Danny Moses: Debt, Gold & the Fed... What's Really Driving Markets?

Guy Adami (0:00)

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SPEAKER_2 (1:05)

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Guy Adami (1:30)

A very warm welcome to the Risk Reversal Podcast. That handsome face you see in the US Open, is that a pullover? I don't know exactly what that's called.

Danny Moses (1:40)

Yeah, you got it.

Guy Adami (1:41)

That, of course, is the handsome, and you're hearing the dulcet tones of one Danny Moses. Danny, how are you?

Danny Moses (1:48)

I'm good, Guy. It's great to be with you.

Guy Adami (1:50)

It is. We're taping this on September 11th, so I want to be extraordinarily respectful. It is, obviously, everybody's saying how hard it is to imagine it's 25 years, but it is 25 years.

So thank you for joining me today. I know I had friends, I know you had friends. If you are in our industry around that time, there's a very good chance you knew somebody that perished that day. So again, thanks for joining us, Danny.

Danny Moses (2:17)

Yeah, no, it puts everything in perspective for sure.

Guy Adami (2:21)

Now, perspective is important, but what we're tasked to do is to try to figure out what's going on in the world. I will tell you, listening to the work that you've been doing with Vinnie and Porter at all, I listened to your piece with Cameron Dawson that dropped.

You've been spot on with all your assessments of what's happening. Here we are, you're going to listen to this on a Monday in September. Bank of Japan is going to raise rates. We've been saying that's going to happen. We've been talking about Japan being the epicenter of this entire thing, which by the way, I think it continues to be. Let's start there and then back our way out.

Danny Moses (2:56)

Yeah, and right back at you, Guy, you've been all over this as well. We always talk about it only matters in Japan when it matters. People add nothing, nothing, oh yeah, Japan, but we're going to fix that.

Don't worry about it. Well, as I said a few weeks ago on a podcast, you would think we were in a financial crisis, which we are the way that Bessent had been acting. He kind of thinks he's sly, but he controls, I am the house. He's going to intervene in Japan in the end and all that. It really comes down to one thing, and that is our US Treasury market, right? And our ability to keep yields down because we have so much to issue. That's really the bottom line here. Certain things you can control and certain things you can't. Whatever we're going to do foreign policy-wise, it causes oil to spike higher and make inflation run, whatever. But Japan in and of itself as a market had a choice. They can sell US Treasuries over 1.2 trillion of them to defend their own currency and or buy back their bonds. And this all started, Guy, again, in the summer of 2024 when Japan ended the yield curve control as you and I have been talking about. And so here we are. So how do we really just start using gum to plug holes in a boat is really what we're doing here. And I think more important, Guy, the stuff that's been brought to the forefront, the stuff that now the genie is out of the bottle is the over 40 trillion in debt. I don't know if it's just crossing that number that made people start to look at it or $2 trillion deficit we're going to run this year, which is approaching 7% of GDP. These are not sustainable things. So I think people are concerned. We can get through certain periods. We can survive higher rates now. But how do we cure this? How do we? So at some point, this administration, the next administration has to start taking pain.