Jensen: Negative real yields make government spending worthwhile despite poor execution
Greg Jensen · Greg Jensen – Bridgewater Associates (Manager Meetings, EP.06) · Aug 12, 2021 · at 41:44
Bridgewater Co-CIO Greg Jensen explains the macroeconomic math of government fiscal stimulus in negative real rate regimes.
0:00 / 0:12exact quote · 12.3s
720p mp4 · rendered on demand · StarZero watermark
“You have a negative real yield world borrowing to do things that are good for society. You don't even have to be very good at it when the real yield is negative. You can be pretty crappy at deciding what's good for society and it's still worth it.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Greg Jensen
Jensen: Very high chance humanity fails at superhuman AI development
“We only get one chance to develop an intelligence greater than us, and if you do it wrong, it's the end of things, and there's a very, very good chance we're going to do it wrong, just judging by how rarely we as a species get things right the first time.”
Jensen: Bond sell-off and rate rise will exceed market expectations
“I believe that's setting up a much bigger bond sell-off and interest rate rise than the markets are expecting.”
Jensen: Policymakers will accept inflation over a deflationary market crash
“I think policymakers are much more likely to take inflation than a deflationary crash at this point. And there's so much that can be done in society by distributing the wealth via those mechanisms. So I think you're likely to see that.”
Jensen: Negative real yields are priced into both equities and bonds
“The world is bad for investors going forward. It's been great looking backwards. So take that, but recognize going forward, the real yield priced into everything is bad. People look at the real yield in bonds and say, Why would I want a negative one, negative …”
Jensen: Speculative companies lacking cash flows will get hammered if rates rise
“And the companies that may not have cash flows are extremely reliant on the current levels of liquidity and really low interest rates. Where if interest rates change, that phenomenon could change quite quickly, and those companies will get hammered.”
Jensen: Mexican peso and Brazilian real face extremely bullish macro setup
“I think the Mexican peso, the Brazilian real, what you're seeing in those countries and much of the emerging world relative to the developed world is much more traditional monetary policy, traditional fiscal policy. So while you had a big push of fiscal during…”