In Episode 137 of Hidden Forces, Demetri Kofinas speaks with professor of finance at Beijing’s Peking University, Michael Pettis. Profesor Pettis’ research has focused mainly on Chinese financial markets, global trade & capital flows, and central banking. He spent seventeen years on Wall Street running fixed-income trading and capital market desks and has advised governments on privatizations of national banking systems and commercial bank debt restructuring & loan issuance.  In their latest book, “Trade Wars are Class Wars,” Michael Pettis and his co-author Matthew Klein argue that rising inequality within countries heightens trade conflicts between them.   The entire conversation lasts for approximately two hours and we devote the first hour to understanding how balance of payments and capital flows—themselves heavily dependent on the dynamics of wealth and income distribution within a country’s borders—can generate imbalances in trade, asset prices, interest rates, debt levels, and currency valuations, often leading to misallocations of capital for the surplus and deficit countries alike.   The second hour is devoted to applying this balance of payments framework to specific economies—namely, the United States, the Eurozone, and China. Demetri and Michael discuss how the financial instability generated from the sorts of imbalances discussed in this episode are now seeping into our systems of government, turning a financial crisis into a political one. For Super Nerds and Autodidacts, you will want to consult your rundowns and have your transcripts handy for this episode. There are links in the rundown to many of the concepts and theories discussed, as well as charts and images that are relevant to the discussion.  You can access the overtime of Demetri’s conversation with Michael Pettis, as well as obtain copies of the transcript and rundown to this week’s episode through the Hidden Forces Patreon Page. All subscribers gain access to our overtime feed, which can  be easily added to your favorite podcast application. Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe & Support the Podcast at http://patreon.com/hiddenforces Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod Episode Recorded on May 16th, 2020

How the Wealth Gap Drives Imbalances in Global Trade & Finance | Michael Pettis

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In  Episode 359 of Hidden Forces, Demetri Kofinas speaks with Economist Lacy Hunt about America’s national savings and debt crisis. Dr. Hunt is the Executive Vice President and Chief Economist of Hoisington Investment Management Company. He previously served as Chief U.S. Economist for the HSBC Group, as Executive Vice President and Chief Economist at Fidelity Bank, and as Senior Economist for the Federal Reserve Bank of Dallas during the course of a 55-year career studying markets and the economy. In the first hour, Lacy Hunt shares his broad assessment of how the global economy is doing and the monetary and cyclical economic indicators he relies on to make that assessment. He and Demetri discuss the increased role of the US Treasury as an economic policy actor in the post-pandemic period and the concerning decline in the net national savings rate. They also discuss whether the neutral rate of interest, a hotly debated topic among economists, is moving lower, and what this means for trend growth, interest rates, and inflation. In the second hour, Dr. Hunt explains why he believes that the Fed has been able to raise interest rates by more than 500 basis points in less than two years without inducing a recession. Is this because other causal factors have remained more accommodative, or have the lags just grown longer and more variable, and if so, why? What does this tell us about the business cycle and the effectiveness of monetary policy? He and Demetri also discuss the chronically high fiscal deficits and the implications of trying to reduce them in an environment where the economy is becoming more dependent on government spending to boost economic growth, support critical national investments in energy and defense, and contribute to the private savings of the economy. Finally, Lacy Hunt explains why he believes that demographics are destiny and how trends in population growth, fertility rates, and family formation in many developed countries will impact growth and inflation in the years to come. You can subscribe to our premium content and access our premium feed, episode transcripts, and Intelligence Reports at HiddenForces.io/subscribe. If you want to join in on the conversation and become a member of the Hidden Forces Genius community, which includes Q&A; calls with guests, access to special research and analysis, in-person events, and dinners, you can also do that on our subscriber page at HiddenForces.io/subscribe. If you enjoyed listening to today’s episode of Hidden Forces, you can help support the show by doing the following: Subscribe on Apple Podcasts | YouTube | Spotify | Stitcher | SoundCloud | CastBox | RSS Feed Write us a review on Apple Podcasts & Spotify Subscribe to our mailing list at https://hiddenforces.io/newsletter/ Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe and Support the Podcast at https://hiddenforces.io Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod Follow Demetri on Twitter at @Kofinas Episode Recorded on 03/26/2024

