On this episode, rapid real growth is where we're going. I love trying to put the pieces of the puzzle together—lessons learned in history. We have to go back to the Industrial Revolution to understand what's going on today.
Greetings, everyone. It is Employment Friday, and it's Labor Day weekend here in the US. So, happy Labor Day weekend to everyone. This month's In the Know will be a little different in that we're going to be talking about very long-term charts. And the reason for this is we're trying to make connections between the Industrial Revolution and this technology revolution. This is a work in process for us, and so I'll probably be posing as many questions as having answers. So I think we'll be taking this journey together, putting the pieces of the puzzle together, particularly around inflation and interest rates, and especially now that we know so much more from Fed Chairman Warsh. His Jackson Hole presentation was quite illuminating, and we'll go through that as well. I do think one of the reasons economic indicators are transforming here is because we are in a technology revolution, and so I think we're going to see numbers that are going to be quite surprising to the consensus view out there.
The consensus view is that really nothing much is changing. We've been, in terms of real GDP growth globally, at about 3% for the last 125 years—Industrial Revolution—and projections... I guess I'll start with that first chart right now. So you can see this chart, and Brett Winton, our chief futurist, developed this chart in collaboration with academia, or certainly academic journals. And what you see here is what I just described. So for roughly the last 125 years, 3% GDP growth globally. And of course, the developed world has been slower than that. China has brought us or kept us at that 3% range for the last 25 years, I would say. And you can see this is a very long-term chart going back to 100,000 BC, and of course, all of these are very rough estimates. But what the chart is trying to communicate is technology revolutions tend to increase real GDP growth by quite a lot. And yet for the last 125 years, we've been at 3%. No one was alive, or shall I say very few people were alive, to experience anything other than a global GDP growth of 3%.
You can see from 1500 to 1900 there was some innovation—of course, the printing press and so forth. So there was a twofold increase from the prior 1,500 years. So a twofold increase, but the Industrial Revolution gave us a fivefold increase in real GDP growth: from 0.6% on average during the 400 prior years to 3%. And you can see now what we believe is going to happen in the next five years. We believe that growth rate is going to at least double, and we actually think that's quite a conservative estimate, especially seeing the profound growth coming out of everything AI, and because there are five major innovation platforms evolving today. You've heard me say them before: starting with AI, the biggest catalyst, but robotics, energy storage, blockchain technology, and multiomics sequencing and technology broadly in the life sciences space. So those are five innovation platforms.
The Industrial Revolution was more about three major platforms: the setup was the rail explosion in railroads, and then after that, telephone, electricity, and internal combustion engines. So, a fivefold increase. Is it possible that we will get a fivefold increase in real GDP growth globally—so, 15%? We think it's actually possible. We know that Elon Musk is starting to use 10% to 15%. And so anything is possible, especially with Elon Musk, and he certainly is driving this revolution in very important ways. But you can see here the IMF is expecting 3.1% growth, so more than two times the consensus expectation out there. And that 3.1% rolling into this year is still 3.1%. So despite some of the very rapid growth rates in these technologies, the IMF has not changed its point of view.
Now, why am I going through this? It relates importantly to inflation and interest rates. I've just given you the real GDP growth story; this is nominal GDP growth. What is nominal GDP growth? It includes real GDP growth plus inflation. And here you can see a shorter-term history since the early '60s. You can see what happened because we went off a gold exchange standard in 1971. You can see what happened to nominal GDP growth, which included both real GDP growth and inflation, and how far we went into double-digit territory. Back then, it was both interest rates and inflation that ended in double digits.
So here you can see since then a secular decline for 40 years. If you do a trend analysis, both nominal GDP growth and interest rates had been falling, and so most people in our business have not seen anything other than falling interest rates until recently, really until COVID. During COVID, there was the last big drop in interest rates, and since then, of course, we've been seeing a rise. Now the question is: we've been saying that we believe inflation is going to surprise on the low side of expectations, perhaps going negative, and I'll present some charts to give you an understanding of why we believe that. But one of the things that's going to be operating on the other side of inflation is real GDP growth. As I just mentioned, we think it's going to accelerate quite significantly. So there is going to be a tug and pull: real GDP growth up in this nominal GDP calculation, and inflation down, maybe negative.
