Interview: Scott Bessent on the SGE, Oil, Gold, Bitcoin, and More

Gold can be a risk off, and a risk on asset. Bitcoin is a risk on asset

Housekeeping: great find by GoldFix Founder

Braden Brock

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Some quotes: Bessent on the SGE, Oil for Gold, the Dollar, the Yen, Bitcoin, etc.

“This Shanghai Gold Exchange — very interesting.”

“We see India and China being able to pay for oil, which is the ultimate Dollar commodity, in Rupees and RMB.”

“Gold can be a risk off, and a risk on asset. Bitcoin is a risk on asset.”

TOPICS:

00:00 - Intro

00:59 - Scott's Background

04:22 - Early Career

06:46 - Intro to Global Macro

08:28 - The Creation of Key Square Capital Management

10:24 - Navigating Information Overload

11:25 - Micro & Macro Knowledge

13:42 - The Sequencing of Macro Events

15:44 - De-Dollarisation & Economic Disruption

20:36 - Analysing the Japanese Economy

32:46 - Chinese Economy

37:18 - Macro Investment & Geopolitical Risk

39:09 - Thoughts on Ukraine / Russia Future

42:24 - Potential Impact of AI on Productivity and Regulation

47:10 - The Global Shift from Capital to Labour

51:20 - Closing Questions

58:45 - Outro

Authored by MoneyMazePodcast

Today’s guest is the new US Treasury Secretary, serving under Donald Trump. The role gives him immense responsibility for managing US obligations and finances, including circa. $7 trillion of annual US federal spending, the $35+ trillion fiscal debt pile and continued inflationary pressures on both US businesses and consumers (so, no pressure!).

Prior to this, Scott was a globally respected and market-moving hedge fund investor. He was key player on the George Soros's team, who in 1992 helped the Quantum Fund make $1bn, shorting sterling ahead of the UK’s withdrawal from the ERM.

Then, as Soros’s CIO, he was also dubbed ‘The Man Who Broke the Bank of Japan’ by the Wall Street Journal, making approximately $3.5bn on the Abenomics trade from 2012-2015!

Scott is widely acknowledged to be one of the world’s most highly respected macro hedge fund managers, and is the Founder of Key Square Capital Management. He has also taught financial history at Yale and is a prominent philanthropist.

In this episode, Scott explains the key ingredients in being a macro manager. He charts his journey, working with legendary investors such as Stan Druckenmiller and George Soros.

He opines on a range of key investment themes, including his thoughts on de-dollarisation, debt, commodities, the Ukraine rebuild, and AI. He also shares his analysis of the fast-evolving markets in both China and Japan.

Scott goes on to discuss risk, when and how he sizes positions, signposts that influence conviction, and dealing with information overload. A tour de force!

Interview originally recorded in September 2023.

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