Latest / The Money Puzzle / Happy Liberation Day - Trump's turning point

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Happy Liberation Day - Trump's turning point · The Money Puzzle

0:10
Speaker 1: Hello and welcome to The Australian's Money Puzzle podcast. I'm
0:13
Speaker 1: James Kirby. Welcome aboard everybody. This week is a week
0:17
Speaker 1: that might well be a milestone in the markets, in
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Speaker 1: international trade. It might be a milestone in history, in
0:24
Speaker 1: investment history, that's for sure, because this is the week
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Speaker 1: that Donald Trump unleashes, if you like, his Liberation Day program,
0:32
Speaker 1: which is a program, as I'm sure all listeners know
0:35
Speaker 1: by now, is to introduce a range of tariffs right
0:38
Speaker 1: on imports into the US for across every country in
0:42
Speaker 1: the world, and it has the potential to upend the
0:45
Speaker 1: economic world order as we know it. As we know
0:48
Speaker 1: it back as far as the end of the Second
0:50
Speaker 1: World War nineteen forty seven General Agreement on Trade in Tariffs,
0:53
Speaker 1: which was enhanced and improved all the way up up
0:56
Speaker 1: through the World Trade Organization to what we have today.
0:59
Speaker 1: This is now imperiled, basically, and investors don't know where
1:03
Speaker 1: to move. They certainly know what to do in the
1:05
Speaker 1: short term, sell stocks because the US is down five percent.
1:08
Speaker 1: US markets down five percent, the most important market, dragging
1:11
Speaker 1: a lot of other markets with it, including our own.
1:15
Speaker 1: So crucial I think to understanding what's happening is an
1:17
Speaker 1: understanding of Donald Trump. And my guest today has a
1:20
Speaker 1: unique understanding of Donald Trump because he's been there, He's
1:23
Speaker 1: been in the Oval Office, he's been at the rallies,
1:25
Speaker 1: he was at the famous rally where they all went
1:27
Speaker 1: wild in the capital, and he has a unique view
1:31
Speaker 1: on Trump. It's Cameron Stewart and he's the chief international
1:35
Speaker 1: correspondent of the Australian. How are you, Cameron, Hi, James.
1:38
Speaker 1: Good to be with you, Good to have you on
1:41
Speaker 1: the show. I think some of us, at least had
1:44
Speaker 1: paid no attention to Trump as when he was in opposition,
1:48
Speaker 1: and many people, certainly in the investment markets, didn't expect
1:50
Speaker 1: him to return. Tell us you, I'm sure you asked
1:53
Speaker 1: us lots of times, but tell us your impression of
1:56
Speaker 1: Trump up close, because not many people have been up
1:59
Speaker 1: close since seeing him in action. Is he as erratic
2:02
Speaker 1: in person as he seem from a distance. Is he charming?
2:05
Speaker 1: Is he charismatic? Is he overwhelming? What's it like?
2:09
Speaker 2: That's a good question. I've been in the Oval Office
2:12
Speaker 2: twice with Trump and been around him a lot in Washington. Firstly,
2:17
Speaker 2: I'd say he's very orange. He's even more orange in
2:19
Speaker 2: real life than he actually appears on television, which is interesting.
2:22
Speaker 2: But look, there's a couple of things that'd say similarities
2:26
Speaker 2: between the Trump mark one i'll call it for the
2:28
Speaker 2: first term and Trump to this term one. Is absolutely
2:32
Speaker 2: even more of a showman now than he was then.
2:35
Speaker 2: He really understands the business of being the president and
2:38
Speaker 2: what you have to look like and the bizaz that goes.
