Welcome to Meren Talks Money, the podcast in which people who know the markets explain the markets. I'm mere in sumset Web. This week we bring you a conversation with veteran market economist Eddie Adenny, the president and founder of your Denny Research. I've been reading his work for years and highly recommend it. You can read it as well if you visit one of his websites here Denny quick Takes dot com ed. Hello, thank you so much for joining us today. We really appreciate it.
Thank you.
Now, there's so much to talk about today, and so much positive stuff to talk about, is what I'm hoping for here, and you have an excellent record of being both optimistic and correct.
Right well, thank you for staying that.
So what I want to talk about today is where you see us going from here. We won't bother meandering around the past too much. I want to talk about the odds of something brilliant happening over the next couple of years, and the odds of something awful happening over
the next couple of years. And in one of your recent notes, and I will say, by the way, anyone who's listening who doesn't know ed I'm a very enthusiastic reader of all his work, and if been following me for a while, you will have seen him quoted everywhere, so you'll know a little about Rethinks already. So Ed in a recent note, you talked about three possible things that could happen, three possible historical periods that the next few years could be. Right about what could be like?
And you mentioned the nineteen seventies. I don't think we really want that. The nineteen nineties. We wouldn't mind the late nineteen nineties, would we And the nineteen twenties, which, of course we didn't really have a Roaring twenties in the UK, but you definitely had one in the US. So shall we start with the bad things that might happen? The bad decades? We might follow them? We can end on a high note, right, So what might be similar
to the nineteen seventies? You give that a twenty percent probability.
Well, the nineteen seventies from a macroeconomic standpoint stood out as being inflationary, and there's been a lot of concern that we may repeat that experience because back then we had two energy shocks in nineteen seventy three and again in nineteen seventy nine, and they both came out of the Middle East, and as a result of that, as
energy prices went up, it spread throughout the economy. Energy is extremely important to the economy, clearly, and so it spread into wages, and from wages it came back into prices, and so we had a wage price rent spiral. People forget, but rent inflation was also a big problem in the nineteen seventies. Well, it could be DejaVu all over again
in the current decade. It doesn't feel like it to me right now, because inflation has come down dramatically, but it came down dramatically in the nineteen seventies following the nineteen seventy three shock, and then we got hit again. And it's conceivable given that the Middle East once again is boiling, and that there's a potential. Not a potential, but it sure looks as though a lot of the
conflicts are spinning out of control. If that starts to affect the price of oil and pushes it up dramatically because of supply disruptions caused by the conflicts over there, then it would be very similar to the nineteen seventies again, and so I think it's certainly a possible scenario, given the way things are going over there. But what's interesting to me is will the news has been awful. The
price of oil has been remarkably tame subdued. It's down still sharply from its peak of last year in September twenty seventh, and that's despite the war between Israel and Hamas and the escalation of tensions by Rand's proxies in Syria, Iraq, Yemen and so on, and of course the disruptions to Red Sea shipping. So put that all together and we've
got a geopolitical crisis. But so far, the price of oil has been remarkably tame, and I think that's because China is in a recession, Europe center recession in the US, but the US is doing pretty well. So all in all, from an economic standpoint, so far, so good. From from a geopolitical standpoint, not so much. It's quite quite quite a bad situation.
Yeah, And there's still a chance that putting putting oil aside, the disruption to shipping through the Red Sea could have implications through the supply chain and we could have an inflationary impetus from that regardless of the oil price.
Well, it's you know, so ships aren't going to Sewers Canal. And then from what I understand, there's an issue with the level of the Panama Canal which has also reduced the ability to get a lot of ships through that way to other routes. So, yes, I think you're absolutely correct and bringing that up.
I mean, it is one of the things that we worry about relentlessly on this podcast. We worry about inflation a lot. I mean, there was a similar point in the nineteen seventies of where we are now. Inflation is dead and that's that it's all fine and behaved as the worm, when of course it hadn't actually been destroyed, and back it came, and in spades twice.
