00:00Going to the five tenets that you were talking about, given the imbalances in the deficit, in the debt load, and the amount that people are going to have to sell, governments are going to have to sell, do you think it's appropriate for the Fed to be cutting rates right now?
00:12I think the picture on cutting rates is slightly mixed, and it has to do with the split in the economy, and it has to do with split in capital markets, which means you're trying to look at the economy as a whole, but what you have is in certain sections of the economy,
00:36you have an enormous amount of liquidity, enormous amount of wealth, things like if you're in the top 1% of anything, which is the top 1% of the income earners, the top 1% of the stocks, NAI, and so on and so forth, wow, there's a tremendous amount of liquidity and fantastic,
00:57and so you would say, if anything, you'd worry more about the bubble and how you start to pull the punch bowl, that kind of thing, but we have a very diverse economy,
01:09so if you're looking at, let's say, the bottom 60% of the population and the conditions of the bottom 60% of the population and labor markets and so on, then you have a very, very different issue.
01:24I don't think monetary policy at all is going to be able to do that.
01:27I think that there's a strong situation where the natural instinct is if things aren't exactly like I would like and I'd like to make them better, I should ease monetary policy.
01:42Okay, so I mean that's now, we've learned that, right, because every time you do that and then things go up and people are happy and so on, but there's a cost of doing that, right?
01:53The cost of doing that is that there's, you know, one man's debts or another man's assets, and so when you artificially lower the interest rate so that it is not attractive,
02:06in a sense, the hold is an asset, and it's very attractive to borrow and buy things, that creates an imbalance.
02:12So I think that discipline is not something that anybody seems to want, and yet I think it's needed.
02:21So when I think about the monetary policy and so on, I think not much, if any, but I also think it's not really dealing with the whole so well because of the disparity in the parts.
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