2:41
Speaker 2: We all recall the disastrous Oval office meeting between him
2:44
Speaker 2: and Ukraine's Zelenski when he said this great television that's
2:48
Speaker 2: that was his final take on the actual thing that's
2:51
Speaker 2: consistent from the first term. The second thing is that
2:54
Speaker 2: he still has a very visible glass jaw. He's very
2:57
Speaker 2: easily anger. If he feels disrespect a foreign leader disrespects him,
3:01
Speaker 2: then that foreign leader is going to be in for trouble. Personally,
3:05
Speaker 2: he's actually quite funny. He's got quite a good sense
3:08
Speaker 2: of humor. Of course, he goes to very dangerous areas
3:10
Speaker 2: with that humor sometimes, and he's certainly charismatic. He holds
3:14
Speaker 2: a room very strongly, very clearly. But I would say
3:16
Speaker 2: there are some differences being up close to Trump in
3:20
Speaker 2: the first term compared to now James and that is
3:23
Speaker 2: that here you can really see it in his face
3:26
Speaker 2: almost he relishes the power he has this time more
3:30
Speaker 2: so than he did in the first term. In the
3:33
Speaker 2: first term, he didn't really know how to work believers
3:36
Speaker 2: of power in Washington. He didn't really know how Washington worked.
3:39
Speaker 2: Of course, he was a business person, and he had
3:42
Speaker 2: a record turnover amongst his staff. He was being chased
3:46
Speaker 2: by the special prosecutor over a range of issues, and
3:50
Speaker 2: you could see he was like the apprentice part of
3:52
Speaker 2: the part, basically the apprentice president. But now second time around,
3:57
Speaker 2: you just see it in his face. He is in control.
4:01
Speaker 2: He wants to be in control. He's backed by Republican
4:04
Speaker 2: majorities in both houses of Congress, a solid election when
4:09
Speaker 2: he knows the game. He's only got one term and
4:12
Speaker 2: doesn't need to be re elected. He's appointed these amazing
4:14
Speaker 2: disruptors to run the departments around Washington. And so I
4:19
Speaker 2: think in that way, Trump is a different beast than
4:23
Speaker 2: he was the first time.
4:25
Speaker 1: Like Scaramucci's points that everyone ends up on the woodschipper,
4:29
Speaker 1: and I think we all expected that, but it's not
4:31
Speaker 1: happening as certainly not happening in anything like the piece
4:35
Speaker 1: is it so the people he puts into Treasury or
4:37
Speaker 1: Secretary of State or Commerce or whatever, it's relatively stable.
4:41
Speaker 1: Then is it compared to the first year of the
4:44
Speaker 1: first term of the first run.
4:46
Speaker 2: Well, it's stable in the sense that he hasn't sacked
4:48
Speaker 2: anyone yet, although mind you, he was very tended to
4:50
Speaker 2: do so over the signal gays of controversy, of course.
4:53
Speaker 2: But what he's done, of course, this is his way
4:55
Speaker 2: of getting back at the swamp in Washington, is to
4:57
Speaker 2: put people who don't like the departments to actually put
4:59
Speaker 2: them as head of the departments. He's done that with
5:01
Speaker 2: the FBI, has done that with Roight Kennedy and the
5:04
Speaker 2: Health Department. And his idea is to basically challenge those
5:08
Speaker 2: departments and move them into his line of thinking, if
5:11
Speaker 2: you like. And so whether it's successful is a question
5:14
Speaker 2: that's still to be answered. But that's a huge thing
5:16
Speaker 2: that he's done, which he didn't in his first turn.
5:19
Speaker 1: I don't want to get too much into the thickets
5:21
Speaker 1: of politics, because our listeners are interested in how this
5:25
Speaker 1: affects their investing future and becaus the standout. The last time,
5:31
Speaker 1: there was various people who were quite prominent in the
5:35
Speaker 1: financial side of the Trump administration mark one this time,
5:38
Speaker 1: though Mosque is so prominent. I just wanted to ask
5:42
Speaker 1: you sort of a simple question, which is, do you
5:44
Speaker 1: think Mosque would be as prominent this time next year?
5:48
Speaker 2: No, I definitely don't. Why is that because I think
5:51
Speaker 2: that there's not enough room for the egos to be
5:54
Speaker 2: being so close to the things. I mean, I think
5:56
Speaker 2: a lot of people have been surprised by how prominent
5:59
Speaker 2: MUSC been early on, actually sat in on calls with
6:03
Speaker 2: Ukraine's Zelensky and it's extraordinary stuff, really, And we are
6:06
Speaker 2: taking bets in the newsroom. And how long he'll last?