I think what's different this time is that the FED is much more sensitive to inflation. It took them a little while to recognize that it was a problem in twenty twenty two, but they scrambled and they I think went from behind the curve to ahead of the curve, the inflation curve, and so I think the Fed's credibility
on fighting inflation has actually improved quite a bit. The other thing is I think we've discovered that quite a bit of the inflation we've experienced has turned out to be transitory, and it has been very much related to the pandemic and the supply disruptions related to the pandemic, and so far those disruptions were much more widespread and much more inflation than what we're seeing so far in the current situation.
Yeah, it's hard to write it off though, isn't it.
Yeah, I give it a twenty percent subjective probability, so you know, and then there's two other scenarios exactly.
And I was going to say that what he said the other day, Grunt snaps, as we are moving from a post war world to a pre war world, and you know, nothing is a forerunner of inflation more than war. It's pretty much. It was a leading indicator of inflation coming So.
Wars our inflationary wars are definitely inflationary historically.
If inflation were to come back or whatever, it's already coming back. Numbers slightly higher than than expected in the UK this week. It's hard to see rates coming down in the way that most people seem to expect, isn't it.
Well, it becomes in the nineteen seventies. Again, the scenario there was that Paul Volker came in the late seventies and basically decided that he had to let monetary policy wreck the economy in order to bring inflation down. And that's been sort of the key thought process of pessimists since twenty twenty two, since the FED started raising interest rates. The basic concept was that there's no way we're going
to bring inflation down without a recession. Historically, it typically takes a recession to bring inflation down, but I think one of the reasons that hasn't happened is because the Chinese and the Europeans have done us a great favor. They've had a recession, and because of the particularly the recession in China, there's been falling goods prices. So we still do a lot of business with China, and this certainly had a deflationary impact on the global economy and
particularly the US. So we didn't have to have a recession in order to bring inflation down. They did it for us.
Yes, it's given us. What is it you who calls it immaculate disinflation? Right, it's given us that we've been very lucky. Okay, So that's a twenty percent likely head, but pretty much everyone else he comes on the podcast gives it about an eighty percent likely hit. So we're already moving forward nicely with the optimism here, thank you.
The second the second possibility that you actually only have only quite recently started talking about it as a distinct possibility, which again you give twenty percent, is the late nineteen nineties, which went bad at all until nineteen nineteen ninety thousand punds suddenly got bad. But the late nineteen nineties they were a hoot, right, that wouldn't be all bad.
Well, Speculative bubbles are wonderful as long as you remember to get out right before the bubble bursts. You can certainly make a tremendous amount of money in a very short period of time. But you can also lose your mind and conclude that you know, it's a new era and everything is just amazing and it's going to be amazing forever. And then not only do you keep speculating, but you leverage the speculation, so there is a potential for irrational exuberance similar to what happened in the late
nineteen nineties. And yeah, all of a sudden I'm seeing a lot of similarities. I mean, in videos a great company. I don't recommend to buy, sell, or hold individual stocks, but it is an amazing company. I mean, they went from making a lot of money selling chips for gaming to selling a lot of chips for mining bitcoin, and then suddenly they were the only people selling picks and
shovels for the gold rush in artificial intelligence. So the company's stock price has just kind of gone straight up, especially since open ai introduced chat GPT in November of twenty twenty two, and the stock's been hot. But so of other stocks like Microsoft, anything that's remotely related to artificial intelligence has been really off the charts, and I'm
struggling whether it's hoopla or hype. I think some combination thereof I think it's going to take a while before AI makes a huge difference to our economy, but I think it'll make some difference. I Meanwhile, there's a lot of other technologies that I think will be very good for my base case, But for this scenario, the similarities are. You know, a tech bubble, tech lead bull market that becomes increasingly narrow focused on the large cap companies that
are likely to benefit. Back in the late nineteen nineties, the stock that really took off was Cisco. Cisco makes a lot of equipment for the Internet, and the stock went up eightfold from nineteen ninety seven to two thousand, and then it collapsed for all sorts of reasons. But the reality is Internet certainly continued to proliferate. But I think for the reason Cisco collapses because everybody bought their equipment, partly for the for the Internet expansion, and partly because
of the concerns about the Y two K problem. So when we crossed into the new millennium, companies had spend a tremendous amount on redoing their technology, and then suddenly all that demand kind of vanished at the turn of the clock. So it's conceivable that we could have that kind of scenario. We're maybe in the early phases of it right now.
But to get into that kind of melt up, we'd need to see but we need to see rates falling fast. So we'd need to see everyone getting concerned that inflation was going to fall to two percent or below, and then we'd need to see actual rate cuts come through from the Fed.
At least, it's a fascinating scenario to think about, because you know, put yourself in the shoes of FED shared your own Powell, he's just more or less said that they're done raising interest rates, that it's restrictive enough, And he and a few other FED officials have said, you know, if we do keep making progress and bringing inflation down, we will have to think about lowering the Fed funds rate because if we don't do that, then the inflation
adjusted FED funds rate actually be going up. And so we don't want to be more restrictive than we are, so we might have to consider lowering rate. So, just having said all that, the markets have had a tremendous rally. I mean, we're up thirty five percent since the bottom of the bear market back on October twelfth, twenty twenty two, and a lot of that has been led by technology, which is very very much of a high beta sector. That's the best way leverage, way to play an economy
that's growing without interest rates going up any further. And if the market starts to sense that the federally is about to cut interest rates, imagine how much higher things might go. So, I mean, I think Fred Chert, Jerome Pile knows all that, and I think he might very well start to push against it and say, you know what, we're actually not in any rush at all to lower interest rates. I mean, look, the economy doing well, inflation's
coming down, what's the rush to lower interest rates. Nevertheless, if the FED becomes less relevant because we're not spending you know, nights and days wondering how much higher they're going to take interest rates, the markets can focus on the fundamentals and on the hype. And right now, the fundamentals look obviously good for the economy, and there's plenty of hype about AI.
Yeah. I mean, it feels like it would be a great shame for the FED to start cutting rates aggressively again when they finally got them to a level that feels historically normal.
I agree.
So in less there was a wopping great recession, it would make sense, surely for central bankers around the world to go, thank god, we have an opportunity to normalize here. Let's try and stay somewhere around four percent, because that's roughly where they've been for the last three thousand years, and it's kind of works well.
I think you make an excellent point, is that in some ways. While we all know that the central banks have been tightening, they've also been normalizing. We had a very abnormal period from two thousand and eight, the Great Financial Crisis through the Great Virus Crisis in twenty twenty two where central bankers were just obsessed with bringing inflation back up to two percent. Those were the days, right, and so they put interest rates at zero, they had
quantitative easing. Quantitative tightening was not something that they envisioned at all. And at the same time, some of them had negative interest rates. So we're we're kind of back to normal. So why not leave it that way for a while? What's the rush to lower interest rates? And if they do lower interest rates, then they really have a risk of instead of worrying about price inflation, they may have to worry about asset inflation.
And then of course they if they do cut again when we're not in an actual recessorary situation, they've got nothing left if we do move it. That's right, another nasty period.
Come.
I to ask you, as lets sign asmastide, do you have any thoughts about where the two percent target came from and whether it's valid. You know, we spend a lot of time on all our podcasts and all our articles talking about two percent and the importance of two percent, and John and I have traced it to a paper written in New Zealand a couple of decades ago, but we can't go back. Yeah, and that's it, right.
I think you're right. I think the New Zealand was the first central bank, or among the first, to have an inflation target, and it kind of caught on. It became sort of an obsession with macro economists that maybe if the FED targeted some very low inflation rate, we could have nirvana. And you might recall there was a description of a period there in the eighties and the nineties.
It was called the Great Moderation that the central banks had figured out how to calibrate their policy so that inflation would be very low, very moderate, and the economy would continue to grow. And it looked like a pretty good scenario until the central bank started to go wild about deflation, being terribly concerned about deflation, and suddenly they become obsessed about getting inflation up to two percent. I
had no problems with inflation below two percent personally. I mean, I think most of us who had jobs, and most people did have jobs. Low inflation is a good thing, and zero inflation is fine, but they were paranoid that if it got down to zero, my god, it could turn into deflation. You're just need a little bit more cushion. So it's kind of nonsense, quite honestly.
Okay, good because that's what I thought that it was kind of nonsense. So I'm glad to hear you confirm that. Of course, that period you talk about the Great Moderation, that was the period when our chandler dot to see to bolish boom and bust, which will not sure about that.
It gives them something to do, you know, they can write papers about it and then try to implement policies to achieve that target. I guess it's a way to sell their importance. But I think the central banks have become way too important in our investment lives and our business lives because they are so meddlesome and.
We also, I mean, if you look at the way that inflation has come down over the last year or so, it's not a given that that has anything to do with central banks. Anyway. They're very good at claiming credit. But you could say that the previous period of disinflation has nothing to do with them, and the inflation was something to do with them with the frantic money printing, but that coming down again wasn't necessarily anything to do
with them. Well, a lot of taking credit where it might not be you.
You and nice should go on a road show because it seems like we agree. And I'm sorry, I don't mean to finish your sentences off, but you know, I'm inspired by the spin your putting on things, because the same spin I've been putting on is, you know, you've got to be empirical, you've got to be data dependent. They keep saying they're data dependent, and yet they come up with it Kakamami theories that they try to force
the data to fit. But you're absolutely right. I think we're we've learned that inflation isn't just a monetary phenomenon. I won't say that it's not a monetary phenomenon, but it's not just a monetary phenomenon. There are a lot of moving parts there, and I think historically when you look at inflation, it tends to be very spiky. The faster it goes up, once it peaks, it comes down almost as fast, and it does tend to be spiky.
The seventies is actually an aberration, and again I think a lot of that had to do with the geopolitical crises in the Middle East.
That's why we need to keep an eye on those geopolitical crises we've got at the moment, right, should we move on to the good bit? The good bit, the bit that you give a sixty percent probability to the Roaring twenties. And John and I have been really, really hoping for a Roaring twenties. We started talking about it, I think when you first did we read that and we were like, Yes, that's what's going to happen, that's
what we need. And since then there's been kind of precious little kind of a Roaring twenties.
Well, you know, at the beginning of the decade, I did start to think about the possibility that the twenty twenties could be like the nineteen twenties if nothing else kind of rhymes. And they do say that history doesn't repeat itself, but it does rhyme. And it was interesting that the nineteen twenties before that, just before the nineteen twenties, there's a horrible war. It was called the Great War.
They didn't have World War iiO to call it World War one at the time, and it was horrible, and not only did people die from the war itself, but then because of all the diseases that the soldiers gave one another in the trenches. We had the Spanish flu in the late in nineteen eighteen nineteen nineteen, and so we had a pandemic, We had a war, and in the United States, and I think around the world in thee twenty there was a recession. And back then they
still still talk call these things depressions. So it must have been pretty depressing to think about the outlook for the nineteen twenties at the beginning of the decade. And yet it turned out to be the roaring nineteen twenties because of technological innovations, things as high tech as plumbing, the auto manufacturing adapted more efficient ways of producing things, and as a result of that, we had a tremendous
productivity boom. And productivity is a wonderful, wonderful economic variable because the more you can get productivity to grow, the more output you get per worker. By definition, you get less inflation, you get wages rising faster than prices because people workers do tend to get paid their real wage in productivity. So it was a great period. It ended badly in nineteen twenty nine nineteen thirty, though I point out that it was not because of the It wasn't
the economy's fault. It was because of this smooth ally tariff. But that's a whole nother subject. But so there are similarities. Now we've had a pandemic. I think we've got a technology revolution that started in the nineteen nineties. It was fairly crude back then. If you could replace secretaries with selectric typewriters who were on selectric typewriters with Word, or if you could replace a lot of bookkeepers with the
Excel spreadsheets, then you could increase productivity. But the technology wasn't all that applicable to businesses across the board the way it is now. I think now every company is a technology company. You either make it or you use it. If you don't use it, you're going to lose it, You're going to go out of business. So there's a lot of pressure in companies to use alogy to increase productivity,
particularly since there's a chronic labor shortage. So you put that all together and I think we're in the early stages of a productivity growth boom, and I think it's already sort of been. The data is already there to show that it's happening. Back in twenty fifteen, on a five year trailing basis, the productivity growth rate was zero
point five percent at an annual rate. So in the five years prior to the late twenty fifteen there's only zero point five close to zero then, I mean, and now the number is one point eight percent on a comparable basis, So that's a tripling of productivity growth. I think it's going to go to three to four percent, which sounds delusional maybe you know, far fetched, but that's the kind of productivity growth we've gotten in the previous
three productivity growth booms. And I think this one of the technology lends itself to increasing productivity and just about every business I can think of.
It's interesting, isn't it, And that they're an awful lot of people who spend their entire time worrying about falling populations, about lack of labor, about demographic pyramids, etc. But if you look back in history, some of the greatest periods of productivity growth have come in periods when the labor foruth has been shrinking quite fast rather than rising, because that's when there's enormous pressure on people to create the
innovations that will keep things going. And I think the dynamic is the same in the US, but certainly in the UK we hear constantly about how we must have more and more people, we must replace the disappearance of our own workers with constant immigration, because that's the only way the economy will keep going. But I tend to feel rather as I think you do, that is the shortage of labor that forces innovation, forces creativity and forces productivity.
And after all, the UK, the UK population has been increasing very fast over the last decade or so and it's done us very little good at all. GDPP ahead has been flat, very slightly rising, but certainly doesn't reflect anything particularly good. So I'm very much with you on
this one. And if you look, for example at Japan, there's a I think one of the newspapers had a big piece earlier this week about Japan and the amazing innovations you see there in terms of robotics and AI to help deal with the falling population.
Yeah, I completely agree with that.
And if One of the things that we've been worried about, both in the US and in the UK, across Europe as well has been low real wage growth. This productivity boom that will finally push up real wages and finally give us some fans of a shift in the income inequality dynamic. Well, I mean sounds wonderful.
Absolutely, look on real wages. I've actually been pointing out that the data shows that wages are divided, you know, average hourly earning is divided by the price deflator, which is the best kind of monthly way to keep track of real wages. They've actually been growing since nineteen ninety five. The period of stagnation was prior to that, particularly during the seventies and the eighties, because of the industrialization, because
of globalization taking jobs away from Americans and others. A lot of jobs went to Japan in the suventies and the eighties, and then we saw China coming in to the global economy. But the reality is the data shows that real wages have been increasing at an annual rate on average of one point four percent since nineteen ninety five. So the reality is workers on collectively have actually seen
their real wages going up and that compounds pretty nicely. Now, I think we could see real wages growing even faster than that because of faster productivity growth. There's a very close correlation between productivity and real wages. So I'm optimistic on that score. And as you said, there's a shortage of labor, I mean you've got a shortage of labor,
you've got to pay a higher price for it. And the only way that works without causing a wage price spiral as if productivity does in fact make a comeback, and I think that's what companies are scrambling to achieve, and I think they are achieving it.
Actuals. Do you worry about the effect of the rise of passive investing on the market. I'm one of the things that you write a lot about a lot is the Mega eight or the Steep seven. However, you like to look at these few technology stocks and one of the things that have pushed their prices up over and over and over is the momentum that comes from money continually pouring into index based ETFs. Is that a long term problem for markets?
Well, I think it can be a problem during bull market, so obviously it can kind of feed on itself. The problem with the ETFs with passive investment is that people just pile into indexes, and if they all kind of pile into the same indexes, then you wind up with a potential concentrated market with just a few stocks doing very well. Active managers aren't going to put more than two percent of their portfolio, maybe three percent of their portfolio and any one stock. They tend to diversify, they
don't put all the eggs in one basket. But the ETFs, of course, can have much more weight in just a few stocks. So we have what I call the megacap eight. Others call them in the magnificent seven. I watch a lot of movies, so I want I want Netflix to
be in that composite. And the megacap eight now account for something like twenty seven twenty eight percent of the share of the market capitalization of the S and P five hundred and no very few active investors are going to concentrate their portfolio that much in a handful of stocks, much to their chagrin obviously, because that's where the performance is vide because.
They're always end up performing as a result. Okay, so let's go back to the Roaring twenties.
Sure.
Hopefully this is excellent for stock markets. Right. It's not quite the melt up, but it's a better longer term bullish case.
It's a better longer term bullish case from a fundamental perspective. The risk is that everybody else besides you and me and a few others kind of joins the party here. So you know, I think, didn't Prince sing a song about let's party like it's nineteen ninety nine, So I think favorite, Yeah, So I think that the nineteen twenties is great for the fundamentals. It's great for productivity and real wages and prosperity. Hopefully the stock market just doesn't get too ahead of it.
The stock market does pretty much always get ahead of things, and it's already possibly a little ahead of itself already. I mean, it's certainly smashed through your forecast at the end of last year, and I don't know if it's smashing them already this year, but can't be far off.
I have to tell you, I do talk to people in the press on a fairly regular basis, and I had an interview recently with a young fellow from a Korean newspaper, and you know, I thought we were going to have a pretty broad range conversation, but he kept coming back to you know, he said to me that retail investors in Korea are very excited about artificial intelligence. How can they play it? And it's just dawned me that it's a big world out there with lots of
people playing the market. And if this really catches on on a global basis as like a really hot place to be, then it could turn into the nineteen nineties. But even if it does, it's not the end of the world. I mean, we had, you know, a tech wreck in the stock market in the early two thousands, and yet we're well advanced beyond that in terms of real GDPs and an all time record high real consumer spending, all time ra or highest standard of livings that would
never have been better. I know people argue with me about that, but the reality is, even if we have a speculative bubble in stocks and tech stocks and it bursts, it's probably not going to change the course of progress that would be made fundamentally in a twenty twenty and a roaring twenty twenties kind of scenario. As I mentioned before, Cisco was a hot stock in the late nineteen nineties that crashed in early two thousands. But that wasn't because
suddenly somebody slammed the bricks on Internet. Quite the opposite. The Internet has become a ever president in our lives.
So we can have unless it, it would be all bad. We could have a Roaring twenties and a late nineteen nineties at the same time.
Absolutely, so sixty plus twenty is eighty percent. So I guess I'm quite polish.
You're very village. I'd call that extremely villished. Okay, so here I am. I'm a retelavestor. I'm an ordinary persident in the UK or the US. I'm listening to you too, and I'm thinking this is fantastic. Marin's finally got someone on who's positive about stuff. What should I buy?
Well, I think that what they do is of go with the underlying fundamentals. The underlying fundamentals I think are positive, particularly in the US. I would overweight the US and a global portfolio.
Would you even at these valuations, even though significantly more expensive than most of the markets, You'd still overweight it.
I've been favoring what I call a stay home over a go global scenario since two thousand and nine twenty ten, and it's worked pretty well. I guess at some point I'm going to overstay my welcome there. But for example, I've been opposed to investing in China. I just don't think it's a good place to invest from the point of view of the political intervention by the communist government in the economy. So I've been down on that very right there. India has been a great place to invest.
But talk about a bull market, I mean, that's been a very hot market. So you know, when you actually go around and look for places that are cheap, some of them are cheap for a good reason and aren't necessarily going to turn around. I guess, you know, you could look at Vietnam, which is actually still viewed as a frontier market as opposed to even emerging market. That's
in other words, it's still on the dicey side. Mexico is a big beneficiary I think of de globalization because production is going from places like China to Mexico closer to the United States. But the United States in some ways as an emerging economy, believe it or not, we're seeing a tremendous amount of spending on shoring and bringing manufacturing back to the United States. We have an extremely diversified economy. If you want tech, it's hard to get.
I mean, I don't know that there's really any companies comparable to the Megacap eight around the world. I mean, Samsung, maybe I won Semi. I mean, they're clearly some great companies around the world. But in terms of leading age technology, a lot of it seems to be here in the US. Maybe we come up with a lot of the concepts and then we produce the concept somewhere else. But yeah, I would I would overweight the United States, even though it's not cheap. What's really not cheap, of course, is
the Megacap eight. And that's where the potential for a nineteen ninety scenarios come in. Is that everybody trying to kind of gives up and says, all right, I didn't get into these stocks. I just got to get into them, and everybody gets that has missed it gets in at the top. But I would say technology finance industrials are
the areas of the market that I've favored. You know, my problem in giving advice these days is it was better advice near the bottom, which is when I actually did turn bullish back in October of twenty twenty two, about two weeks after the market bottom, so there's a lot more value there. But small and mid cap stocks have actually been very frustrating for me because they've looked really cheap for a long time and suddenly they finally
caught on. Since October of last year, I think once the markets started to believe that the FED was done raising interest rates, the market started to broaden, and then just recently it started to narrow again. So it's been kind of a checking game to play. But I think if you're looking for some really good values, there's a lot of small cap midcaps areas of the market, and
again I would focus on technology financials. Biotechnology has been doing better, so there are opportunities for sure, But as always, worked with a good financial advisor that you feel comfortable with, that knows what your needs are and can help guide you.
