Bitcoin in Macro Land

Published Sep 10, 2021, 8:00 PM

El Salvador is not a nation that comes up in global-macro investing discussions very often, but its embrace of Bitcoin as legal tender marks an interesting milestone in the evolution of the cryptocurrency’s role in financial markets. Ben Emons, strategist at Medley Global Advisors, joined this week’s “What Goes Up” podcast to discuss El Salvador’s embrace of Bitcoin and correlations it’s exhibiting with other parts of the market. He also discusses the European Central Bank’s decision to reduce asset purchases, and he shares some current stock-market strategies.

Hello, and welcome to What Goes Up, a weekly markets podcast. My name is Mike Reagan, and I'm a senior editor at Bloomberg and I'm Aldona Higher, across asset reporter at Bloomberg. This week on the show, it was a pretty interesting week in macro news. While Al Salvador is not exactly someplace that comes up in market conversations often, this week it became the first nation to adopt bitcoin as legal tender and didn't exactly go very smoothly. Also, another major central bank made it clear it's ready to start tapering bond purchases that it's been making to counteract the effects of the pandemic now that the recovery is picking up steam. What does it all mean. We'll get into it with a macro strategist at an investment advisory firm. But first, Bill Donna, I have to it's back to school week, which is means there's a lot of drama in the Regan household with you know, getting your books in the backpack and having the right outfit and everything. I was trying to figure out what Vill Donna, a young Vill Donna, was like back to school time. I'm guessing you were like gung ho to get back to school every septeme. Yeah, I loved back to school. It was so fun. All the new stuff, you know, all of your new notebooks and things, all the new grammar. Yes, oh gosh, don't get me excited. I figured I should have haven't had you give a pep talk to my daughters. I had a feeling you were enthusiastic back to How was back to school for you when when you were going to school in the eighteen eighties? Oh in the eighties, Oh my good? Did he It was well, you know, it was a one room school house and we had to walk both ways uphill in the snow and and that sort of thing. But you know, eighties bore. That hurts. I'm sorry, that hurts. I'm dealing with this. And I had a teenage Sun News so easy and so tenth grade now, so with all that stuff. Same thing. That voice, there's bed Emens. That's our guest. He's a macro strategist at Bedley Global Advisors. Bed House. Back to school going in your household? Well, it's actually schools just more. My wife's giving me a hard time, but I don't know. My son is actually following the instruction, so it's more than knuckle sandwich. It gets served every day, you know. But that I wanted to talk to you about what I mentioned at the opening, there's El Salvador. I know you've been watching the El Salvador situation. UM. Fascinating to me that we finally have a bitcoin as legal tender, albeit not in a major market economy. But I think you know it's it's breaking that seal of a government actually accepting bitcoin as legal tender. Walk us through sort of the implications of it in your view? I mean, is this a big deal in sort of the evolution of crypto? Um? And though there was kind of a glitchy uh introduction uh in El Salvador. How are you thinking about it all? You know? What what does this mean? We mean sort of from the evolution of bitcoin. It's definitely important, staff, Mike, because look, if if you have a country as small as l Salve that are is and although it doesn't have a major currency and occurrencies back to the dollar, it's in economy adopting adopting bitcoin in a wider way, like as in everything that you want to buy and transacting can be done there in bitcoin. To that Shivo wallets that they created where they purchase I believe something like forty million dollars of bitcoin in there, and so obviously there's a limited demand, but okay, it's it's it's enough for people to get really comfortable with transacting in something that allows them to be part of this digital revolution and not dealing with a black markets. Right like some of these countries, I go solve it over to or Argentina and Venezuela will probably go this way to Yeah, people transact more in the black markets, and and and and while they're having an official currency rate, that doesn't mean much. So I think the implication of it is is that other central banks are taking this also serious. And what I noted was just not that long ago. I think just a week or two weeks before El salvad or you know, launched this bitcoin law, the Central Bank of Australia launched a project with the Central Bank of South Africa Singapore, and I believe it was Korea to look at the way of using a digital currency central bank digital currency CBDC and allowed for international payments across boarder payments. Really more the institutional version of bitcoin and so as that happened as that project is under ways called Project Dunbar, and you have this l salved Or example. I think we're making a big leaps forward here or where ultimately going to be in is that although our currency system will not change because that