Viktor Shvets on Inflation and How Crypto Could Cause the Next Financial Crisis

to the highest since two thousand eight. So you saw this immediate assumption in the market that we would get a bunch of inflation because the Feds on hold for longer, and meanwhile we have fiscal stimulus and the economy is recovering really strongly. Exactly right, I mean that is you know,

it's sort of interesting. I was watching the press conference and there were so many questions about inflation, so many questions about when the FED is going to perhaps pull back one day on its asset purchases, the so called taper, and the answers were really the same. Like Sherman, Powell was incredibly consistent. By the way, I should mention recording this April. The meeting was yesterday, but the answers were

incredibly consistent. He's like, look, I'm not gonna do anything until we get there, until we see the inflation, until we get the full employment everything, and so he's kind of like stop asking. But this dynamic in which everyone sees these pressures are building in the economy for an unknown length of time and a FED that's willing to not do anything until they actually like emerge in a sustained way, and so you get these expectations of greater

reflationary forces at the minimum to come. Yeah. I find this a really interesting moment in markets, because, as you mentioned, the FED is pretty emphatic that it sees inflationary pressures as transitory. You know, these are things like commodities prices going up because of supply bottlenecks from COVID, and the central Bank expects that they're not gonna last that long. But meanwhile, the market seems to be positioning for something

very different. At least, you know, if you look at the three year break even that I just mentioned, that's three years out, and certainly that's pricing in higher levels of inflations at the same time. It's really interesting that the market seems to be taking that stance, because of

course we've had ten years of no inflation or deflation. Uh. You know, despite lots of monetary easing from the Central Bank and a relatively strong economy, we haven't seen price increases like you would have expected from some economic models like NEHRU or the Phillips curve. So really interesting moment in time, and today we're gonna be talking all about inflation with one of our favorite odd lots. Yes, we're going to bring back Victor Schwetz. He's a strategist over

at McQuary. Victor, thanks for coming on again. Thank you very much, Tracy. So do you want to lay the scene for us When you look at the world right now, what inflationary pressures, if any do you see? Well, there is no question that if you goes through the next six and nine twelve months, whether you look at the United States or whether you look at other countries as well, inflation will pick up for exactly the same reason as what you've just outlined, base effect, recovering demand and supply

side bottom lights. Whether you have a war or a pandemic, usually it has a demand and supply shock in some form. Supply disappears, companies become zombies, incapable of providing sub services. Some of the capacities just withdrawn investment goes down, and so when you start recording bring supplies never quite know how much capacity should they provide. I will demand go up ten percent, and so the result is it usually takes four or five or six quarters to what I

would call normalized demand and supply. And I think what fair Reserve is saying is that this is a transitory period that we are not confident that inflation actually will be sustainable. And as we go back and go sort of forward to the end of twenty two or into twenty three, we're not that confident that there will be such a strong inflationary pulse um. And I find myself an unusual position, because I usually quite disagree with many

things that FED does. I find myself an unusual position to actually agree that it is probably easy case that the precious transitory. And if you think of inflationary break even rate, the interesting thing is that five by five, for example, are lower than five. So clearly even the market itself assumes that there will be more inflation to

begin with and then it comes off later on. So when you say the five by five, what what you mean is the market has expectations for where inflation will be over the next five years, but there's also expectations essentially over what five years out will look like five years out from now, kind of ten years out, I guess, And there's sort of view of this initial hump the inflationary pressure is now, but then the market is expecting something, um, a sort of a return to normalcy after that. Yeah,

the market is not anticipating deflation. The market is not anticipating dec inflation, but it doesn't anticipate a runaway inflation where you're consistently getting three four or five. Because remember, if you just think of G five economies and if commodity complex doesn't move terribly far from where it is today but sort of going forward, then it's all mathematically correct that inflation will go to around three four, maybe even touch five. That compares to G five inflation Sat.