Now, what you can also see from this chart is nominal GDP growth and the 10-year Treasury yield, from a trend point of view, are correlated pretty highly. And so the question is, where are we going now? As you can see, the 10-year Treasury yield has really been basing. It's been in a range since I'd say 2023. So we're in our third year of this range, but you can see that nominal GDP growth—now, I will say, to qualify this, this is the 10-year moving average—seems to be breaking out, and one would expect the Treasury yield to follow it. Now, this 10-year moving average has some endpoint sensitivity associated with it. So if we're right, and real growth goes in one direction and inflation in the other direction, interest rates could continue to base around this level. If real GDP growth is north of 7%, say, into Elon Musk territory, and inflation is just slightly negative, then we will see 10-year Treasury yields moving up. It's just the market working.
When we were at 0% interest rates—and we started there in earnest during the '08/'09 time period, and really for a lot of the market after that when rates were moving down—the Fed was helping that along. I think we're going to look in hindsight and say, "Okay, that did cause big problems and really contributed to the chaos going into and coming out of COVID." Here is an even longer look at long-term interest rates. You can see, in the context of longer-term history, that where we are today—year-to-date the average is around that 4% to 4.4% range—is pretty much in the zone of pre-going off the gold standard, I would say. And so not surprising to be back here; the market is working. We were on the gold standard and then the gold exchange standard until 1971, and then all hell broke loose, and now we've corrected that. Now we're coming back to a more normal range.
I know that everybody, when they hear interest rates are going up, gets very scared that this will have negative ramifications for the equity market. But if you'll notice recently, the equity market is hitting all-time highs despite interest rates continuing to move up. And so what is that all about? Well, if you break apart long-term yields—and you can break them into an inflation component and a real component—what we're seeing is rates have been going up recently more because of real growth expectations than inflation expectations. So, again, this is just the market at work, and we're very happy to see the equity market holding up so well in the face of rising rates and despite all the talk about the deficit and the overwhelming $40 trillion of debt in the United States compared to roughly $30 trillion in GDP.
I'll get into that in a moment, but before I do, I just want to make one more very long-term observation. Post-Fed—the Fed was created in 1913—once we got through the Depression, we've been in a world where the yield curve has been positively sloped for the most part, unless we're going into a recession. You can see the gray shade there is a positively sloped yield curve, and the red means inverted. Inverted means long-term rates are lower than short-term rates. But look at what the world looked like from this point of view prior to the Depression: more often than not, the yield curve was inverted, meaning long rates were below short rates. Rarely did we see a positively sloped curve, and we believe that one reason for that is we were entering into the Industrial Revolution. The Industrial Revolution had that tendency towards deflation. We were on the gold standard, but there was the impact of new technologies on the inflation rate, which were deflationary. So long rates reflected more of that deflationary undertow, and short rates were more focused on real growth, the growth in the real economy.
So we think we might be going to something like that now. You can see in the pre-Depression period, the yield curve was inverted during those shaded areas, which is when real GDP was negative, but it was also inverted during periods when real GDP was not negative. You can see we've had our first episode there. This last go-round, we had a highly inverted yield curve, and yet we never went into a recession post-COVID recession. We were looking at that as possibly an indication that we would, and in many sectors, we did. We know manufacturing did, we know housing did, we know small businesses did, and we know lower-income consumers have felt like they are in a recession. So there was some forecasting ability of the yield curve to say times were going to be tough for certain sectors, but the overall economy got through it.
So it's the first indication we might be back into Industrial Revolution times where the yield curve was inverted most of the time—I think it was more than 60% of the time—and the average inversion was roughly 100 basis points. But you can see that we got much deeper inversions at other points in time.
Here we are with a shorter-term look at the deficit, and you can see we've tipped down. Now, one of the reasons we've tipped down—and our expectation was that we would not tip down, but we have—is that defense spending is ramping even more aggressively, and I would say corporate tax reductions are much more significant than we thought. In other words, lots of tax refunds for a lot of building and investment that started last year. Neither one of them is a bad reason: national security is important, and corporate tax reductions are excellent—that has given corporations huge refunds to reinvest, and they are reinvesting. We do believe, though, that on balance, if we're going to develop a trend here in the deficit, it will be to lower and lower deficits, hitting the minus 3% that Treasury Secretary Bessent has said is his goal for the end of 2028. We believe we'll get there because real GDP growth is going to be much stronger than anyone anticipated.
