In this episode of Monetary Matters, Jack Farley interviews Gerard Minack of Minack Advisors about his views on interest rates and the global economy. Minack discusses his shift away from secular stagnationist views, citing larger government deficits, increased investment demand, and the crumbling of globalization as catalysts for a regime change leading to higher real yields. He anticipates treasuries settling in a 4% to 6% range, influenced by fiscal loosening and potential collisions between the US's demand for savings and other countries' desires to retain savings. The conversation covers the impact of demographics, green energy, defense spending, and the role of Japan in global capital markets. Minack also shares his perspective on the US stock market's vulnerability due to high valuations and the potential for international markets, particularly Japan, to outperform, while also touching on the AI trade and its potential impact on earnings growth. Finally, they discuss the Australian economy and equity market, noting its unique characteristics and challenges.