America’s National Savings and Debt Crisis | Lacy Hunt

In  Episode 358 of Hidden Forces, Demetri Kofinas speaks with Anne Stevenson-Yang, the founder of J Capital Research, which publishes highly diligenced research reports on over-valued, publicly traded companies, with a particular focus on China. Anne is also the author of several books on China and the Chinese political economy, including “Hello Kitty” and “Wild Ride: A Short History of the Opening and Closing of the Chinese Economy.” The first hour of this episode is a conversation about the history of the Chinese economic miracle, as seen through the eyes of someone who experienced those changes firsthand. Anne recounts the early phases of China’s liberalization in the 1980s, the post-Tiananmen political crackdown and subsequent rapid growth of the 1990s, and how the Asian Financial crisis at the end of that decade set the scene for the go-go years of the early 2000s, culminating in the Beijing summer Olympics and the 2008 financial crisis, which was in many ways a crisis enabled by the trade and capital imbalances of China’s export-driven growth model and rapid economic integration into the global economy. In the second hour, Anne and Demetri explore the China that has emerged under the leadership of Xi Jinping and why Anne believes that this represents a dark turn for the country. They discuss the enduring impact of COVID-19 on China’s economy, on the psychology of its people, and how the communist party’s response to the pandemic showcased the country’s systems of surveillance, including its social credit system, which has its own analog in the form of Western social media and surveillance companies. You can subscribe to our premium content and access our premium feed, episode transcripts, and Intelligence Reports at HiddenForces.io/subscribe. If you want to join in on the conversation and become a member of the Hidden Forces Genius community, which includes Q&A; calls with guests, access to special research and analysis, in-person events, and dinners, you can also do that on our subscriber page at HiddenForces.io/subscribe. If you enjoyed listening to today’s episode of Hidden Forces, you can help support the show by doing the following: Subscribe on Apple Podcasts | YouTube | Spotify | Stitcher | SoundCloud | CastBox | RSS Feed Write us a review on Apple Podcasts & Spotify Subscribe to our mailing list at https://hiddenforces.io/newsletter/ Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe and Support the Podcast at https://hiddenforces.io Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod Follow Demetri on Twitter at @Kofinas Episode Recorded on 03/19/2024

What Comes After the Chinese Economic Miracle? | Anne Stevenson-Yang

In  Episode 357 of Hidden Forces, Demetri Kofinas speaks with the CEO of CrossBorder Capital, Michael Howell, about the run-up in gold and bitcoin prices and whether this signals the return of "money printing" driven by overwhelming government debt and deficit payments. Michael Howell has had the most accurate economic and financial forecasts of any analyst Kofinas has spoken with in the last several years. Demetri asked him back on the podcast to help explain why risk assets continue to outperform despite higher interest rates and what new all-time highs in gold and Bitcoin signal about global liquidity and investor confidence in the integrity of fiat currencies as reliable stores of value amid skyrocketing government debt and deficits. In the first hour, Michael breaks down the indicators he relies on to make his forecasts and why he expects economic growth and inflation to reaccelerate this year and into 2025. In the second hour, Howell forecasts which assets and asset classes he thinks will outperform, the direction of interest rates, the steepening of the yield curve, and how the expiration of the bank-term funding program (BTFP), the draw-down in the reverse repo facility (RRP), and a temporary decline in liquidity from tax payments could create buying opportunities for investors over the next several months. You can subscribe to our premium content and access our premium feed, episode transcripts, and Intelligence Reports at HiddenForces.io/subscribe. If you want to join in on the conversation and become a member of the Hidden Forces Genius community, which includes Q&A; calls with guests, access to special research and analysis, in-person events, and dinners, you can also do that on our subscriber page at HiddenForces.io/subscribe. If you enjoyed listening to today’s episode of Hidden Forces, you can help support the show by doing the following: Subscribe on Apple Podcasts | YouTube | Spotify | Stitcher | SoundCloud | CastBox | RSS Feed Write us a review on Apple Podcasts & Spotify Subscribe to our mailing list at https://hiddenforces.io/newsletter/ Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe and Support the Podcast at https://hiddenforces.io Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod Follow Demetri on Twitter at @Kofinas Episode Recorded on 03/13/2024

