Martin Wolf on Trump's Shakeup of the Global Order

Martin Wolf has been called one of the world's most important economics commentators, and has for decades written in columns and his own books about the evolution of the global economy, chronicling the rise of globalization and the subsequent pushback to liberal trade. And he's had a lot to write about in recent weeks. President Trump's unveiling of sweeping tariffs against pretty much every single US trading partner has not only roiled global markets, but is shaking up international politics as well. Countries around the world are now struggling to understand exactly what the Trump administration is trying to achieve, how far it will go in terms of its political and economic isolationism, and how they should we respond. On this episode we speak with Wolf, the chief economics commentator for the Financial Times, about what Trump's reordering of global trade means for the world, how Europe and China might respond, and the origins of the US administration's economic discontent. Read More: Trump’s Tariffs and China Collide to Shock the $115 Trillion Global EconomyWhat’s Left of Globalization Without the US? Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

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• 0:00Speaker 00

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• 1:41Speaker 01

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• 1:57Tracy Alloway?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

• 2:01Joe Weisenthal?

  And I'm Joe Wasenthal.

• 2:02Tracy Alloway?

  Joe, we're here in London.

• 2:03Joe Weisenthal?

  Still in London.

• 2:04Tracy Alloway?

  Still in London. It's been interesting. I think I've mentioned, so I obviously, I went to university here. Got my first job here, first at Bloomberg. I left very quickly and joined the FT. And I was here for like 10 years and met my husband here. So I've just been walking around the city this week, just feeling very nostalgic about everything.

• 2:23Joe Weisenthal?

  This is a very weird time to be in London. For one thing, I have to say, like, the whole time zone thing really messes me up. And like, I'm like, you know, the, the concept of time zones still blows my mind a little bit.

• 2:36Tracy Alloway?

  As an American, I'm not surprised to hear you say that.

• 2:38Joe Weisenthal?

  The most obvious. It's like, I can't believe the market's still open. But also, you know, we're in a time where changing perceptions towards the US are a big story. And normally, if I'm being honest, if I could be a sort of rude American for a moment.

• 2:55Tracy Alloway?

  Always, Joe.

• 2:56Joe Weisenthal?

  Global perceptions of the US are not typically a very big deal to me. They're not something that I think about very often. Except insofar as we're in a period where our president claims to want to be doing trade deals with the rest of the world. At which point, these elected leaders around the world have domestic constituencies that they have to be accountable to. And as such, perhaps we're in a period where perceptions of the US actually substantively matter.

• 3:23Tracy Alloway?

  Well, here's the other thing I was thinking about. I was walking past my old university and I was thinking, both you and I did international relations.

• 3:30Joe Weisenthal?

  Yeah.

• 3:31Tracy Alloway?

  And I was thinking how amazingly irrelevant that degree has become. And I was thinking back to the reading lists we had in the early 2000s about like, implementing globalization and globalization, colon, the way forward and things like that.

• 3:46Tracy Alloway?

  So much of that just feels completely off the table at this moment.

• 3:50Joe Weisenthal?

  No, all these like these hopes for like various multilateral agreements and we're gonna sign and that but now the plan is to sign, you know, bilateral agreements with 70 different nations in 90.

• 4:02Tracy Alloway?

  While insulting them on a daily basis.

• 4:04Joe Weisenthal?

  While insulting them. I mean, come on.

• 4:06Tracy Alloway?

  Okay, so I'm trying to unify all these different themes. My former employer, the future of globalization, the fact that we're here in London at a time when Europe-US relationships really seem to be in the gutter in many ways. So we have the perfect guest.

• 4:22Joe Weisenthal?

  We do have the perfect guest.

• 4:23Tracy Alloway?

  Truly the perfect guest. We're going to be speaking with Martin Wolf. He is, of course, the chief economics commentator over at the FT, sometimes described as the most important economics commentator in Britain, which, given that the UK exports a lot of commentators, is really saying something. Also, the author of a book on globalization, of course, although, as I understand it, your feelings have evolved over the years. So, Martin, welcome to the show. Thanks so much for coming on.

• 4:48Speaker 04

  It's a pleasure to be here in beautiful London, which feels very pleasingly away from the US.

• 4:53Tracy Alloway?

  Yes, I, yes.

• 4:54Joe Weisenthal?

  Right, though we're setting the tone for the conversation.

• 4:55Tracy Alloway?

  Yeah, there we go. Is it amazing to be an economics commentator in the current environment in, or is it incredibly depressing in the sense that, you know, we're seeing a lot of new and interesting ideas, I'm doing air quotes, although I'm on a podcast, new and interesting ideas coming out of certain administrations about how economics works and how it could theoretically work. And at the same time, you're seeing the tearing down of a lot of established norms and principles from traditional economics. There's a lot to write about.

• 5:25Speaker 04

  Yes, this was a question that a lot of people asked me during the financial crisis, when it was really at its worst and very, very frightening, which is, in a very different way, the closest to what, in my professional career, to what we're experiencing now. My answer used to be, I divide myself into two people. As an economist and commentator, it was the best period of my life. As a father and a grandpa, grandfather terrified the wits out of me, and I would say the same now, but probably even more so.

• 5:54Tracy Alloway?

  Wow.

• 5:54Joe Weisenthal?

  By the way, this is kind of like me and Tracy, except Tracy is the side of you.

• 5:59Tracy Alloway?

  I fully embody the anxiousness and Joe is basically the exhilaration that things are happening.

• 6:04Joe Weisenthal?

  Well, I said this in a recent interview, like, I just get so excited. I just love seeing the line. And I feel like I wanted, wish, I'm taking a moment to hedge that. I actually do have a person side. I am not just someone who stares at a screen all day and I do genuinely care about the actual sort of health of the world.

• 6:21Tracy Alloway?

  The fact that you feel you have to announce that publicly is slightly worrying, Joe, but good. It's good to know.

• 6:27Joe Weisenthal?

  You know, there's a part of me that thinks this is a bigger story in many respects than the great financial crisis, because in retrospect, although the great financial crisis or the global, I forget what we call it, global financial crisis was enormous and maybe once in a century, it was a very big bank run and bank runs happen from time to time. They're not that unusual and there's a playbook and you backstop the banks and you do some Keynesian fiscal policies. This feels like to me right now, something that could metastasize into a truly bigger story in terms of the lasting imprint it has on the world.

• 7:03Speaker 04

  I think that's very plausible now. During the financial crisis, I didn't view it quite this way, partly because I know a lot of economic history and not least because my parents were from continental Europe and escaped from the most obvious consequence of the great financial crash, which was the Great Depression and Hitler. In history, we have mostly survived huge financial crises, but sometimes people don't deal with the bank run. And the most famous case, obviously in history, was what happened in the 30s.

