WEBVTT

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Welcome to this curated educational transcript of the Joe Rogan Experience. In this session, we provide a deep-dive examination of the critical perspectives and historical dialogues presented in Episode #1921. Our mission is to offer a high-fidelity, searchable research resource for students of cultural history, emerging technology, and global discourse. This transcript has been specifically optimized for academic reference, linguistic study, and archival preservation regarding Geopolitics, Global Demographics, and the Future of Energy Markets. Joe Rogan Podcast, check it out. The Joe Rogan

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Experience. Train by day, Joe Rogan Podcast by

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night, all day. Hello, Peter. What's going on,

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man? Nice to meet you. Right back at you. It

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has been a crazy year. Yeah, it's been a crazy

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year for everything, right? Yeah, it's one thing

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when you talk about how the world's going to

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be coming to an end. It's quite another when

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it's like here and now. Yeah. Well, you've been

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working on this. type of material, this subject

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matter for quite a long time. So tell everybody

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your background. Let's see. My background is

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in economic development. It's all about figuring

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out what works where and why, and why if you

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try the same policies in the next town over,

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it's usually a disaster. And then I worked actually

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here in Austin at a company called Stratfor for

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12 years, and I was their sole generalist. So

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it was my idea to kind of plug everything together

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and figure out what the map of the world looks

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like and how if you pull a string on one side

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of the world, something changes on the other

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side. Well, your perspective on sort of global

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interactions with China and Russia and the United

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States and the energy supply and the food supply,

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I have not heard before. I haven't heard it as

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comprehensively as I've seen you put it together.

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So I'm kind of excited to talk to you about this.

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So I guess we should start it with Russia. When

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Russia invaded Ukraine, you were not surprised.

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Not even a little. No. You expected this and

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you felt like this is inevitable and this is

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just something that was always going to happen

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and it's not going to just stop at Ukraine. No,

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not even remotely. The Russian space is among

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the worst farmland in the world. And so they've

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never been able to generate enough income to

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have a road network. Everything has to be moved

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by rail. And their frontiers are just huge and

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they're open. And if you've got a force that

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can't maneuver itself, your only reasonable defense

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strategy is to be forward positioned and use

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geography to help you out. So you expand until

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you reach mountains or oceans or deserts, and

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then you anchor on either side of those and plug

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the access points. Unfortunately for Ukraine,

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There are two of those access points on the other

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side of Ukraine. So the Russians were always,

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always, always going to try to push through and

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retake that territory, territory that they had

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controlled for most of the last 350 years. Unfortunately

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for them, in the 30, 35 years since the Soviet

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system collapsed, the Ukrainians have developed

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an identity. And now they would like to be something

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other than a road bump. So one of the narratives

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that was going around was that the reason why

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Russia was pushing into Ukraine is because NATO

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was moving their arms closer to the border of

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Russia. There is something to be said for that.

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You just have to put it into context to really

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understand it. So the Russian point of view is

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for us to be secure, we need to expand until

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we reach a point where invaders cannot overwhelm

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us. We have to be able to plug those access points.

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But to give the Russians what they want, you

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have to sign over the future of Estonia, Latvia,

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Lithuania, Poland, Finland, the Czech Republic,

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Hungary, Slovakia, Romania. Belarus, Ukraine.

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Oh, let's go on. Azerbaijan, Armenia, Georgia,

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Kazakhstan, all the stands. Basically, the Russians,

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in order to feel safe, they have to be able to

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occupy total populations that are twice of their

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own. And I'm sorry, but that's just not feasible.

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So, you know, technically, the people who claim

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that NATO provoked this are correct. NATO can't

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have what it wants in Russia. in order for Russia

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to feel safe. But for Russia to feel safe, they've

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got to occupy over 180 million people. And that

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was never part of the game. So what do you think

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they anticipated was going to happen when they

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started the war? Well, I don't think it was just

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the Russians who anticipated it. Ukraine, the

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last war in 2014, basically rolled over. They

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proved to be militarily incompetent. They were

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corrupt. They couldn't put up any sort of resistance.

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Crimea fell in just a matter of a couple of days.

