In this episode, Luke Gromen joins the show to discuss the trade agreement with China, why the U.S. can’t afford real interest rates, and how the bond market—not policymakers—is now setting the rules. We also explore the hidden costs of decoupling from China, the inevitability of dollar devaluation, why any attempt at fiscal austerity is doomed, and more. Enjoy!

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(00:00) Introduction

(01:38) China Trade Deal

(08:09) Balance of Trade IS Currencies

(10:45) Ads (Blockdaemon, Arkham, Ondo)

(12:08) Gold, Yuan & USD

(15:36) China Market & Competitive Edge

(20:06) Global Bifurcation

(24:51) Southeast Asia & Industrial Policy

(29:23) Ads (Blockdaemon, Arkham, Ondo)

(31:23) US Fiscal Endgame

(35:56) Treasury Tools

(41:06) Why Issue Any Long Duration?

(43:40) The Fed’s Next Move

(45:38) Austerity Risk

(51:06) The Trend Hasn’t Changed

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.