April 23, 2025 • 10 mins
In this week's roundup, Merryn Somerset Webb, speaks with Money Distilled newsletter author John Stepek about the recent volatility in the markets, significant increases in gold prices and the role of US President Donald Trump in market shifts and the theoretical versus practical independence of central banks.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Hi John, Hi, listen.
We're talking in the middle of the week, and there's
(00:23):
been a lot of fuss over the last few weeks,
a lot of volatility, lots of seteria lots we're talking
about bear markets, lots of people complaining about their four
O n ks, et cetera, et cetera. So I have
just had a quick look and guess that's for me. Okay,
over the last twelve months. What's the change in the
S and P five hundred?
Speaker 2 (00:42):
Okay, so it's not going to be connection toory. We
call it about six seven percent actually.
Speaker 1 (00:48):
Over seven percent up. Also over seven percent up the
last twelve months. Yes, yes, I'm going to double check
that in real time for you, okay, because I have
access to a Bloomberg terminal, and here we are. NASADAC
Composite Index year to date not so good, down twelve
(01:10):
point two seven percent over the last twelve months, plus
seven point ninety three percent. So if you are just
an ordinary person who doesn't trade in and out all
the time, isn't just directly watching finance Telly, et cetera,
you have eight percent more money if you're invested in
the US than you did twelve months ago. Can we
(01:31):
just say this is all a great, big clus fair
nothing or is that a little simplastic.
Speaker 2 (01:35):
It's a little bit simplistic, but it's not, hye simplastic,
you know when you think about it, you know, yeah,
I mean it's a good watch.
Speaker 1 (01:46):
Yes, But also what it tells you is that that
you know returns last year we're absurd and the American
aquity market was ludicrously expensive and ludicrously concentrated at the
end of our year, and it moved much too far,
much too fast. And so even after everything's happened so far,
this year just will be up. And twelve months ago
told you that what happened towards the end of last
year was slightly not.
Speaker 2 (02:05):
Yeah, definitely, And I mean that's place the whole point.
But TROMP being a catalyst for shifting things over the
years towards everything else which we knew was going to happen.
Speaker 1 (02:17):
Time it. We just couldn't time it.
Speaker 2 (02:19):
Yeah, you just needed a push, and Toomp's been the push,
and I suspect that's still going to carry you Oin.
Speaker 1 (02:26):
Yeah, I mean it's going to come up and down.
I mean as we are speaking today. We are speaking
on Wednesday. By the way, then as I is up
over four percent as we speak, So you know, you
get this this huge volatility. But I think we still
suspect overall that there is a great rotation underway from
very expensive stock to cheapest stocks. And we have got
our main podcast this week out on Friday is with
(02:47):
a value Investor, which is really interesting in the context
of this great rotation out of expensive the cheaper markets.
Speaker 2 (02:53):
Well, for once, yeah, if you do it often enough.
Speaker 1 (02:58):
And the other thing, John, that you and I have
been that for twenty five years and twenty five twenty
five years.
Speaker 2 (03:04):
Yeah, yeah, it's suning like that had a field sketched
twenty twenty five years.
Speaker 1 (03:11):
Hey, the gold price at the gold price, I don't know, Harry.
We are do the gold price up in dollar terms
forty percent over the last year alone, down little today
because everything else is going up because it is the
greatest portfolio insurance of all time. Yes, you're doing up
the direction, et cetera. But nonetheless there's been a phenomenal
run and we're just going to enter it into our
(03:33):
we told you so section.
Speaker 2 (03:34):
Well, thanks, So, what I think we can definitely put there,
especially seeing his late twenty five years ago. Everyone said,
what idiots, and you had actually been bettered buying gold
twenty five years ago within the S and P. I
mean that is striking. And I including reinvested dividends so
that you could have bought golden. You wouldn't even have
had to reinvest the dividends because there aren't any.
Speaker 1 (03:53):
I just sit there expect that's what you did, isn't it, John, Yeah.