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And I think a lot of us who were in the security

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side of things thought that this was going to

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be to a degree a bit of repeat. I was probably

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one of the more optimistic people for Ukraine

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because I had seen them develop a culture and

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seen them arm and train and seen it be meaningful.

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But Ukraine is still a flat country and the Russians

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are still one of the largest militaries in the

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world. So even I was saying that within six months

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to a year, this was all going to be over. But

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the Ukrainians have surprised to the upside and

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– Probably most importantly, the Europeans didn't

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just roll over and let this happen like they

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did the last seven times that the Russians have

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gone on the warpath since 1999. And that's changed

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the game fundamentally. And when you look at

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it going forward, if people didn't anticipate

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that the Ukrainians were going to be able to

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fight back as well as they have, and then you

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look at it going forward, like, where does this

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go? Well, there's two paths here. And the problem

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is we haven't seen either side fight in their

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full glory yet. And until we have that fight,

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we really can't judge. In their full glory, like

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meaning? Well, the Ukrainians are the underdog,

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but they're in the process of rapidly arming

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with more and more sophisticated equipment. And

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by the time we get to May, they will have been

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able to do a lot of deferred maintenance on the

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equipment they captured from the Russians, which

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was more equipment than they started the war

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with. And there will be 60 ,000 Ukrainian troops

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that have trained in NATO countries with more

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advanced equipment back in the field. So, you

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know, we get our Athens, if you will. On the

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other side, the Russians will finish their second

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mobilization and they will have at least another

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half a million men in the field. Now, they will

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be badly trained and badly equipped and badly

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led with low morale. But troops like that have

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a technical term attached to them. Russian. There's

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nothing about this war. that is unique in Russian

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history. The first year is always an absolute

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shit show. And then the Russians throw bodies

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at the problem until it goes away. And in half

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of those wars, the Russians ultimately win. So

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by the time we get to May and the mud season

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is over, we'll have a more advanced Ukrainian

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force fighting a much larger Russian force. And

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we will get our first real... glimpse at how

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this is going to go, and we should know which

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way it's going to break. Now, it'll still take

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time, because if the Russians are going to win,

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it's going to take them a year to overwhelm Ukrainian

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defenses, and then they have to occupy the country,

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and that's going to kill a couple million people.

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or the Russians are going to be able to completely

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break the logistical supply chains that allow

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the Russian troops to even exist, and we'll have

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a half a million dead Russians, and the Ukrainians

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will be able to push the Russians out of Crimea

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in the east. And then we get to talk about the

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next stage, because this is just the opening

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phase of what is going to be a multi -year and

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perhaps even multi -decade conflict. Jesus. Yeah.

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Welcome to Russia. How do you think it goes when

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May rolls around? Yeah, ask me again in May.

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Right now, the balance of forces clearly are

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edging more and more towards the Ukrainians.

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They've proven to be more adaptable. When the

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Russians made it clear that they were going to

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do a second mobilization, that seemed to have

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broken the log jam in a lot of countries, most

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notably Germany. And we now have armored vehicles

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up to and including some light battle tanks,

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which I know all the tankies out there are going

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to hate that term. But anyway, armored vehicles

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that have some serious firepower are going to

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be coming. now. The Bradley's from the United

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States specifically. And that is a tool that

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the Ukrainians have not had. So every time the

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Ukrainians have achieved a tactical breakthrough,

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they can only push as far as their infantry can

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run. Now their infantry is going to be mobile.

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And in a war of movement to this point, the Russians

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have proven that they're absolutely incompetent.

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And why is that? Part of its graft The guy who

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is the defense minister, Shoigu, is he's arguably

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one of the least competent people on the planet.

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But he's a friend of Putin. And so he's been

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able to milk the Defense Department for everything.

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Best guess is that he has taken a third of the

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budget himself for procurement and his flunkies

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have taken another third. So very little gets

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to the military itself. So it's corruption. Huge

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corruption. And that means no training. Or if

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there is training, it's basically a parade. When

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you're using a force that can only supply by

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rail, you're completely dependent upon trucks

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for local distribution. And that's why the Ukrainians

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went after the trucks with all the javelins that

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they got early in the war. They didn't really

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go after tanks. They went after the trucks. And

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they've destroyed roughly 2 ,000, maybe 2 ,500

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of them. And that has reduced the Russian military

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to going back to Russia, confiscating city buses

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and literally Scooby -Doo vans and bringing them

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back to the front. Think of a Scooby -Doo van,

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now filled full of artillery shells. You know,

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every time you hit a bump, and that is their

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primary ammo supply system now. Because the rail

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system into Crimea got blown up, the Kerch Bridge,

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and what's going into the east is all under artillery

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range. So they have to use truck, and they're

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just not very good at it. Now, for a lot of people,

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the big fear is that if Russia starts really

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getting desperate. Then they use nukes. Sure.