• 7:35Joe Weisenthal?

  Right.

• 7:35Speaker 04

  And it led, the Federal Reserve completely failed to deal with it in any sensible way. And it led to the Great Depression, which was the biggest economic downturn in sort of modern history, the last two centuries. And that led absolutely clearly, it's a theme of one of my books or part of the theme of one of my books, to the election of Adolf Hitler. And that led to certain other events like World War II and the death of 60 million people and so forth. So during the financial crisis, I was really frightened. Now that we, they did do the sensible things, all the things I wrote at the time, they should do. So I feel very happy about that. They went back to Walter Badchuk, who knew how to do with these things. And that seemed fine. Now, right now, I would agree with you.

• 8:19Speaker 04

  Certainly, this is a bigger event because it's a fundamental undoing of the world economic order, as created after the Second World War. It is, I think, also in the backdrop, a fundamental remaking of the American Republic. And right now, of course, it involves a, because it's both of these, and because of the extraordinary role the US has played in the world since the Second World War, since forty-one, really, with Pearl Harbor, it really means a remaking of the entire world order. So we, right now, I think the most important thing that I say when anybody asks me what's going to happen next is, I really don't know because nobody can.

• 9:00Tracy Alloway?

  Since you brought up the economic policy of the nineteen thirties, and since Joe is currently reading Adam Toose's Wages of Destruction.

• 9:08Joe Weisenthal?

  That's right.

• 9:08Tracy Alloway?

  And everyone who has interacted with Joe over the past two weeks.

• 9:12Joe Weisenthal?

  Has heard me talk about detail, yes.

• 9:14Tracy Alloway?

  That you are reading about.

• 9:15Joe Weisenthal?

  That's what I do. I tell everyone what books I'm reading.

• 9:17Tracy Alloway?

  Adam owes you a commission at this point because you are literally like, hi, I'm Joseph Eisenthal. Have you read the good book of Wages of Destruction? Like, this is Joe right now. Talk to us a little bit more about any parallels you're seeing between the current economic environment, or I guess the grievances felt by American policymakers versus what we saw in the nineteen thirties.

• 9:38Speaker 04

  I think that what is striking to me is the differences. I do argue in the book I wrote, The Crisis of Democratic Capitalism, which you certainly should read.

• 9:46Tracy Alloway?

  We will. It's on the list.

• 9:48Speaker 04

  Is, is this idea that the global financial crisis was a very big shock. It had quite long-lasting effects, notably so in the US. And I argue in that book that one of the reasons, probably the main reasons, that the Republicans' party, when they start realizing what had happened, shifted from Mitt Romney to Donald Trump as their candidate, which was an enormous revolutionary change. That that shock had, as it percolated through, helped a very large number of relatively conservative, middle-class Americans feel that this Reaganite stuff about free markets and so forth was, to put it bluntly, crap.

• 10:29Tracy Alloway?

  Hmm.

• 10:30Speaker 04

  Because these people have led them down the path. And they wanted somebody who embodied their ideology, their attitudes, very reactionary ones in my view. But not with that economic baggage. And Trump was the perfect person. So in that sense, I do think the global financial crisis. And it's a theme of my book. It's not the only reason. Deindustrialization and other themes which Trump plays with are also important. And I have a long discussion of that going back to the seventies. But the, that big shock, I think, played a very big part in shifting the Republican Party in the populist nationalist direction. And that's of course why we are where we are now. So in that sense, I think there is a link. But of course, and this is the contrast.

• 11:12Speaker 04

  The, for the reasons we've discussed, in the end, the policymakers involved, basically under the Obama administration, many of whom I of course know, some of them are quite good friends. They did manage it in the way it wasn't managed in the thirties. So there was a fairly quick recovery. The financial sector was put back on its feet, though with an immense amount of federal support. And the economy's recovered. And what is striking about this revolutionary moment in economic policy we're seeing. It is, I think, sort of unique, and I don't fully understand it. It depresses me because, but I have to admit it.

• 11:51Speaker 04

  The American economy has done better than any other developed country since the pandemic. The pandemic was a shock, but it's motoring. Real incomes have been rising rapidly. The jobs performance was exceptional. Now, that's about as far as Germany in the thirty threes, you can imagine, when unemployment was twenty-five percent. And it was not much of a welfare state. So the economic explanation in the classic sense doesn't really work.

• 12:18Tracy Alloway?

  Hmm.

• 12:18Joe Weisenthal?

  I've been thinking about exactly this because I have been reading Adam Duzes, Wages of Destruction. Which is the

• 12:25Tracy Alloway?

  Martin, send him a copy of your book and he will do the same.

• 12:29Joe Weisenthal?

  Yeah, yeah, I'll plug it for two or three straight weeks. But the only time that I've, you know, I have very mixed feelings about all of this because look, I'm in these wonderful Bloomberg offices and I'm staying in a nice hotel and I have a job where I get to type for a living. But like, America is an incredibly rich country. And I always think, you know, the distribution of financial assets in the United States is, as everyone knows, extremely skewed to say like the top 1% or whatever. But the actual distribution of real resources, when you look at the size of American houses, when you look at the number of people have cars, when you look at the size of American refrigerators with ice machines that typically work.

• 13:07Joe Weisenthal?

  America is an extraordinarily wealthy country for a wide swath of the population. And so when I read history in that respect, it doesn't read at all to me like the actual real economic conditions that I would say associate with the 1930s.

• 13:25Speaker 04

  I think that's absolutely right. Of course it isn't. And that's created a puzzle. Nonetheless, it seemed pretty clear, and I refer to quite a bit of literature on that in my book, that it's not surprising, people are very, very concerned about their relative positions.

• 13:41Joe Weisenthal?

  Yeah.

• 13:42Speaker 04

  People are very, very concerned about their security, that's their sense of security in their positions. And those anxieties are often related, not just with their economic positions, but also more broadly with their cultural positions. And, you know, America's a country that's gone through some big revolutionary changes, deindustrialization, which obviously is real. That's a transformation of many, many communities. The push for gender and racial equality is real and it clearly runs up against anxieties and hostility. That was also very, very real. The new economy, while you're absolutely right, clearly right, but it's still true.

• 14:24Speaker 04

  When I go through America, on many occasions I've parked a car and gone across the country to places like Erie, Northern California, way.

