Ray Dalio was on CNBC this morning discussing a wide variety of topics. Below are all seven videos of the interview, along with a brief description and computer generated transcript. Enjoy!
Dalio: ‘Gold’ is the New ‘Cash’
In an exclusive interview with CNBC’s Andrew Ross Sorkin, legendary hedge fund manager, Ray Dalio explains why he think the precious metal should be part of every investor’s portfolio. CNBC’s Jim Cramer weighs in.t:
andrew ross sorkin sat down with a rare interview with the world’s largest hedge fund manager. ray dalio. thanks, melissa. i did sit down with ray dalio. on goals, he is not necessarily bullish, but thinks about it as the ultimate insurance policy. take a listen. i think gold should be a part of everybody’s portfolio to some degree because it diversifies the portfolio. it is the alternative money. we have a situation now where when you have too much debt, too much debt let’s to the printing of money to make it easier to service. so all of those things mean that some portion should be in gold. warren buffett won’t touch gold. okay. yep. you think he’s wrong? clearly you must. i think he’s making a big mistake, yeah. gold is like cash. it’s an alternative version of cash. so all the long-term, it’s not the best investment. over long-term, it’s a little bit better than cash over long-term. ray dalio thinks there’s smooth sailing ahead for the most part when it comes to the market, but he believes there is this tail risk and it’s that tail risk that has to do with inflation and what’s going on in europe but has them thinking that you have to have a bit of your portfolio at minimum in gold, melissa. andrew, just quickly, did he say d-o-d, did i get quick ticket out of the country? dedz gold miners? no. people say own gold and guns. he says own gold. some people worry about the etf. he’s not arguing that you should be buying gold as an investment. he’s not arguing that gold is necessarily going up in price tomorrow. he’s saying, look, i think that there is some surge chance that there could be a problem ahead. he talked about flying from new york to l.a. and he says, for the most part, it’s going be smooth sailing but there could be a bump along the way. by the way, if there is a bump, ben bernanke and the rest of washington won’t have too many levers to pull any more and that’s when the gold comes into play. cie munger said gold is your — jewish families so into their garments, civilized people don’t buy gold. how he got away with that comment, i don’t know. and we showed the clip during squawk in the 6:00 hour. one of the things, and he painted a worse case scenario, he talked about the rise of hitler and he talked about in an absolute worst case scenario, that’s what he worries about the most. as long as they’re not filled with tungsten, i think that’s the key. note to self-drill into your gold bars, check them out. andrew, thanks very much. a lot mover squawk on the
Dalio’s Rules of Investing
Ray Dalio, Bridgewater Associates founder and CIO, explains why he doesn’t get “caught up in the moment” when making investment decisions. CNBC’s Jim Cramer weighs in.
the short version, those who forget histdoomed to i don’t — i think so many people overreact. they see things in a short-term way. they’re up against it. if it didn’t happen in your life before, then you’re not paying attention. but almost all important events never happened in your life before. so i made up for a lifetime, a monetary system breakdown. 1971, it never happened before. this thing didn’t happen before. so i think it’s — when i’m looking at it, i think these things sort of keep happening over and over again. and then i have this temporary plate and then i have these rules, if this happens, that happens probably because it’s all happened before. that was ray dalio talking about his investment pieces. let’s get down to the new york stock exchange. jim cramer joins us now. jim, you’ve been listening to a bit of this conversation. where are you on qe3? we haven’t talked about that lately. i think qe3 is an answer to the gridlock in washington. it’s an answer to the fact that investment is going to fall off dramatically if washington isn’t resolved and it forces money into the stock market. ray, this interview is fabulous. i think he’s the best. i also more hop in his interview than i thought. i’m going to take the other side. if he has a lost decade in europe, if he has the southern rim in charge, i say they’re not going to be competitive versus the united states, that’s major. we are taking control, again, of world innovation and world business. europe doesn’t sound important to me. jim, if bernanke gets fired and we talked about this around the table, as well, today, how does the market take that? bernanke is the savior of the market. bernanke and the media, bernanke caused the bottom, the generational bottom with a 60 minutes interview that said we’re not going to power any bank’s failure. ever since then, he has back stopped the u.s. economy, back stopped the banking system and i think he’s a voice of tremendous reason. he’s not a self-promoter. he’s a man of plain english. he wants to put people back to work. and if that’s bad, well, it’s not the american way. you want to put people back to work. i guess john taylor made the point that the more you try to put people back to work with some of this stuff, you more you keep high unemployment levels. he actually said that. i don’t know if you actually saw him say that. i’m meeting rosswell this g. there they’re saying, listen, because of washington, our business is going to turn down dramatically. i don’t know what’s the counter balancsequestration. what’s the counter balancing force? the only calibrating force i see is bernanke. i don’t know who is doing anything right in washington. jim, thank you very much. we will see you in just a few moments. great interview. great interview.
Hedge Fund Titan Reads Europe’s ‘Tea Leaves’
Legendary hedge fund manager, Ray Dalio, Bridgewater Associates founder and CIO, shares his predictions on the future of Europe and why he believes the euro zone is likely to stay together, with CNBC’s Andrew Ross Sorkin.
store opened 41 minutes ago, lines have been lined up for days. ray dalio made strong predictions on europe. hear what he had to say, take a listen. i think in the next couple of years i think that we’re going to have a depression in southern europe and it’s going to be a managed depression. there will be a combination of monetary policy, printing a certain amount of money to relieve it and at the same time a de-leveraging and restructuring of debt. de-leveragings, restructuring of debt and austerity are deflationary, and they are negative for growth. printing of money is inflationary and positive for growth. you have to have enough stimulation that you raise growth, you have to have a higher level of growth than you have of interest rates and so that process will continue and it will be a 10 to 15-year managed depression. the euro in that thesis stays together in. i think the euro stays — eurozone. — likely to stay together, although in later years, it’s more risky. i think the euro is controlled by southern europeans for the most part. it’s a vot of the members, and it will be run that way. and that will help to achieve i think that the policy by mario draghi and the ecb is a policy to achieve a balance of those things, a balance of austerity, a balance of de-leveraging and a balance and monetization, and i think we’ll continue that. if there is a breakup, i think it’s more likely that the northern europeans would leave. i think the euro stays — eurozone. — is likely to stay together. although in later years it’s more risky. i think the euro is controlled by southern europeans for the most part, it’s a vote of the members, and it will be run that way. and that will help to achieve the balance. dalio forecast the u.s. financial crisis and the european debt crisis based on his template for how the economic machine works and we also have a bit of breaking news on ray dalio, cnbc’s hedge fund specialist, one of our great producers here reporting that bridgewater’s $55 billion all weather portfolio is up 12.2% year-to-date, annual return of 17.5%. bridgewater’s $75 billion pure alpha fund is up 3.1% in 2012, since 2010 pure alpha has an annualized return of 25.6%.
Will Fed’s Sprint to Print Ease Economic Woes?
Ray Dalio, Bridgewater Associates founder, & CIO, shares his thoughts on QE3, and John Taylor, Hoover Institution senior fellow, explains why he thinks government policies are the main reason for a delayed recovery. Mohamed El-Erian, Pimco CEO, weighs in.
latest headlines out of it. i got the chance to sit down for a rare interview with the world’s biggest hedge fund manager ray dalio, founder and chief investment officer of bridgewater associates. here is what he had to say when i asked hi about the fed’s plan for qe3, announced last week. i thought that was a reasonable plan. i thought that was a good plan. is there an historical corollary? that’s always the case, yes. in other words the historical corollary is always the purchase of central bank, expanding its balance sheet to buy financial assets and depending on the circumstances — at this point in the game? yes, just recognize i think, recognize that quantitative easing is the new interest rates, right? so ask yourself, when everybody’s used to interest rates and they’re making a big deal out of quantitative easing like it’s something that’s something radically different than easing interest rates. the big difference is, when you ease interest rates you stimulate private sector credit growth. private sector credit growth is no better than printing money, in either case you have to ease so if you have a growth rate that’s bad, you now do quantitative easing. we’ll have more of the ray dalio interview and his thoughts on europe later this hour. it’s been a week since the fed announced qe3, and you just heard ray dalio. joining success john taylor, senior fellow in economics at the hoover institution, also a professor of economics at stanford university,ed el erian our guest host stays with us. john, i’d almost call that when i heard ray dalio, almost call that sort of against the current thinking, almost nonconsensus what ray dalio just said. so many people said qe3 does, the benefits are questionable, and that the possible negative effects are more prominent. which camp are you in? i’m in the camp the benefits are pretty small at this point and worried about the cost, too, so it is quite more favorable about the quaupttative easing than is appropriate. we had a week and the things they focused on like mortgages have not responded, optional adjusted spreads, et cetera. he has $130 billion to invest, it’s possible he could be long some assets and possible he could be long gold. part of his argument is even if it’s not as effective or efficient as you’d want, you still spend the money. not if you didn’t have a dual mandate. that’s a different story. it’s a more short term — the fed had a dual mandate and chose to follow one mandate over the other and now reversed its course. i think it’s a negative at this point. it’s causing uncertainty, people don’t know how to interpret all of the different rules forward. he’s clearly on a different side than that. he believes really that austerity, any form, whether from the fed or on the fiscal side right now, he’s more anxious about that than he is the upside or downside of stimulus. you thought housing prices are getting better, the stock market at a four-year high. i wonder what — i can’t figure out what the fed was focusing on. we thought they saw something the rest of us didn’t see, that was even worse than we were — there’s always that concern but this is a new fed, quantitative ease something not the kind of thing we’ve seen in the past, that’s a a new operation and whenever the economy slows down there will be massive quantitative easing. john, speak about this fed put because the market reads what you think about the costs, especially on what’s going to happen to liquidity, the functioning of the market sector and says john may be right, i’ll worry about that later. right now i want to ride this wave of liquidity. so the market right now focuses almost exclusively on the benefits. at what stage would you tell investors forget about the benefits and start focusing on the cost and make the cost your investment theme not the benefits. the costs are already there for the whole economy, for investors some investor also benefit from this, know more about what the fed is going to do in certain areas so for certain investors it’s quite positive. for the equity market as a whole at what point do you say they should not be responding just to qe? i think the equity market will respond to these announcements for a while, but the loaning term thing is fundamentals in the economy and i don’t see that being benefited by these actions. you might see movement short term and maybe that’s what people focus on but the general movement in the market is based on other factors. john you look at government activism and i brought up glooen span before, he says government activism causes corporate, the private sector to delay these long-term investments into fixed assets. he threw the fed it’s action into activism, too but mostly the government itself. do you consider the fed’s action also to be delaying the recovery? this big picture of policy uncertainty talking about it all the time, the fiscal cliff. here is the quote i have come to the conclusion the labor recover i have due to poor government policies of which regulatory expansion and policy uncertainty are a substantial part, you shave a whole percentage point, you say it would be a percentage point lower in unemployment without the regulatory overload. we don’t know exactly but i would say that’s a reasonable estimate. regulation, we just had an expansion of regulation the last few years, number of federal workers doing regulatory activities and number of pages in the federal register. chanos yesterday said the regulatory what’s been done in the last four years was enti the previous four years and four years before that. that’s not true. we have hey an expansion in the number of federal workers by a large shot. i compare this expansion compared to the great expansion in the 1980s, we were doing the opposite. it wasn’t a credit bubble. it was a typical, different type of financial break, right? nothing is exactly the same. the argument we’ll have it until the — including state workers, too? i don’t know how he — most interesting numbers chanos came up with, said the 1.500 in terms of how much capital expenditures, he said — capital expenditures to businesses, 4 billion. back to 4.2 billion, which is more he said than 2008. the issue was it wasn’t clear it was happening in the u.s., meaning a lot of these were u.s. companies that invariably were employing — hiring that would go along with capital expansion isn’t happening because of productivity or technology or whatever else. well we’re not getting as much as we did in terms of employment. employment-to-population ratio is down compared to when the recovery began. how long can we ride this, the participation rate going down? could they, we’re at a 50-year low, it’s suiting the current administration for the participation rate to continue to drop because — makes the unemployment rate look better. you don’t need to add jobs to bring it under 8%. can we keep spanking this thing to below 60 on the participation rate? it’s going backwards. people are dropping out of the labor force because they’re discussing the labor market. question still get to 7.8. it’s not the way to do it. will it keep happening in the next two unemployment reports? could be. it’s a bad labor market and people are dropping out. it’s a bad labor market but ends up looking better. the way we got the numbers. but i look at the number of workers who are working age population and it is going down. so that’s a critical number. we’re going to come back, we’re going to take a break and come back. we’re the only ones alowed to
China’s Troubles Continue to Plague Investors
Ray Dalio, Bridgewater Associates founder, & CIO, discusses his concerns about China’s deteriorating economy, with CNBC’s Andrew Ross Sorkin. Also, Mohamed El-Erian, Pimco CEO, weighs in on the risks of investing in China. “When you buy exposure in China you are subjecting yourself to a very unlevel playing field,” he says.
this is the pursuitof perfection. china’s economy continues todeteriorate, d government efforts, hedge fund manager andchina bear jim chanos expressed his concerns yesterday calling it a classic emerging market roach motel. in my exclusive interview with ray dalio i asked him what he thought of what’s going on in china. years past in japan when it was going strong they called a recession anything less than 3% growth. in china anything less than 6% growth is a recession meaning italso has, it causes a lot of financial problems and it’s disruptive and it’s a problem. so i think that we are in that vicinity, something like that. the fact that they can have 6% growth and think that’s depressing and we can have 2% growth and think that’s good is a reflection of the difference in our competitiveness. let’s bring in our guest host, mohamed el erian, ceo and cio of pimco. chanos yesterday again called ibelieve it was the h class shares the roach motel of emerging markets where foreign money comes in and never gets back out. what is your take? there are a ton of this, we are closer to ray, our baseline is that china will slow to 6.5% to 7%. critical is not the cyclical issues. the government can deal with thecyclical issues. the critical issue is can china navigate the middle income transition. only five countries have navigated this middle income transition at high speed, it’s like an adolescent that happens, the transition happens at $5,000, $6,000 per gdp, per capita. the big question, can they do that?the political situation is complicating this. our gut feeling is yes, they’ll be able to but it’s going to be really bumpy and this is one of the big five risks that the market faces going forward. and nobody’s ever done it with that many people. nobody’s ever done it with that many people and nobody has done it when they influence the global economy so much. so this is really uncertain, really uncertain, and it’s always gdoo to remember that most countries, brazil, the indonesias, failed at that level.so this is an important stage in history. jim cramer is in your mind of thinking that you won’t see a slowdown in china but also with chanos, don’t buy any securities. both of them are correct in the sense that when you buy exposure in china, you are subjecting yourself to a very unlevel playing field, so youbetter know how you’re going to navigate that. eight months, nine months ago, i remember talking about it on this show that 6.5% in china was not consensus back then and it would be a hugely more negative worse situation, more of a drop-off in gdp than anyone was forecasting eight or nine months ago. so you’re saying we’re there and you look at the shanghai index. it’s there. so it was going to be 6.5, and it did, there’s a lot of bad –not just in shanghai. all of the emerging market indices priced in lower growth. 6.5 is priced in now? i think 6.5 to 7 is pricedin. what they’re not pricing in is beneficial impact of qe, they’repricing in the bad impact on qe for the rest of the world. can you project out further? if you were projecting this nine months what, is your new projection for the next year? we think they stabilize at 6.5 to 7. you think it stay there is? we think it stays there for awhile. we don’t think they get back to nine or ten for a number ofyears. if ever or – if ever is a strong statement. i think you’ve got to recognize if the base is getting bigger and bigger, and the underlying changes that have to happen are more complicated.it can be the new normal in china. the question that arises iscan the political system, based on the implicit contract of little democracy, can it take it. we’ll have more from pimco’s ceo and co-cio, mohamed el erian. still toment could, jobs and
Possible Downturn in US Economy: Ray Dalio
Discussing how too much monetization could trigger inflation, with Ray Dalio, Bridgewater Associates founder, & CIO. Also, Mohamed El-Erian, Pimco CEO, weighs in with his thoughts on the outlook on the U.S. economy.
let’s talk about ray dalio. i got a chance to sit down in a rare interview with the world’s biest hedge fund ray dalio, founder and chief investment officer of bridgewater associates. one of the many topics we covered was the possibility of a significant downturn in the united states economy. so if you have a downturn, there’s a possibility that you don’t have that right mix and that you could have a downturn. the odds of that are comparatively low but i worry about it because it’s significant possibility. i described it as though, imagine you’re on an airplane that’s flying from here to los angeles, you’re probably going to get there okay but if you hit an air pocket and meaning if the economy goes down, there’s not an easy way to reverse it. monetary policy is less effective because when you buy a bond, when the federal reserve makes a purchase, that has the effect of giving money to somebody who won’t put that money into something like that bond. and that money does not easily go to people who spend it, that’s a bajance between monetary and fiscal policy and i worry about the policymakers getting that balance right. that’s a possibility and a scary possibility. other than that, i think the most likely situation is we will fly successfully from here to los angeles essentially but we have longer risks. you need a balance between austerity and sometimes debt restructurings, and monetization. if you have too much monetization, you’re going to have an inflationary problem. you have too little stimulation, monetary and fiscal policy, you’re going to have a depression. being in the betting business i also know what i don’t know. i would say that there are reasonable risks that it will not be managed well. wow. there is an interesting fact that some viewers may not know, dalio forecasted the u.s. and european debt crisis back in 2008 and based on his template for all of this, he calls it the econ machine, that’s how he thinks about all this, and it’s worth reading. you’ve probably read it before, what were you going to say? go ahead. forecasts or forecasted? i looked it up, i saw it coming up. that we were going to say he forecast. both are used, but forecasts is the preferred form. forecasts is an irregular verb meaning that its past form don’t follow the gerule of adding ed to the base. i would have added ed. real quick, though, the paper is called the economic paper works dot-com. who are you? we’ll have more of our exclusive interview? we are. you interrupted all of this. when did you do that interview? you had work after the show was over so you felt you worked some overtime that day so you, i mean i’ve heard the whole story about the alarm clock and everything. pretty much. you deserved to come in at 7:00? that’s pretty much how i think about it, yes. i know. joining us with reaction to some of ray dalio’s comments and thoughts on the economy, mohammed el erian, ceo and cio of pimco. you were watching squawk box somewhere, where is that in europe. andrew is sacrificing himself when i heard you pick on my nets i agreed i need a diversion and andrew, you’re giving him a hard time — it’s worked but he’s taken a lot of heat. you saw i hadn’t seen the score. in fact there was a time when we were talking about our teams being in first place earlier this year. what happened? that didn’t last very long. 443. let me tell you one fact, if you exclude two innings when they gave up 15 runs it wasn’t such a bad game. it was a 1-1 game. right. just two innings, the first and the ninth. that’s like we added 4 million jobs in the last 15 months, if you get rid of the two innings, we’re much better off. you’re on a roll. what’s in your coffee this morning? much better off than last year. i want some of your coffee. you’re in europe, what city? i was in germany. you were in germany, but yesterday i asked the same question a few times could chanos, should we be adding the shorts in europe, getting rid of some shorts, lessening up on the shorts or going long? i said to you earlier maybe we missed it. you’re not so sure, are you? what you’ve missed is the massive rally in the short end of italian and spanish bonds which is huge and rightly so because the ecb has cut off that tail. isn’t that the first thing that would happen in a real turnaround, isn’t that the way it would play out? be careful. it’s the same issue in the u.s., it’s the same issue else where. central banks are very good at trying to limit the left tail and certain sectors benefit hugely, financial is one of them, so they’re very good at limiting the left tail but they can impact the right tail, what can go well, be careful central banks may also be containing the recovery because of the distortions they impose, and ndly, they have taken valuations up here but fundamentals stayed down here so investors have no not only get excited about central banks can take the valuations up, they have to ask the questions how will fundamentals manage. this is complex. you’ve used it many times in its past. i think the stock market is reflecting the fact that central banks are all in. the next step is going to be more involvement. what did you want to ask him, dalio, you want to ask him specifically? specifically he has a real concern this goes off the rails. from a handicapping perspective he’s saying we’ll get as he said from here to l.a. and everything if you hit the pocket, all hell breaks loose. we agree. he says the probability of something going badly and uncontrolled, unmanaged downturn is reduced but our ability to respond, should that happen. should that happen — we have very little ability because policies are taken into unfamiliar territory. how do you invest under that scenario? first of all do you it obviously in a differentiated manner. for example, yes, play the wave of central bank liquidity. it’s a huge wave, play it, but understand that it will not — when you say play it, what does it mean to play it in. there are certain sectors that will benefit tremendously from the activism of central banks. there are others for example if you’re investing in a company or country like greece that is highly levered and negative cash flow, no amount of central bank liquidity is going to help you out. this is a time of incredibly differentiated approach, not only in the equity market and the corporate band market but also in the government bond market, and people have to realize because you’re trying to reconcile three things, central bank action, fundamentals and valuations, and they are a tug-of-war going on right now in valuations. okay. i’m still not sure what to do. i’ll give you a whole list of details as we go along what to do. europe is too monolithic to get an answer on. you said greece, doesn’t count. they shouldn’t have been in the eu anyway. that’s a real issue because they’re one of the big five risks. how do you undo the fact they shouldn’t be in the eu? there are some other ones that barely should be in. how do you undo it? that’s the problem. you can’t. when it’s all said and done at least in the next five years don’t theytay? if you’re a german, a simple choice, eitherrite unlimited
What Worries Hedge Fund Titan Ray Dalio?
Raymond Dalio, Bridgewater Associates founder, & CIO, discusses his biggest concerns about the global economy, and why he thinks gold should be part of every investor’s portfolio, with CNBC’s Andrew Ross Sorkin.
hedge fund opens up to the media. andrat down with ray dalio and he asked about about his biggest worry about the global economy. i don’t know whether we’re beyond the point of being able to successfully manage this. orry about social disruption,about another leg down in the economies causing socialdisruptions. because deleveraging can be very painful until they’re managed. but when people get at each other’s throat, the rich and the poor and the left and the right and so on and you have a basic breakdown, that becomes very threatening. for example, hitler came to power in 1933 because of the social tension between the facts. so it’s go end on how the peoplework this through together. not surprisingly he’s also a big believer in gold. he here is what he said about owning the precious yellow metal. i think gshould be a part of everybody’s portfolio to some degree because it diversifies the portfolio. it is the alternative money. we have a situation now where when you have too much debt, too much debt leads to printing of money to make it easier to service. so all of those things mean thatsome portion should be in gold. warren buffett won’t touch gold.okay. do you think he’s wrong? clearly you must. i think he’s making a big mistakah. gold is an alternative version of cash.so long term, it’s in the best investment. over long term, it’s a little bit better than cash. however when you’re having amonetary crisis, when you have a fiat monetary system and youhave the need for money, debt is a promise to deliver money. so if you look at each of those devaluations that have taken place, march 1933, president roosevelt closes the banks and then opens them and says you can get your money. and then they broke the link with gold. and so the history over that period of time is that money can be produced. gold is somewhat limited.it’s an alternative that should be part of everybody’s portfolio, but not in a big way.
Dalio on QE3 and US Dollar
In an exclusive CNBC interview, legendary hedge fund manager, Raymond Dalio, Bridgewater Associates founder, & CIO, shares his thoughts on the Fed’s monetary policy and the competitiveness of the U.S. dollar, with CNBC’s Andrew Ross Sorkin. “There’s a short squeeze on the dollar,” he adds.
advantages and disadvantages. but here is andrew’s newsinterview. a squawk news maker sat down for a rare interview with andrew. the world’s largest hedge fund manager ray dalio from bridge water associates. his fund currently has $130billion under management. let’s he hear what he had to saywhen andrew asked him about qe-3. no, i thought it was areasonable, good plan. is there a historical core later? oh, yeah. it’s always the case. in other words, historical corrolary –but at this point in the game. just recognize i think thatrecognize that quantitative easing is the new interest rates, right? so ask yourself when everybody’s used to interest rates and they’re making a big deal out of quantitative easing like it’ssomething radically different than easing interest rates. the big difference is when you ease interest rates, you stimulate private sector credit growth. private of private sector credit growth is no better than printing money. in either case, you have to ease. so if you have a growth rate that’s bad, you now do quantitative easing. we also got the chance with andrew to hear dalio’s thoughts on how competitive the u.s. dollar is in the world rightnow. listen to this. dollar overvalued, undervalued? well, i guess over the near term, i think that it’s going to decline because as we’re alleviating — there’s a short squeeze in dollar. there’s a lot of dollar denominated debt. so that means there’s a lot of promises for dollar. that means people need dollars. so when we have the movement in emerging countries and capital flows that way, europe and european banks lend dollars. they have a funding problem so they need dollars. that all creates a squeeze. but like any market squeeze, once you have the market squeeze that’ses passed, then it goes down and i think we’re in the phase of that happening. ugly contest.do you want the dollar, the euro or the yen? it’s an ugly contest.so i think over a longer period of time, those currencies havetheir problems. and then we have emerging market currencies.they’re not very well developed, but it they have a much hrfundamentally strong position. and then we have gold as acurrency. so that’s the comparison.