February was only point seven. In March it was only like one and a half. So there's no question inflation will go up. What the market is saying is that they think, and I agree with that, that it will pull back. In fact, I will go beyond that and say that decent inflation is far more likely longer term

than you know, two point two or to inflation. There are people out there, um, and Larry Summer's sort of springs to mind here, but there are people out there who are describing, you know, fiscal stimulus combined with easy monetary policy as uh, irresponsible, I think is the way Summers put it, but something that will ignite big price rises that the Fed doesn't appreciate. Obviously you don't agree with that argument. But what do you think it is

that they're getting wrong here? I see lots of people, for instance, reaching to the analogy of the nineteen seventies or the nineteen sixties as an era of high inflation. Yeah, they do, uh, And there's a lot of investors and commentators who seem to feel that we probably somewhere around late sixties, and yes, it will take a bit of time, but ultimately we are going to an anchor, so to speak, inflationary expectations, and inflation will be much much stronger than

most people expect right now. I completely disagree with that, and primarily I disagree with that that whether it's a Congressional Budget Office or whether it's Larry Summers, they're all using very much an industrial age framework. In other words, the era where capital was capital, fixed assets where fixed assets, labor was labor. None of those things aren't true anymore. So if you think of for example, US private sector,

US private sector GDP is now six intangible assets. If you look at Europe, depending on the country choose, it's twenty five to intangibles. Even in China it's anywhere from fift. Why is it important, Well, intangibles don't have the same capacity constraints, the incredibly fluid and they spill over from one industry to another good synergistic benefits. So it's the first point to remember. If we're not actually building roads, machinery factories you know, are railways and the rest of it,

it's a very different investment we're making. And if you think of Biden's package infrastructure package, Republicans are right to say that only about is real infrastructure. But that's the whole point that we should not be investing in real infrastructure. We should be investing in the future. So that's the first area, which is capital and where do we invest and how it behaves. The other area is labor. Remember everybody is still relying on Bureau of Labor statistics sort

of classifications. Are your plumber, electrician? Are you are your business professional? Are your full time? Are your part time? With In reality, labor is really stretched in many areas, like for example, you're recording now this conversation. In the past, somebody else would have been recording, So you're stretched. You're doing many jobs in the service oriented industry, employees are now either non conventional or gig economy, and so labor doesn't function the same way as it has done in

industrial age. And so the way basically describe it is capacity constraints incredibly hard to compute even in the good days. Today it's almost impossible. In fact, I would argue capacity constraints just melt away in front of you every day. They're just going away high and higher. And to me, that explains why Philip's curve did not work and hasn't worked for several decades. And by the way, it even predates China, it didn't even work in the eighties forgetting

the last twenty years. It also explains why commodity prices could go up but battery prices, for example, go down. It ex planes how we can ignite shell Guest revolution. Remember Show Guest was invented or for the first TIME'M tried in nineteen but in three we couldn't respond with shell guests, but today we can. So to me, it's technology, financialization, changes in the functioning of capital fixed us, it's intangible

as it's labor. All of that implies to me that I don't think we're really facing capacity constraints at all. You make a very compelling argument that various structural factors in the economy were unlikely to see her repeat of the nineteen seventies, that these sort of general conditions that we experienced, or at least the general inflation conditions that we experienced pre crisis, will probably be more the norm

after the short term bottlenecks. However, and you know, you mentioned Biden again last night, hearing the big sort of Biden speech laying out its infrastructure plan. And yet, however, we do seem to be having this big political shift, and the big political shift that we keep talking about on the podcast there. It's multifaceted, but the big thing for us is the shift from reliance primarily on monetary policy as the main driver of macro stabilization to fiscal policy.

And that feels like a pretty big deal. So setting aside our current commodity constraints and bottlenecks, this new thinking and this sort of like new willingness of democratic small d democratic leaders to spend more, at least in the US, perhaps in Europe and elsewhere. That feels new. How does that play into the mix and thinking about what the post crisis economy is going to look like? For you, absolutely, Joe, you you, You're totally right. It is a shift. And

coronavirus accelerated that shift. By the way, that shift was going on even before coronavirus, almost nobody was exercising much restraint on fiscal spending even prior to coronavirus. But COVID accelerated this process quite quite dramatically, and people accepted and people in fact increasingly demand the spending. And so from a political perspective, it gets easier and easier to ignore sort of the guidelines or constraints of fiscal spending or

financing or anything else. And so that is a major issue. Instead of just relying on the monetary policy, you're now relying on the fiscal policy. Was monetary policy in more supporting rule? However, a couple of things to highlight Number one, where do we invest money? Now, If you think of COVID nineteen shacks, for example, according to Federal Reserve, only

of the money was spent. The other seventy or percent went essentially either into financial speculation you know, bitcoins, equities, real estate alternatively went into state of the bankruptcy is to repay the debt and so and so what you have seen is a relatively low for called multiplier. Now, infrastructure theoretically has a much higher, larger multiplier. But again I've just said a second ago. Only of what Widen