• 14:34Speaker 04

  Far north, there are lots of poor people in America. And most Americans that I know don't see them because they fly over them. And but I've actually driven across it. So there are lots of poor people and people are frightened of ending up there. In my view, they're they have a sense, you know, I'm one real hospital. Medical problem away from bankruptcy. So I think there is in an insecurity and anxiety which. Comes up with these cultural and economic things mixed up to which Trump addresses his appeal. Perfectly. He's the perfect populist for America. And that one of the things I've learned, which is new, because I've never lived through it with a.

• 15:15Speaker 04

  A political demagogue like this, how incredibly good a brilliant demagogue is. And exploiting those resentments and offering himself up as the solution to all this. And that's the way I would now see this.

• 15:29Tracy Alloway?

  Speaking of resentments, I mean, it does seem if we zoom out on an international scale, so away from the domestic US economy. It does seem like the Trump administration's major grievance is this idea that. The US hasn't been compensated enough for its role in the international financial system. And the fact that the dollar is a reserve currency and all of that. And it's very difficult for me to wrap my head around that particular position. Like, I understand there are downsides and upsides to that special status. But the Trump administration seems really committed to the idea that this is a giant burden being carried. By the United States. What are your thoughts on that particular argument? Like, how true is that? Or like, what are the actual downsides?

• 16:14Tracy Alloway?

  And then, secondly, what do you think of some of their policy proposals where they're trying to attend to this issue? And I guess alleviate some of their complaints.

• 16:23Speaker 04

  Well, what's particularly puzzling about the position they've adopted is that while they do think it's a terrible burden. They want to cling on to it with all possible might. I mean, the people who've made the most sort of sophisticated analyses of this. And that's obviously not Donald Trump. It's Stephen Miran. He's a chairman of the Council of Economic Advisers. Sort of make it clear, we want to get rid of all the costs. We'll come to that in a moment. But we definitely want to make the keep the dollar as the world's dominant currency.

• 16:54Tracy Alloway?

  Have our cake and eat it.

• 16:56Speaker 04

  We they really want to have their cake and eat it. Well. This is get is really quite complicated. The right answer is half an hour, which we don't have. So the summary of it, the argument about whether the dollar is a burden or a privilege has really been going on since the sixties and it's when I started studying economics. So I'm very familiar with it. And it led to the first attempt to readjust the cost of this, which has the closest parallels to what we are seeing now, which is Nixon, under Nixon, the Nixon shock of seventy one, when he basically tried to get the dollar devalued. Sounds familiar, right? I mean, that's what they're, one of the things they're trying to do is to get everybody to appreciate their currencies against the

• 17:38Speaker 04

  dollar. And the reason they needed to get the dollar devalued is then is they had a fixed exchange rate system, obviously not the situation now. The dollar was tied to gold, dollar mon, the monetary policy of the US in no way represented what you should do if you're on the gold standard. They, one of my constant points is that lots of people say going off gold in seventy one was the worst thing that ever happened. But my argument is that the US was never really on gold. We can discuss that if you want. It's rather remote from this. But the key point is he imposed import surcharges, sounds

• 18:16Speaker 04

  familiar, and he told them those will remain until you revalue your currencies. And indeed, they did get them revalued. John Connelly, the Treasury Secretary, famously said, the dollar is our currency and your problem. And so he sorted this out, as it were, and that ended up in the regime of generalized floating. So the US got its way. But after that, no real effort was made to readjust it. What is true, for reasons that are linked to the Asian financial crisis of the late nineties.

• 18:53Speaker 04

  After a lot, I won't go through the Plaza to the Louvre simply because, because that's You can if you want. Well, it's part of the story, of course. Another period of similar problem arose. There are two, two other periods when this problem re arose. The excessive appreciation of the dollar from the American sense and the sense that was leading to uncompetitiveness and that affected important parts of the economy and something had to be done about it. And so that was Nixon was the first one. The second one was the Reagan era and he introduced, has some similarities with subsequent developments, more recent developments. He had Paul Volcker running the Fed, so hyper tight monetary policy and a floating exchange rate and a big fiscal expansion, right?

• 19:38Speaker 04

  Tax cuts, the combination of very aggressive fiscal expansion, tight monetary policy is a classic combination in economics to lead to an appreciation of the real exchange rate and it did. The trade deficit exploded, Japanese cars wiped out American cars. There was hysteria about this, that Americans introduced voluntary export restraint or imposed them. Bob Lighthizer, interestingly, was a negotiator at that time and has echoes, doesn't it? And finally got so, this created so much protectionist pressure in the United States that the Americans decided that they needed to get the dollar devalued and that was what the Plaza Accord was about.

• 20:20Speaker 04

  And then two, three years later, I think two years later, the Louvre Agreement, they decided to stabilize it. So that was another example of this concern about people want the dollar too much. They, I want, we want it to be the global currency, but we don't want too much demand for dollar. The third episode, the more recent one, is really very interesting and is a theme of my previous book, The Chips and the Schocks, which is about the financial crisis, is after the Asian financial crisis, two things which came together happened. First was the explosion of China onto the world markets and China's massive accumulation of reserves as a byproduct with determination to keep the renminbi fixed. Against the dollar.

• 21:04Speaker 04

  And that led to the explosion of the Chinese current account surplus. It reached a peak of ten percent of GDP in two thousand and eight. And the other thing that happened, which went parallel after the Asian financial crisis. Every trading power in Asia decided we could never let that happen again. And what they thought had happened to them was running a current account deficit, a big trade deficit. And borrowing lots of dollars because they discovered. Well, most of the dollars they borrowed was from Western banks and mostly American bankers. They ran and they didn't have a central bank that could print dollars. So when they had a run, their economies crashed. And so their conclusion was we must accumulate dollars without limit, more or less. And run current account surpluses to accumulate these dollars.

• 21:49Speaker 04

  Those two things came together and that led to an enormous expansion of the US external deficit. And that, in my view, directly led to the global financial crisis. So these are the three episodes all around this same problem of the dollar's role. And that's not wrong. Now, the question is how you manage it. It's not fundamentally a trade policy problem, pretty obviously. It's an exchange rate compativeness and macroeconomic policy problem. Interacted and reasonably sophisticated policymakers who handled the previous episodes. In the end, the presidents all have listened largely to relatively competent economists.

• 22:32Speaker 04

  Manage these episodes, including most notably the global financial crisis, which is the biggest of these episodes. The basic point here is, yes, management of a global system. In which the money in the system, which is the dollar, is produced by one country. Does lead to very significant instabilities, which is why.