would put an end to our conventional amount apolicies. It is right, you know that that will not happen. But the fact that you're going to transition to a digital world where you can settle everything digitally, you can transact everything digitally. Can you then imagine that we can actually open the stock market during the weekend. That could be an implication that sounds big, but it's actually the way because if you can instantly settle money and security is that fast because of the technology. Yeah, that's a huge lead forward right for man kinds. As famous estronaut set Vildana just got very excited when you mentioned the stock market open on the weekends. That means she'll get to work on the weekends, which I think you sometimes cover bitcoin whenever it's really volatile. We do tend to cover it over the weekends as well. But yeah, my eyes did just for all the listeners sort of get really wide. But Ben, I do want to ask you. It used to be an argument that a lot of crypto people made about bitcoin that eventually you're going to start seeing it being used to purchase your morning coffee or your morning breakfast sandwich or whatever, which never really hand out, at least not in the US. It's really difficult to to to do something like that. Depending on how things play out in El Solvador. Does that mean potentially that that could be an argument again for why somebody might want to own bitcoin where you might be able to use it to transact with your you know, your everyday needs. Yeah, I think so, because if people get comfortable with this with a cryptocurrency which is volatile, and you know, the argument was made when Fel Salvador launched this that as as bitcoin sold off because of the glitch. Okay, so I'm buying. I just bought a pizza that was worth you know, fifty bitcoin dollars of bit coin nosworth tony tous. Let's say that's a that's pretty strange, right, It would not be uh, you know, very pleasant. But I think it's just like when you had in the past, how the banking systems so traditional of just cash going around that has become very digital. I mean, I do most of my payments through my through my iPhone or an app most of it. So I think that is the direction we're heading with this. As you mentioned, there's a fair bit of regulatory um oversight that's you needed, and it's not clear who's going to be the responsible agency to look after crypto. That's I think the big issue in the United States. Um, the SEC was regulated, but then you have the I R. S and then you have the Treasury Department, then you have maybe Department of Justice, and there's another agency. I do think that we're not that far away from that reality to have crypto being used for payment because last year and summer bit quietly, but the Office of Currency Controller, which is the regulator for commercial banks, did allow banks to accept crypto as a cortical deposit and so that people have purchase crypto they could actually deposited at their at their bank. And I don't know the exact technical specifics of it, but that new SIDEM always was in my mind like, okay, so if we're starting with making it possible to be a deposit, then it becomes an anchor right for for using it as a means of payment over time, even though it's still very subject to volatility markets, subject to technological challenges, and the concerns over the technological chances in frauds and criminal activity that that obviously here big concerns about Politically, they want to make sure that that obviously doesn't happen. So but I think I'll solve it, or a small country it is, it is one you know, wants to step forward of this. Uh. I find it fascinating that no regulators can sort of decide who's in charge of this thing. But I think they should put the Space Force in charge of it. You know, the goal, the goal is always to send these things to the moon. So put the put the space to force in charge of regulating it. But but I know you've been doing a lot of analysis sort of looking at relationships between bitcoin and ethereum and crypto in general with the more traditional asset classes in the market, oil and stocks at meme stocks. I think you know you've noticed some kind of correlations and relationship. Walk us through what your analysis of that looks like. You know, how does bitcoin sort of fit into the traditional asset classes. Is it influencing the prices of I mean Obviously you've got your stocks that are exposed to crypto in some way, but is it influencing things on a macro level in your opinion, Well, you have to start with at last point as you're making so you know, the list of company needs that have using bitcoin or crypto or having a more digitalized business has just compounded as it's increased very rapidly, and you know that that does influence the stock market because if you take all those companies together as a market way, and it's direct or indirect exposure to crypto bitcoin, then the fluctuation of bitcoin has become more correlated with the changes in the S and P five that's particularly this year has been that's been the case. That's a big difference from the number of years before. Then obviously as we had the more wider adoption, if not recognition on institutional side to hit the people who manage money institutionally looking