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And it would have to be very desperate. I have

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never – I've not been as concerned about the

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nuclear question as some folks because there's

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really only four scenarios. Scenario one is the

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Russians consider throwing one against the United

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States. But we've made it very clear from our

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intercepts and our sharing of information with

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the media that we know exactly where Putin is

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at any time. We're listening to his phone calls.

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We're reading his emails. And so – He now knows

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very clearly that if he throws a nuke at the

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United States, we're going to throw one not at

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Russia, we're going to throw one at him. And

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there's no version of this where he survives.

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So he has tamped down the rhetoric quite a bit

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since last March. Option number two, nuking Ukraine.

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That doesn't make sense. They want to occupy

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Ukraine. You don't want to have your troops in

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a place that's a radioactive wasteland. There

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may have been a case last year for nuking Poland

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and Berlin and Stockholm. in order to disrupt

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the weapons flows into Ukraine. But after the

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battles of Izium and Kherson, the Ukrainians

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have more Russian gear now than they know what

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to do with. It's going to take them months to

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bring that all online. There's a lot of deferred

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maintenance that needs to be done. And so disrupting

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the weapons flows no longer is a critical issue

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because the weapons are already there. So the

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only scenario I can see where the Russians would

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seriously consider nukes is if Ukraine doesn't

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simply win. but decides to carry the fight across

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the border into Russia proper. In that scenario,

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where the very existence of the Russian government

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is threatened, that would probably change the

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math. But I don't find that likely without a

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significant shift in mindset in Washington. We're

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not just providing the Ukrainians with the weaponry

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and the ammo. We're providing them with the intelligence

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and most of the steps of the kill chain. Without

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that, the weapons are of limited usefulness,

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especially at long range. And the Ukrainians

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have no desire to rupture that relationship.

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So we're talking about a theoretical that is

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at a minimum seven months away, probably further.

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This whole thing is such a terrifying conflict.

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Being that Russia is a nuclear superpower and

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the history of Russian wars, I mean, it's such

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a long history. of sacrifice and death. And they

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have, it's like they're accustomed to it in a

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way. Oh, we can do better than that. We can make

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you a lot more depressed. Okay. So let me give

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you two things. Number one, the Russians are

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relatively casualty immune. They fight in an

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area where they fight with numbers. They've never

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been technologically advanced versus their peers.

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They've always just thrown bodies at it. So there

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has never been a conflict in Russian history

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where they have backed out without first losing

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a half a million men. We're at about 100 ,000

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now. We have a long way to go before the Russian

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military breaks. So the Russians have lost roughly

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100 ,000? That's the best guess. How many Ukrainians

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have been lost? Probably about a third of that.

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But that is a third in terms of military forces.

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In terms of civilians, we really don't know.

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It could be as much as 250 ,000 at this point.

00:12:32.919 --> 00:12:35.830
We just don't know. Really? Well, the data exists

00:12:35.830 --> 00:12:38.529
on the other side of the front line. All we know

00:12:38.529 --> 00:12:40.450
are about what has happened in the territories

00:12:40.450 --> 00:12:42.529
that have been liberated. And if you think of

00:12:42.529 --> 00:12:47.590
things like Bucha and Izium, German radio intercepts

00:12:47.590 --> 00:12:50.710
told us as far back as May that there were at

00:12:50.710 --> 00:12:53.750
least 70 places behind Russian lines that had

00:12:53.750 --> 00:12:56.370
suffered massacres like Izium. I'm sorry, like

00:12:56.370 --> 00:12:59.529
Bucha. And when we've had additional liberation

00:12:59.529 --> 00:13:02.330
since then, it corroborates that general assessment.