Are Gold and Bitcoin Signaling the Return of Money Printing? | Michael Howell

In  Episode 356 of Hidden Forces, Demetri Kofinas speaks with Paul Triolo, Senior Vice President for China and Technology Policy Lead at Albright Stonebridge Group, where he advises clients in technology, financial services, and other sectors as they navigate complex political and regulatory matters around the world. This episode was inspired by an article Paul recently published for American Affairs titled “A New Era for the Chinese Semiconductor Industry.” In it, he examines how semiconductor export controls levied by the US Commerce Department have been received in Beijing and how China's domestic semiconductor ecosystem has responded. Paul and Demetri spend the first hour of the episode assessing the state of the Biden administration’s strategic competition with China in the area of semiconductors. Specifically, they ask (1) what are the administration’s goals, (2) are those goals clear to Western companies that have depended on selling into the Chinese market for a large share of their revenues, (3) and is the administration itself clear on what it wants to accomplish with these efforts? In the second hour, they examine the fallout from the 2022 and 2023 semiconductor export controls, including some of the unintended consequences that could adversely impact major players in the Western semiconductor ecosystem over the long term. They discuss the Chips Act and whether more needs to be done to support America’s domestic semiconductor industry. They also do a deep dive into China’s response to these measures, including a new top-down approach to industrial policy and fully supporting open-sourced hardware architectures as a way to protect their companies from further restrictions. Lastly, they examine China’s success in electric vehicles and whether this is a harbinger of what could happen in other sectors if American policymakers are not careful. You can subscribe to our premium content and access our premium feed, episode transcripts, and Intelligence Reports at HiddenForces.io/subscribe. If you want to join in on the conversation and become a member of the Hidden Forces Genius community, which includes Q&A; calls with guests, access to special research and analysis, in-person events, and dinners, you can also do that on our subscriber page at HiddenForces.io/subscribe. For a 50% discount to American Affairs, use the code “HIDDENFORCES24” during checkout. If you enjoyed listening to today’s episode of Hidden Forces, you can help support the show by doing the following: Subscribe on Apple Podcasts | YouTube | Spotify | Stitcher | SoundCloud | CastBox | RSS Feed Write us a review on Apple Podcasts & Spotify Subscribe to our mailing list at https://hiddenforces.io/newsletter/ Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe and Support the Podcast at https://hiddenforces.io Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod Follow Demetri on Twitter at @Kofinas Episode Recorded on 03/05//2024

A New Era for China's Semiconductor Industry | Paul Triolo

In  Episode 355 of Hidden Forces, Demetri Kofinas speaks with mythologist and storyteller Joshua Schrei about the cultural, social, and political consequences of the rise of Artificial Intelligence. According to Joshua, humanity is entering an era whose only corollary is the stuff of fairy tales and myths. Powers that used to be reserved for magicians and sorcerers are no longer metaphorical, and it’s unclear if humanity has the tools and initiatory frameworks to use them responsibly. What’s at stake is our civilization, something that was obvious to the creators of the atom bomb but which seems less salient today, even though the risk of societal collapse stemming from the proliferation of AI and its associated technologies is arguably much greater. In the first hour of their conversation, Josh and Demetri discuss the role of magic, the desire for animacy, the burden of the Anthropocene, and why we keep gravitating toward powers that might kill us. In the second hour, they examine what life in a post-scientific era could be like, whether mass hysteria and a collective unmooring from reality are symptoms of the “AI moment,” and whether what we are living through today is really a spiritual crisis that cannot be solved through technological innovation, medication, or the endless pacification of media and entertainment You can subscribe to our premium content and access our premium feed, episode transcripts, and Intelligence Reports at HiddenForces.io/subscribe. If you want to join in on the conversation and become a member of the Hidden Forces Genius community, which includes Q&A; calls with guests, access to special research and analysis, in-person events, and dinners, you can also do that on our subscriber page at HiddenForces.io/subscribe. You can listen to The Emerald Podcast here and support the work Joshua is doing through Patreon here. If you enjoyed listening to today’s episode of Hidden Forces, you can help support the show by doing the following: Subscribe on Apple Podcasts | YouTube | Spotify | Stitcher | SoundCloud | CastBox | RSS Feed Write us a review on Apple Podcasts & Spotify Subscribe to our mailing list at https://hiddenforces.io/newsletter/ Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe and Support the Podcast at https://hiddenforces.io Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod Follow Demetri on Twitter at @Kofinas Episode Recorded on 02/28/2024

How the Wealth Gap Drives Imbalances in Global Trade & Finance | Michael Pettis

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