at crypto as this must be another alternative that plays a big role too, And that's where the regulatory parts of it comes come into play when it comes to the SEC and and the Treasury Department, and then you as you have this sort of correlate issue between bitcoin and broader markets. Positive, it's been a positive correlation this year. You may think about and that you can take the steps further of Okay, this could effect different assets, not just equities, but it could spill over to other assets. Now, what's interesting with with with crypto and an etherium for example? Two, it's obviously high energy uses right and one thing that has happened with the etherium as it got back in significant demand because of the upgrade London upgrades that happened a few weeks ago and the fact that that the non fungible tokens have exploded in trading, so people very excited about that. But you need etherium for that. Eterium is of course related to the big to the blockchain technology. The ethereum does require a fair bit of energy and so etherium gas prices as they say, which are you can find online I have jumped. So there's a bit of a relationship too of the physical markets with the space of crypto. So at think it all points to the same direction of as we were talking in the previous discussion, was you have crypto assets at becoming part of the investment universe. The transition from what it was like a very esoteric technology that was off exchange and very privately managed and traded becomes more wider adopters. And then what you're going to get now is crypto stock, scripto bounds, crypto features, which which exists Bitcoin features, and as we moved to that e t F, which is I think likely to happen at some point, you get the retail public even more involved, at different retail public than those meme traders that you talk about, which is the link. They've moved from memes stocks to non fungible tokens recently for some reason. But you know the fact that you get then Meme stucks with saying micro Strategy is a company that's considered to me, memes stuck. Yeah, that's all about bitcoin, right, micro Strategy. So there goes those linkages between meme stucks, non fungible tokens, and bitcoin right. So I think it's it's just morphing into this larger and larger universe of the relationships between bitcoin, crypto aspects, and financialists. And not to spend too much time on cryptocurrencies, although it is so fun to talk about, and I do have questions about um the broader market as well, but I want to ask you one more thing. I was looking at one of your notes and you wrote that bitcoin slide is that necessary means to achieve digitization of financial markets? And I wanted to ask you what you meant by that, and maybe in particular if you can focus on that bitcoin slide part of the question. So we had now three sell offs and called the slide, but the sell off in bitcoin, and there's all these particular reasons for why that happened. The last one this was more specifically ready to fitness realy. Uh just I guess a market reaction of people being overly excited along bitcoin and there's a glitch and people get a little scared and itself off. But the real the way I look at that is to say that volatility that we're experiencing is indeed maturing asset right of it should actually be very volatile as it becomes more matured, because there's more more people involved in that space, right, And there's no surprise that then if something like with this event's reel event would you would have not really mattered much at all, suddenly becomes very sought out on the web, and it leads to volatility of bitcoin even though it didn't need to be that way. It was just you know, a short glitch in the app chief of wallet as opposed to anything with where bitcoin was mind or traded on exchange or anything like that. Right, So, so I think it's a function of that that it becomes a it's maturing, and therefore the volatility isn't necessary means for us to make that further step to this completely digitalized financial markets. I find amazing that we already making steps that way. The central maker Thailand has issued the bonds over blockchain settled it, and the European Investment Bank, which is the agency Europe that looks after infrastructure investments, is issuing bonds over blockchain. When you gets institutions involved testing that that ours, this is going to become very quickly mainstream within I predict alms will predict within the next year. So we're going to have a lot of corporations doing this um same way, all adopting that technology. But it cannot come along with more volatility as more more people are getting involved in this, right, And that's I think where I'm coming from. But I wanted to switch gears a little bit, uh to another topic. I know you've been watching closely. That was Christine Laguard at the European Central Bank this week. I feel she pulled a bit of a Jedi mind trick by basically announcing tapering and then saying, no, I'm not tapering. You know, but you know, given the negative yields in Europe, and the case has always made whenever the question is well, who's buying US treasuries at these yields that the argument is, well, have you seen the yields in Europe? Um, you know, how big of a