00:13:06.109 --> 00:13:08.570
So that's piece one you can be a little depressed

00:13:08.570 --> 00:13:11.250
about. The piece two, the Russians see this as

00:13:11.250 --> 00:13:13.350
an existential fight for their survival. They

00:13:13.350 --> 00:13:14.850
feel if they don't get those blocking positions,

00:13:15.029 --> 00:13:18.289
they're doomed. And they're probably right. But

00:13:18.289 --> 00:13:20.570
we now know that the Russians are fighting so

00:13:20.570 --> 00:13:22.590
badly. They're doing much worse than the Iraqis

00:13:22.590 --> 00:13:26.720
did in 1992. Really? Oh, yeah. If we had a direct

00:13:26.720 --> 00:13:29.220
fight now between NATO and Russia, it would be

00:13:29.220 --> 00:13:32.159
a thousand one casualties. And I don't know anyone

00:13:32.159 --> 00:13:34.000
at the Defense Department who's happy about that.

00:13:34.320 --> 00:13:36.539
Because if the Russians see this as an existential

00:13:36.539 --> 00:13:40.559
conflict and they know they can't hold a match

00:13:40.559 --> 00:13:44.240
to NATO, the nukes are their only option. So

00:13:44.240 --> 00:13:47.980
the primary reason why everyone in the West has

00:13:47.980 --> 00:13:50.980
gotten shoulder to shoulder on this is they know

00:13:50.980 --> 00:13:54.679
that if Ukraine falls and Poland's next. There

00:13:54.679 --> 00:13:57.120
will be a direct fight. The Russians will lose,

00:13:57.620 --> 00:13:59.399
and then there will be a general nuclear exchange.

00:14:01.720 --> 00:14:04.919
So there's plenty of really solid reasons to

00:14:04.919 --> 00:14:08.039
root for the Ukrainians on this one. Jesus Christ.

00:14:08.820 --> 00:14:13.820
Now, when this whole thing broke out, what do

00:14:13.820 --> 00:14:17.159
you think the Russians expected Ukraine to do?

00:14:17.019 --> 00:14:20.039
to just give up. Absolutely. That's what happened

00:14:20.039 --> 00:14:22.860
in 2014 for the most part. And what are the possible

00:14:22.860 --> 00:14:28.299
scenarios for Russia? I mean, it seems like they're

00:14:28.299 --> 00:14:30.820
completely committed to this. They are. And if

00:14:30.820 --> 00:14:34.360
they don't win it? The Russian position is that

00:14:34.360 --> 00:14:37.639
our demographic structure is in such diseased

00:14:37.639 --> 00:14:41.220
and aged and terminal decline that the Russian

00:14:41.220 --> 00:14:43.779
state will be turning the lights off sometime

00:14:43.779 --> 00:14:49.860
between 2050 and 2070 anyway. Anyway. Yeah. They've

00:14:49.860 --> 00:14:52.159
had a series of big melon scoops out of their

00:14:52.159 --> 00:14:54.840
birth rate throughout the history, World War

00:14:54.840 --> 00:14:57.320
I, World War II, the collectivizations under

00:14:57.320 --> 00:15:00.460
Stalin, Brezhnev's mismanagement, Khrushchev's

00:15:00.460 --> 00:15:03.500
mismanagement, the post -Cold War collapse. And

00:15:03.500 --> 00:15:05.860
a lot of these stack on top of each other. And

00:15:05.860 --> 00:15:08.159
the biggest one stacked on top of the post -Cold

00:15:08.159 --> 00:15:10.639
War collapse. So there are more Russians in their

00:15:10.639 --> 00:15:12.279
50s and their 40s and their 30s and their 20s

00:15:12.279 --> 00:15:14.940
than teens. And then they lie about the data

00:15:14.940 --> 00:15:18.269
of the teenagers on down. Which means that there

00:15:18.269 --> 00:15:21.570
aren't enough Russians that have been born in

00:15:21.570 --> 00:15:23.889
the last 30 years to carry the ethnicity forward

00:15:23.889 --> 00:15:26.309
much farther. And so they're thinking if they

00:15:26.309 --> 00:15:28.289
can forward position their military and plug

00:15:28.289 --> 00:15:30.370
those gaps now with their last generation of

00:15:30.370 --> 00:15:32.950
young people, then they can kind of die on their

00:15:32.950 --> 00:15:36.769
own terms 50 years from now. Have they really

00:15:36.769 --> 00:15:40.690
thought about this in that term? Yeah. One way

00:15:40.690 --> 00:15:44.129
or another, this is the end of Russia. The question