• 22:57Speaker 04

  Intelligent people have thought about this, have quite logically said we would have a better economy if we had a world currency, but we don't know how to produce a world currency. The Europeans created the euro for this reason within Europe. I won't go into the question of whether it worked, but the point is there is a problem here. Now, the problem is how you manage it without blowing up the system. A trade war with everybody at the same time won't solve the problem because underneath it, it's a currency and macroeconomic policy problem. And I think that this mainly nowadays relates to the role of China in the system. They're not wrong about that, I've written quite a lot about this, but unfortunately

• 23:39Speaker 04

  the way the US is going about it, I don't see how they're going to get to a resolution. But in the end, the US has to decide, do we really like having the dollar as the global currency? Of course they do. It gives them enormous power, it makes borrowing much cheaper, it allows the biggest economy in the world to run ridiculously large fiscal deficits, 6% of GDP at full employment, with explosive debt because everybody is invested in holding dollars. And that gives the American policymakers spectacular room for maneuver. They can have guns and butter, and they've done it many times. And periodically they get very upset about it, but it's a choice they made after the war.

• 24:22Speaker 04

  They could stop it, but they would lose an awful lot in the process of the idea that it's an unambiguous loss to the US, as has just been pointed out. The US is, despite this terrible burden that they are whining about, an immensely rich and powerful country, which can spend more than its income indefinitely, and it's not going to go bankrupt. So from our point of view, and particularly speaking as a British person who knows what happened when we lost this, all those sterling crises when I was growing up in the 50s and 60s, obviously were all about losing that, very, very undesirable because people ran from sterling. And we couldn't run fiscal deficits of 6% of GDP, we would blow up, let's trust Trump.

• 25:06Speaker 04

  So I we would say, stop complaining, guys. You're rich, you're fat, and your currency is basically safe unless you screw up monstrously. So why are you screwing up monstrously? That's where we are now.

• 25:20Tracy Alloway?

  Joe, can I just say that was such a treat? Martin Wolf on the three defining moments of the development of the global like dollar reserve system. Absolutely amazing.

• 25:30Joe Weisenthal?

  That was fascinating. I just have one question. Can you give us like the 30 second version of why we weren't on the gold standard prior to 1971? Because I think listeners might be curious about that.

• 25:40Speaker 04

  Well, okay, well, that's very wonky.

• 25:42Joe Weisenthal?

  So the 45 second version.

• 25:44Tracy Alloway?

  He gave you an additional 15 seconds.

• 25:46Speaker 04

  I'll just start. The gold standard required a very strong relationship. The I'll go back, really, let's go back. The how the gold standard operated was defined by all people, not any economist, but David Hume. The great Scottish philosopher, one of the great geniuses all time in the middle of the 18th century. When he explained very simply, imagine gold is your currency. In that stage, gold pretty well was the currency, though there was. And so if you ran a balance of payments deficit, you financed your deficit with exports of gold. And what that did is as the gold was disappearing from you, you were being demonetized. And the money in the economy was shrinking.

• 26:31Speaker 04

  And so what you had to do is lower your prices. Because he was a monetaryist, as all economists were, and I still am in some ways. And so prices adjust downwards, that makes you more competitive. And that will adjust the balance of payments will move into surplus. That's how it's supposed to work. So if you're on the gold standard properly and you have a currency linked to gold with a fixed price, which Sterling had the fourth 1931, well, we'll go into the history of Sterling and gold. And the US was supposed to have until 71. Then if there's a gold drain, you're exporting gold to satisfy creditors who accumulating claims upon you. Your monetary base shrinks, so your monetary policy should tie.

• 27:16Speaker 04

  Automatically and that will introduce deflationary pressure in your economy. And your price level will fall and that will equilibrate it. So in the late sixties and early seventies, let's take this episode. The US ran a huge current account deficit and the main reason was. They decided to finance the Vietnam War by increasing the fiscal deficit. So they they created excess demand in the US that created inflationary pressure in the US. That went on for quite a long time and a huge current account deficit. But they didn't want to allow the Fed to start tightening monetary policy. And deflating the American economy to reduce the price level. They were very happy running these huge current account deficits.

• 28:00Speaker 04

  And that meant, of course, the rest of the world was accumulating dollar claims at a very rapid pace. Particularly the Germans, the Japanese and so forth. And after a while, they started, and France, and they started saying. We don't want all these dollars, we want our real stuff. And they started converting their dollars for gold. And that's when the drain on Fort Nosk happened. And then the US had a very simple choice. It was pretty obvious, we were discussing it when I was a student in the late sixties. They could ignore this and the gold would disappear and then they would have to go off gold. They could reprice gold, which they didn't want to do because it was a recognition of failure. Or they could go off the gold standard.

• 28:42Speaker 04

  And the one thing they didn't want to do was deflate the economy. That meant they were ignoring the rules of the gold standard. The rules of the gold standard were if you were losing gold. You had to deflate your economy to make it competitive again. By lowering your dollar prices in a fixed rate regime. And at these crucial moments, this crucial moment, they chose not to do that. So the regime collapsed. And in the Great Depression, by the way, even more important, they failed to do the reverse. At that stage, they had a huge current account surplus. America was very, very competitive and the US was, of course. Uh, price level was collapsing, so it was becoming even more competitive.

• 29:26Speaker 04

  And that was exporting the depression to the whole world through the gold standard system. And so what the US should have been doing, instead of allowing the money money supply to collapse, Friedman, of course, wrote classically about this in his book with Anna Scholz, they should have been expanding the money supply like crazy. So this was the inverse. That was the first great crisis. What I discussed earlier was the second crisis of the gold standard in the 20th century. So in the Great Depression, the US failed to follow gold standard rules, which was precisely when they had a huge current account surplus and they had this immensely strong position in gold inflow. They were not pursuing massively expansionary monetary policy.

• 30:10Speaker 04

  On the contrary, they were pursuing massively contractionary monetary policy, making it all worse. And the price level was collapsing in the US. So again, they failed to follow the rules of the gold standard. The US showed itself, unlike the UK in the long period it ran the gold standard, a country incapable of allowing the foreign position, basically the balance of payments, to force its monetary policy in directions either expansionary or contractionary. So my view is that the gold standard under the US from the 20s onwards, that was basically when it shifted from a sterling-based to a dollar-based gold standard, the US never followed the rules of the gold standard. In two colossal episodes, it ignored them. So of course, the gold standard collapsed.

• 30:54Speaker 04

  And all these whining about this again is ridiculous because the US has never had any intention, and that's what we're seeing now, of allow any international rules, agreed rules, from actually forcing it to do something it didn't really want to do.