Speaker 2 (03:56):
Just a law effort. Well, I wish it's what I did.
Speaker 1 (04:01):
Any We don't always do what we recommend anyway, So
here we are, gold price up a lot, and gold price,
you know, you would expect if the chales over the
last few months continues, if we continue to have doubt
about the America, about the global monetary system, about the dollar,
about incoming global recession, et cetera, you would think to
yourself or the gold price will continue to go up.
(04:22):
But I think we both slightly feel it's moved a
long way, very fast, and there could be a little
bit of a correction in here.
Speaker 2 (04:31):
Yeah, and I think, well, there's a number of things.
I mean, it was on the front cover of the
Ft today and yeah, I mean again, there's no sheath
on the Ft, but gold's one of those, cause golds
a slightly more obscure asset. You have to watch the
more financial peoples than the normal peoples because the gold's
never given me in the front cover of the Times.
But as the stock market may be at some point,
(04:51):
if it could actually is hard enough. But as far
as gold goy is, if you see it on the
front cover of the Ft, there's probably a big contrat
and indicator and that means it's come too far, too fast.
Bitcoin's the same, And I said, to be fair, I
remember twenty seventeen high in bitcoin. It was on the
front Covery Money Week, which I was editing at the time,
and even when I looked to the cover, I thought
(05:12):
the top of the market signal you have become your
own What's night? And then it was absolutely was. So
the more obscure the aid, the more you have to
sort of downgrade your your cover expectations. But I think
for gold, sentiment wise, that's a tell. And also you
(05:32):
have to go we have got when you've been watching
an asset for that for as long as we have,
and you're starting to feel a tiny bit kind of hegy.
I don't think it's the mega top. I think we'd
have to see a few other things happen. For me,
you think it was the absolute top, but I think
that it's probably due a breather.
Speaker 1 (05:52):
But then there is a possibility there the gold mineer
is might catch up a bit.
Speaker 2 (05:56):
Yeah, I mean you would think so. And silver, Well,
the interesting is silver's going up today, which I think
is probably more to do with the fact that everyone
is feeling relieved the Trump isn't in the fire, you know. Yeah,
and it's tariffs. I think it's silver. There's an element
of silver that goes up alongside the economic growth, and
(06:16):
that bit has been crushed by recent events, which is
one reason why it's departed so far from gold. So
we might see silver catch up as well.
Speaker 1 (06:24):
And you'd expect gold miners to lag a bit with you,
because it's not just gold going up, it's gold going
up and staying up that matter.
Speaker 2 (06:32):
Yeah, yeah, I mean, although they are still they're really
lagging it. And I mean I think that's partly to
do with the fact that they've been such a reliable
capital incinerators for such a long time that people just
really need.
Speaker 1 (06:46):
To capital andcinerated. If you run a gold mining company,
please send your head now direct.
Speaker 2 (06:52):
To John and John. You have used, don't you?
Speaker 1 (06:55):
Independent central banks? And we've talked about this a lot
over over the years. Or central banks ever genuinely independent?
Should they be independent? And in fact there's whole central
bank independence. I think it's kind of you anyway.
Speaker 2 (07:06):
Yeah, it's just a it's a convenient fag leaf. It
was fine in the nineties and the two thousands and
actually the tens because the central banks were doing exactly
what the government wanted them to do. Any keeping rates low. Yeah,
nobody felt uncomfortable about it. If it was happy enough
about it. Well, yeah, they should really should have been
(07:26):
higher while China was exportant inflation around the world. They
should have leaned against that. Then we wouldn't have got
the acid bubble in the house place bubble, and everyone
would be less measurable. Now because that's I do they say,
the fact the house place has been too.
Speaker 1 (07:41):
High central bankers also, Director John, Please, But we had
all that period where it looked like independent central banks
were an absolutely fabulous idea, the great moderation, low interest rates,
low inflation. We had the hero central bankers, Greenspan, et cetera.