00:15:44.129 --> 00:15:46.330
is whether it dies in the long term on their

00:15:46.330 --> 00:15:48.690
terms or in the shorter term when they're completely

00:15:48.690 --> 00:15:51.370
unmoored. Because if they fail to secure those

00:15:51.370 --> 00:15:53.809
borders, then they've got a 2 ,000 -mile open

00:15:53.809 --> 00:15:56.070
border with countries they consider to be hostile.

00:15:56.309 --> 00:15:58.590
And they have no way of moving troops around

00:15:58.590 --> 00:16:00.210
in a way that would allow them to defend it.

00:16:00.309 --> 00:16:02.029
They'd just be waiting for somebody to come over

00:16:02.029 --> 00:16:04.470
and knock them over. And you believe that they're

00:16:04.470 --> 00:16:08.029
aware of this, that they can't survive past 2050,

00:16:08.409 --> 00:16:10.389
2070, whatever it is? I think that's what's been

00:16:10.389 --> 00:16:12.870
driving them because 2022 was the last year.

00:16:13.000 --> 00:16:14.779
they had a sufficient number of people in their

00:16:14.779 --> 00:16:17.799
20s to even attempt this. So from my point of

00:16:17.799 --> 00:16:19.860
view, not only did the war always have to happen,

00:16:20.000 --> 00:16:26.600
it always had to happen by now. Jesus. Now, is

00:16:26.600 --> 00:16:31.179
this just because of the nature of a dictatorship

00:16:31.179 --> 00:16:34.299
that's run by someone like Putin, that it's just

00:16:34.299 --> 00:16:37.200
completely mismanaged because he's just dominated

00:16:37.200 --> 00:16:40.279
the power structure and made sure that everybody...

00:16:40.600 --> 00:16:44.159
falls in line with his ideology and his reign?

00:16:44.360 --> 00:16:47.700
Like what caused all this to be so poorly managed?

00:16:47.960 --> 00:16:50.299
Well, Russia has always been poorly managed and

00:16:50.299 --> 00:16:53.639
authoritarian. But under Putin, it's taken a

00:16:53.639 --> 00:16:57.580
much darker turn because of the nature of...

00:16:57.899 --> 00:17:00.360
the end of the Cold War. If you remember back

00:17:00.360 --> 00:17:03.840
to 1982, there was a coup in the Soviet Union.

00:17:04.519 --> 00:17:08.400
And Chernomyrdin and Dropov and Gorbachev were

00:17:08.400 --> 00:17:11.839
FSB, well, then KGB agents who basically overthrew

00:17:11.839 --> 00:17:15.960
the old system of Brezhnev and took over. Because

00:17:15.960 --> 00:17:17.339
they were the only ones who really had a full

00:17:17.339 --> 00:17:18.720
understanding of what was going on. They controlled

00:17:18.720 --> 00:17:21.559
the information. They were not able to save the

00:17:21.559 --> 00:17:24.900
system. And so it broke. And Putin is the...

00:17:26.090 --> 00:17:28.369
successor to that legacy because he was also

00:17:28.369 --> 00:17:31.230
in the KGB. And we're now in an environment that

00:17:31.230 --> 00:17:34.750
between the terminal demographic structure of

00:17:34.750 --> 00:17:37.789
the Soviet slash Russian system and Putin's personal

00:17:37.789 --> 00:17:40.809
paranoia, so he's gone through and purged what

00:17:40.809 --> 00:17:44.190
was left of the KGB FSB of anyone who has personal

00:17:44.190 --> 00:17:46.910
ambitions to succeed him, we're left with an

00:17:46.910 --> 00:17:49.970
entire political elite of only about 130 people.