deal is DCB sort of taking the foot off the gas a little bit with their emergency pandemic program. I mean, is this It doesn't seem like it's caught anyone by surprise in the markets. You know that the euro was kind of mixed against most currencies. I didn't see any sort of dramatic moves. But how are you thinking about this announcement from Regard this week? Is it, you know, changed the calculus at all? Thinking about um, you know, bond markets going forward for the rest of the year. It could be mine because I think like so she says that you know, the lady can't can't taper, and it isn't tapering that that reference to market tenters speech. But in the in the yes, it's they are right whatever you call slowing down those purchases and any survey it ultimately is taper. But the market, you know, the bond marketing Europe rallies on this because you know, whatever they are slowing down the pace with, it still covers a fair bit of issuance well into next year. And that's just I think the reason why there was a bit of a relief, but almost all of it issuance, right, And yeah, fair fair bit of But here's the interesting change it's going to happen um is the e c p IS is very smart running two programs at the same time. Right, they have this emergency program called PEP, and they have this Q program. It's called a p P and a Q program will come back in a more meaningful way as the PET program buying sound and they she talked about that extensively. But the importance for the bond market is that under that PET program, we really are addressing the pandemic and we're going to buy large volumes as much we can to keep market really really loose influential conditions and everything functioning well till the pandemic video is weighing off is the first step for the easy B to acknowledge that the pandemic is in their minds slowly changing, but it is waning. And they made the point about that they hit the vaccination, which is a key metric to the ECB. So this that change happening. Plus they're going to make the app the normal keyv program a more important part of their their two kit. And the reason why that matters is because that program is designed to bring inflation back to the target and keep it to the target. And that program is really the guidance on that is about interest rate hikes in the future once you succeed by bringing inflation back to the target. So my view, Illness, is that yes, we've got this nice rally on this bat, you know, okay, slowly adjusting issues still covered, But on the app, the issues and issues or bond is not much covered. It doesn't need to be an eight billion program, probably much smaller, maybe forty maybe thirty billion. Do you ever put pressure on yields in the future. Plus it's really designed to bring inflation back, which the marketable does know, like once you get there the rate hig so to speak, will be coming into the horizon, and and that's that's I think what's going to play from here now. Now, why does this matter even further is that year Zone government bonds, as you say, are negative yielding majority of it. So you have this negative yielding bond indecks that you can look up on Bloomberg. That was something like I think sixteen seventeen trilling recently, and it has fallen by a few trilling because yes, boond deals and French governmentent deals and all those have all moved up a little bit higher. I think it's going to continue that way, which means that the deflationary expectations in those bond prices in Europe are really moving away. As the ECB is succeeding with the strategy of managing the pandemic then bringing that new that old TV program back to life again inflation to the target. Some people may be sounding like, wow, this that's a pretty ambitious man, because that's never gonna happen Europe. But I think that they have some window here to succeed with that. So I think negative feels your will somewhat disappear entirely, but will someone even though the e C you will keep buying bosh. I appreciate that. Then, you know, Bildna gets bored with the ECB talk. She wants to talk about stunks with with an end stuns right right, I'm not going to use that word. But I did want to bring us back to the domestic, the U S stock market, because something that we were looking at this week is strength in tech, in particular the big cap text talks, and we found that about fifty of SMP five hundred stocks are down ten percent since May, and that's true of of Russell two thousand stocks. So what does that tell us about tech strength and why investors might be treating big tech as safe havens right now? And is it at all tied to some of the worries that people have about COVID and the delta variant. It's certainly with that IKS so there's uncertainty about delta variant. And really because of the delay of going back to office, is made to stay at home trade so to speak. You know again you know flaring up in in in in value right, the meaning it's it's becoming populican at tech plays a big role in it. But I think it's also to do with that this defensive nature of the market goes further than tech. And that's that's fifty fifty portfolio. I'm jumping maybe to the topics if you wanted to discuss, but it's fifty fifty. Idea that I was looking at was you have industrial staples, and