Speaker 2 (07:55):
The Plunge Protection Team, lunch Protection team.
Speaker 1 (07:58):
And when we look back now, you and I said,
at the time, of course, fell andre I told you so.
But you when you look back now, you can say, well,
this was simply a function of deflation being exported from
out of China. And we don't really know if independent
central banking is any good at what it's supposed to do.
Speaker 2 (08:16):
We don't really know.
Speaker 1 (08:17):
If the models work. We don't really know if independent
technocrats do a better job of interest rate fiddle than governments.
Speaker 2 (08:26):
Yeah, and I don't thinks even that. I think it's
more the doint. Basically, you've got the if you're in central,
if you're an independence is contingent or in someone giving
the tea, then you're not independent. You're just not independent.
So it only lasts for as long as they're happy
for it to do. And I mean Arthur Bond's in
the eighteen seventies with elected nexton is a classic example.
(08:48):
And it's the same thing. No, I mean, you know
I should if if Trump wants to say Lane not
get a depot, he will find a way. He doesn't
have to do it. I fire on them, and would thought.
I thought that there are other ways to get around
any resistance. But the point is that whenever the kind
of politics and the central bank, the politics and the
(09:10):
technical as pomp heads, the politicians are going to win
one we had another. So I think that the idea
of central bank independence is really just it's just a mirage.
It's like the two percent inflation target is sort of
it's what for a yo and then stops working and
(09:31):
you find something else.
Speaker 1 (09:32):
Okay, we're going to stop at that, John, because I
can feel your hobby host is rising to.
Speaker 2 (09:35):
This or note.
Speaker 1 (09:48):
Thanks for listening to this week's Marin Talk's Money Debrief.
If you like us, you rate, review, and subscribe wherever
you listen to podcasts. Alsof He's short follow me and
John on ex of Twitter. I'm at Mariners w and
John is John Underscore Step. This episode was produced by
Someasadi Production, Sport and sound designed by Moses and Questions
and comments on this show and all our shows are
always welcome. Our show email is merin Money at Bloomberg
(10:11):
dot net.
Bloomberg Audio Studios, podcasts, radio news. Hi John, Hi, listen.
We're talking in the middle of the week, and there's
(00:23):
been a lot of fuss over the last few weeks,
a lot of volatility, lots of seteria lots we're talking
about bear markets, lots of people complaining about their four
O n ks, et cetera, et cetera. So I have
just had a quick look and guess that's for me. Okay,
over the last twelve months. What's the change in the
S and P five hundred?
Speaker 2 (00:42):
Okay, so it's not going to be connection toory. We
call it about six seven percent actually.
Speaker 1 (00:48):
Over seven percent up. Also over seven percent up the
last twelve months. Yes, yes, I'm going to double check
that in real time for you, okay, because I have
access to a Bloomberg terminal, and here we are. NASADAC
Composite Index year to date not so good, down twelve
(01:10):
point two seven percent over the last twelve months, plus
seven point ninety three percent. So if you are just
an ordinary person who doesn't trade in and out all
the time, isn't just directly watching finance Telly, et cetera,
you have eight percent more money if you're invested in
the US than you did twelve months ago. Can we
(01:31):
just say this is all a great, big clus fair
nothing or is that a little simplastic.
Speaker 2 (01:35):
It's a little bit simplistic, but it's not, hye simplastic,
you know when you think about it, you know, yeah,
I mean it's a good watch.
Speaker 1 (01:46):
Yes, But also what it tells you is that that
you know returns last year we're absurd and the American
aquity market was ludicrously expensive and ludicrously concentrated at the
end of our year, and it moved much too far,
much too fast. And so even after everything's happened so far,
this year just will be up. And twelve months ago
told you that what happened towards the end of last
year was slightly not.
Speaker 2 (02:05):
Yeah, definitely, And I mean that's place the whole point.
But TROMP being a catalyst for shifting things over the
years towards everything else which we knew was going to happen.
