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Julian Robertson Discusses The US Debt And Upcoming Inflation Expectations
Some gloomy predictions direct from the horse's mouth (how did CNBC allow such a bear on? No prescreening of hedge fund manager guests?)
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This is the correction we have all been waiting for:
Dow down 50 points.
Yep, buy the dip. To the moon Alice!
Don't be ridiculous, DOW will finish positive, as it was, is and always will be for ever more.
This is the talk of tops anon.
Maybe old rich wise JR was trotted out to restore
market share to CNBS in half an hour at 9PM Wed,
if not profits.
In any event, agree with JR on just about everything
but 15-20% interest rates.
In real terms, adjusted for the douche in BDI since June, they are already 49% plus nominal rates.
Not one man in a million recognizes deflation...
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3251493
JR acts like he knows less than the most marginal poster (like me) here. Downright scary if it's true.
Sorry for the off topic question ... My J.O.B. blocks most streaming media content (YouTube, CNBC clips etc.). Does anyone know a simple way around this so I can stay informed with ZH clips like this, but off my IT's radar? Thx in advance.
Sucks for you. Get another job!
The ramp is right on time but it's looks like it's struggling a bit.
Better yet, quit your job. Obama has made unemployment a rather profitable opportunity these days.
Have to agree - get another job. If you're producing the expected work load, then your employer shouldn't be putting restrictions on how you get it done. However, they're obviously nazis and you should rebel against it in every way. You should start by demanding access, and you'll be denied by some higher power that will prefer to remain anonymous using some excuse such as bandwidth use. Who the hell are they?!? Demand it or leave. You should exit without grace and in total anarchy against their constraints - DON'T let them hold you back. Take a dump on your desk before you leave - you want people to hear about your ordeal. Unless your actually just the copier boy, then you should be focused on making copies and reading blogs.
Guys, you snooze you lose. That was the correction - they happen quick in bull markets that are products of federal reserve intervention. Last one in is a rotten egg.
Agreed, to the moon alice and BEYOND
LOL.
+1 Pigpen
Time to see what it's like on Jupiter & Mars....
this story seems familiar, is he pimping BIDU if so it was run 6 mo ago.
I would not be surprised if US indexes went to crap and Shanghai ranged or moved just a bit. They had their retrace. Any upcoming stock crash will affect mainly US andUK, other countries should do much better this time as they do not trust the scammers like they did pre 2008.
I disagree, think it will be a replay of last year with the dollar going up, commodities and stocks around the world going down. The Nikkei is up 35%+ off its lows with Japanese exports down 36% year over year in the latest month. Germany is an export driven economy; who are they exporting to? I was just reading in the Economist that Europe has auto production capacity to produce 4 million more units than demand from the peak in 2007. Not one auto plant in Europe has been closed. The European governments have been doing cash for clunkers and paying subsidies to companies to not lay off excess workers.
Where are corporate earnings going to come from in the next few years to justify current valuations of stocks?
entirely agree. very concise post. sure you do not cover everything, who can in a soundbyte life at times, but imo, this is a very on target post.
Gerald Celente is pissed!
http://www.youtube.com/watch?v=oNiAAiSMu9Y&feature=related
I am Chumbawamba, and I, too, am pissed!
No, Gerald Celente was pissed a month ago. Why you posting month old videos on a current stream?
Hey, fuck you. His message is mother fucking timeless.
I am Chumbawamba.
It takes a street wise guy from the Bronx to say it point blank:
Its like the Bonanos versus the Gambinos, only its the Goldman mob wiping out the Lehman boys, no different.
They're money junkies. They will lie about anything to get more money.
Thanks for the link.
Other people are speaking out against the oligarchy:
http://www.kpfa.org/archive/id/53994
This is a MUST LISTEN! I've posted it before but if you haven't heard it - do so!
Awaiting Armageddon
Fucknuts! That interview is no longer available from their website! What was the gist of it, or is there an alternative source? I love Guns & Butter!
KPFA Rocks!!
I am Chumbawamba.
Play this clip in your Computer’s media player
Yup, at least a month old.
I like his defenition of HELOC's though. In the old days these (2nd mortgage) were only for losers. This should be repeated over and over so people will remember it when the next RE bubble inflates. But it might not inflate for a while.
although i think robertson is more sensible than
most other guests msnbs could have had i think
he had a brain fart by declaring the recession is
temporarily over....
please pardon the interruption of this regularly
scheduled recession while we bring you a spurt
of irrational growth...
we now return you to your regular recession...
i am sorry but a recession is over when it's over
and there is no evidence that it is over....even
if we see growth in q3 one point does not make a
line!
and i have news for bubba, the chinese and japanese
are not buying our debt....uncle ben is buying
it from his cayman island accounts...