6:09
Speaker 2: I said six months, and I'm sticking to that. I
6:11
Speaker 2: think the problem is going to be apart from egos,
6:14
Speaker 2: James is the doge, the Trump's musk's task of cutting
6:18
Speaker 2: massive amounts of spending from the federal government. Now, look,
6:22
Speaker 2: he's doing that in a fairly robust and sometimes clumsy way,
6:27
Speaker 2: cutting money to the wrong departments and having to restore them.
6:29
Speaker 2: It's been fairly messy. But the trouble with that is
6:32
Speaker 2: that we are now starting to see a backlash from
6:35
Speaker 2: people A who are losing their jobs and B who
6:38
Speaker 2: are scared of losing their jobs, and Musk is becoming
6:41
Speaker 2: quite unpopular in the United States. There's a tax on
6:44
Speaker 2: Tesla cars. It's really interesting to see how the mood
6:47
Speaker 2: towards Musk is changing. And I think it will be
6:50
Speaker 2: a very easy solution by Trump at some point in
6:53
Speaker 2: time to say, Elon, thank you very much, we've had
6:56
Speaker 2: enough of you. You can go, and that way Musk
6:59
Speaker 2: goes and Trump doesn't get the blame for some of
7:01
Speaker 2: these cuts. So I think we're going to see a
7:03
Speaker 2: breakdown in this relationship within twelve months, well within twelve months.
7:07
Speaker 1: Right, So some sort of a Machiavellian twist there that
7:11
Speaker 1: you put someone in that was an impossible task. Really,
7:14
Speaker 1: whoever goes in to cut up the government departments was
7:17
Speaker 1: going to face fire and here it comes. Yeah, okay,
7:21
Speaker 1: very interesting. Just also on that when people are talking
7:26
Speaker 1: economics and Trump he was re elected. Wall Street eventually
7:31
Speaker 1: sided with him late in the day. Maybe they knew
7:33
Speaker 1: he was going to get in anyway, but the sort
7:35
Speaker 1: of titans of Wall Street, Larry Fink and co. They
7:38
Speaker 1: sided with him in the end, and their public explanation
7:42
Speaker 1: of that was that he would bring in tax cuts,
7:45
Speaker 1: that he would bring in deregulation, but it's all about
7:48
Speaker 1: tariffs right. So far this year and in this first
7:50
Speaker 1: six months or so, the US has been the weakest
7:53
Speaker 1: stock market in the world. In fact, it's fall and
7:55
Speaker 1: five percent since the start of the year. It's lower
7:58
Speaker 1: now than it was when Trump went in. As I said,
8:00
Speaker 1: it's dragging Australia with it, of course as usual, which
8:02
Speaker 1: basically mirrors that four or five percent off for the
8:05
Speaker 1: year so far. Has the tariff's agenda, I will say
8:12
Speaker 1: it run out of control, but it has completely dominated
8:14
Speaker 1: the administration so far. Do you think he will ever
8:18
Speaker 1: move to the other parts that people elected him for,
8:21
Speaker 1: that the market elected him for, that war Street wanted.
8:25
Speaker 2: I think he will. I think it will take a
8:27
Speaker 2: bit of time because Trump mark Io has seemed in
8:30
Speaker 2: such a rush to do everything all at once, from
8:33
Speaker 2: tackling woke culture to closing the border to getting peace
8:36
Speaker 2: in Ukraine and Gaza. So the more regular side of
8:39
Speaker 2: being a president, as you mentioned, his election promises, deregulation,
8:43
Speaker 2: tax cuts, basic economic reform have faded into the background,
8:47
Speaker 2: and of course the only economic focus really has been
8:50
Speaker 2: the tariffs. But I think they will come back into focus.
8:53
Speaker 2: But of course, the considerations there will be impacted by
8:57
Speaker 2: whatever tariff policy he settles on going to do to
9:00
Speaker 2: determinal level of income that the government gets from those tariffs,
9:03
Speaker 2: and that will flow into other aspects of economic policy.