I'm going to go now to the chart I referenced earlier, talking about this debt as a percent of GDP. You can see the green line there takes us back to the late '40s, and you can see the debt-to-GDP ratio is near an all-time record. Many headlines are screaming, "Record-breaking debt, $40 trillion!" As a percent of GDP, not quite record-breaking, as you can see, but it's been hanging in there. COVID and all the stimulus really took us there, and we've stayed there. That, of course, is very upsetting to a lot of people who are looking at profligate spending, fraud, waste, and all of that.
Now, the purple line here is government debt to corporate equities. You know what that looks like. Now, it's not apples to apples; of course, the government doesn't have equities, and this is not total debt to all equity. But it gives you a point of view: the debt as a percent of equities has been coming down much like it did during the '90s. In the '90s, we were in a very good market for equities, and in fact, in the '90s, I think we hit our first government surplus in many, many years. So debt to equity is down and is near record lows, except for the late '90s. What this is telling us is the ability to support the debt has improved because there has been wealth generation.
Now that brings into focus the scary thing going on with wealth taxes out there. We are adamantly opposed to wealth taxes, mostly because we are so pro-innovation, and we think that would destroy the animal spirits out there. Hopefully that is not where our economy is going, because that will give China an advantage over the US, and China is our biggest competitor these days as it relates to innovation.
We've started with fiscal policy; now looking at fiscal policy and monetary policy on the same chart. M2 is in the green; that's the growth rate on a year-over-year basis. It is a four-year annualized growth rate, and so is the growth in federal outlays, which is in the purple. We think that if you compare today to the '70s, there is no comparison. We're at the lower end of this chart's range, and so from that point of view, we can take some comfort. But we do agree that as the economy grows faster, federal outlay growth should slow down, especially transfer payments and other social types of payments. You can see money growth, putting that in perspective the last four years: this is not an inflationary monetary growth rate. COVID was, but we have undone that, and that is all to the good.
The other thing we like to focus on—and we've mentioned this many times—is M1 growth. As opposed to the four-year annualized rate, that 1.7%, on a year-over-year basis it is a little over 5%. As we've mentioned before, if nominal GDP growth is going to accelerate from 5-ish% where it has been recently, then demand for money will increase, and M2, we would imagine, would continue to accelerate.
However, one of the other things we're watching carefully is the velocity of money. The velocity of money is flattening out right now; that's the green line here. You can see from the purple line—and in fact, this is the only correlation we've been able to find as we've tried to explain why velocity started moving down in the late '90s and really in a trend sense has been moving down since—it's the labor participation rate. Interestingly, in today's employment report, that did tick up a bit, so that's interesting. And yet, if it continued to go down because baby boomers are retiring and immigrants are leaving, then we believe the velocity of money would continue to flatten out, if not decline. So when we think about the supply and demand for money, we have to take this variable into account. Now, some economists disagree with me. Probably the most important economist to me, Art Laffer, thinks that velocity is just a residual. I have watched it over the years and have linked it to a number of things, maybe the most important one of which is the labor force participation rate.
Here's another... We've gone through this probably every time I've done this series, but the yield curve is flattening out again, which is really interesting, and we are moving towards that negative area. You can see we were there, and we were all worried about the recessionary ramifications of that yield curve in '23, '24, into '25, and we didn't get a recession. So I'll hearken back to the very long-term yield curve chart: we could go negative again because real growth is accelerating, impacting short-term interest rates, but inflation is likely to come down. We'll go through why we think that it's likely to come down, perhaps dramatically, and long rates will be more affected by that. So long rates could drop below short-term interest rates.
Here we'll go to inflation. The reason I want to focus on this measure of inflation, headline PCE inflation, is the Jackson Hole speech that Chairman Warsh gave. He is focused on this number, and it is at 3.7%. That is high by historical standards, certainly the last 30 years, and he wants that down to 2%. So this is a little shift in our thinking if he really means that he is looking only at this measure of inflation. Here's M2, yes, a little over 5% as I mentioned before on a year-over-year basis. You can see the 3.7% next to money growth. If this measure of inflation keeps going up, the Fed will tighten more. We think it is temporary, that the oil price impact from the Iran war is the reason, and that it is getting set up to turn down. But he has focused us squarely on that, and we just have to face it.