wants to do is real infrastructure. If you invest in green energy, alternative energy and transportation platforms, if you invest in R and D fundamental research, this is all very very good stuff and actually longer term raises your capacity are capabilities, But it does not have the same fiscal multiplier as building a road or building a dam. If you think of human resources are spending, that's even lower multiplier and much lower really time, even though it's totally

appropriate and it's absolutely the right thing to do. So. So the first thing to highlight is that everything we're doing today on the fiscal side is either exceptional circumstances. We justified because it's like a war. You know, we're fighting a war. That's why we're doing it. Alternatively, we're doing something for very distant future, which in turn is disinflationary. If you invest in oil, that's inflationary. If you invest

in lithium, that's disinflationary. And so the way I look at it is we are not investing enough in the areas that actually would generate a longer term inflationary outcomes.

In fact, what we're doing with strengthening the case with disinflation on a longer term basis the other thing very quickly to highlight where all the report not that long ago and sort of known a zeguist or the spirit of the age, and basically what we argue is a fiscal policies are very, very very hard, and the reason they're hard is that people have a schizophrenic approach to monitory versus fiscal policies. Monetary policy is supposed to be technocratic.

Over the last eight or nine years, have become completely free. There is virtually no adult supervision at all. Central banks can spend trillions of dollars and almost nobody cares. And the reason for that there is a perception that monetary policies atmocratic and it doesn't generate debt. Now that is not true, but that's what people believe. Fiscal policy, on the other hand, people look at it very very differently. They basically view a fiscal policy as inefficient, unfair, and

generating debt that needs to be repaid. So, once again, none of it is true, but that's what people believe. And so the result is in almost every country. China clearly is an exception, but in almost every country, in order to engage in physical spending, you have to have community support, You have to go to legislature, whether it's a parliament or congress, to get it approved. You need to itemize it. People need to know exactly where you

spend every dime. Nobody else Jeremy Pal every time he spends. But on the fiscal side, you need to explain where you're going to spend the money, and it usually is time limited. It's sunsets, whereas monetary policy these days have

a completely open ended there is no sunset. And so the problem we struck shuring fiscal policy predominantly as an exceptional circumstance is that as soon as the economy is recovered, and I see the United States will be recovering very strongly in the first, second third, and into the fourth quarter. Even as economy is recovered almost inevitably within three to six months. That will be debate. We must put our house in order. Radical left is destroying America. There will

be discussion. We are bequesting to our grandchildren trillions of dollars of debt. How are we going to finance it? And and that's sort of a discussion. Would imply that the line of least resistance right now, the least resistance is for politicians to sunset fiscal policy. Economies are recovering, everything is doing is doing fine. Let sunset it now. Nobody is going to do another grief. Nobody is going to try to do austerity. But we're not talking about austerity.

We are talking about the level of fiscal pulse that we can actually maintain. And I think it's actually going to go down before it goes up again, and then it will go down again before it goes up. It will be stopping, go, stop and go. And the reason why that is important permanent policies have a very different impact to temporary ones. There are people out there who say that the experience of the pandemic has changed everything.

I think Joe and I have had quite a few episodes by now about how the pandemic has changed everything, but that there's more acceptance of fiscal stimulus. MMT has been making some in roads among policymakers, so people aren't as worked up around the deficit as they once were.

And one of the arguments that I've seen about why to actually be concerned about inflation is that even though the current fiscal stimulus that's been announced might not be enough to generate substantial price increases, it's sort of opened this Pandora's box. Well Pandora's box isn't a good term for it, but you know, it's led to the shift around physical stimulus where we don't know how popular it's going to be further on, and it could become very

politically popular. People like to have stimulus checks mailed to them, people like better infrastructure things like that, so you could get repeated fiscal stimulus over and over. Um, you clearly don't agree with that, but I'd love to know more of your thinking around this. Well, I I actually do agree that there will be a regular stimulus list That's why I've argued that nobody will be running primary surplus assailable.

Nobody is going to do austerity, nobody is going to try to do another degree sup Portugal or something like that. That's all gone forever. All we arguing is, and we create a consistent long term physical strategy that doesn't rely on revisitation of COVID, doesn't rely on revisitational wars on major financial dislocation, can we reach the stage that we also will be managing our investment without reliance on the bond market um and directly funded out of central banks

as we go forward. And so my argument was that that will be the ultimate destination, but it's probably at least five teen years out. And the reason for why it is five teen years out because clearly in every country you could think of, there is a degree of polarization, so in other words, not a degree, there is a very high level of polarization. There is no consensus agreement. Anybody who is younger than about thirty five basically agrees with a strategy. Anybody is sort of all much older

than that does not agree. And you can mathematically calculate at what stage somebody like AOC is bound to become a president of the United States. If you think of the younger generation, they were roughly about twenty of the Boks cast in the latest elections. If you project forward somewhere between kind of two, that younger cohort is going to be the dominant force. And so what we need to do is have a lot of a lot of problems, a lot of dislocations over the next five to ten years.