you know this type of even utilities, and that includes TACK considerably defensive. Some of those have actually lacked TACH even though the defensive sectors. And at the same time you have the offensive side of the market, retail, some of the reopening sectors that are still much value in there, let's say airlines as an example. And so I thought about this fifty fifty portfolio of those combined and tracking that against the tech sector. And it actually, interestingly how the fifty fifty portfolio is performing better now than tech. And you can also see this from the relative value between tech and say industrials. So industrials have been really strong because of the pandemic and all the production is needed, all the pipeline pressures a sorry supply chain supply chain pressures that we have. But if you take the relative ratio between tech and industrials, that's now a lot lower than it was during the major disruption phases in January or last year when really attack was huge the outperforming. So there is strengthen tech, but it's not as strong anymore, I think if you compared to industrials that has been before. At the same time, the market to your point is defensive or getting more defensive, which is I think also now the debate in the market you had Interestingly b of Ay were really barished on the market, upgraded there and here in target, but I still buries. You have another more Stanley who are much more bullish and they have kind of become more cautious. I think that speaks to this market ready to have some sort of correction again and tack therefore place this defensive role. You know, it is an easy position to be in if you do get this draw down so to speak. But I would say though this that as the last point the draw down ultimately will really happen. I think because of the economy shifting again from what we had a bit of a delta impact of number of months of weeks becoming again more visible, that that's going to weigh because that way full taper will taper off and then the tapering from the fat comes into play. Plus the bunch of resolution that's being negotiated is a big pressure to get that really through. There's plenty of that fundamental vision to see a draw down in the market, which then would make tech I think, a bit vulnerable ultimately at a large s capturle on the perform. So tech is in demands because of defense. But I think there's come a moment that this draw down in the markets is upon us again, as all these opinions are gatting, converging to one another, and everybody's getting cautious. Yeah, I'm curious about that, but I think in one note, correct me if I'm wrong. But you mentioned that one possible catalyst for a drawdown could be sort of a renewed rotation into Europe or other parts of the world. And you know, how are you thinking about that relative value globally? I mean, if we especially here in the US, you know, obviously we're we're kind of plateauing out on vaccines. You know, we we seem to have this hesitancy to vaccination that parts of Europe and the rest of the world don't quite have. Um at the same time, you know, uh, it doesn't look like this three and a half trillion dollar budget plan from Biden is is going to pass without some some cuts to it. We've got the that treaded UH debt sailing approaching again and the famous extraordinary measures and all that. Is it a time to start looking outside of the US and start looking overseas. Do you think you could use it as an argument micas Um if we had some relative under performance of Asian markets to the US, because Asia was the first resion to come out of pandemic without much pain, but there was also the region where the vaccinations were really slow in the first phase. Now they're picking up really rapidly, right and and it's not just in Singapore. Is happening also in even markets at Hong Kong, but it was huge hesitancy about vaccinations. And Japan now too has picked up really quickly. So Asia is getting in that respect a bit in a better position. If you think about this rotation trade, which really a momentum trade, right that that has been playing the entire pandemic. Each time one area under performs another area, and a progress made in the pandemic, and one way or the other, right, whether the lockdowns end or vaccinations increase the money flows to that under that relative underperforming area. In this case, now it's it's Asia specific area. Think of Singapore, think of Hong Kong, think of New Zealand, think of Japan. And yeah, if you look at an at a graph where you normalize those ets versus dispiety, that is a gap, right, and I think it will not pret entirely close that gap, but it will definitely be a catch up here really playing on on again, this reopening cyclical momentum idea that we've been into and since say April of last year, when we come out of the depth of the of the of the worst of the pandemic. Europe on the other hand, is now a little bit in a phase of that. Yes, E c B is my view, tapering the lady can taper, right, So it is happening, and and you can kind of tell right it's it starts like way way on the markets there that they're down more month to day so far since all that hawkey language came out and now today we get the news then then US markets or Asian markets. So so I do