how do i correctly assess risk of a given investment in the current market environment and you said this you said you can't because the market is broken every day we sit in the boardroom of old beds in singapore and try to figure out where and how to invest the partners capital and every day it gets harder and harder to do i'm curious in singapore where your base how does u.s. policy both fiscal and fed policy including zur factor into that view of yours. well i mean service is not a us policy it's a global phenomenon that we get we have this really look around the world the concept of easily. a recent study in japan finance minister said recently that they were falling behind in cuba as some kind of rice might not bones about europe's going to have to it's own sake the only way out is to either let this things fall apart or create copious amounts of money and they're trying to find a mechanism by which to do that and this is the same governments manipulating markets to try and try and push investors further out the risk but given the no

return at all having cash in the bank is a very dangerous thing to do so i mean you know we said we talk to investors all around the world who are who assists trying to some way to find some kind of yield when you've got a ton of inflation we see no real real real returns really let's need to be up in the sort of three and a half or five percent range and that's a very difficult sometimes once you know one thing because sitting here in the in washington we just are always harping on the fed we're always harping about is there but are you saying that in this global context where all there are many central banks are engaging in these same policies that the fed is just one part of that or do you see it as a more significant part then perhaps some other major players well that's certainly the biggest part of that i mean it's competitive debasement and he comes here with the weakest parents he wins right now everybody needs to base their currency. they're all saddled with these debts which they just can't they can't get laid off without inflation the other one says it was really to default with so they don't get the kind of growth that's going to help them get out of those debts organically

so when faced with a choice of the full or inflate the it's the simplest and by far the most politically palatable solution is to inflate the public generally don't tend to notice that specially when they've given a lot of numbers like two percent of the c.p.i. which i think anybody paying attention clearly knows that is why understated gas so then let's get more into that because you wrote the way you sum up kind of the impact of all of this is that when you're looking at how to price rask. how to accurately price things you say the price is wrong because of all these distortions it's a playoff the game for the price is right which turns out is the u.s. and u.k. phenomenon so let's talk about an example of some that's wrong pricing ok we have a chart this is from your newsletter at tips now these are supposed to provide protection against inflation the principal in the interest payments rise with them placed in fall with deflation as measured by what you just mentioned the consumer price index this is the chart you published showing tips negative yields twenty years out is the price right and if not how far from right now it's clearly wrong

this is the this is this is heard many times it is this is the herd mentality people she says and i really shook up investors and there was a loss of trust that's a loss of a loss of face people are genuinely worried now and so they're piling into instruments that traditionally. have provided them safe harbor chips as well. as u.s. treasuries another great example you know u.s. skyrocketing you know people almost as a kneejerk reaction jump into these things because in times gone by they provide a safe safe haven but intel is going by the jets and the problems with not government don't shoot so least decent from still provide it so you know as we've seen you know the the wild card it gets big taken on to these public balance sheets you know people are running into the it's crazy you know the swiss swiss farms the swiss of cape deterrence he said you're emplaced to print unlimited amounts of swiss francs in order that people pay and yet the swiss can also borrow money from

the public. roads so the price is clearly wrong and all those things. and it's just a question of when they fall over but imminent is not the same as leverage for them while these things are inevitable they will also make you find this a value we just don't know when that's going to happen and with that in the fair value is there any way to even begin to ascertain what would be their fair value without this herd mentality because looking at tips you mentioned that c.p.i. people don't trust that many people don't believe that accurately reflects inflation so where do we even begin. but that's it that's the sixty four thousand dollar question i don't think anybody really knows what truth anybody has i think we all have this creeping sense that the prices we're seeing are right and i don't think anybody takes the c.p.r. seriously or. anybody anywhere and yet that's the that's the number that you know poll that was paid off and all kinds of just months and again just continues and