• 31:25Speaker 00

  What's next for virtual assets? I'm Jacob Grease, host of Economy Scale, a series exploring growth in key global sectors. And in this episode, we're diving into the digital forces shaping finance. Sean McHugh from Dubai-based Virtual Assets Regulatory Authority has this to say.

• 31:41Speaker 05

  We're seeing a lot of institutional players come in, digital asset dedicated hedge funds, high-frequency traders and that sort of thing, and folks who service institutional clients.

• 31:49Speaker 00

  As more capital enters the market, adaptive regulation is likely to become increasingly key. Reece Merrick of Ripple says.

• 31:57Speaker 06

  A lot of regulators globally would like to keep the industry at arm's length. That's the opposite here. I think also what you'll find is that regulation and frameworks can come out, but some of them are maybe a slight iteration on some 80-year-old policy and not actually in line with what the technology can do and offer. And again, that's very different in Dubai.

• 32:16Speaker 00

  Listen to the full episode wherever you get your podcasts. This series is brought to you by Bloomberg Media Studios and the Dubai Department of Economy and Tourism.

• 32:27Speaker 01

  This is the Bloomberg Tech Minute, brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Businessweek's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 33:09Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job hours. That candidates quote must be willing to work extended hours and weekends as needed. One major perk for all that hard work employees access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 33:50Tracy Alloway?

  We could happily just keep asking you questions about, you know, financial history, but since we are in London and there is a lot going on, I feel like I have to ask at least one UK specific question. So I met with some friends of mine from university. I've been meeting with them like over the past few days. All of them are professionals, seem to be doing pretty well in their career, but the discussion always ended up centering on salaries and real wages. I knew the UK had a productivity problem and a real wage problem, but I was surprised to hear the extent of it, at least according to some of my friends. What's going on there? Why has this happened?

• 34:29Speaker 04

  I think that unlike what we've been discussing so far, this is one of the great puzzles. Actually, I called about this very, very recently or based on recent work. And it's not unique to the UK, though I will describe one aspect which is an outlier. Up to 2008, so from about 1992, 2008, so after the Thatcher revolution to 2008, British productivity growth was really pretty strong. So between 1990 and 2008, output per head in the British economy rose by, I think it was about 38%, which is pretty good over a period of 17 years. It was around 2% a year.

• 35:11Speaker 04

  And that was much better than our European peers and quite a notable improvement of what had happened in the 70s and 80s. So we felt pretty happy. We were catching up again. Since then, since 2008, output per head has gone up over the entire period by just a little over 5%.

• 35:31Speaker 04

  Just think of that contrast, it's dramatic. Now, our put ahead in other European countries has not been much better over that period. But they were already doing relatively poorly before two thousand eight. The slowdown in the UK has been greater than anywhere else. Up to two thousand eight, we were doing about as well as the US and since then we've been in a different class. Though I should be saying, if you look at the whole period since two thousand eight, the US has actually been doing worse than in the previous period. The US looks so great because everybody else has been doing so badly. So the question is, why has this collapse in the UK happened?

• 36:09Speaker 04

  And I honestly think we can think of lots of possible explanations, but we don't fully understand it. You can't identify it in just one sector, though there are some sectors which are particularly important. It seems to have happened in most sectors. Our investment rate is very low, but it's always been relatively low, so it's difficult to say the change there is decisive. There are some aspects of the public sector which clearly are important. The weakening and decline of the oil and gas sector is important. The fact that the financial sector has never been as dynamic as it was before two thousand and seven and eight is important. But the extent of the decline and what is essentially the loss of dynamism in British capitalism.

• 36:54Speaker 04

  If you just look at the FTSE, look at the stock market index, most of the companies there are old and dying. We don't fully understand it, is no doubt that the complete absence of a dynamic technological sector, high-tech sector is important. When you start looking at the detail though, and that was very interesting in this column and the work I did in this column, it's pretty clear that an even bigger difference is in the use of technology in the rest of the economy compared with the US. So I think that we can see what's happened, there's been a general loss of dynamism in the private sector. But it's very difficult to ascribe it to specific policy changes because they really haven't been dramatic ones.

• 37:36Speaker 04

  We very much, the tax regulatory system is much like it was before. So what looks like is that they're sort of just dying. And this is sort of a European why problem too. So, and of course, productivity growth. Disappears, real wage growth stops because in the end, the real wages are incredibly highly correlated, not perfectly, with the rate of growth of productivity in the economy. The same is true for the US. If you look at long periods, distribution matters a little. But I mean, Paul Gruber actually said this once a long time ago, productivity isn't everything, but it's almost everything. So the basic answer to this question is we know,

• 38:19Speaker 04

  as it were, what the proximate cause is, but we don't know why it's happened fully. I have lots of theories, but we don't really know why this has happened. And it's a general European problem to some degree, also in East Asia, Japan is noticeable, though actually in the recent past pandemic, post pandemic period, Japan has done relatively well.

• 38:42Tracy Alloway?

  Since you mentioned Europe, one of the things people are getting excited about now is the idea that maybe the tariff war, US isolationist policy is going to be this big catalyst for Europe. And we've seen European mainland stocks certainly go up recently. People are getting excited about, finally, we're going to have, you know, maybe the prospect of some real fiscal integration, or if not real fiscal integration, at least a lot more fiscal spending on things like defence and stuff like that. Is that a realistic possibility in your view?

• 39:12Speaker 04

  Well, and just to support this, even though it's partly an economic shock, which the Trump administration has given Europe two big shocks. It's created a sort of security panic, is NATO over? And that was particularly focused on the issue of support for Ukraine. And an economic shock, which was the proposal in now withdrawn for another 80 odd days of penal tariffs, 24%, I can't remember what exactly the figure for the EU was, somewhere in that range. Do you add the two together? This is a crisis. So if not now, when? If

• 39:53Speaker 04

  you believe, as John Manet, one of the great founding fathers of the EU, said that Europe is born in crisis, this is a big crisis. The world order is being Transformed and the crucial ally, the country on which we're heavily dependent, has got absent, as it were, possibly even hostile. Yeah. So that's the plus side. Yes, they really ought to respond. The obstacles to change are also very, very big. Europe is fragmented. It doesn't have a genuine people. The Brexiteers were right when they always said. Europe doesn't have a demos, it doesn't have a people, it has peoples. That's not surprising. Look, you know. The Roman Empire disappeared fifteen hundred years ago and Europe has effectively been dis- divided ever since.

