Warsh, Iran, Gold, and the Death of Everything You Thought Was Safe
Episode publishedPodcast: Lumida Wealth : Non-Consensus...Lumida Wealth : Non-Consensus Invest Beyond the Ordinary
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Welcome to nonconsensus investing. I'm Ram Alawwalia, your host and CIO at Lumida Wealth, where we specialize in the craft of alternative investments. At Lumida, we help guide clients through the intricacies of managing wealth so they don't have to shoulder the burden alone. Through this podcast, we draw back the curtain to reveal the strategies employed by the best in the business for their clients so that you too can invest beyond the ordinary.
Welcome. Welcome, everyone. It's Angelo Robles, and welcome to At Family Office and the Angelo Robles podcast. Today, Worsh, Iran, gold, AI, Bitcoin, first company to a 100,000,000,000,000 and everything, the death of everything that you thought was safe. The conversation honestly, that Wall Street should be having, but they're not. Our special guest today is Ram Alawwalia, CIO of Lumida. For the fifth time in the last two years, Ram, it's a pleasure to say my friend, welcome back. Ram, I cannot hear you.
It's great to see you again, Angelo. It's a real pleasure. I always enjoy these. You're you're a first rate critical and global thinker always on the right trends and asking the right questions. So thanks again for having me.
You're very kind. And for my audience that's newer, Ram is not only one of my favorite guests, perhaps my most of my intellectual long form two hour plus discussions, geopolitics, macroeconomics, investing, AI, Bitcoin, we have a lot to cover and Ram without further ado, let's get right to it. I'm gonna start with something that seems to die down then rears up quick. I think broadly investors and family offices underestimate the impact of what we loosely define as the yen carry trade. So in some ways, it's been a free money machine. Now for context, the yen carry trade lets investors borrow, l
So I'm actually not really concerned about the yen carry trader, the rising yen yen borrow rates. Okay. So the reason why is that it's so heavily discussed that markets and market participants adjust around these risks. What hurts markets are left tail surprises that are not anticipated. The Mac truck coming at you 20 miles an hour from two miles away doesn't hurt you. So I actually don't think there's much risk around this, around the Yen carry trade. So that's my first non consensus view for you here.
Okay, you're getting right to it. I'm gonna give you a little pushback there. Japan's 0% rates effectively, I think aren't they subsidizing US asset prices for what a decade of free money flowing into, let's say Silicon Valley, treasury auctions and real estate. Like, where is this? Just because it may not be a black swan does not mean if it unwinds, it's not gonna get messy. Or do you think it's simply a short term if it does?
The US dollar has also run up quite a bit relative to the yen despite the fact that US dollar is down relative to other currencies too. So that effect is offsetting this. I think that the usage size and scope of the yen carry trade is overblown relative to those impact. You know, Vanguard is not involved in this. The vast majority of investors are not involved in it. Very specialized investors, including Warren Buffett, are involved in this. But, like, even in the case of Warren Buffett, he's doing permanent capital noncallable carry trades. Those won't have day to day impacts. And the nature
I mean, Ram, if Japan holds more US debt than any other nation, of course, outside of our own country, meaning with treasuries, And they run the Yen carry trade because they trust The US will stabilize the currency. And might they have a little too much trust? Now we could ge
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