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Audio Interview: Rob Arnott (Pimco All Asset & All Asset/All Authority)
Thanks Scott. Very good interview. (Yes, skip past the gold ad.)
Once again, Mr. Arnott voices his opinions unabashedly, closing with his now familiar "please don't shoot the messenger."
Some key points:
Fed painted itself into corner. No way to unwind gracefully.
Addicted to printing money.
Central banks cause asset bubbles too...fueled by their profligacy.
Likened current Fed policies to covering over rotting floor with wall paper.
US stocks seen by investors as safe haven compared to EM.
Most investors think stocks are more attractive when higher priced, which makes no sense. Value investing is contrary to human nature.
Inflation now highly likely.
You can get an economics degree today without ever reading Adam Smith.
Keynesian economics has failed again and again, yet governments keep trying it...because it promotes bigger governments. (During recent Santa Barbara Q&A period, Mr. Arnott acknowledged disagreeing with Paul McCulley, former PIMCO senior partner, on such matters - "Paul always was a Keynesian.")
If quantitative easing fails, current governments try more aggressive quantitative easing, but at the risk of collapsing currency.
Volcker-like austerity could only be successful today if we unshackle private sector, which is currently over regulated. Unless companies are deliberately hurting someone, get out of their way, as Jefferson intended. Then private sector GDP can make up for austerity measures on government side, like after WWII.
Central bankers today are addicted to stimulus, like crack, and do not have the spine to stop.
Comments
Once again, Mr. Arnott voices his opinions unabashedly, closing with his now familiar "please don't shoot the messenger."
Some key points:
Fed painted itself into corner. No way to unwind gracefully.
Addicted to printing money.
Central banks cause asset bubbles too...fueled by their profligacy.
Likened current Fed policies to covering over rotting floor with wall paper.
US stocks seen by investors as safe haven compared to EM.
Most investors think stocks are more attractive when higher priced, which makes no sense. Value investing is contrary to human nature.
Inflation now highly likely.
You can get an economics degree today without ever reading Adam Smith.
Keynesian economics has failed again and again, yet governments keep trying it...because it promotes bigger governments. (During recent Santa Barbara Q&A period, Mr. Arnott acknowledged disagreeing with Paul McCulley, former PIMCO senior partner, on such matters - "Paul always was a Keynesian.")
If quantitative easing fails, current governments try more aggressive quantitative easing, but at the risk of collapsing currency.
Volcker-like austerity could only be successful today if we unshackle private sector, which is currently over regulated. Unless companies are deliberately hurting someone, get out of their way, as Jefferson intended. Then private sector GDP can make up for austerity measures on government side, like after WWII.
Central bankers today are addicted to stimulus, like crack, and do not have the spine to stop.