while we have both sides kind of aligned in that they don't want the system to fall over you can get away with these things but this whole thing is a confidence going source of the governments everywhere are desperately trying to create this confidence to get people willing to put their money back to work willing to invest the money taken out of the bank out from under the mattress and get it into into productive operation but the problem they've now created for themselves is as soon as they achieve that as soon as they they create the sense of confidence that they you know it's ok we can take that money out of safety and we can start going out further on that risk as soon as they do that the first is going to happen is people look at their holdings are government bonds if you look at the negative deals they can take on their level look at the balance sheets of these institutions and they're going to sell and there are seven sas they're going out and at that point you know the fed on the other central banks lose control of interest rates and then we could see some some really draconian measures started to be forced out of necessity what do you think would carry that sort of that sort of a chain reaction of events. well sanity returns frankly i mean the

east prices are clearly wrong and we see you see headlines out of europe with people who are relieved that somehow they're going to find a way to keep the scene which don't seem to possible for them but let's assume they do find a way to pretty soon you see people running into books and there's only one person to write a check and so do their grades and that's germany so the reaction is clearly not the same circumstances but that is purely just my fear and i spoke about this. so-called c mentioned earlier on. and that's that's where we are you people are genuinely afraid now comes and they are running to the government for help and the governments are the guys with all the debts it's a crazy situation it is a crazy situation so then on that note would you say that a phenomenon like this where the national bank pegging its currency to the euro and printing printing printing like crazy but the government being able to borrow a negative year olds and in some cases do you think that accurately reflects the

demand for safety as well as liquidity and these are very uncertain times it does and obviously the one thing that government bonds do have going for them is because it's like you know treasuries once they're incredibly liquid and people are prepared to give up some return just to have that liquidity but really if you think about it if i told you that you have a close any commodity with a supply and the price for both at all time highs you kind of think that that doesn't really speak to the economics what i want and yet here we are we have we have government bonds because the world supplies all time highs. and prices all times and those things it can't last i spoke about stein's law which is a very simple economic law that says if something kind of going forever it will stop and that's it is simple it's beautiful but it's absolutely true you know ultimately government bonds cannot stay at their all time high prices at all time are spies forever. only gravity and seventy reassert themselves and the process of

the full significance of gravity and sanity to things the lagging today and central banks bend the laws of physics so my question are heavily in debt and governments as well as their central banks with their easy policies are they essentially borrowing stability from the future and order to forestall volatility today that's absolute is a great well that's absolutely worked and obviously we have to we have to put this in the context of the political so i don't simply is this whole saying it is very much a political moment and so politicians don't like constituencies that don't want volatility they don't borrow money from the future don't borrow safety from the future. for the future if if and wherever they can because ultimately as your guest on your previous show was saying that they could borrow this from the future as those doesn't happen on their watch that's fine so that's what was it we're seeing this is tremendous intergenerational transfer of assets from kids and grandkids to you

know. look it's wrong in every kind of way but this is this desperate need for stability and this year olds or correction when they have been part of the business cycle for hundreds of years i don't see what the big series other than the fact that they let this thing get so far out of greenspan's keeping interest rates so low that you know some you. let this thing gets its monster control on the part of actually applying senseful business practices right and you know when we get back i want to hear about what you think about the u.s. elections because they're speaking about politicians they all want volatilities so i'm curious how you think what you think is the significance of these elections in the u.s. especially from where you're based in singapore some more with greg williams in just a moment and still ahead right here the mainstream media has been burning everyone with every single detail about the elections but. is there any chance that they

could grow up the announcement over who was america's next commander in chief we'll tell you how the networks are working to avoid any mistakes and what they need first be maybe reflective of in these economic times that's all in tonight's loose change but first you're posing market numbers.

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welcome back in the u.s. any glance to a newspaper or a t.v. screen and it's just what you want selections all the time but how much time do they matter to say an investor sitting in singapore trying to figure out how to invest clients' money well lucky for us brett williams is here to help us understand that his strategy advisor for office and best management is currently in san francisco not in singapore where is typically based but mr williams welcome back i want to know being raised in singapore are the u.s. elections a big deal to people in asia do they care or does it matter particularly i think people care yes and i think you have to care about i think the important thing here is the after months of these elections and it seems we're getting very mixed signals everybody's very partisan democrats are actually convinced that a bomb is going to let you know publicans are actually convinced that well he's going to get it in the sun but i think what we see it asia is that whatever happens

