I just mentioned that with futures continuing to rally we've seen other commodities like oil rising as well. If China really
comes out of that Covid locked down. What we see more inflationary pressures and how would that affect markets.
Well I think that's right. It's slightly complex but I think you have to look at China very much as we saw the US Europe and
other markets we had a very sharp down fall in GDP in one quarter something like 30 per cent fall in the US. But very
quickly recovered the US pretty well. Recovered what it lost. Europe slightly less the at UK slightly less again. So I think
that the real situation with these lockdowns is you do get spikes downwards of GDP but you also see quite significant
recoveries. Maybe not back to what it was before but pretty close. So I can see us having maybe a temporary period where
China comes back on stream and looks to do business again. And of course that'll be positive for the markets. But I see that
being very much short term which probably leads to Lloyd Blankfein remarks over the weekend about looking at a recession
maybe longer term. This push and pull in the market is really interesting right now especially given that also the dollar is
so strong which would usually mean really pressure on the commodity space. Right. Where do you see the greenback going.
Well I think the greenback's likely to stay strong for a while. You know tensions in Ukraine aren't going to go away quickly.
They will probably become less of a front page or news item in the evenings. But it's not going to go away quickly. And that's
always good for the dollar. It seems difficult to see any other currency really taking over. You know China's had a weak spot
recently. The dollar obviously the dollar euro cross is an important one and one has to be strong when the other's weak.
And we've seen certain currencies like sterling fall out of bed. So I think that really focuses on a stronger dollar. The debate
over U.S. interest rates is against 50 basis points is 75 basis points will also keep the attention there. So I can see the
dollar staying strong for a while. Does that mean you actually do see euro dollar parity given the
widening fundamentals seem to be in place. Well that's a bold statement. But then again we almost had
sterling dollar parity back in 1985 just as I was going to business school funding out of the UK. So I am aware that these
these things can happen. I think they would probably be a spike down.
I wouldn't see it being sustainable at that rate. But you know we have a little way to go yet. And I think that the features at
the moment seem to imply dollar strength at least maybe for the next quarter.
Are we starting to see a bit more appealing using government bonds as a way to offset some of the equity volatility.
Well that's a difficult one of course because if we're looking at interest rates I mean the the bias for interest rates is to
go up. You know I think there's no doubt about that. That's just going to happen. And you know we may see breaks in that
particular trend but it looks as if that trend now is is fairly firmly set. The issue with equity volatility is that it's going
to happen in an environment like this. We are very much in a transition environment where we're looking at a transition to
higher interest rates to higher inflation to higher food prices. And that sort of transition is going to create volatility. And
there's probably nowhere really to hide except in the short term in cash. And of course based on the aforementioned conversation
probably dollar cash. But you can't keep all your eggs in one basket. You've always got to keep aware the fact that markets
will move Vulcans will change. And maybe it is time when you when other currencies seem cheap to start accumulating. And yet
some traders have at one point in the past year pointed to crypto being perhaps a hedge. Given all of these inflationary
pressures in Europe calling this a bull market play thing where do we go from here.
Well I think the thing with cryptos they really showing their their colors. You know in this sort of environment the way
they've come off so much. The problem with cryptos is you know who's your daddy. The Fed may be immensely fallible as I've been
saying for a number of years but at least it is. They does have the power of the state the power of taxation behind it. And I
think we have to focus on those fundamentals. Now if you're in rubles in rubles falling out of bed you'd probably need some
kind of hedge and cryptos for a short period were that. But I think it's very difficult really to say that they are anything
but a small small diversionary
issue in terms of what you're looking at in terms of major financials.