think that the Europe probably despite the success with vaccination rates, will deal now with more the policy changing to degree. So that's an interesting aspect of the global macro landscape too, right because if you look at Asia Pacific, New Zealand and Korea for example, they booked success against the virus and they now seeing their bunches normalized was two on the tenure. So it does show that when you get that advice better on the control, that interests can depart from the virus influence on the pandemic at that's important observation. And the second ones is Europe that you made a huge progress with all the vaccination, you're getting the situation. They're also better under control. Now you can focus on adjusting policy and that will affect markets negatively inequities there right, So I think if you look at both examples, I think the opportunities in Asia specific equalities they have lacked the US and you know the this progress in the pandemic there, but that also means yields normalizing, So there is that risk on trade where the Europe is a bit of the opposite way. You get a bit of traction attraction on equalities we are in the US. Not that that in that situation just yet, but the yields of trasies are kind of arranged around the boxing, and so is the SNP. So I do think we're gonna go to that scenario. I mean, I would expect us that we will get to a point where fields are going to be reflecting more of a normal economy that is not so much anymore the influence of the pandemic as tapering then gets on the way. Tiden up your straight jackets. It's time for the craziest things we saw in markets this week? Now the thought, as you know, Ben is no stranger to this podcast, it's not his first time at the rodeo, so I know he came prepared with the crazy thing for us. Bend, Let's have it. What's the craziest thing you saw in markets this week? So you know, you know it's a bit from history too that you know. I had once Twitter account of while back, and it got hacked and all kinds of funky stuff happened. So but these days I'm a little bit on there again. I watched all the celebrities on there, and it's your Fildana tweeting and Bloomberg tweeting, and then all of a sudden, one evening, I see this this is tweet coming out of a guy laying with two hairy legs on the beach, you know. And but the interesting thing is that those lacks for it's just the lower legs will actually looked like she's but the restaurants pretty hairy, it turned out to you, And I thought, like, this is crazy thing. You were you at the Jersey Shore. That was me at the Jersey Shore. Yes, yes, I do not shave the upper parts of the legs. That's just uh, that's just my natural, uh receding hairline. I guess that's why you should stay off Twitter. Ben enough, I was hacked to Ben. Yeah you did. Okay, those are my legs. I'm proud of those legs. Alright. Thought that's a that's a good one. I don't know, can you beat my hairy legs? Well, I was just gonna go with something that happened to me, which is I was reporting on bitcoin earlier this week, and I was in the midst of talking to somebody about why bitcoin could potentially hit and then go above that this week, we were just looking at some technical signal and while we were talking, it started dropping. And that's my weirdest thing for for this week. It's just the speed with which bitcoin fell, Like I think it was on Tuesday, Tuesday morning, New York time, it went from down ten percent down twelve, down fifty. I looked up. I have this little screen on my bloom Book terminal. I was down and I literally couldn't believe it. We were just talking about it potentially going higher, and just the speed with which it fell it was. It was something that's when you quickly say, well, where's the support that if? Right? Yeah? And then I was I was chatting the topic, I was chatting with people. I was like, what just happened? And I was like, I have no idea, but this is normal for the clear point. Yeah, it looked more like a Saturday Night special for bitcoin then, right. You know? Then, uh, what you see at the opening of a week. That's a good one, Bill Donna, I'm gonna give you mine. Mine's courtesy of U story in Coin Desk the Matt Live Mean Excellent Money Stuff newsletter. Now it kind of feels like cheating to talk about n f t s and the crazy things, because the whole concept is crazy in my opinion, but this one is especially crazy. Um because okay, there was and it combines the other craziest thing of our lifetime, which is doge coin. So the image of the original Sheba a new dog that dose coin is based on. It's a meme. I'm hopefully people know what I'm talking about, but it was a meme with a dog, and that that's what dose coin was created around. That was turned into an n f T. That image, it's sold for about four million dollars uh a few months ago. Three months ago. Now here's where it gets crazy. So someone whoever bought it decided, Okay, I'm gonna carve this up and offer fractional shares of this n f T um seventeen billion tokens were created by cutting up this n f T. Of of them sold to one buyer, and it's time to play prices, right, all right? All right? Ben, if I were to if I were to buy a four million dollar n f T, what would you expect someone to pay for twenty of that four