9:06
Speaker 2: So perhaps, to be charitable to Trump, he's trying to
9:09
Speaker 2: solve the tariff problem first and then see what falls
9:12
Speaker 2: out from that. But that it might be a bit
9:14
Speaker 2: too charitable to suggest there's a grand plan here. But
9:17
Speaker 2: I think that he will go back as a four
9:19
Speaker 2: year term. We're only well less than one hundred days
9:21
Speaker 2: into what so much has happened. I think he will
9:23
Speaker 2: be forced to go back and look at some of
9:25
Speaker 2: the more basic factors of being a president, and that includes,
9:28
Speaker 2: of course trying to get prices down, which will be
9:30
Speaker 2: a huge challenge for him.
9:31
Speaker 1: Yeah, right, Okay, we'll take a short break. We'll be
9:34
Speaker 1: back in the moment. Folks. Hello, Welcome back to The
9:43
Speaker 1: Australian's Money Puzzle podcast. My guest today is Cameron Stewart's
9:47
Speaker 1: chief international correspondent of The Australian and something of a
9:51
Speaker 1: veteran Trump watcher. One thing I wanted to ask you
9:54
Speaker 1: is about people say you don't understand the US so well.
9:59
Speaker 1: And of course I don to understand the US so well.
10:01
Speaker 1: I've only ever taken holidays there like most people. But
10:04
Speaker 1: having said that, I read the Wall Street journal I
10:06
Speaker 1: watched the news very closely. But what they say is
10:08
Speaker 1: you don't understand the impact of Trump on the street
10:11
Speaker 1: in the US that inside the US, it's a completely
10:13
Speaker 1: different view. Inside the US, he speaks for people who
10:16
Speaker 1: were never spoken for before. He had this extraordinary election
10:20
Speaker 1: where he was not just re elected, but he had
10:22
Speaker 1: stronger votes from all the various constituencies that you wouldn't expect.
10:29
Speaker 1: So tell us what your impression of what Americans think
10:32
Speaker 1: of Trump and how they view it as opposed to
10:34
Speaker 1: how we view it Americans.
10:37
Speaker 2: For example, I went to a lot of Trump rallies,
10:39
Speaker 2: and his supporters there are very much as sort of
10:42
Speaker 2: slice of the general support he has around the country,
10:45
Speaker 2: which is strong in the regions and also in really
10:48
Speaker 2: rural areas. It's interesting, Jimes because the people that go
10:51
Speaker 2: to the rallies and the classic Trump supporters go along
10:55
Speaker 2: and they just absolutely thrive on Trump's rhetoric that the
10:59
Speaker 2: system is not working for them, and that's a system
11:01
Speaker 2: across the board. Socially politically, they feel forgotten. They love
11:06
Speaker 2: his promise to destroy the system, and he links it
11:09
Speaker 2: very well with nationalism, which is a hugely potent force
11:11
Speaker 2: out there in regional and rural America. So he has
11:14
Speaker 2: a very potent mix that he sells to to people.
11:17
Speaker 2: And look at I say so as in that's not
11:19
Speaker 2: a fake thing. They certainly feel it very much. But
11:22
Speaker 2: what he doesn't do he doesn't pay much attention to details.
11:25
Speaker 2: He just said, we're going to make America great, We're
11:26
Speaker 2: going to restore manufacturing, the markets are going to go well,
11:29
Speaker 2: it's going to be fantastic. He doesn't go into the details.
11:32
Speaker 2: And I think the interesting thing here is that he's
11:35
Speaker 2: still that he support is falling. Trump support is falling
11:38
Speaker 2: even amongst some of his supporters. And the question comes
11:41
Speaker 2: when the details don't suit Trump, And that is a
11:45
Speaker 2: I think when prices don't fall, because I think he's
11:48
Speaker 2: going to have a real challenge to try and combat inflation.
11:51
Speaker 2: What's less of inflation with the tariffs that he's.
11:55
Speaker 1: Yes because they're inflationary, Yeah, yeah.
11:58
Speaker 2: They're inflationary. And also when jobs are lost people, the
12:00
Speaker 2: whole notion of Trump is will restore jobs, and he's
12:04
Speaker 2: Elon Musk cutting tons of jobs, of course, and then
12:07
Speaker 2: you've got the markets which are very rocky at the moment,
12:10
Speaker 2: and if that led to job losses as well. So
12:12
Speaker 2: I think that you're seeing a bit of a potential
12:15
Speaker 2: reckoning from Trump supporters in relation to Trump at some point.