I'm presenting this one, which is taking the same measure of inflation, but it's called the Dallas Fed trimmed mean PCE inflation. What it tries to do is take out the tails on either side—high and low inflation. The only reason I'm bringing it up here is because I believe in his testimony to Congress after he had been appointed by the president, he focused on this measure of inflation, and you can see it's at 2.3%, very close to the 2%. So we don't think that he's focused only on the pure headline 3.7%. He has his eye on this one, and he probably has his eye on Truflation, because one of the task forces he's commissioned is to look at inflation measures both public and private. Here's a private measure, and you can see that it too is closer to 2%: on the headline, 2.4%, and on core, it is at 1.3%. So core is starting to telegraph, "Hey, wait a minute, maybe you should not think about tightening as your next move." We put all three on this one; you can see what an outlier the headline PCE is relative to the others. So stay tuned on that one.
Here's one reason we think inflation is going to come down dramatically. It is very interesting that despite two wars—the Russia-Ukraine war and the Iran war—oil has not been able to crack the 2008 price, which at the very peak was $147. We didn't get as high as the post-COVID price in this last round with the Iranian war, and a few things have happened: Abu Dhabi has dropped out of OPEC—it dropped out in May, and its production is up 7% to 8% since then to a record a little over 4 million barrels per day; Venezuela is threatening to drop out of OPEC, I'm sure encouraged by President Trump, and that's another source of oil that is going to be developed more aggressively and maybe make it more to the Western world than to China. We know that this price signal up in the $80 to $90 range is a huge incentive for a lot more production, and it is happening. In the US, we're up at 13.6 million barrels a day; we're exporting over 6 million of those, and we were exporting almost nothing in 2015.
And so we think that behind the Straits of Hormuz, waiting to flood the market, is a lot of oil. The question is: will Saudi Arabia throttle back? We don't think so, because Abu Dhabi in particular and Saudi Arabia are very competitive. Abu Dhabi has turned its focus to investing aggressively in technologically enabled innovation, and its mindset has been this for at least five years. When I visited Abu Dhabi, it was clear they were focused on AI well before the ChatGPT moment, and they were trying to figure out ways to capitalize on it. Saudi Arabia is unlikely to basically let Abu Dhabi push its oil out, because Abu Dhabi, I believe, has concluded that the oil price has peaked. This chart supports that, and transportation is moving onto the grid, and the grid is not supported by oil; it's supported by natural gas, nuclear, hydro, solar, wind.
So we believe the demand for oil is peaking, has peaked, is in the process of peaking, however you want to say that. We have believed that for quite some time, but we think now the floodgates are going to open because Abu Dhabi and maybe Saudi Arabia will want to get as much of their reserves out of the ground and capitalize on this oil price before it falls. We would not be surprised to see the oil price drop back to $30, which you see here is the average of the last 50 years or so. But the process of moving away from oil really started 50 years ago when OPEC lifted prices fourfold almost overnight after we went off the gold exchange standard. That process has been a long time in coming, and I think we're now here.
There's another reason we think inflation is going to come down dramatically: it's technology. Look at how rapidly these costs are falling. The purple one is genomic sequencing. In 2003, it cost roughly $2.7 billion to sequence one person's genome; now it costs less than $100, and it's probably going to $10. And then the black line there is AI inference costs; they're dropping 99.99% per year. Both of these costs are starting to get into the healthcare system, and AI through every industry. Productivity is going to be driven importantly by AI, and there's nothing like productivity as a force against inflation.
Now here is the gold price, and I'm going back to Warsh here. You can see in green here the gold price behavior during the terms of Chairman Volcker and Chairman Greenspan. Both of them, I believe, used gold as their guide, and during that period, inflation dropped considerably. We beat inflation. And then what happened? This did start under Greenspan, but in the late '90s, we had Long-Term Capital—I've gone through this before—we had the Russian default right before that, we had rolling Asian crises, and finally, we had Y2K. All monetary authorities around the world were fearful that Y2K would shut the global economy down because programmers, when computers really started making a difference, basically thought we would be in the 1900s forever. So they didn't put in "19," and we were going to shut down at the end of the millennium.
So the Fed eased, and then of course it eased again. When I say eased, interest rates went up, but they should have gone up a lot more given the growth and the speculation that was taking place in the late '90s. Then we had the tech and telecom bubble, and interest rates came down during the bust. So we had many easing moves, many more than we should have. I do believe when history books are written, we will conclude that that set off a loss of purchasing power for the dollar in terms of gold, and we saw it more in gold than we saw it in inflation. But we have made up for that recently.