you're going to have this terribly excited house senate white house and that's to be very difficult for to get things done and it seems to never certainly not in my living memory have the parties been so far apart in this complete lack of bipartisanship corporation middle. and so i think when you have a comes if obama gets back you know i think the public could be very resentful of that it looks like they're going to have control of the house so to make things very difficult for him i think it's wrong to get senate democrats. to be similarly sad about saying so whatever happens i think we're going to get some kind of gridlock. and that's really going to leave a friend just a bit empty and is the most important player in all of what he does to two thousand and fourteen and so you know we have this crazy situation where we can have a central bank to setting policy i think pro-business i think romney has money clearly is certainly the current business candidate and that seems to be the big issue facing this is that we need is this. to feel more comfortable investing which

they really don't my conversations are the best is around the time she said people are are really uncomfortable with the current destruction and their attitudes towards business look i'm not a republican or democrat asking you nice guy to comment on the number of us doing the best of times but you know i think the aftermath is going to the most important thing with the fiscal cliff approaching. that's going to suddenly become very very important everybody i think all of us attention to pay to it to now because it's all because you say everywhere you look it's all about the campaign but we're going to end up on november seventh with a new president and then suddenly december thirty first is going to loom very very large and if we do get this divided after march selection where both sides really really dislike the assumption seems to me to be chased and we don't want to work and don't want the other side to get their own way we could be in a situation where we stand a sense last august when they looked at ceiling expire and we had tremendous policy

markets when you don't step through so i think there are investors everywhere we do worry about this election we paid very very careful attention to it. but we're more concerned about the aftermath than which of the guys gets it ok and terms of the aftermath one large part of that too is the government debt and the deficits i mean that's a concern that i hear from so many people how is that viewed in asia especially in a region that funds so much of the u.s. borrowing in terms of the government at least. the interesting thing about zero zero we we as a consonant went into this into this crisis and saw a better shape in the west and that was because back in ninety seven ninety eight we had the asian currency costs and you know there was tremendous forces you know there's a lot of damage done to a lot of these economies but it gave them the opportunity to get their balance sheets in much better shape and with the exception of japan which is a huge perception you know some of the smaller economies in asia singapore particularly where i have. better seats are in star health so health you know

states than those in. west and so we worry about us and we've been through as so says in recent memory but the extent to which asia suffered was. far far smaller a comparable situation should the united states to get done so passes so it really is to us it's all about the dance or what to do about it and the sense you know you're certain is that there really is nothing they can do about it at the moment except try and inflate that data was interesting and you know when you're talking about the volatility in people's concern about volatility after the elections one thing we saw the speculative long exposure on the ten year treasury more than doubled in the past week to the highest position since march of two thousand and eight does that have anything to do you think with investors betting on volatility . like this i think everybody who is in these markets and pays careful attention i've yet to have a conversation that anybody who doesn't think at some point the market's going to talk about it it just feels like perhaps people are now thinking disc inflection

point and they're starting to charges themselves i think they'll be very close stops on those positions i don't think people it's a huge directional bet but around events like this we tend to get on the senate seat and we tend to get to reactions and the bond markets sort of you run for credit for correction and just quickly before we go on this has you look into farmland headed back to laugh and tell me tell our viewers quickly why. i think some of your followers is actually less than and someone will will if you're growing food for example you're always going to you're going to get c.p.r. you will get frustrated because food is an essential component to it it goes up people need to meet more people need to eat was asia more people need to eat higher up the food that's where you get a lot more people switching from the grain most diet to a protein based on a knowing agricultural land makes all the sense in the world and it's something that if you worry that it's going too far and price too high they're not making any

more bearable and while gold. it's a sensible so. you are going to let's go with what we saw. so much so we tried to get that and you lose some things and it's a potential asset that we. single. right across the world you know everyone copes with the climate political jurisdiction doing that that we could get some kind of balance return on but that's just very interesting some of said that that farmland gerda's like black gold maybe you'd agree to thank you so much for being on the show grant williams strategy advisor for help as investment management but it's a start. all

