Transcript of FFTT conversation with Grant Williams, with chts added for context

MACRO-THEMATIC TRENDS - Report 18 Jun 2020 by Luke Gromen

Hello-

Hope you’re well. Attached above is this week’s edition of FFTT. In lieu of our usual FFTT, wanted to share our transcript of a lengthy conversation we had last week with Grant Williams and The Investors’ Podcast, as it touches on and reviews a number of key issues we have been discussing, with added color from Grant and TIP.

We have added in some key charts for context as well. This report is 25-pages long and is a 25-30 minute read.

>>> Transcript of recent FFTT conversation with Grant Williams & The Investors’ Podcast, with charts added <<<

Key points:

* If the US is going to be in a Great Power Competition with China, a lot of the rules of geopolitics and finance may begin shifting back to Cold War-type market rules, even as many market participants are still using a post-Cold War lens to evaluate markets. (Pages 2-4)

* We don’t think oil can go crazy on the upside as long as China’s moving the marginal oil barrel from being priced in USD to being priced in CNY. (Pages 5-6)

* Overall USD strength has been surprising given Fed balance sheet expansion; recent relative USD weakness has been surprising given Fed tapering of UST buying & massive Treasury TGA increase (Pages 6-7)

* For the first time ever, the Fed’s balance sheet growth has exceeded the total tax receipts of the Treasury over the prior 12-month period, and the “Venezuela-ization” of US markets (Pages 8-10)

* If globalization was disinflationary for goods and labor prices, shouldn’t de-globalization and a “Great Power Competition” between the US and China be inflationary? (Pages 18-20)

* Has the US crossed the Rubicon as it relates to Universal Basic Income (UBI)? (Pages 21-23)

Thank you for reading this edition of FFTT. LG

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