12:19
Speaker 1: These are contemporary pools, are they, Cameron? Is that what
12:23
Speaker 1: you're referring to? Yeah?
12:24
Speaker 2: Right, yes, okay, yes, that's true. He's now only four
12:27
Speaker 2: in ten Americans agree with his tariff policy and the
12:31
Speaker 2: way he's going about the economy at the moment, so
12:33
Speaker 2: that's not Yeah, so you know that's definitely less than
12:37
Speaker 2: his elected number. So a lot of people are getting alienated.
12:42
Speaker 1: Yeah, what about the arrival of the billionaire? Is that
12:45
Speaker 1: amazing photograph of the moll laned up Mark Zuckerberg and
12:48
Speaker 1: Bezos Musk or basically standing in a line? Do you
12:53
Speaker 1: think that sort of unlikely coalition? How will that play
12:57
Speaker 1: out from here?
12:59
Speaker 2: Well? I guess depends on how much Trump helps them
13:02
Speaker 2: with their coffers and helps their business. Trump at the
13:04
Speaker 2: moment is quite happy. It seems to be very libertarian
13:07
Speaker 2: with the big tech titans, letting them do an awful
13:09
Speaker 2: lot with their business and not really challenging them a lot,
13:13
Speaker 2: and he is quite happy for them to not pull
13:16
Speaker 2: back on social platforms. I think that they love the
13:19
Speaker 2: Trump agenda at the moment. Again, reality may well bite
13:23
Speaker 2: in that respect. I think that might be a bit
13:25
Speaker 2: more of a temporary alliance, if you like. But it
13:28
Speaker 2: certainly does help Trump to be in the good graces
13:30
Speaker 2: of those enormously powerful. I mean, these are like the
13:33
Speaker 2: railroad Titans, aren't They are the nineteen.
13:35
Speaker 1: They are, absolutely, they are the modern day railroad barons. Absolutely.
13:39
Speaker 1: But one thing that's and I know there's always this
13:41
Speaker 1: sort of thing. Americans don't get satire. Americans don't get irony.
13:46
Speaker 1: Do the Trump supporters genuine supporters that they are, and
13:50
Speaker 1: many of them being basically Republican Party supporters who were
13:53
Speaker 1: just who would be Republican voters in any event, and
13:57
Speaker 1: Trump is just the latest iteration of who they would
13:59
Speaker 1: vote for. But is there any sense of irony among
14:02
Speaker 1: that supporters that there is a squad of billionaire as well?
14:06
Speaker 1: In the show when the proposal was to drain the
14:09
Speaker 1: swamp and all that.
14:10
Speaker 2: It's a great question, James, But then again, how did
14:13
Speaker 2: Trump a billionaire become the hero of the working class.
14:16
Speaker 2: This is the phenomenal irony of the whole Maga movement,
14:20
Speaker 2: is that he had a billionaire, never fought for his
14:23
Speaker 2: country as a general or was a politician, which of
14:26
Speaker 2: course previous presidents have always been that sort of milk.
14:29
Speaker 2: Here's a guy, a businessman, taking over, and he's a billionaire,
14:32
Speaker 2: He's got a gold skyscraper in New York City, and
14:35
Speaker 2: yet he is seen as the man of the working
14:38
Speaker 2: American and whereas the Democrats, the traditional Democrat party, are
14:42
Speaker 2: seen now as a party of inner city elites. It's
14:44
Speaker 2: an extraordinary flip. And Trump has done that.
14:46
Speaker 1: Again and they re elected him on that. So there
14:49
Speaker 1: was no basically any suspicion of that or questioning of
14:53
Speaker 1: that was muted basically because he was re elected.
14:56
Speaker 2: That's right. And would agree that he's doing exactly what
14:59
Speaker 2: he promised to do. To give Trump his due, He's
15:01
Speaker 2: not saying he's not lying about it. He's doing absolutely
15:04
Speaker 2: what he promised he would do. He's just doing it
15:07
Speaker 2: at full speed.