• 40:39Speaker 04

  Except under the Catholic Church and we know where that ended up in the sixteenth century. So the, the answer is that. I don't know whether this crisis is big enough to force the sorts of changes. Economically, which Mario Draghi wrote about in his report, or politically, to deal with the security questions. I tend to be skeptical, simply because I know how big these challenges will be and how much resistance there has been. To every other necessary change. I think the crisis may have to get bigger. But I don't rule out the possibility that the crisis will get bigger because if you ask me. What will the American policy look like a year from now? I have absolutely no idea.

• 41:23Speaker 04

  But it could be much more hostile than it is now. It's quite thickly possible. In which case, maybe the Europeans really will be forced. At the moment, it looks like individual nation-state response, not collective. And there, the one really big change, I think. Is that the Germans are panicking. And Germany in the centre of Europe is always prone to feeling insecure. That's part of its. History. And I think it's pretty clear that the new government coming in will be much more aggressive on economic policy. It's forgotten the debt break nonsense. It clearly will be, mount a pretty big defence build up. It will become a much stronger motor of demand. And all on its own, though it can't carry the whole of Europe, that will make a big difference.

• 42:07Speaker 04

  But I think in the end, at least in the next few years. We should trust more on what individual nations above all Germany do. It's much more difficult for France, which is also very divided politically. Remember, there's a very big, what I refer to as fifth column, a Putinist fifth column in Europe. And France is hugely fiscally constrained, unlike Germany. So I'm modestly optimistic about the near term, but a really big leap into union, I don't see.

• 42:54Speaker 01

  This is the Bloomberg Tech Minute, brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs. And hands-on experience matters more to recruiters than advanced degrees. With the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.

• 43:37Speaker 01

  But according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at chatgpt.com.

• 44:17Joe Weisenthal?

  The idea of 90 days and where the US is going to sign all of these bilateral trade deals with partners all around the world strikes me as absurd on its face. I mean, you know, trade deals take years and years to negotiate and especially the limited constraint, just whatever, I strikes me as absurd. Nonetheless, I mentioned in the beginning, you know, normally, I'm sorry, I would not typically care how, you know, the approval ratings of the United States and Sweden or Denmark do not typically particularly interest me, but in an environment of attempting to do deals, it strikes me as very relevant that the leaders of these countries have to be accountable to the individuals who elected them.

• 45:02Joe Weisenthal?

  Talk to us about the mood, either among the elites who are going to be involved in these theoretical negotiations, which I don't even know if they're existing, and the impulse to try to rectify, to try to come with to friendly relations with the new administration in the United States right now. How bad is it and how much of a hindrance is that to achieving something that resembles a happy outcome?

• 45:29Speaker 04

  So I think this has to be broken down also to several elements. Countries will want to reach a deal with the US.

• 45:38Joe Weisenthal?

  Okay.

• 45:38Speaker 04

  The US is very important. It's a very important partner in terms of both security and trade. And the administration is correct that these are linked in people's perceptions. And this is particularly true for Asians broadly defined, particularly East Asians and Europeans. So they will want to reach a deal if they can. The second issue, which is really important, is they will need to feel that this is a deal. And this is about trust.

• 46:08Joe Weisenthal?

  Yeah.

• 46:08Speaker 04

  That's particularly if it's got politically painful aspects to it, and I'll come to the the substance of the deal in next. Is they will need to feel that the US is going to stick with it. Okay. And there's no doubt whether, in a way, I think for policymakers who are reasonably professional, whether you like the country or not, is not that important.

• 46:26Joe Weisenthal?

  Okay.

• 46:26Speaker 04

  Though obviously the people really hate the Yanks, it's going to become more difficult. But the crucial question they have is, can we trust this? We're not going to go through this every week, are we? And at the moment, they're not sure if they won't have to do it every week. And there's no doubt in this regard that the treatment of Canada has been quite a shock.

• 46:46Joe Weisenthal?

  Yeah.

• 46:46Speaker 04

  That, you know, that really came out of the out of the blue sky. I was always pretty pessimistic about what the Trump administration would do, but this has been really quite out of left field and the.

• 46:58Joe Weisenthal?

  And the Greenland stuff, right?

• 46:59Speaker 04

  Well, Greenland, yes, but Greenland is less important than Canada's a real long term ally friendly. You, Trump himself signed the the United States, Mexico and Canada agreement and then sort of blew it up. So that makes, do we trust them? The third is, obviously you can't do a detailed trade deal. And they seem to have an ambition to somehow link the currency with it. I have absolutely no idea what's going on in these discussions, none of, nobody, I think, seems to do. And that's seems to know in detail. But there is something that somebody suggested to me and I've been thinking about that the Americans might be saying,

• 47:40Speaker 04

  which might fit into their general theme, assume that all this smoke and mirrors is basically a cover for the complete decoupling of the world from China.

• 47:52Joe Weisenthal?

  China, yeah.

• 47:52Speaker 04

  That's all they're trying to do. And this is a.

• 47:55Joe Weisenthal?

  And is Europe willing to do, be part of that?

• 47:57Speaker 04

  Yeah, and for having frightened people and shaken them enough with these absolutely ridiculous bilateral tariffs nonsense, which everybody can see is an unworkable way of running world trade. Discuss that too, but that's a different matter. Though basically what the US, let's suppose the US comes, um, is that we will go back to the status quo ante. If you follow our tariffs on China. Right, that's the deal. And we promise, again, this come back to the trust. If we're going to completely burn our boats with China, and this particularly applies to some of the Europeans and.

• 48:35Speaker 04

  Japan, all the countries in the region, we really have to trust America. So it's a very big ask. But that's a deal that maybe quite a few countries will be willing to sign. But I certainly wouldn't guarantee it because, as I said, it's a tremendous cost. They all know China is an immense and rising power. For many countries, it's their most important trading partner. For most countries, they trade with the US, though important, isn't that it? Europe can survive without it, let's be clear. I mean, we are real adjustment, but it's not, you know, their most important trading partners are themselves. If I remember correctly, they trade more with the UK than the US. So they can survive.

• 49:21Speaker 04

  But if the US is really after getting everybody else to break with China and or agreeing that they're going to go on the holding the dollar, they are going to, they're not going to increase their reserves. Europeans don't have much anyway. But I could imagine a very simple deal like this might work with quite a few countries, but it won't work with everybody. And it will shatter the world. But at least it sort of makes, if you think that really what the US is about is breaking China, which I don't think they can achieve. By the way, I don't think they can achieve, I think China will survive perfectly well. But the, it's another matter. But the, then I can see something might come out of it.

• 50:01Speaker 04

  But if they're really trying to negotiate a real trade deal with every single country and it's all going to be different. That's completely impossible.