During the end of Bernanke's term and Yellen's into the beginning of Powell's, we saw the gold price stabilizing pretty much in a range again. But COVID set it off, as did the Iran war. Some will say the Russian war and our own confiscation of wealth, and people just rushing for an insurance policy against the confiscation of wealth. So recently it's been both fear of inflation after COVID, but perhaps more so recently, fear of confiscation of wealth. The gold price going up, I know that Warsh does not like. And so it is interesting that the gold price peaked on the day President Trump nominated him, and we would not be surprised to see the gold price stabilize around here, maybe go down. The jury's out on that; we're going to be in a wait-and-see mode. But if the dollar moves up as we believe it will because the returns on invested capital in the US are going up relative to those in the rest of the world, we believe the gold price will come down.
Now I'll just go quickly through the rest of the charts. It's Employment Friday; it was a strong report: 162,000, I think the expectation was in the 50,000 to 55,000 range. Household employment, which captures more businesses—boom, it was more than 450,000 jobs created. The average work week was longer, and that means the economy was really cranking in August. Now, this is a three-month moving average of the household employment metric, and you can see on a year-over-year basis employment has been bumped, but we believe it is turning around. For those who think that AI is going to destroy jobs, you've got another thing coming: we think it's going to create jobs. The Ramp survey suggests that companies that are harnessing AI more aggressively than others, their employment ranks are going up much faster than the others.
The labor force has been coming down. Baby boomers leaving—that's not going to stop for five years or so, so this could continue to come down. Immigrants leaving is also a pressure, so we wouldn't be surprised if we're talking about labor shortages in the not-too-distant future. Speaking of, you can see in the green line here the unemployment rate is still 4.1%; that's where it stayed last month. But the unemployment rate for the 16- to 24-year-old cohort went back from 8.5% to 9.1%. So entry-level jobs, yes, we're seeing some of those disappear. Again, just encouraging those people who are looking for work: go out, start your own business to solve a problem that bothers you, and use only AI and don't hire anyone, and you will increase the probability of getting a job out there considerably. You might even be successful with a new business, although only 10% of startups succeed.
Here you can see the next chart: University of Michigan, a little bit of a lift in the consumer mood, maybe because gasoline prices, while still up year-over-year, didn't continue to go up. You can see average hourly earnings growth rate at 3.1%, still very well-behaved. If productivity is in the 2% to 3% range now, it means that unit labor costs are not going to impact inflation. Personal savings are still low, although they did tick up. A lot of people are hand-to-mouth on the lower end of the income spectrum. On the other end of the income spectrum, you've got high-net-worth families enjoying a booming stock market and booming venture funds, and so they're willing to dig more into their savings. So that's kind of a bifurcation.
I just present this chart to say, yes, the yield curve went negative, but consumption stayed at a pretty hefty growth rate or decent growth rate given what's been going on. So this economy has withstood a lot. But housing has not. You can see existing home sales here, new one-family homes, homes for sale. We thought this line would continue down, and yet it's turned around. I think builders started building on spec again as interest rates ticked down for that moment in time. I can't explain why this is going on. We thought that builders wanted to clear themselves of all of this inventory because interest rates are going up, but they quickly pivoted back to a very little dip in interest rates taking them back into spec building. That's the only thing we can figure out. But there are a lot of homes for sale out there, and prices in the new home sales front are still going down.
On the existing home sales, they've been accelerating a little bit. We expected those to continue following new home sale prices, but they have not, again probably because of high net worth. Here you can see mortgages: yes, the interest rates went down, but have come back up. So my guess is builders will want to clear some of those inventories. Here you can see manufacturing PMI: is this manufacturing sector moving from just-in-time inventories to just-in-case inventories? Probably not. The AI revolution is impacting not just technology capital goods, but also non-technology capital goods.
Here's total non-defense capital goods ex-aircraft, and what we're illustrating here is the breakout that we have seen since COVID in this measure after 20 to 25 years of topping out at the same range, going nowhere. And so maybe with this technology revolution, we've got miles to go. You can see the growth rate during the '90s during the internet revolution, and you can see we're heading back at nearly the same rate now, and you can see how long that was sustained. I would start the marker for this one around the ChatGPT moment, a little bit after it. So we're only in the first few years of what we believe is going to be years and years of capital spending.