15:09
Speaker 1: Right, So what do you think. I know it's very difficult,
15:11
Speaker 1: but so here we are. This is the Week of Liberation,
15:14
Speaker 1: Day of the tariffs. Australia will be affected to some degree,
15:18
Speaker 1: but I suppose the eye popping tariffs, So of things
15:20
Speaker 1: like the twenty five percent on cars for instance, going
15:23
Speaker 1: into the US and general motors and forward, you would
15:28
Speaker 1: think that they would be going up in the stock market.
15:30
Speaker 1: You would think he's doing them a favor, but they've
15:32
Speaker 1: been falling. Actually, how do you think is going to
15:35
Speaker 1: pan out midyear? You were talking about the first hundred days.
15:38
Speaker 1: What are the sort of questions that will dominate the
15:40
Speaker 1: Trump administration for the rest of the year.
15:44
Speaker 2: Look, I think with as far as Trump's concern it's
15:47
Speaker 2: interesting his second term on tariffs is fairly different to
15:50
Speaker 2: his first term on tariffs. Of course, he was a
15:52
Speaker 2: big tariff guy in his first term, and people often
15:54
Speaker 2: forget terroriffs he put on China. He's always been susceptible
15:58
Speaker 2: to that. But this time around, and this is what
16:00
Speaker 2: I think has shaken so many allies, including Australia, is
16:03
Speaker 2: that he really is a different beast on tariff's. He
16:06
Speaker 2: really has come out this term with a sense that
16:10
Speaker 2: America has been wronged, and that's capital A and capital W.
16:15
Speaker 2: The sense of grievance is really driving his tariff policy
16:19
Speaker 2: this time he sees them very much as nationalistic, almost
16:22
Speaker 2: a tool of vengeance in a way that he didn't
16:25
Speaker 2: in the first term. And I think that's why, of course,
16:26
Speaker 2: we saw Australia fail on the geinting exemption from the
16:30
Speaker 2: still and all a millium tariffs recently, whereas they've got
16:33
Speaker 2: that same exemption in twenty eighteen. And the bottom line
16:36
Speaker 2: I think there is that Trump is just a different
16:38
Speaker 2: beast when it comes to tariff's this time around. And frankly,
16:41
Speaker 2: I think if the same Australians were running the show
16:44
Speaker 2: as we're running the show, then it's Malcolm Turnbull, Julie
16:48
Speaker 2: Bishop and Joe Hockey as the three key players. I
16:50
Speaker 2: think Australis too would not have got an exemption this
16:53
Speaker 2: time around. That's sound different. I think Trump is on
16:55
Speaker 2: That's interesting.
16:56
Speaker 1: Yeah, yeah, okay, So they've become core stitch And as
17:01
Speaker 1: you said, to some extent, that's the explanation, isn't it
17:04
Speaker 1: for basically turning against what we're allies? Who are allies?
17:08
Speaker 1: But this idea that how could he possibly turn against
17:11
Speaker 1: his own allies? But that's the explanation that the allies
17:13
Speaker 1: have let the US down.
17:16
Speaker 2: That's right. Absolutely, it's the ally's fault and he's getting
17:19
Speaker 2: them back, but he is incredibly erratic with it. It's
17:22
Speaker 2: interesting he's committed to tariffs to a large degree, but
17:26
Speaker 2: he's still a bit skittish on them. And I think
17:28
Speaker 2: this is fascinating for Australians to watch. It's very disturbing,
17:32
Speaker 2: of course if you have a lot of investments. But
17:34
Speaker 2: he imposed twenty five percent tariffs on Mexico and Canada
17:36
Speaker 2: and then of course the stock market went, whoa, we
17:38
Speaker 2: dived and he delayed them for thirty days, and we've
17:42
Speaker 2: got this mystery on I think Thursday, Australian time, of
17:46
Speaker 2: what he's going to do with this Liberation Day, which
17:49
Speaker 2: I see one of his former aide, Steve Bannon, wants
17:51
Speaker 2: to turn into a public holiday. So it's going to
17:53
Speaker 2: be fascinated to see exactly what he does at that
17:57
Speaker 2: point in time. I think the one thing that actually
17:59
Speaker 2: scared Trump James is the stock market. He does not
18:04
Speaker 2: want to see a great dive on Wall Street. He's
18:07
Speaker 2: one of the few presidents you might recall in his
18:08
Speaker 2: first journ that actually linked stock market's success to his
18:12
Speaker 2: own policies. Other presidents don't do that market still.
