um I think you will these these shocks um if you can smooth them that that's fine but if you can't um um I won't say that um that these shocks are good things because they're gonna promote energy sufficiency because that's more of a longer term thing. Yeah
indeed. Um So robert earlier we were talking about you know the proton good heart thesis that one push back against the idea that the world is de globalizing is that well there are many other parts of the world that will remain very much globalized and we have favorable demographic to bring us you know cheap manufacturing for income. But we certainly cannot avoid the firm fact that the west is trying to drive us away
from
relying too much on china so that china plus one strategies and you know finding ways to push back against I. P. And all that sort of stuff. So so this this narrative of pushback would that undermine global growth prospects? I mean we have been such a big data to china's growth over the last two decades. Where are we going to get alternative sources of growth if we're going to start pushing china toward the corner.
Um No I don't well chinese growth you know it's it's it's enormous but it's it's not going to see the see that those
high single digit growth rates that did it. It's gonna drop 554% which was like korean levels, these are the kind of examples that you see all first japan, then the knicks and then the china so its growth rate is gonna gonna go down, go down to some extent and you know I've always been, maybe people have different views on it but I'm hopeful for they tend to focus a lot of demographics but I'm hopeful for like the Philippines and the South south asian countries um and even africa and
to take take up some of this to take up some of this like I mean I'm an internationalist and um I think um the the west has compared Eastern, it was a very china faced a very benign environment until fairly global environment until now. And so you know I hope I hope that I hope that benign environment will continue but you know there's this this geo geopolitical issue that that
you know that's that's going on right now. Um my my feeling is that as I was saying unlike the soviet union china was the beneficiary of the of the global system and of a benign global system and I think their their leaders are going to realize that you know what are we going to gain from kind of exciting with being sort of pariahs of the international system because they gain and and just doing this calculus of how europe and the rest of the open part of Asia
and the United States um that that of where their future is gonna lie will make them and I and I don't will they may not admit it, but a rational actor would kind of jointly determine sort of global where the global economy would belong with the U. S. And I think european countries like china would and I so I'm not I don't think it's gonna head in the direction of let's um you know, let's be a pariah of the goal because they they benefited so much and it's it's just been so good
for china, whereas for the soviet union, I think it's arguable where the internationalization has helped them that much except for the oil prices and stuff. But for china it's um it's very clear so I'm not that negative about china kind of disappearing from global the global picture. Yeah
that is robert. I mean
this is this is again it's like the the most the very important political economy question, I don't think anyone has an answer right?
Um Well I guess, you know, I I worry the other side of the thing which is that it's not just a question of whether china was to be part or not. I think the answer to that is pretty clear they do, but the pushback that they're getting particularly from the US and perhaps increasingly this is a coalition of democracies and how that ends up worries me quite a bit
and it's I'm not alone sitting here in Singapore. There are others also worry that countries also gets sort of, you know, pulled and pushed between these two great powers and how that sort of gets in the way of investment and so on. But
there's no doubt about that.
But I'm glad that you still are sort of, you know, pinning your hopes on rational actors. That's what we need.
Right,
robert deco. Thank you so much for your time and it
was really, really great talking to you and don't be a stranger. I'll see you in L. A. Yeah,
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