• 50:09Joe Weisenthal?

  Tracy, there's a good article yesterday on the Bloomberg. Trump putting pressure on the Hungarians, saying, because there's a, Hungary is a huge destination for like real capital inflows from China. Like Nick Denton was talking about it, there are BYD factories there. So like the pressure there, and you know, Orban is like a Trump guy, et cetera. So like, these are really interesting tensions.

• 50:30Speaker 04

  Well, Orban has a very bad economy. He runs his system as a crony capitalist system. It's a surprise, surprise, it doesn't work very well. He's desperate and the Chinese know he's desperate and the Chinese are very clever. So he's playing both sides. My feeling is it couldn't happen to a nicer man, to be squeezed by the two, the totalitarian system and the authoritarian system at the same time. Viktor Orban deserves it.

• 50:54Tracy Alloway?

  So I'm just going to ask one more question, the most important one. You know, we started this discussion talking about the development of our current bout of political populism in the States. On behalf of my dad, who believes that the Bank for International Settlements is secretly ruling the world, can you please tell him what actually happens at Bilderberg? You've been there, right?

• 51:17Speaker 04

  Well, they are two very different things.

• 51:19Tracy Alloway?

  Yes, I realize, but-

• 51:20Speaker 04

  It sounds as though your dad, I'm shocked to know, is one of these American conspiracy theorists.

• 51:26Tracy Alloway?

  Yes, to put it mildly.

• 51:28Speaker 04

  Bilderberg and the BIS are two completely separate institutions to do completely separate things. And all I can say, having followed the BIS pretty closely for a very long time, they might wish to be that sparrow, but they surely are not. And one of the best examples of this, I will give you of their failure, I like evidence, right? Strange thing. Up to 2007, the chief economist of the BIS was a very dear friend of mine, whom I much admire, Bill White, a Canadian. And he was arguing against all the central banks, particularly Greenspan's Fed, that monetary, and then Ben Bernanke's Fed, the monetary policy was

• 52:10Speaker 04

  far too loose, that as a result, the financial sector was going completely crazy, and that if they didn't do something about this, they were going to end up with a whacking great financial crisis. And the BIS did a wonderful job of warning people.

• 52:27Tracy Alloway?

  Clearly, no one listened.

• 52:29Speaker 04

  And nobody listened, which would suggest to me, it's probably the clearest evidence yet, that they don't run the world. And also, quite possibly, if they had run the world, and I wrote a bit about that at the time, I think it was a bit more complicated even than that, linked to the balance of payments and so forth, if they had, we might be in great, much greater shape, better shape now, and Trump would now be president. And so, if only the BIS had run the world, is my answer. Bilderberg was just a very, a meeting of business people, politicians and-

• 53:04Speaker 04

  So forth, created by the Dutch of all people, hardly the world's greatest enemy of freedom and so forth. One might say even the inventors of modern capitalism at a national level. And because they thought after the Second World War, we needed informal meetings among elites, yes, there are elites, to keep the transatlantic relationship working. That was what it was for. And it was set up by the Dutch royal family for to make this work. And I was at many, many meetings of Bilderberg, I'm very proud of that. They were in fascinating discussions in which people said things that would never, I think, have been said in public and from which I learned hugely.

• 53:49Speaker 04

  The greatest example to me, which was unbelievable, was the relationships between the Americans and the Europeans, particularly the French, in the lead up to the Iraq War, when it became perfectly obvious that the US was crazy. Another example, alas, again, if Bilderberg meeting had been as powerful as everybody thinks it would, Trump would never have happened because that's exactly, precisely what Bilderberg was trying to prevent.

• 54:16Tracy Alloway?

  I will communicate this to my dad. I'm not sure this will convince him.

• 54:20Joe Weisenthal?

  He's not gonna listen.

• 54:20Tracy Alloway?

  But I'll try.

• 54:21Speaker 04

  All I can say is Bilderberg and the B I S have been astoundingly unsuccessful in achieving what they wanted to achieve.

• 54:28Joe Weisenthal?

  I just have one last question. It kind of goes back to Tracy, when we were talking about the dollar and, you know, and you talked about the mechanics of the old gold system in which you deflate your economy and your exports become more competitive. One of the things that is a recurring theme on this podcast is that when it comes, and you talked about deindustrialization. When it comes to industrial capacity or even construction capacity, we sometimes talk about nuclear. The US is out of practice, that setting aside exchange rates, et cetera, that that institutional muscle to build a new nuclear plant or to build a very, you know, productive new car EV line, et cetera. Even the T-shirt factory, we're out of practice.

• 55:10Joe Weisenthal?

  And it makes me wonder, like, are exchange rates really even an important lever in the modern economy when we think about it? And, you know, there's so much about network effects. At San Francisco, there's only one San Francisco, there's only one Shenzhen, et cetera. Just putting on your purely economics commentator hat. Do you see exchange rates as being particularly important in the modern economy to think about the distribution of production?

• 55:38Speaker 04

  The short answer is no, they're not completely unimportant. I mean, if you want to have the capacity to build infrastructure, it's a good idea to build infrastructure. And anyone who wanders around the US a lot realizes you haven't been, if you've been wandering around China, wandering around the US as I have in the last 25 years.

• 55:56Joe Weisenthal?

  And it's not because of our currency that we're not building infrastructure.

• 55:58Speaker 04

  It's because you decided to waste your money on tax cuts instead of build things. When did you last build a nuclear power station?

• 56:07Joe Weisenthal?

  No, there was the vote, the vocal one, but yeah, other than the one in Georgia. Yeah, it's been a long time.

• 56:12Speaker 04

  It's a long time. When did you last build major roads? What happened to your fast, high-speed trains, your subways? I mean,

• 56:18Joe Weisenthal?

  That's not a dollar.

• 56:20Speaker 04

  Nothing. That's because the Chinese invest 40% of GDP, you invest about 20 difference, yes? And they invested in infrastructure to make them a modern economy. So they have stupendous capacity to build infrastructure. Do you want to invest 40% of GDP? You can, all you have to do is cut consumption by 20% of GDP. Good luck with that, Chums. And so obviously not deindustrialization. Every developed world country is deindustrializing because why? Consumers aren't spending much as much as before on manufacturers. Cause it's a very rich country and every American has every machine you can imagine. So it's just replacement stuff.