Gradually demographics will call us around it, and then you have a different set of policies. Think of the monetary policy. When Japan introduced in earlier two thousand's, people were questioning whether that's disaster, complete disaster. Then there were you introduced globally around two thousand and eight. Between two thousand and eight and two thousand and twelve, the first question every fun manager would ask you, when do we normalize monetary policy?

When I used to tell them we will never normalize monetary policy, people didn't expect that. He didn't ex apped. It took people ten years until they finally recognize that monetary policy can never be normalized. Irrespected what Jaron Powell thinks or what he might or might not do. If you think of fiscal policy today. I view it in a very similar light to two thousand eight to thousand

twelve monetary policy. One of the first questions people ask, yes, fective, we understand that we will be spending more money, but how are we going to pay for it? What is the endgame of what we are what we're trying to do. Now, when you tell them we'll never pay any of that back, it doesn't really matter. People don't accept it, and so what you need, you need time. People don't move in revolutionary steps. So what we have today is acceptance at

fiscal policy play a much more important role. What we don't have is an acceptance that that sort of expansionary state policy is permanent and it's never going to change, and that that expansionary policy will be funded through central bands. So the way to look at mixing fiscal and monetary policy together. By doing more fiscal we're reducing the speed of disinflation rather than creating a great deal of sort of sustainable inflation. So what does it mean for you know, investors?

Like I was, there are so many charts that if you look at I mean, there are so many charts that are shooting straight up obviously at least as of as of now. But not only that, there's so many church that are shooting straight up that are clearly reversed a trend that had been in place pre crisis. So the most obvious example is like you know, e M stocks, they had generally been and I think like about a two year under performance run at least since early going

into the crisis. Now a straight lineup, look at like a commodity some of the commodity and disseries very uh downward trend. Now straight up, is there a new this new regime that we're talking about, the new monetary policy,

fiscal mix and so forth. Does it change how mark to behave on a sustainable way or do we just sort of go back to this like sixty forty goldilocks world in a year two where you buy some text docs and you buy some bonds and there's a disinflation and uh yeah, you have a really easy now, Joe, you you, you're absolutely right. There is a regime change that is occurred. If you think of a lot sort of sixties and seventies, there was a significant regime change

into late seventies early eighties. There was another regime change occurring in late nineties, and so they around those periods where there is a regime change. And so going forward, because we're mixing fiscal and monetary policy together, we are not going to have such a consistent trend over the last fifteen years. If you did not realize that we live in a disinflationary world, if you didn't realize that boast labor and capital is losing pricing power, you probably

no longer managing money. You're probably no longer with us. And so as we go forward, our say over the next ten to twenty years, this is going to be a much more complex world. Now. Part of the reason is complex. As I said earlier, we're mixing fiscal and monetary policy rather than just relying on trickle down economics asset prices and in effectively creating stro monetary policy disinflation.

This time around, it's going to be some inflationary spikes, there is going to be some disinflation respikes, there will be sector rotations depending on what government wants to do and where the government wants to invest. So it's going to be, in my view, more complex world because of the policies. But there is another thing that is going on, and that is there is a technological change that is

going on. Between mid nineties and two thousand, technologies were dominated by PCs, by corporations, by business applications, government applications. Around two thousands it started to change. Remember Amazon was a tiny company back into thousand and so between two sus then call it twenty eight twenty, it was a

world dominated. But what I describe as a digit manipulators, they're basically company manipulating digits of information, whether it's a short social media or downloading videos or trading stock exchange of getting information or whatever that might be. Now those companies become incredibly powerful. Now what we're going to do for the next twenty years is starting to much more

manipulate atoms and physical matter. So, in other words, this is the age of manufacturing logistics, different alternative energy platforms, transportation platforms, green energy. This is the period of robotics, automation, This is a period of infotech and by tech. Now this new era will be much more capital intensive than the previous twenty years. But as I said early on about Biden, where you spend the money is different. So

