GM106: What Happens When the Debt Finally Matters ft. Marvin Barth

**Marvin Barth** (0:01)
The critical driver of inflation is expectations, nothing else. Like, yes, you can create inflation, otherwise, yes, there will be short-term shocks to inflation. But if inflation's expectations are stable, inflation will come back to where it was.
The problem is, is the Fed allowed inflation expectations to get out of control. And that's why we're not going to get inflation expectations back down until the Fed does something about them.

**SPEAKER_2** (0:31)
Welcome to Top Traders Unplugged. In markets, success doesn't come from predicting what happens next. It comes from being prepared for what you can't predict.
In each episode, we go deep with some of the world's most thoughtful minds in investing, economics and beyond to understand how they think, how they prepare and how they decide, and the experiences that shaped how they see the world. No noise, no short cuts, just real conversations to help you think better and invest with confidence.

**Niels Kaastrup-Larsen** (1:05)
Marvin, welcome to the podcast and thank you so much for joining Cem and I for what I know will be a fascinating conversation with you. You come highly recommended by our recent guest and friend Dave Dredge. So we're super excited to have you here. Marvin, how are you doing?

**Marvin Barth** (1:21)
I am well. Thank you for having me on, Niels. Jim, pleasure to finally come on the show. I'm a big fan. You guys have a great podcast.

**Niels Kaastrup-Larsen** (1:29)
Thank you so much. Thank you so much. Has it been a quiet summer for you or has kind of the global macro environment sort of kept you from switching off completely?

**Marvin Barth** (1:41)
Well, you know, I uncharacteristically decided to take a month off.
So for last month, I've been off. Supposedly off, right? And, you know, one of the things I like to emphasize about my research is that it has a very long shelf life. So, you know, I routinely have people asking me for reports I wrote a decade or more ago because they're still relevant. And so what I did is I set up ahead of time a whole spate of emails every two days to all my clients and subscribers that highlight things going on and say, hey, here's what I've written on that topic in the past. And that's been great.
The more important thing for me is I have finally gotten a chance to just decompress and start to think deep thoughts again after what has been, I think, for everyone a frenetic 18 months, right? You know, President Trump, whatever you think of him one way or the other, is a human volatility machine. In fact, I've described him as a antidote to Minsky moments, right? It's impossible for too much risk to build up in the system with that guy there, because there is something new every single day, right? And even for somebody who, for the most part, I would say, actually called everything he was doing quite correctly ahead of time, that didn't help. It didn't matter. Like, it's just so frenetic. So for me, contrary to most people, it actually has been a relatively quiet summer, just simply because I got to disengage for the last month, even though the rest of the world kept going.

**Niels Kaastrup-Larsen** (3:33)
Yeah, no, indeed. Jim, what about you? Any decompression in Chicago this summer, or?

**Cem Karsan** (3:40)
I would say I'm in this brief little eddy in the river this summer. It's been a busy, busy summer. My kids are back and my son's about to go off to boarding school. So this is a beautiful week or two of just reconnecting at 15

**Niels Kaastrup-Larsen** (3:56)
Yeah, good stuff.

**Marvin Barth** (3:58)
Fantastic.

**Cem Karsan** (3:59)
Yeah.

**Niels Kaastrup-Larsen** (3:59)
Now, since it's your first time on the podcast, Marvin, I did want, you know, for the audience to get a little bit of sense of your background. It's pretty impressive. But instead of just doing the usual list of all the kind of prestigious jobs you've had, I thought maybe I could ask you to pick, and I know it's a bit unfair when you don't know that I'm going to say this, but maybe you could pick two or three kind of pivotal points in your career where you experienced something profound, maybe, that kind of shaped how you think today and which ultimately led you to where you are today and having set up thematic markets that you run today.

**Marvin Barth** (4:46)
Okay. So, let me start with something early, which was I largely worked my way through university, and I worked actually a bunch of odd jobs, but I'll highlight two. I worked in a Heinz Tomato Ketchup Factory, and I worked as a commercial salmon fisherman in Alaska.