Speaker 1 (02:17):
Time it. We just couldn't time it.
Speaker 2 (02:19):
Yeah, you just needed a push, and Toomp's been the push,
and I suspect that's still going to carry you Oin.
Speaker 1 (02:26):
Yeah, I mean it's going to come up and down.
I mean as we are speaking today. We are speaking
on Wednesday. By the way, then as I is up
over four percent as we speak, So you know, you
get this this huge volatility. But I think we still
suspect overall that there is a great rotation underway from
very expensive stock to cheapest stocks. And we have got
our main podcast this week out on Friday is with
(02:47):
a value Investor, which is really interesting in the context
of this great rotation out of expensive the cheaper markets.
Speaker 2 (02:53):
Well, for once, yeah, if you do it often enough.
Speaker 1 (02:58):
And the other thing, John, that you and I have
been that for twenty five years and twenty five twenty
five years.
Speaker 2 (03:04):
Yeah, yeah, it's suning like that had a field sketched
twenty twenty five years.
Speaker 1 (03:11):
Hey, the gold price at the gold price, I don't know, Harry.
We are do the gold price up in dollar terms
forty percent over the last year alone, down little today
because everything else is going up because it is the
greatest portfolio insurance of all time. Yes, you're doing up
the direction, et cetera. But nonetheless there's been a phenomenal
run and we're just going to enter it into our
(03:33):
we told you so section.
Speaker 2 (03:34):
Well, thanks, So, what I think we can definitely put there,
especially seeing his late twenty five years ago. Everyone said,
what idiots, and you had actually been bettered buying gold
twenty five years ago within the S and P. I
mean that is striking. And I including reinvested dividends so
that you could have bought golden. You wouldn't even have
had to reinvest the dividends because there aren't any.
Speaker 1 (03:53):
I just sit there expect that's what you did, isn't it, John, Yeah.
Speaker 2 (03:56):
Just a law effort. Well, I wish it's what I did.
Speaker 1 (04:01):
Any We don't always do what we recommend anyway, So
here we are, gold price up a lot, and gold price,
you know, you would expect if the chales over the
last few months continues, if we continue to have doubt
about the America, about the global monetary system, about the dollar,
about incoming global recession, et cetera, you would think to
yourself or the gold price will continue to go up.
(04:22):
But I think we both slightly feel it's moved a
long way, very fast, and there could be a little
bit of a correction in here.
Speaker 2 (04:31):
Yeah, and I think, well, there's a number of things.
I mean, it was on the front cover of the
Ft today and yeah, I mean again, there's no sheath
on the Ft, but gold's one of those, cause golds
a slightly more obscure asset. You have to watch the
more financial peoples than the normal peoples because the gold's
never given me in the front cover of the Times.
But as the stock market may be at some point,
(04:51):
if it could actually is hard enough. But as far
as gold goy is, if you see it on the
front cover of the Ft, there's probably a big contrat
and indicator and that means it's come too far, too fast.
Bitcoin's the same, And I said, to be fair, I
remember twenty seventeen high in bitcoin. It was on the
front Covery Money Week, which I was editing at the time,
and even when I looked to the cover, I thought
(05:12):
the top of the market signal you have become your
own What's night? And then it was absolutely was. So
the more obscure the aid, the more you have to
sort of downgrade your your cover expectations. But I think
for gold, sentiment wise, that's a tell. And also you
(05:32):
have to go we have got when you've been watching
an asset for that for as long as we have,
and you're starting to feel a tiny bit kind of hegy.
I don't think it's the mega top. I think we'd
have to see a few other things happen. For me,
you think it was the absolute top, but I think
that it's probably due a breather.
Speaker 1 (05:52):
But then there is a possibility there the gold mineer
is might catch up a bit.