18:15
Speaker 1: But the market's went very well in his first one
18:17
Speaker 1: hundred days last time.
18:18
Speaker 2: That's right, and so he thumped his chest at that time.
18:21
Speaker 2: I recalled it. What he's saying this is, look at me.
18:23
Speaker 2: I'm a great president. The market loves me. Now the
18:26
Speaker 2: market doesn't like him at the moment. And if the
18:28
Speaker 2: market starts to hate him, then I think you might
18:30
Speaker 2: see him pulling back on some tariffs. And I think
18:33
Speaker 2: the way he will do that will be in a
18:35
Speaker 2: way that doesn't lose face. And that would be, say,
18:37
Speaker 2: for example, with Australia, when he meets the Australian Prime
18:40
Speaker 2: Minister in Washington, they have dinner together and everything, and
18:43
Speaker 2: you have a sort of exemption given on the one country.
18:46
Speaker 2: I think that might be the way that Trump goes backwards,
18:49
Speaker 2: if he wants to go backwards down the track.
18:51
Speaker 1: Okay, very interesting. Yeah, And that whole change of tone
18:55
Speaker 1: where you can start to give exceptions to the policy
18:58
Speaker 1: that you've announced, it gives you some regal room. Okay,
19:01
Speaker 1: very interesting. We'll take a little break. We've got some
19:03
Speaker 1: very good questions, including one from Rosie which I've kept
19:07
Speaker 1: for Cameron because I knew he was coming on the
19:09
Speaker 1: show back in the moment. Hello, and welcome back to
19:19
Speaker 1: The Australian's Money Puzzle. I'm James Kirby and I'm talking
19:22
Speaker 1: to Cameron Stuart. Cameron, by the way, is the international
19:25
Speaker 1: affairs correspondent on The Australian and someone I have worked
19:29
Speaker 1: with on and off for a long time. I think
19:33
Speaker 1: roughly nineteen ninety three would have been the first day
19:35
Speaker 1: I saw him in the office of The Australian. So
19:37
Speaker 1: that will tell you how long ago it was. That
19:39
Speaker 1: not that we've been there ever since. By the way,
19:41
Speaker 1: We've all done interesting things. But here we are. Here
19:43
Speaker 1: we are, many years later, back back here. Okay, Now
19:47
Speaker 1: the question is from Rosie. Thanks for your podcast so informative,
19:50
Speaker 1: keeps things in perspective and provides me with the reliable
19:54
Speaker 1: financial news I could most reliable financial news I could
19:57
Speaker 1: ask for. Thank you, Rosie. I don't normally read out
19:59
Speaker 1: those first parts, but that one was interesting. Okay, here's
20:02
Speaker 1: the question. I have a question about Trump, and I
20:05
Speaker 1: was interested. I've noted Trump seems very interested in legitimizing
20:09
Speaker 1: cryptocurrency and has recently established an official strategic Bitcoin reserve.
20:14
Speaker 1: That's right, Previously, Trump has seemed very concerned, but share
20:18
Speaker 1: markets are making sure they're strong right now, he seems
20:20
Speaker 1: not to care about that. I wondered if Trump possibly
20:23
Speaker 1: doesn't care about markets tanking because he's more interested in
20:27
Speaker 1: boosting the value of crypto. Is that too cynical? Nothing
20:31
Speaker 1: is too cynical, Rosie. We'll just put the story, We'll
20:34
Speaker 1: put the question straight to camera about crypto and the
20:37
Speaker 1: strategic reserve. That was extraordinary, wasn't it that he would
20:40
Speaker 1: first of all, he was so pro crypto. Secondly, we'll
20:42
Speaker 1: just put the whole crazy thing about his own tokens
20:44
Speaker 1: to one side for the moment, because it's too important
20:47
Speaker 1: really to be distracted. How important is crypto to him?
20:52
Speaker 1: Is there something more going on than we might think.
20:55
Speaker 2: Yes, I don't know. I'm not well qualified to comment
20:58
Speaker 2: on Trump's crypto policies, but I do think he's very
21:02
Speaker 2: worried about the market and very influenced by the market.