million dollar n f T. Yeah, well that would be eight on the town? Is that right? It would be eight on? That's a good quick math there. I put you on the spot there, but yeah, but yeah, but you know of four million is not eight on the thousands, right, It maybe be more two millions, right, because in can be doubles easily, simply because it's such a unique artifact that that you own on that blockchain. No one else can until those that changes. So now it's just not transaction zoo zooper monetized market here, that's for sure. Yep, yep, you're in the right direction. Forty five million for of an n f T that originally sold a few months ago for four million. So I guess the idea is that you break this thing up. I don't know. I'm trying to guess what the idea is for Bretti. This is crazy, but I guess that notion of fractionalizing it and breaking it up, you know, I don't know. I don't know. I can't wrap my head around this. As Levine said, it's all a big joke. And uh, you know, the original joke was at selling for four million, and then it's an even better joke that it sells for million. But well, you know, the topic that we didn't talk about. It you wanted to talk about was by Bill Gross. It's only an interest in these n f T st about that now, now listeners don't know Ben used to work at PIMCO back in the Bill Gross era. He was it was a credit fund you you uh manage right? Global funds have also as also involved in his total Yeah yeah, so you know. But you know Bill's history is also artifacts. Is this postamp collection, right, a huge collection, a very unique posted so again, same idea. He was the only one owning that and unless he sold them, which he did, but he has sold a part of it for for charity. I think that's why he was interested in the n f T concept. But the interesting thing I found from his opted was that he you know, he was complaining a lot about Okay, we're not really too lower interest rates already told you ten years ago that rates were too low, even lower, and gosh, we're going to do here. Those are the bomb funds, you know, think about the n f T s. And I always wanted to say, like, well, that's your diversification, right If if you think about if you're worried about inflation, if you worry about lower interest is a real interest rates being so negative, then an n f T probably is is another sort of form of a hedge against you're dissiccated bond market, so to speak. Because it bonds have a risk reward that's so asymmetric. You have more downside and upside in the current situation, even much worse than when he rented about it ten years ago, when he also said that it was a really poor time for treasuries. Then an nf he could make a difference, and the returns and NFTs are so gigantic that that would compensate you so much for any kind of inflation shark. That was sort of I think where he was coming from. But you know, at the end of the day, a mutual funds and you know, for the act mutual funds so to speak, you know, it's unlikely to purchase n f T s and they're not going to be calling on the n f T king anytime soon, as I suppose, not like you know, but but but both even though he you know, during the time that he managed his funds, yeah, he was an advent post stamp collector, right, and and he was very known in that world, which is, you know, completely outside of the defencial markets world. So like like n f T, that's a good comparison because you know, what is the intrinsic value of that little piece of paper that stamps purnt it on you know nothing, No, but it's the value is what someone's willing to pay for it, So I it kind of makes sense to think of n f T s in that perspective. I guess. Yeah, collectors item, you know, and people want to hold it and it's there for an emotional value. I guess, but collectors item, so no one else has it but you. You just really have this really unique artifact and therefore it's worth a lot more intrinsically than than than with the physical value for this. Yeah, vildonna, should I make an n f T and my dog? Do you think anyone would should try it? Definitely? Well why not? This is the time? Yeah, And speaking of the time, I think that is all the time we have for today. Bett Emon is always a pleasure to catch up with you Bet on the podcast many times. Listeners. If you want to hear Ben's takes on other things, you gotta scroll through a few months worth episodes. But he's been on a few times and we are he's appreciate his time. Thank you, Ben, Thank you make thank you for that. It's great to be a good discussion. Thanks Ben. What goes up will be next week. Until then, you can find us on the Bloomberg Terminal, website and app, or wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter follow me at Reaganonymous. Bildonna high Rich is at Bildonna hi Rich. You can also follow Bloomberg Podcasts at podcasts and Thank you to Charlie pelto Bloomberg Radio and the voice of the New York City Subway System. What Goes Up is produced by Laura Carlson. The head of Bloomberg podcast is Francesco Leave. Thanks for listening, See you next time.

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What Goes Up

Hosts Mike Regan and Vildana Hajric are joined each week by expert guests to discuss the main themes 
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