Here's the trade balance. I know the president hates the trade balance, but this was predictable. The US is growing faster than the rest of the world. Imports increased, I think in one month, 3.6%—there were some distortions—but exports fell something like 2.5%. If we're going to be growing faster than the rest of the world, this deficit will be going up, but it will be offset with a capital surplus: more individuals and investors, companies choosing to invest in the US as the returns on invested capital go up here. You can see profitability is very good here in the United States, and so this is another reason we will see capital attracted here.
Now we're going into some market indicators. Still puzzled by this one: metals-to-gold ratio. Now that gold has been going down, I thought we'd see a bigger turn in the green line there; we have not. And so that just tells us that something could be going on in China in terms of limiting the growth of metals. We talked about interest rates quite a bit. Interest rates may be going up more because of the US than China; maybe that's all this chart is saying. And then here, S&P to oil: you can see it's hovering near its highs. If we're right on what's going to happen to oil, this is going to break out in a very big way from the top of the range that has actually been in place since the late '90s.
And S&P to gold: again here, many of the bears focused on the deficits and government debt have been expecting a waterfall in this series—S&P going down relative to gold, looking more like the '70s. We disagree entirely on that, and we think we're moving in the other direction. Here's the gold to T-bills total return ratio, and you can see how that behaved during the golden age of equities, the '80s and '90s: it went down. And we think the same thing could happen this time, more because of gold than T-bills. T-bill interest rates were going down for the most part throughout the '80s and '90s; we don't think that will be the case anymore here.
Here's Bitcoin to gold. This is promising; it looks like a turn is in. Famous last words—I don't want to be the famous last words here, but it does look like a little bit of a breakthrough here. And you know what's interesting, and you can see it here: the correlation between Bitcoin and gold is very low by historical standards. And so to see Bitcoin starting to break out relative to gold is very reassuring from our point of view. You know we're big bulls on Bitcoin: it's a technology revolution, it's a new global monetary system, and it's the first of its kind in a new asset class. So we think it has miles to go because of those three revolutions. And if we're right on inflation, the pressure on gold will be to the downside.
I will say we've been thinking carefully about Bitcoin and gold and the insurance policies that both do provide, because we think this technology revolution is going to put a lot of companies in harm's way, and we think there will be counterparty risk if enough companies get into trouble. It's interesting: during the 1800s, 200 railroads went bankrupt, so there was so much capital chasing the rail opportunity. We don't think that's going to happen in AI, because the difference between then and now is the railroads were built on a hope and a prayer that a new world would develop and that revenues ultimately would come. In AI, the revenues are screaming; the returns on invested capital in this space are huge today.
We see Elon's terrestrial data centers turning from huge losses to massive profits as he has pivoted that part of the business for the short term into the neo-cloud business. So huge returns on invested capital. I think Anthropic agreed to pay $50 billion per gigawatt—that's the equivalent, just the $50 billion—and I think it cost Elon and team somewhere in the mid to high twenties. So right there, immediate returns on invested capital. But we do think that there is going to be a lot of creative destruction as this new world happens. Again, robotics, energy storage, AI, blockchain technology, multiomics technology—touching every one of our sectors.
If enough funds like private credit made huge bets on SaaS... And some software companies and stocks are coming back a bit. Salesforce.com had a very nice rebound after illustrating how important Agentic AI and Slack together might benefit that company, but it still has a huge legacy software base to deal with. Nonetheless, it's not all death and destruction in software, but we do believe that there are going to be dislocations in every part of the economy. We've been talking about electric vehicles and robotaxis and the impact on transportation broadly—we think that's one big sector that will see a lot of dislocations, but we think every sector will.
So this idea of where's the counterparty risk in the economy that might accrue to the benefit of both Bitcoin and gold—we shall see. We think Bitcoin is both a risk-off and a risk-on asset, so in the environment we see, we believe this ratio will continue to move up and go to all-time highs. And then just quickly: no care in the world according to bank credit default swaps, so no counterparty risk issues yet. And here's high yield versus 10-year Treasuries: again, very low. The credit markets have not been disturbed much by the debacle in SaaS for the private credit funds, and so there's nothing systemic happening here, and that's a good thing to take away.
So with that, I know this has been a long one, and part of the reason is I wanted to set up a letter that I will be putting out in the next few weeks and touch on some of those topics here. So those of you who do tune in to In the Know had a preview—you get special treatment. Anyway, look forward to the next In the Know, and wishing you once again a lovely long weekend here in the United States and a lovely weekend in the rest of the world.