21:05
Speaker 2: So I would disagree with that aspect of Rosies. And
21:08
Speaker 2: now that's a so question radio.
21:10
Speaker 1: Yes, yes, okay, very good. There you are, Rosie not
21:13
Speaker 1: being taken very seriously by Cameron on that one. And
21:16
Speaker 1: I think probably I would agree there too, that the
21:19
Speaker 1: markets themselves would be so so much more important than crypto.
21:22
Speaker 1: And in any event, Rosie crypto is correlated now to markets,
21:26
Speaker 1: completely correlated. So basically, if the markets are good, crypto
21:30
Speaker 1: is good, and vice versa. So that would all feed
21:32
Speaker 1: into that, all right, Just to finish off, I have
21:35
Speaker 1: a very interesting piece of corresponders from NIL. I just
21:37
Speaker 1: read it briefly. I'm lucky enough to be a member
21:39
Speaker 1: of a defined benefits superannuation scheme, and I acknowledge I
21:42
Speaker 1: have substantial superbalance that's not affected by the market. The
21:45
Speaker 1: benefit is defined. What frustrates me is how defined benefit
21:49
Speaker 1: funds seem to be talked about all the time as
21:51
Speaker 1: some supreme benefit only for old members and never the employer.
21:55
Speaker 1: The returns are magical and can't be obtained by younger employees, apparently.
21:59
Speaker 1: And then the point, all he's life, he paid seventeen
22:02
Speaker 1: percent of his salary into a defined benefit fund. And
22:04
Speaker 1: this Cameron, all the people you deal with, all those
22:06
Speaker 1: senior bureaucrasts that you deal with, and all those senior
22:09
Speaker 1: army and Navy people, they'd all beyond these defined benefits.
22:12
Speaker 1: And if the stock market crashes, they don't care. But
22:15
Speaker 1: here's the point Neil makes that that he says it
22:19
Speaker 1: puts seventeen percent in all the time when you think
22:21
Speaker 1: about it, we don't write by low. It's still as
22:23
Speaker 1: we speak today, it's eleven and a half and used
22:25
Speaker 1: to be used to be like three or four percent
22:27
Speaker 1: one time. But the point he makes is this, it
22:30
Speaker 1: seems to me, with good prudent investment management and long
22:33
Speaker 1: term membership and personal contributions, that a defined benefit fund
22:36
Speaker 1: can be a winner for both sides employer employee. And
22:40
Speaker 1: I guess what I'm saying is the only difference I
22:42
Speaker 1: see between identifying benefit fund and a normal fund is
22:45
Speaker 1: who wears the risk over any reasonable length of time.
22:48
Speaker 1: It seems the returns of an accumulation type fund are
22:52
Speaker 1: often better than a conservative defined benefit fund, and if
22:55
Speaker 1: people were prepared to invest sixteen percent of their income
22:59
Speaker 1: over for years, they could accrue similar benefits. Great point, Neil.
23:05
Speaker 1: Fair enough. We're always making fun. We're always ribbing you guys,
23:08
Speaker 1: probably because we'd love to be you and we wouldn't
23:10
Speaker 1: have to worry about our super and we wouldn't care
23:12
Speaker 1: if Donald Trump crashes the markets, because we'd have a
23:14
Speaker 1: defined benefit. That point stands, but it's also very true
23:18
Speaker 1: that if I put seventeen percent in since I was
23:20
Speaker 1: twenty one, I'd have a lot more money in super
23:22
Speaker 1: than I have today, and so would you. Cameron. All Right, Hey,
23:25
Speaker 1: thank you very much for being on the show.
23:26
Speaker 2: Great to have you, pleasure, Thanks James.
23:29
Speaker 1: Great to have Cameron Stewart there on the show today.
23:31
Speaker 1: And of course keep an eye on what happens next
23:34
Speaker 1: on Liberation Day public holiday. Huh. I supposed to's been
23:37
Speaker 1: suggested by Steve Bennon, so that probably kills it off
23:39
Speaker 1: immediately as an idea. Okay, the email is the money
23:43
Speaker 1: puzzle at the Australian dot com dot au. Talk to
23:46
Speaker 1: you soon.