The irony is that CNBC needs a crisis/panic in order to boost their horrific ratings drop. Their viewership goes through the roof during market meltdowns.
Straight up, dog!
I want to see some mother fucking carnage.
I am Chumbawamba.
"The irony is that CNBC needs a crisis/panic in order to boost their horrific ratings drop."
Well, they're about to get massive one.
Buy CNBC!
Only problem with that logic is that it simultaneously bankrupts the parent company... OOPS.
Nah.
GE/NBC/MSNBC = TCTF = Too Cooperative To Fail.
State run media is a valuable asset.
have you checked quantcast lately? so does someone else.
i recall something where the FCC and the equality requirements where providers of mass information must present both sides of the information. yeah that a definition that needs to be updated.
a definition as a comparable subject to interpretation in similar ways as: fair market value, and what is the value of gold? to boot examine who chairs "czars" the FCC. figures the time the term of information equality needs updating, too many conflicts of interest are currently in power to do so.
i guess that is where ZH and the information derivatives that emerge from ZH can help facilitate.
Wait? Where's Julia Roberts? I've been tricked! This is just about some financial stuff!
LOL
The new Japanese govt. main campaign promise was to increase domestic spending and to decrease its purchases of US bonds. In addition, bonds sold to Japan should be priced in yen.
Finally, the Fed announced that they will be extending MBS purchases- obviously no one wants them. Now the question is, when will they extend their purchases of US Treasury bonds?
"girl you know its true." Milli Vanilli circa 1989
This fits in well with this story
http://ispeakofpeak.blogspot.com/2009/06/chinese-have-no-choice-but-to-k...
from the article
Currently the US will issue over 2.0 Trillion USD worth of Bonds over 1 year. That is net. Including the rollovers it will issue over 3.5 Trillion. That is the official line. My estimate is for over 4.0 Trillion total (2.5 trillion net). Over the last 2 years the Chinese have purchased close to 40% of US bonds. To keep this ratio up they will have to purchase over 1 trillion USD Net of Bonds, just this year. Bloating their US Bond holdings by over 125% in one year. But wait...we are not done yet. The rest of countries are in no position to step to the plate here. Many of them have troubles of their own and last year's record Treasury Bond purchases from the Middle East were only possible because of $100+/Barrel oil. With our Bench lineup retired or hurt or just plain unwilling to play in round 2 of "Who wants to be a Trillionaire (sponsor)?, China will have to buy close to 60% of this garbage. Ditto for 2010. China will be a proud holder of over 3.5 trillion USD of Bonds in 2 years.
Doesn't he have it bass-ackwards? He says that if the Chicoms and Japanese decide to quit funding us we'll get mid-teens inflation. Huh? I can see that we'll get high interest rates, but that's going to make things that take borrowed money to buy (houses) go down in price.
The interviewer looks as though a) she was having a job staying awake and b) having a job understanding what he was saying...
DavidC
Maybe on major downers or what? She said income is up.
Like Wage income is down 4 percent year to year, corporate books are cooked, and she says income is up.
Tax man would like some of that increase in equity to get churned, but really? robo-trader's minions going to lead the economy?
And tell that Captcha algorithm that 7 times -39 is 3 digits.
What is he talking about? "We cannot pay our debts unless the Japanese and Chinese buy our bonds!" "Who will lend us the money!"
This is nonsense. We cannot pay back our debts. Selling our debt is not a way to pay back our debt.
Yikes! He may be right in what the direction is, but his reasoning is ludicrous.
Uh, I think he meant that in a figurative sort of fashion, i.e. we cannot keep the house of cards propped up unless the Japs and the Chinks, er I mean our esteemed landlords continue playing along.
I am Chumbawamba.
guys, you and Mr. Robertson and all other USD bears are missing the point. Have you seen the US current account deficit lately....? No, well its collapsing, meaning there will be no need to rely on the chinese and japanese to buy US treasuries. The biggest buyer of US debt wil be the US consumer. The hottest selling x-mas item will be the US 10y treasury!
Uhhhhh, that assumes enough people will have enough confidence that the US government will be a going concern long enough to collect on that paper.
Gold does not have a counter-party.
I am Chumbawamba,
The current account balance as a figure of merit is garbage. I focus only on current balance of trade. Why?
