ChrisCookimageErik:     Joining me now is Chris Cook, former director of the International Petroleum Exchange (IPE) and now a senior research fellow at the Institute for Strategy Resilience & Security at University College London, as well as an independent energy consultant.

Chris, the reason I’ve been keen to get you on the show is that you come from a very different perspective than most of our guests, who approach the finance industry from a background of knowledge of economics. As a former regulator, you are an expert on how cheaters cheat and how manipulators manipulate.

With that background and a particular focus on those kinds of things going on in energy markets, you’re able to draw from that experience as a regulator of one of the biggest energy markets in the world when you were with IPE. So I’d like to dive into the current situation in WTI as well as the much bigger picture of what’s going on with oil markets.

But, before we do, since your background is so interesting, please give us a little bit of color on what you learned about markets from your experience as a regulator and how that experience colors the way that you think about markets today.

Eric Peters HeadshotErik:     Returning now for his second feature interview is One River Asset Management’s Eric Peters.

Eric, I’m so excited to get you back on the program. There’s quite a number of topics that I’m looking forward to talking to you about.

One of them we’ve been discussing quite a bit lately is the reserve currency status of the US dollar. And, particularly, the fact that a lot of people around the world have an incentive to change that status – even though, I think, a lot of American investors don’t take this risk seriously.

The US derives a lot of benefits from having that reserve currency status. Recently, Sergei Glazyev, the Russian scholar who has been credited as the mastermind of the de-dollarization campaign that is trying to persuade the BRICs countries to abandon the dollar, had a video in English. (We’ve got the link to that in the Research Roundup email for listeners’ benefit.)

Eric, I know you’ve done a lot of thinking and a lot of research about this. Most people I talk to, either they’ve never heard of this stuff or they’re not concerned about it.

How do you feel? Am I crazy to think that we should be concerned about the people in the world who would like to replace the US dollar as the world’s reserve currency?

LukeGromenErik:     Joining me next as this week’s feature interview guest is Luke Gromen, founder of the forest for the trees. Luke prepared a fantastic deck of 35 charts and graphs for us, so be sure to download those. Registered users will find the download link in your Research Roundup email. If you’re not registered yet, just go to and click the red button that says Looking for the Download.

Luke, it’s great to have you back on the program. You have been one of our most outspoken long-term secular dollar bears. You’ve articulated a very coherent argument which basically says it’s inevitable that the US dollar will lose its hegemony in the long term over the world financial system – and not having that artificial demand for dollars is going to weaken the dollar in the long term.

But I believe that you’ve actually turned short-term dollar bullish. So please fill us in. What has changed your thinking? Is it a change? Or is this just a tactical view that you have? And what do you see short, medium, and long term for the US dollar?

Luke:   Hi, Erik. Thanks for having me back on. It’s certainly great to be here.

We had a tactical shift a little over three months ago, really. And it was based on, effectively, what we were seeing in markets. And so, as we stand on the dollar versus where we came into the year, we think that the second half of the year is going to be really what we call on Slide 2 “A Tale of Two USD Trades.”

There’s dollar trade number one, which is, near-term, a US dollar short squeeze as Fed hawkishness [continues] despite softening emerging market currencies. We think is likely to continue. And we’ve talked about this in our research over the last three months as the Fed is potentially shooting the hostage. Or, in more draconian terms, burning down the world. And that is the near-term tactical shift you’re referring to.

EllenAnasJoePart 1 Ellen Wald

Erik:     Joiing me next on the program as our first feature interview guest this week is Dr. Ellen Wald, author of Saudi Inc. – The Arabian Kingdom’s Pursuit of Profit and Power.

Ellen, I think even you have been surprised by how many people are talking about this book. It seems to be on everyone’s mind. And I know the approach that you took was to try to explain to your readers not the outside perspective but the inside perspective on Saudi Arabia, how they think about the oil market, and what they think that things are all about.

So please give us the high level – unfortunately, we don’t have time today to go into all of the fantastic detail in your book. But, at a high level, how does Saudi Arabia think about the oil market?

And particularly, help us understand – so many investors are confused. It feels to us outsiders like in 2014 they really shot themselves in the foot, basically, crashing the oil market, cutting off their own sources of revenue.

Was it really an act of incompetence as some people thought? Or did they just see things differently? What’s going on?

JeffreyShermanHeadShotErik:     Joining me next on the program is DoubleLine’s other Jeffrey, Jeffrey Sherman, who runs the Strategic Commodity Fund for DoubleLine.

Jeffrey, thanks so much for joining us on the program. Let’s start with the big picture. Jeff Gundlach famously called, to the day, the top of the secular bull market in bonds. I think on that day it was 1.32 or something intraday?

And I think it was on that afternoon that Jeff Gundlach declared, okay, this is it. And, sure enough, we’ve been all downhill in price, uphill in yield from there.

Now, for a long time, you guys were saying, hey, past 3%, that’s really the confirmation line where you get past there and it’s really game on. But you’ve changed your view recently. And, as I understand it now, DoubleLine’s view is that, as long as the 30-year stays under 3.22, probably the 10-year yield will be contained. At least for a little while.

So that begs the question: Why is the 30-year suddenly the gating factor? What’s the whole rationale here? Where do you see things? Give us the big picture of Treasury yields.

Jeffrey:            I wouldn’t say it’s as much of a change in view as waiting for confirmation to the marketplace. And so, as your listeners are well aware, no one wants to hang their hat on one single factor when predicting markets, even if it is trying to predict the yields and looking at one specific yield.

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MACRO VOICES is presented for informational and entertainment purposes only. The information presented in MACRO VOICES should NOT be construed as investment advice. Always consult a licensed investment professional before making important investment decisions. The opinions expressed on MACRO VOICES are those of the participants. MACRO VOICES, its producers, and hosts Erik Townsend and Patrick Ceresna shall NOT be liable for losses resulting from investment decisions based on information or viewpoints presented on MACRO VOICES.

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