• 57:04Speaker 04

  The replacement demand for iPhones is there, but it's small. So in the end, of course you're not. Now, it is true, you could be making more of your consumption at home. That would Possibly raise the share of manufacturing US GDP by three percentage points at most. If you eliminated the deficit, maybe four, maximum five. That's not going to fundamentally transform industrial capacity because unlike China, which is still a very poor country where people are still buying their first car, their first everything, the US doesn't have the demand. And of course, Chinese wages are genuinely cheaper, much cheaper because it's much poorer. Do you want to be that poor? So now, of course, these are real forces.

• 57:49Joe Weisenthal?

  Yeah.

• 57:49Speaker 04

  Of course, the trade surplus of China is, I think, a bit of a disruptive factor. And I've argued for 20 years, something should be done about it. But the idea that that's the principal problem of the US and of deindustrialization in the US is just nonsense.

• 58:05Joe Weisenthal?

  Tracy, I just got a new fridge with a working ice maker. I'm not signing up for a big consumption decrease. I'm just putting it out there.

• 58:12Tracy Alloway?

  Aren't you going to have to buy another fridge with a working

• 58:14Joe Weisenthal?

  I know, because they never work.

• 58:16Tracy Alloway?

  dispenser in like a month or something?

• 58:17Joe Weisenthal?

  Yeah, sure, those never work.

• 58:18Speaker 04

  Well, that works. If you could scrap, you buy a fridge every year and scrap it and make sure it's an American made fridge.

• 58:24Joe Weisenthal?

  We'll get, then we'll get that.

• 58:25Speaker 04

  That will contribute.

• 58:26Joe Weisenthal?

  Then we'll get that ramp up in production.

• 58:27Speaker 04

  Contribute some, some shit. But obviously, if you smash domestic consumption in the US, that's not going to do much for domestic manufacturing. It will shift, however, to the sort of products that go into investment. It is perhaps important to remember the composition of demand is very important in determining the sorts of stuff you make. But as somebody who said, well, you talked about T-shirt, does the US really want to go back to being the T-shirt hub of the world? And I mean, it's just ridiculous, isn't it?

• 58:55Tracy Alloway?

  This is the thing that I really don't get about the push for the weaker dollar. It's like, we're going to trade off slower growth for a few T-shirt factories potentially and a very slight, like, I guess, accounting effect from the exchange rate? It doesn't seem like the best deal to me, but here we are. Martin Wolf, thank you so much for coming on All Thoughts.

• 59:18Joe Weisenthal?

  That was fantastic.

• 59:19Tracy Alloway?

  Yeah, really enjoyed that.

• 59:20Joe Weisenthal?

  Really, that was great.

• 59:22Speaker 04

  Thank you.

• 59:35Tracy Alloway?

  Joe, that was so much fun.

• 59:36Joe Weisenthal?

  That made the whole trip to London, basically.

• 59:38Tracy Alloway?

  Worth it?

• 59:39Joe Weisenthal?

  I mean, I imagine if we had cajoled him, we could have gotten him eventually to come on Zoom, but I feel like that made the whole trip worth it.

• 59:45Tracy Alloway?

  It was definitely better in person. And I have to say, when I used to work at the FT, Martin was there. I never spoke to him. I wasn't like important enough to interact with one of our best columnists. But I remember I used to see him like in the FT cafeteria with like 12 different newspapers spread out in front of him. And I was always like, oh, there's Martin Wolf thinking deep thoughts about the world.

• 1:00:09Joe Weisenthal?

  And there he was. You know, I'll say two things. One macro thought and one micro thought, which is Martin, yet another example of someone who is interesting because he knows specific details, which I'm always trying to hammer home, like people who know actual dates and figures, et cetera. They're always smarter and better thinkers than the people who don't commit those things to memory. And then the micro thing is I'm really just like interested in this idea that there used to be a world economy in which things adjust, right? That, okay, you export your gold, you have deflation, your competitive, your domestic

• 1:00:51Joe Weisenthal?

  industry is more competitive, you get sales globally and then, you know, you reflate your economy, et cetera. I just do not, right now, believe the world works like that in such a way that suddenly the US would become a competitive manufacturer of goods simply by dint of having a weaker dollar.

• 1:01:12Tracy Alloway?

  Yeah, and certainly not as quickly as certain US policymakers seem to think it could happen.

• 1:01:17Joe Weisenthal?

  Right.

• 1:01:18Tracy Alloway?

  Well, the other thing I would just say is it's good to talk to Martin for many, many reasons. But also, I think he's sort of representative of the fairly like baseline view among European policymakers about everything that's going on right now. And his point about making trade deals with the US at the moment, I mean, I think that's like the realistic position that a lot of people are taking.

• 1:01:39Joe Weisenthal?

  It's interesting because one of the things that I've been wondering about, so like that chart that Donald Trump showed on April 2nd was complete nonsense.

• 1:01:47Tracy Alloway?

  The board, the Trump board.

• 1:01:48Joe Weisenthal?

  Yeah, the board that changed the world, the liberation day board. So it's like, what is the ask? Because it's obviously not.

• 1:01:55Joe Weisenthal?

  Lower tariffs or lower non-tariff trade barriers because that's all fabricated. It is, and people are converging on the idea. The only realistic ask is asking other countries to truly break their relationship with China. And it's interesting that Martin thinks that there could be a number of them who actually would be willing to sign up for that, that the price of free trade with the US is much more restrictive trade with China.

• 1:02:23Tracy Alloway?

  I'm glad you also brought up Hungary because I feel like that's going to be a really interesting test case to watch because you know, if anyone is going to walk away from China because the US is telling them to effectively, it seems like it might be Hungary.

• 1:02:35Joe Weisenthal?

  It could be, except that they're such a destination for Chinese capital investment. There was so much in that conversation, there are other things that I probably wanted to mention and pull out, but all the listeners heard them. So those were the things that stood out.

• 1:02:50Tracy Alloway?

  Let's go to Nando's instead.

• 1:02:51Joe Weisenthal?

  Okay.

• 1:02:52Tracy Alloway?

  Shall we leave it there?

• 1:02:52Joe Weisenthal?

  Let's leave it there.

• 1:02:53Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 1:02:59Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. You can follow an automated feed of Martin's columns at the FT at Martin Wolf underscore. Follow our producers, Carmen Rodriguez at Carmen Erman, Dashell Bennett at Dashbot, and Kel Brooks at Kel Brooks. And thank you to our London producer, Moses Andam, who made this episode happen. For more Odd Lots content, go to Bloomberg.com/oddlots where we have a daily newsletter and all of our episodes. And you should chat in the Odd Lots Discord with fellow listeners 24/7, discord.gg/oddlots.

• 1:03:33Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we take these trips to London to speak to people like Martin Wolf, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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