thank you so much for being here we
really appreciate it how bad is it how
worried do we be you're seeing a
situation that is the same as existed
really in the 1932 45 period in that now
we're seeing the production of a lot of
debt a lot of borrowing by the
government we're seeing zero interest
rates and not the traditional kind of
money monetary policy but the producing
of a lot of money and credit so the
Federal Reserve is buying the Treasury's
debt and the Treasury is getting that
money to my mostly Americans in some
imperfect but remarkably large way and
the Europeans are doing the same in
their way that Bank is a smaller Bank
because the world lives with about 70
percent dollars and only a small percent
euro and they will produce there's for
theirs and there aren't many banks
around the world and so the rest of the
world is going to have gaps holes that
won't be filled so there'll be a big
differentiation as to which entities
benefit and which entities don't do you
think that we're headed into a global
depression so what do you mean by a
depression okay something like happened
in the 1930 so just to repeat 1929 to
1932 there was a fall in the economy and
a very double-digit unemployment rates
and a magnitude a fall in the economy
like about 10 percent do I think we're
in that yes how was that dealt with 1933
what they did is they printed a lot of
money then and the government came out
with a same type of programs that we're
having now yes okay same thing zero
interest rates hit zero same thing okay
same dynamics and then there is the that
money causes an expansion from that
point how long does it take for the
stock market to
exceed its highs or how long does it
take for the economy to exceed its
former highs a long time okay do I think
that's what we're in yes that's what
we're in it'll pass
it the world would be very different
there'll be a new world order but it
will pass and we'll be inventive because
what we're dealing with now is just
money and credit money and credit is
just digital I mean there's no there was
real good services you know that those
are real but everything else is just
accounting and so when you change the
digits and you work those things out and
you work yourself through that takes you
know a couple of years at most kind of
and then you come back into a
restructured environment how much people
seem to think that within I don't know a
year we'll be kind of be back where you
are you're saying no it's going to take
longer does that imply that there is
basically a sort of some systemic shots
that the market hasn't yet fully seen
perhaps to do with the abit of inability
of some players to handle the extreme
levels of debt that are piling up right
now as people can't work you know some
people mistake this as there is a virus
and the virus may come and go okay maybe
we never see it again I don't think
that's likely but I mean the people who
tell me say not who knows but if it
never came back again there will be
those who are broke and and and who will
have lost some income we're going to
change how we operate and in a way the
the supply lines are going to change in
other words with self-sufficiency
what is self-sufficiency now going to
mean do we have enough of this and that
we're going to restructure our economy
and restructure the financial system in
ways that we mean we are not going to go
back to the way it was so do you see
systemic threats to the financial
industry as graceful greater than
Hoffman did in 2008 this is bigger than
what happened in 2008 I'll distinguish
it in 2008 we had banks it's the same
thing meaning you have a certain amount
of leverage things go down
too much leverage means you're broke in
the counting terms so then you look
around and you say who are the
systemically important entities that you
don't want to go broke because do you
want to lose those banks at this time
and then you can make up money and make
up credit and you can keep them alive in
some way and you did it with banks and
through the banks there were the
mortgages and that's what it looked like
this is more complex than that because
there are the banks and then there are
those all of those that are beyond banks
although the little businesses all of
those in all the different places that
are beyond it and it's a bigger crisis
and we have a less effective monetary
policy because interest rates declines
have reached their limit and just buying
financial assets by the central bank and
buying the normal financial assets won't
work they have to buy the debt of the
government and the government or the
many governments have to be effective in
getting buying power and production to
those who need it around the world what
kinds of industries organizations
companies have the best prospects of
thriving going forward there are two
types basically there are those that are
state stable meat-and-potatoes not
leveraged kind of companies you know the
Campbell Soup equivalent you know like
everybody's going to use them all time
kind of thing and then there are the
innovators those who can adapt well and
innovate well and don't have balance
sheet problems in other words they have
strong balance sheets so they're going
to be able to play the game
without having that they will be great
winners and so there's always new
inventions new creativity that is the
new adaptation that that becomes a
company and an entrepreneur and they're
going to do great plus the stuff that
we're always going to need those are the
things that are going to do great in
terms of our recovery this seems like
something that is going to require a
coordinated effort you know financially
spiritually in so many different ways if
we retreat from globalization right now
does that make everything harder going
forward if we retreat from globalization
which we certainly will do it will
certainly make things very hard and when
you have congresses and presidents and
they start to say who will we help and
how will that be and what will that mean
it gets down to real practical questions
and the reality is a lot of those people
won't be helped and then will you'll
deal with how will they behave for each
other or one country's vulnerabilities
on other countries opportunities this
isolation of the United States relative
to the rest of the world this.d
globalization began before we had this
that force there's more of it right and
it happened for reasons okay
so don't overlook those reasons and
don't overlook the reading of history
just because we wish it can happen if
you want to wish it happens it's all
everything is all dependent on the
behavior of those who have their love on
their hands on the levers of power I
would tell you like for example right
now I've been going to China for a long
time and the the Chinese in many ways
are helping in many ways things that are
needed in this crisis and and all that
to even say that is a politically
challenging thing okay because we're in
a world that is so fragmented that even
to publicly say thank you and thank you
to many people and many companies it's
almost dangerous to say thank you to
those who are helping because the world
we're now in an environment in which
there are its enemies and and who is
evil and do you fall into that category
and so the history of these is there's
demonization of different people okay
now you must see it around you
it exists and so how we come out of this
will be how we depend behave with each
other so what's our opportunity here
what changes can we make throughout all
history you go back hundreds of years
you see that any system works for those
who tend to control the system I'm a
capitalist I believe in the system I
believe you can increase the size of the
pie and you could divide it well and if
we talk about how to do that effectively
we need to do it but there it becomes a
time that there needs reforms and those
reforms have to create productivity it
doesn't mean just give money away it
means how do you make those people
productive so that they are also
psychologically productive as well as
physically productive and producing
output now we are restructuring it okay
in it it's the UH neva table consequence
of what we're doing here we will come
out of that there's been a tremendous
transfer of wealth whether people
realize it or not through the production
of all of that borrowed money and all of
that producing of money that is a big
force we will come out of here and the
thing we will talk about over the next
couple of years and probably sooner
rather than later is how we do that
restructuring am I worried now is the
same as my worry then whether that will
be done in a civil bipartisan way that
will both increase the size of the pie
and divide it well rather than damage
the economy because you lose
productivity there are certain things
that are great investments education is
a great investment the more people you
have that are well educated and you have
equal education the more people you're
going to have who have a chance to
compete with each other and raise that
over a period of time it's a hell of
invent investment it will produce more
productivity than ever will cost if it's
done well but what happens is states and
localities think of it as a budget item
so they look at expenses and they penny
pinch on the education because if you're
in a rich town you make your
we'll get a good education and if you're
not and a large percentage of the
population is losing that so that has to
be engineered well so that they're
productive as well as divide the pie
well and everybody believes that the
system is fair if we we can get there my
optimistic that we will get there you
know I don't know I would say I'm 6040
pessimistic that will be good enough
with each other to do that but there's
that possibility this is our test this
is our stress test right thank you so
much for this this was this was really
really really interesting thank you so
much thanks all