Current account = trade out minus trade in plus currency in minus currency out
balance of trade = trade out minus trade in
The currency come in only as long as confidence flows. Once confidence disappears all that currency wants something like assets in return, or highly paid debt.
I scoff at current accounts.
Current accounts are simply a rare meeting place where both central banksters and informed citizens can view a situation with all the interest of having a small bit of gum on the soles of your shoes.
With all due respect to Julian, I think he is barking up the wrong tree. There are 3 sources of capital to finance the govt deficit - the savings that Julian himself talks about (household buying of UST is up), banks (whose agency MBS has been sold to the Fed and have turned around to purchase UST) AND the biggest of them all - printed money (direct QE of UST or indirect via agency MBS funneled into UST by banks).
Furthermore, the Chinese have nowhere to go than to keep buying UST (at least short term over the next few years). Japan is an interesting case - their consumer savings has financed their own govt debt (note to Julian, Japanese govt debt has been financed so long and JGB's still yield nothing!) and UST - they may have to scale back (as they also spend and spend!).
Debt deflation is roughly being countered with these inflationary monetary experiments as we speak.
So, what undoes this all, the $. That is the weakest link here - print $ to try and inflate your way out of trouble and you kill the $ (which is playing out nicely). At some point, Chinese and everyone else will complain about the value of their existing US $....that is the day of reckoning. That also is the distinction between Japan and US - Japan's govt debt could be financed internally because it was always running a current a/c surplus. Alas, US can't because the stupid US consumer, egged on by stupid govt and even stupider Fed, spent on foreign goods and indebted the country to foreigners. The US current a/c deficit has to be financed from outside and therein lies the key weakness, all other spending programs and monetary shenanigans can be "paid for" by internal $ (debased $ of course). What to do about the current a/c deficit and the $4trn of external debt that is already on foreign books?
Seriously, you are a clown.
See (my comment) above with regards to household investment. Most banks will be gone in a couple years; the ones that survived will be starved for capital. QE will eventually and ultimately (no going back now) lead to hyperinflation.
The Chinese have sought and will continue to seek gold. Your ignorance of real money is astounding.
He stated pretty explicitly that we are not headed for deflation, but rather inflation.
Chinese are already complaining. Have been all year. US is inflation already. Has been all year.
Last part of what you said is reasonable.
I am Chumbawamba.
He might have stated that we are headed for inflation, I think not, not yet at least. Chinese can complain all they want and even take tiny steps to move away from $, but they have nowhere to go for now.
Most banks will go nowhere in 2 years, the govt won't let that happen. They will be a source of buying UST (with debased $ and with QE $, but they will).
Only part of what you say above is reasonable is that this path continued stupidly will lead to inflation and hyperinflation.
And not go get into name calling, but can't resist - with a name like chumbawamba, you, I think, is the clown!
I believe you are correct, as usual, but to hedge on what you've stated --- we are truly in uncharted territory at this point having entered the era of ultraleveraging, the likes we've never seen before.
The question is how much actual and real deleveraging will take place --- and for how many years, or decades......
Hence the action by the new Japanese government to discuss its future purchases of US debt denominated in Yen rather than in dollars. The acid test will be if or when China decouples from the dollar and makes the same demands with its funding of the US in Rnb rather than in $.
Tyler they let him on once a year
Oct 2007 as market was at all time highs : "Doozy of a Recession"
http://www.fundmymutualfund.com/2007/10/julian-robertson-calling-for-doo...
Oct 2008
http://www.fundmymutualfund.com/2008/10/julian-robertson-buying-some-of-...
Next appearance fall 2010.
Thanks for those links.
Robertson: 15-20% inflation if Japanese and Chinese stop buying our bonds.
It's almost obvious if you think about it because the Fed will have to print the loot and they will buy the bonds.
Right back to the discussion of the introduction of the process of Mutually Assured Destruction or MAD to the sustainment of America's debt and its national & economic security. This on top of the issues with TBTF/TBTS.
Lunacy.
This interview is rediculous. There's never enough money to pay off the debt in a fractional reserve system. It's DESIGNED that way. We don't have to save for 10 years to fix it. We just have to wipe this system with currency from congress. Simultaneously servicing real debts and the magic money creation. Sure it's a disaster for the counterfeiter banks but who cares really. If fractional reserve keeps making make believe money how can you pay it off with real money. YOU CAN'T. It'll never add up NEVER.
It is well past time to reintroduce the concept of Colonial Scrip.
Surely Mr. Robertson, like some of the posters here, understands that the Federal Reserve buys treasuries. So what is he selling here?