right let's wrap up with loose change to major eco fantasy even though the elections are still a day away the mainstream media is obsessed with carving out so much election data out there it'll make your head spin. the two main candidates for president in two thousand and twelve are tight in my world this is a tired martha the president was forty seven point nine governor romney forty seven point four and the president does lead romney but it's narrowly in the margin of error forty eight forty seven among likely voters i don't think i've ever seen a race that has as everybody is as uncertain as they are it is there's been as much contradictory and conflicting poll data the president is holding on to an eight point advantage among women one shows them tied at forty eight percent if you look way down at the bottom there the others give the president i don't know somewhere between one and three point edge depending on which one you look at the. so an

obsession with polls an obsession with trying to forecast what is going to happen what's interesting is that despite trying to have the most up to speed data the media is also trying to avoid mistakes like we saw in two thousand where many were reporting that al gore had won when in fact he had not their efforts to avoid these mistakes have included them improving their modeling and they have more software in their consulting with political scientists erring on the side of safety allegedly when making a call but this meeting with trying to be i guess more precautionary what does this remind you of this no this is this is again this is directly a result of zero percent interest rates and quantitative easing ok i cannot stress this enough this is the story of the space time continuum and i'm not even kidding right everything was already about now now now everyone wanted everything yesterday another one of the day before yesterday ok because interest rates are so low that

we were sucking duration out of the of the space time continuum not just of the markets but of the future all right so that's why everyone's like yeah it's true it's true it was psyched up here and i mean it's not going to sit around and here's the problem i have with this argument news organizations have always tried to get the information mation out quickly and fast and now they're just adding to their resources because they don't want to totally have a focus like they didn't two thousand which was about speed we didn't have negative interest rates are some zero percent interest rate first of all one so i don't get why there is this i think first of all. i don't believe the fox news is trying to avoid calling it early for whoever it was i don't think that they want to call it early of amisom you see in front jews want to color because part of their strategy and they said we want to call the early for obama so they can secure their victory for their sycophantic president and then fox who want to get run over because that's who they decided they liked even though they were against romney in two

thousand and eight right ok well then why. the thing that i would add is that a lot of these news organizations totally messed up the supreme court decision on health care and they probably just want to their way up or down arms and i remember a lot of getting it wrong ok let's move on because this is pretty interesting it's not a secret that america is falling out of love with their cable companies even though many would say people in america are obsessed with their t.v. but in fact the number of people who are dropping their subscriptions are really affecting business. prior to twenty ten the pay t.v. industry never suffered a quarterly loss in subscribers but has repeatedly since then only three quarters of growth since two thousand and ten certainly a lot of people choosing not to subscribe to cable and using netflix instead are using the internet i've never seen miniature really speaks to this to me of size which is a seismic home watchable. so they're talking about a seismic shift in people that are actually foregoing their cable boxes and forgoing t.v. and they're going online to get their streaming so as

a result time warner cable for example is driving attention to their high speed data and online streaming where more people are watching shows the company just reported and so that's where they saw some of this shifting but dimitri what's really interesting about this is used to work at cablevision where you never thought people were going to give up their t.v.'s right yeah that was actually interesting because i was part of a part of a group with product of a little support of trying to show it was well it was small but we were focused on cable were looking towards the future and i went in there thinking ok cable to be dead in a few you know five ten years whatever but i was surprised to see how resilient wasn't people really were fixated on their cable box when we do focus groups people are obsessed it's like a drugs on the one hand this is great because we're fighting addiction in the united states so who are breaking their addiction with t.v. it's a pacifier medication and it's also interesting that what's happening is that the budget side the the the the money side is what's driving people to cut the cord there's not so much that they don't want anymore they can't afford it it's the

economy is it your it's forcing them to part with eventually they were going to cut their electricity bill although i know you don't want to certainly make them know that they could live without without electricity or gas i don't know about that and did i mention that we're on you tube and hulu both online video streaming to you we're on to it all right with that that's it for our show today thank you so much for watching be sure to come back tomorrow in the meantime you know you can follow me on twitter at lauren lyster you can like our facebook page you can watch any show you missed you tube dot com slash capital account watch just in h.d. on hulu and for everyone here thank you so much for watching come back tomorrow and have a great night. but you don't need to since you're the host of the twenty third. see winter the picket . see.

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