there is no long term cycle for oil. There is no long term cycle for coal or iron, or or or steel, because we won't be building a lot of factories or a lot of roads, a lot of machinery, but there will be a massive continuing upscaling of some commodities. So, for example, if you treat semiconductors as a commodity, which I do, I think they're going to have a long run. Similarly, if you think of copper, nickel, cobbalt, lithium, silver, so there will be part of the commodity cycle which will

be in the bull run. The other single happen is that you know, the likes of Amazon on Facebook are not very good at physical stuff, and so if you want physicality, a lot of capital goods companies actually what comes through the woodwork and instead of being value could actually become semantics. You know your mid subitio electrics, your Honeywells, your Rockwells, your potentially your geo, your semans, those sorts of companies potentially could become more critical. There's also a

new third generation tech companies coming up. You know your tesla's, your needs, your capitals, your Panukias covers and where there is robotics, automation, new energy. There's a lot of startups. So one of the interesting things that is occurring not only the policy mix is changing, but the winners among

thematics are also starting to change. The digit manipulators are still highly profitable, and they will continue to be highly profitable, but very few companies ever make a transition from one world into the next. Some will, but a lot of them will not. So the question is what will happen

to those digit manipulators. Are they becoming a highly competitive utility, regulated platforms and eventually with law returns, so they would need to do things like share buy back, self liquidations, dividends and the rest of it in order to also to drive value. So we have two things happening in my view. Number one, a mix of fiscal and monitor policy is different, creating cross currents. And number two, what you have is a technological backdrop is also shifting quite

considerably contenuous time. The winners are not going be the same companies as what they were over the last twenty years. So what it basically means, instead of saying, well, okay, it's more capital intensive world, government spends more, I should buy commodity, materials, infrastructure, companies, banks, and financials to me that's wrong. Banks have no future. I don't see along cycle for oil or coal or many other basic commodities.

I want to go back to something that you alluded to earlier, or you said, which is that you don't normally agree with the FED, but on this one idea around transitory inflation, you think they have it right. Why is that? Because you know, for years we've heard the FED talk about the natural rate of unemployment and things like the Phillips curve. It seems odd to have the FED suddenly grasped like a big transition in economic ideas.

So why do you think that's happened in recent years. Well, it sort of reminds me when I was a fund manager. If you keep losing money consistently, eventually it changes your mind. But you have to remember, for economics as a profession, any science progresses only one funeral at a time, and so for economics as a science or or or art or whatever that is, to change requires considerable considerable change of basic tenants, basic fundamentals. Now, that will happen, but

that's probably at least a decade away. So economics as a profession is still largely functioning in an industrial age. That has no relevance almost to what we have today. But the practitioners, people who actually at the cold face and they need to face their own losses or their own bad decisions, they do change their mind. And I do think that what Federal Reserve has basically done over the last twelve months or so, they said, you know

what flat philips basically means, there is no relationship. Basically there is no such thing as an inflationary neutral level of unemployment or interest rates. Now, they never actually spelled it out as openly as what I have said right now, but that's basically the implication. And to me, that's a right approach. They're moving in the right direction. But remember they will come under pressure in the next three four months as inflation rates go up. Investors will test them

and they screen. The things they're looking at is still very conventional. So for example, that screen has no Bitcoin, has not dodge Point, has no non fundable tokens, has no specs, has no paritage rates, has no private act.

It doesn't have any of that stuff. It has like general financial conditions of a night spread that spread to your bank and commercial risk, your volatility rate, your spreads, and the high your market things like that, when it's almost guaranteed that the next crisis will have nothing to do with mortgages, will have nothing to do with banks, and we'll have nothing to do with nazdak. But essentially they're still looking at it as if we're facing an

ASTEC debacle or a housing or mortgage debacle. And so the interesting saying is that they've accepted the premise. I think that the economies have changed and the past rules no longer apply, but their screen, in my view, has not yet changed. And so one of the things I keep asking people, is it more dangerous if those digital assets go up another hundred hundred percent? Or is it more dangerous if we go down from from the current levels?