Now and that little run around the world just now, we covered India, we covered Mexico, and we covered pretty much. Ever you did not mention either Japan or the UK, both markets that a lot of people would say are fundamentally cheap, and well they might have had difficulties are both cheap and jam full of fairly interesting companies, but neither of those have made it onto your radar.
Yeah. Well, we were just talking about emerging economies, which is why I kind of mentioned them. But developed economies obviously. In terms of global aggregates, stock aggregates include of course Japan and the UK. I've got no problems with investing there. Japan has been actually on fire, so it's not as though, you know, we're discovering something that nobody knows about. Quite the opposite. It's it's been a very hot market indeed, and the UK is as well.
I'm just saying we haven't been on fire. No hot market here, nothing on fire. Yeah, we just stumble along.
Yeah, maybe there are some opportunities there. But look, I think Europe generally speaking has a demographic issue. It's aging rapidly.
I mean, there has been a lot of migration. But you know, maybe you know, all this migration that's occurring, it's unsettling, it's an be destabilizing politically, but history shows that immigration is actually a source of economic growth if there are good incentives for people who are looking for a better life to actually do that on their own rather than to depend on the government for a better life.
Yeah. Well, the immigration interaction with the welfare system maybe makes now different to historical environments that have been the same. Who knows.
Now it's more destabilizing politically than it's stimulative economically.
Okay, Well, let's not move into a non jolly conversations because you're optimist here, remember that network. We're very much sticking with eighty percent bullish scenario here. But I have one, actually two really important questions from here, and the first is the question that we ask everybody who comes on
the podcast. An answer is compulsory. Okay, if I said that you could only have one of the following assets, and we can argue about whether assets or not for ten years, nothing else, just one of these, which would you choose? And you get to choose between gold, bitcoin, or a deposit account straightforward savings account, cash cash.
Basically, I don't get a chance. I don't get a choice of buying buying equities or bonds.
Nope, nope, nope, no nope, that's not how the game works. That's not how the game works.
Oh my god, And I have to make a choice of those three. Oh well, then if you. If you put me in that kind of world, what the heck I'll take. I'll take a run on bitcoin, though I know almost nothing about it, and I've not been a fan of bitcoin because it doesn't pay a dividend, it doesn't pay interest. From that perspective, I guess it should be in deposits if they pay interests. But if you tell them, you get interest. If I do get it on that asset, put half half, okay.
Half in cash, half in bitcoin. I'm not going anywhere near gold. No gold.
I think bitcoin's sort of become the new gold. So you know, if I'm going to be both conservative and speculative at the same time, I'll take my chances in half in deposits and half in bitcoin.
Excellent digital gold. It is. Okay, thank you so much. Now, one last question, and this is this is slightly off topic, but how did you train your dog to be so well behaved?
Well, they're King Charles Cavaliers and we've got three of them, and they're they're very they're couch potato dogs. They sleep a lot, they're wonderful members of our family.
Okay, Well, I wish we'd had this conversation last week because while your dog is meandering around sweetly and obediently in the background. I've got an eight week old body Border Terrier puppy downstairs that I can hear yapping right now. I think you gonde here wrapping, so I wish I'd gone for a spaniel. That's a bit of advice I could have done with it earlier. Ed thank you so much for joining us today. It's been wonderful.
Talking to you my pleasure. Indeed, thank you.
Thanks for listening to this week's Maren Talks Money. We'll be back next week in the meantime. If you like our show, rate review and subscribe wherever you listen to your podcasts, and do tell your friends. This episode was hosted by Me Maren Sumset Web. It was produced by Summersidi additional editing by Blake Maples. Special thanks to Eddie,
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