The Grant Williams Podcast Ep. 131 - Andrew McDermott

**Grant Williams** (0:10)
Before we get going, here's the bit where I remind you that nothing we discussed should be considered as investment advice. This conversation is for informational and hopefully entertainment purposes only. So, while we hope you find it both informative and entertaining, please do your own research or speak to a financial advisor before putting a dime of your money into these crazy markets.
You're about to listen to a special preview edition of The Grant Williams Podcast between my very special guest and my good friend, Andrew McDermott of Mission Value Partners in Nashville, Tennessee. The subject at hand is Japan and we're going to have the kind of discussion you won't be seeing if you just follow the mainstream Western press. There is a very different story that lies beneath those headlines and Andrew is the perfect guest to tease that out. Every episode of The Grant Williams Podcast including The End Game, The Super Terrific Happy Hour, The Narrative Game, This Week In Doom, Shifts Happen, Kaos Theory and The Hundred Year Pivot is available to Copper and Silver Tier subscribers at my website grantwilliams.com. Copper Tier subscribers get access to all the podcasts, all the members of The Silver Tier get back to podcasts and my monthly newsletter Things That Make You Go Hmmm. So, if you enjoyed what you had on the show and you'd like more high-quality content like it, then please make your way over to grantwilliams.com and join our exciting community today. And with that, on with the show.
Andrew, my friend, welcome back to the podcast. What a joy to see you in good old Nashville. How are you? Good?

**Andrew McDermott** (1:45)
Good, good, Grant. Happy to catch up with you at the end of the summer here. Although I know it's an endless summer in London, you're just getting started.

**Grant Williams** (1:53)
Hey, who ever thought we'd be talking about London and endless summer in the same sentence? That's a real sea change. I'm so glad we got to do this on short notice, because once again, Japan is in the headlines, and once again, it is spawning the kind of headlines that are fantastic and clearly written by people that are either new to Japan or just have certain alerts on their Bloomberg and the articles are already ready. If the end does X, publish this article. So I thought this is a great time for you and I to talk about Japan. We'll spend a little time talking about the macro and the headline stories that are turning everybody's eyes towards Japan once more.
But then I want to, if we can, dig into the weeds a little bit more and talk about the ground up and what's really happening in Japan, because there are so many threads we can pull on with that. You are one of the best, not just watchers of Japan that I know, but articulators of the story and the whole story, not just the headline stuff. So with your permission, get into the macro and then spin into some of the interesting stuff that people aren't going to be reading about in the headlines in the Wall Street Journal.

**Andrew McDermott** (2:57)
Sure. I'm happy to, as my dad said, to stand before you, to stand behind you, to tell you something I know nothing about. And that certainly applies to some of the macro stuff on the end about which I've been wrong for 30 years. So let's give it another go.

**Grant Williams** (3:11)
Let's start there because it is the flashing light that's suddenly making a lot of people sit up and take notes at Japan. The Yen has been on a slow and steady path to destruction for quite some time now. And lo and behold, we finally reached the limit where the Bank of Japan were desperate to intervene. Not that they haven't done that before. They have. But this time it was a little different because we found out later that they were aid-inabetted by Mr. Besant and the US Treasury.
So let's talk about the Yen first, just in a very broad sense. Why now and why there, do you think?

**Andrew McDermott** (3:44)
I don't know, obviously. I think that it is accurate to say that these headlines have garnered a lot of attention. Japan is presently under followed and I got probably a dozen emails. What do you think about this from people, my next door neighbor and all the way up to the few remaining people who think seriously about Japan. And it is a headline moving item, but in the grand scheme of things, it's just, as you noted, a piece of a very long and ongoing story in which Japan, like every other economy, has oscillated between managing its currency and letting it, quote, float. I would argue, as my friend Harry Willoughby does on Jesper Cole's terrific substack, that this is much more about what China has been doing and continues to do than anything else. And in particular, the only other currency pair that has gone in lockstep with Japan has been the Indian rupee. And those two economies are increasingly linked. So this is being viewed as a sort of act of desperation by Japan in which the US is helping.