In The Mr. X Interviews: World Views from a Fictional US Sovereign Creditor, Luke Gromen recounts a conversation he has with a fictional US sovereign creditor to illustrate the current state of the United States’ economy, including why the US dollar is losing its power and what that will mean for Americans and people worldwide.
Gromen is the founder of FFTT, LLC (“Forest for the Trees”), a research firm catering to institutions and sophisticated individuals that aggregates a wide variety of macroeconomic, thematic, and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his customers. His vision was to create a firm that would address the opportunity he saw created by applying what customers and former colleagues consistently described as a “unique ability to put the big picture pieces together” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.
Now in The Mr. X Interviews, he provides an opportunity to get a world view from an impartial person about the state of the economy. Although Mr. X is fictional, Gromen has clearly done his research into the reality of the world economy, citing numerous studies and articles by expert economists and politicians that back up his points about the US dollar’s future. This first volume of The Mr. X Interviews-a sequel is in the works-explores Gromen and Mr. X’s conversations in 2016-2017.
Gromen does not dance around his subject. Right from the start, Mr. X states, “The pace at which the USD-centric global monetary system is breaking down is accelerating dramatically.” He begins by looking at the petrodollar from 1973 to 2014 when oil was only priced in USD globally and why the non-US world tolerated it. Now that is no longer the case. Mr. X states: “What nation would not lend to Saudi or supply Saudi’s social needs in exchange for the right to price Saudi oil in its own currency? Do you think any nation would decline that offer?” He goes on to explain that Americans must not forget that it was oil that chose the dollar as the world’s monopoly reserve currency for oil, not the other way around, and that the world can “unchoose” it.
Next, Mr. X goes on to explain why the Fed’s policies were totally discredited after 2008 because “the policies they implemented in the United States in response to the crisis were nothing in severity like those implemented in Russia in the mid-1990s, in Southeast Asia in the late 1990s, or in Argentina in the early 2000s. It was, like the protestor’s sign said, ‘Capitalism for the poor (EM/creditor economies) and socialism for the rich (the US economy.)’ That caught creditor nations’ attention; we knew we needed the system to change.”
Mr. X goes on to tackle the currency war and its relation to gold and oil. Ultimately, he predicts a crisis coming and that crisis is needed to drive changes that will be for the good of all in the world (except Washington politicians and lobbyists). This crisis will be driven by five historically-unique factors that no one alive has ever seen before: Demographics, Geology, Debt, Economic Reality, and the Repeated Weaponization of the Dollar. He explains, “Because throughout history, all sovereigns eventually default once debts get too high. Always. They may nominally default or they may default in real terms (i.e., via inflation), but they always default. There is no sovereign that has never defaulted.” He goes on to make it clear that even the United States has defaulted and gives examples.