Speaker 2 (05:56):
Yeah, I mean you would think so. And silver, Well,
the interesting is silver's going up today, which I think
is probably more to do with the fact that everyone
is feeling relieved the Trump isn't in the fire, you know. Yeah,
and it's tariffs. I think it's silver. There's an element
of silver that goes up alongside the economic growth, and
(06:16):
that bit has been crushed by recent events, which is
one reason why it's departed so far from gold. So
we might see silver catch up as well.
Speaker 1 (06:24):
And you'd expect gold miners to lag a bit with you,
because it's not just gold going up, it's gold going
up and staying up that matter.
Speaker 2 (06:32):
Yeah, yeah, I mean, although they are still they're really
lagging it. And I mean I think that's partly to
do with the fact that they've been such a reliable
capital incinerators for such a long time that people just
really need.
Speaker 1 (06:46):
To capital andcinerated. If you run a gold mining company,
please send your head now direct.
Speaker 2 (06:52):
To John and John. You have used, don't you?
Speaker 1 (06:55):
Independent central banks? And we've talked about this a lot
over over the years. Or central banks ever genuinely independent?
Should they be independent? And in fact there's whole central
bank independence. I think it's kind of you anyway.
Speaker 2 (07:06):
Yeah, it's just a it's a convenient fag leaf. It
was fine in the nineties and the two thousands and
actually the tens because the central banks were doing exactly
what the government wanted them to do. Any keeping rates low. Yeah,
nobody felt uncomfortable about it. If it was happy enough
about it. Well, yeah, they should really should have been
(07:26):
higher while China was exportant inflation around the world. They
should have leaned against that. Then we wouldn't have got
the acid bubble in the house place bubble, and everyone
would be less measurable. Now because that's I do they say,
the fact the house place has been too.
Speaker 1 (07:41):
High central bankers also, Director John, Please, But we had
all that period where it looked like independent central banks
were an absolutely fabulous idea, the great moderation, low interest rates,
low inflation. We had the hero central bankers, Greenspan, et cetera.
Speaker 2 (07:55):
The Plunge Protection Team, lunch Protection team.
Speaker 1 (07:58):
And when we look back now, you and I said,
at the time, of course, fell andre I told you so.
But you when you look back now, you can say, well,
this was simply a function of deflation being exported from
out of China. And we don't really know if independent
central banking is any good at what it's supposed to do.
Speaker 2 (08:16):
We don't really know.
Speaker 1 (08:17):
If the models work. We don't really know if independent
technocrats do a better job of interest rate fiddle than governments.
Speaker 2 (08:26):
Yeah, and I don't thinks even that. I think it's
more the doint. Basically, you've got the if you're in central,
if you're an independence is contingent or in someone giving
the tea, then you're not independent. You're just not independent.
So it only lasts for as long as they're happy
for it to do. And I mean Arthur Bond's in
the eighteen seventies with elected nexton is a classic example.
(08:48):
And it's the same thing. No, I mean, you know
I should if if Trump wants to say Lane not
get a depot, he will find a way. He doesn't
have to do it. I fire on them, and would thought.
I thought that there are other ways to get around
any resistance. But the point is that whenever the kind
of politics and the central bank, the politics and the
(09:10):
technical as pomp heads, the politicians are going to win
one we had another. So I think that the idea
of central bank independence is really just it's just a mirage.
It's like the two percent inflation target is sort of
it's what for a yo and then stops working and
(09:31):
you find something else.
Speaker 1 (09:32):
Okay, we're going to stop at that, John, because I
can feel your hobby host is rising to.
Speaker 2 (09:35):
This or note.
Speaker 1 (09:48):
Thanks for listening to this week's Marin Talk's Money Debrief.
If you like us, you rate, review, and subscribe wherever
you listen to podcasts. Alsof He's short follow me and
John on ex of Twitter. I'm at Mariners w and
John is John Underscore Step. This episode was produced by
Someasadi Production, Sport and sound designed by Moses and Questions
and comments on this show and all our shows are
always welcome. Our show email is merin Money at Bloomberg
(10:11):
dot net.
Host
Merryn Somerset Webb
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