And clearly going up another will be far more dangerous, because what is happening right now in that world is becoming incredibly interconnected and increasingly leveraged. It's a little bit like mortgage marketing or seven. There was nothing horribly wrong with individual mortgages. It's how you packaged it and collacterized and leveraged it that created the GFC. And what you see today is exactly that people who buying bitcoin also

buying Tesla Tesla buying bitcoin. People who buy Dodge Dodge coin will buy n f T. Some of the exchanges now allow you three fine up to a hundred times leverage on some of those transactions. The whole universe is now at least three or four trillion dollars and is growing. And so the way basically describe it, you know, if you lose a couple of billion dollars, it's like a bad day in the office, But if you lose a trillion,

that's systemic. And so the way I look at central banks and fat I think they've got over the hump of trying to separate themselves from a basic concept like Philip's curve or non inflation rate, but they have not yet transited into altering their screen to look for where the trouble actually will lie. So where is it gonna be? What? Wait, what your vision of the next crisis? Well, that's what I said. Those digital assets will be will be the

next crisis. And the interesting thing to me, of course, is all of those people buying n f T s, are buying bitcoin or anything else, all those specs that are going down the down the triple C death umbrella. Throw them, throw it down in quality. All of those people are declaring independence from the state in some form, but it will be the state that will need to

bail them out. And that will be the r N of trying to become independent from the state when you actually will be relying on the state to help you, to bail you out and to avoid systemic outcomes. Why will it be the state? Like what is the linkage between um something like bitcoin or n f t s and you know, a regulated bank and the traditional financial system. Well, it is a butterfly impact because we are in other words, that the butterfly, you know, flapping the wings suddenly creates

a problem. That's what it is. We're highly interconnected, We're highly leverage. I mean, the whole global economy, if you're single financialization is a police leverage five times. One could argue to look at the growth basis maybe eight times, eight to ten times. So we incredibly leverage, were incredibly financialized. We increasingly instious. In other words, one group of assets

buyas into other group of assets. And that's the inevitable outcome of the monetary policies that we've pursued for the last thirty or forty years. It basically forces people to go down and down the line, and and so and so. What happens is that eventually central banks can't tolerate any

molatility at ALLLL. They can't tolerate any price discovery because you never know, you know, some disaster in a digital universe might bring down mortgages into Jikistan, which in turn will impact mortgages in Los Angeles or something like that. You just don't know. You have to remember that if you sing of triple cy debt right now, which is basically bankrupt company is they're trading at almost the lowest spreads ever. If you think of average HIGHER'L spreads, it's

only three again, one of the lowest ever. Think what happened a couple of months ago when the movie Index, the Bold market Index pretty much in two days, went from forty seven to seventy three. In the same couple of days, VIX went from fifteen to thirty. So you can see how significant dislocation in assets, which are becoming

increasingly integrate into various sesset classes. A dislocation there could just drive suddenly the high yield spreads, and then you find a lot of companies relying on the triple see that, for example, will be unable to service or we'll have to go bankrupt. So that's what it is. It's interconnectedness. So long as those digital assets are the periphery, So long as just a couple of people who are really interested in that doing it, everybody else is completely segmented

and separated, then that's not a problem. But that is not the way to each the lasses behave. Look at even n f T. Look how much have gone up just in a space of bull months. What I'm saying is, if you do the same thing for the next twelve months and another twel months, eventually reached the state that it will become systemic. Victor, fantastic having you on as always. Uh, And we'll have to get you on in maybe in another year to see uh whether or not crypto has

become further embedded with the global economy and financial system. Okay, we would loved it. Okay, Victor Schwetz from McCary take care of Victor, Thank you so much. Okay, cheers, So Joe. One of the things I love about talking to Victor is you you start out talking about inflation and commodity prices and market expect stations and then somehow you get to Bitcoin is going to lead to a state sponsored bailout at the end, and doge coin and coin. Yeah.

I don't disagree with him, by the way, but like, I just love the transition. It feels like the great doge coin crisis of is just like something that has to happen one day, right, Like if you just think about the arc of history, it just feels like that that has to happen. Yeah, Victor, I do really like the way he thinks at this point about sort of

fighting the last war. I also think it's just interesting because I do think that it is extremely tempting to think, like, Okay, this is the new era post grade financial crisis, this is the new era of inflation pressures or labor market tightening tightening, or the change in direction on rates or whatever,

and there is some stuff happening. But I think he provides some very like sort of um, a good temper to all that, the enthusiasm that you know, still the most likely outcome is the burst now, but then a a reversion to a sort of like an economy that has a lot of the same characteristics as the pre crisis economy. Did, Yeah, exactly. Shall we leave it there? Yeah, let's just leave it there. Okay, all right, This has been another episode of the All Thoughts Podcast. I'm Tracy Alloway.

You can follow me on Twitter at Tracy Alloway and I'm Joe wisn't thought you could follow me on Twitter at the Stalwart. Follow our producer on Twitter, Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of podcast, Francesca Levie at Francesco Today, and check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening to