Mike Kudzel
speaker
62 appearances
1 recordings
1 series
first heard May 2025
last heard May 2025
Mike Kudzel’s voice in public audio — every appearance, attributed to the second.
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Appearances
Mike Kudzel, a money manager at PIMCO, got to work on Tuesday, April 8th, ready for a crazy day.
Kevlar like what firefighters wear because markets were in flames in the aftermath of President Trump's big tariff announcements.
And that is weird. Because normally, when investors get scared, as they were that day, they sell risky things like stocks to buy stuff that they see as safer. And historically, that safer thing has been U.S. government bonds. Treasuries.
Historically, buying treasuries has been seen as the safest thing of all. So when the stock market is looking dicey, treasuries are supposed to go up. And... People run towards the U.S. dollar because it's safe.
I heard you almost say flight. It's a capital flight, right? That's the phrase?
Mapital height.
That's what I came up with. You got something better? I think he didn't want to say capital flight because capital flight is like a big thing. It's money sprinting away as fast as it can go, typically from an emerging market country whose government has just done something fiscally reckless or like unforgivable.
So this phrase is not something that any money manager would just throw around casually. But it was the song that was in Mike's head.
Was there like some kind of tipping point that you're like, if that keeps going, we're beeped?
Mike told me the tipping point was when the 30-year Treasury hit one of those round numbers that just freak people out.
Interesting in a bad way. Yes. And Mike is like, okay, this is new. This map at all height.
A regime break, like maybe the end of the reign of the dollar, the era in which people all over the world turned to U.S. treasuries and dollars for safety in times of crisis. This could be the end of something not just for money managers like Mike, but for everyone.
For the past 80 years, the dollar has been the reserve currency of the world. And the question Mike and a lot of other people have been starting to ask is, what if that's changing? What if the world stops seeing the dollar as the safest?
And I'm Mary Childs. And like Mike, we have some questions. Because the things we talk about at Planet Money, the world of economics and finance, that world is approaching its own kind of regime break. The regime we have been under was built on some basic ideas. Things like, you know, a dominant dollar is definitely good for Americans. Global trade makes the world richer.
It's in America's interest to be the world's cop. Federally funded research pays off. You know, that kind of thing.
So this is something we're going to keep covering over the next few months, an occasional series. Let's call it Pax Americana, about that post-war balance that had put the U.S. at the center of the economic solar system and how that might be changing.
So a reserve currency is one that countries around the world hold in reserve in the vaults of their central banks and in bank accounts of their central banks. They can hold any currency or they can hold some of this and some of that. The idea is they need to keep their trillions of money somewhere safe to store value until the day when they need to spend it.
One way a central bank stores another currency is by buying that country's debt. Because for all intents and purposes, if you're holding U.S. treasuries, you're holding dollars. Same for Japanese government debt. You're holding Japanese yen, etc.
Thank you for joining me today.
Currencies are his thing. Because Ishwar spent 17 years at the International Monetary Fund, which lends dollars to developing economies. So a lot of his life has been watching dollars flow all around the world. And he has seen the dollar's dominance on a more micro level. Like sometimes when he's been traveling, he has found himself without the local currency.
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