00:17:50.670 --> 00:17:52.829
And Putin has removed anyone who has leadership

00:17:52.829 --> 00:17:56.630
ambitions. Now, they all see the world the same

00:17:56.630 --> 00:17:59.009
way. They all kind of agree with Putin on what's

00:17:59.009 --> 00:18:02.589
at stake here. But it does mean that when this

00:18:02.589 --> 00:18:06.309
generation is gone, this is it. This is all the

00:18:06.309 --> 00:18:10.509
leadership talent that the country has. So because

00:18:10.509 --> 00:18:14.529
of his sort of top -down approach, he's eliminated...

00:18:15.289 --> 00:18:18.150
all the possibility of future leaders in some

00:18:18.150 --> 00:18:20.410
way. Even if Russia did have a replacement generation

00:18:20.410 --> 00:18:23.990
coming up, and it doesn't, he's taken steps to

00:18:23.990 --> 00:18:25.670
make sure that they can't challenge him. And

00:18:25.670 --> 00:18:28.529
so any sort of leadership talent has left or

00:18:28.529 --> 00:18:33.130
been killed. What do they hope happens? I mean,

00:18:33.170 --> 00:18:35.839
when everything's going so poorly? Like, what

00:18:35.839 --> 00:18:38.700
do we know about how they're assessing things?

00:18:39.000 --> 00:18:40.440
Well, they're obviously not thrilled with the

00:18:40.440 --> 00:18:43.660
way the things are. They're using one bit of

00:18:43.660 --> 00:18:45.640
propaganda after another to justify it, saying

00:18:45.640 --> 00:18:47.099
that, you know, we're fighting all of NATO or

00:18:47.099 --> 00:18:48.819
like, you know, demons are involved. That was

00:18:48.819 --> 00:18:51.039
my personal favorite. Oh, yeah. You know, when

00:18:51.039 --> 00:18:53.839
it came to the Kyrsten offensive and it became

00:18:53.839 --> 00:18:55.740
clear that there was more going on than just

00:18:55.740 --> 00:18:57.420
NATO weapons, the Ukrainians actually knew what

00:18:57.420 --> 00:19:00.140
they were doing. They changed the line from that

00:19:00.140 --> 00:19:01.819
these are all Nazis to these are actually gay

00:19:01.819 --> 00:19:06.059
demons. Gay? Gay demons, yes. What? Yeah, Russian

00:19:06.059 --> 00:19:09.099
propaganda is a hoot. Please explain the gay

00:19:09.099 --> 00:19:11.019
demons. Oh, I don't know if I can explain it.

00:19:11.079 --> 00:19:12.460
I'm just saying that this is the official line

00:19:12.460 --> 00:19:15.240
right now, that we have homosexual demons fighting

00:19:15.240 --> 00:19:21.380
us in Ukraine. But why gay demons? Is there a

00:19:21.380 --> 00:19:25.529
mythology to that? Not really. The guy who's

00:19:25.529 --> 00:19:29.809
in charge of the Orthodox Church is a Putin crony.

00:19:30.930 --> 00:19:33.869
Kirill is his name. He's kind of like the Eastern

00:19:33.869 --> 00:19:36.849
Orthodox Pope, if you will. And he has been a

00:19:36.849 --> 00:19:38.869
partner with organized crime and with Putin since

00:19:38.869 --> 00:19:42.390
the beginning. And so he is coming up with ever

00:19:42.390 --> 00:19:46.369
more creative approaches to the propaganda. And

00:19:46.369 --> 00:19:50.509
so this is a way of – how can I say this without

00:19:50.509 --> 00:19:55.710
pissing off half of the people listening? Imagine

00:19:55.710 --> 00:19:59.470
Trump using his influence with evangelical Christians

00:19:59.470 --> 00:20:02.630
to come up with a theological reason why something

00:20:02.630 --> 00:20:04.789
didn't go his way. It's kind of the equivalent

00:20:04.789 --> 00:20:07.970
of that. And so gay demons is what he came up

00:20:07.970 --> 00:20:09.910
with. Gay demons. Yes. And they ran with it.

00:20:09.950 --> 00:20:12.309
So that's on state propaganda now. Really? Yeah.

00:20:12.349 --> 00:20:15.250
It's wild. And what's the epicenter of the gay

00:20:15.250 --> 00:20:17.789
demons? Oh, Kiev, obviously. Kiev. Yeah. So we've

00:20:17.789 --> 00:20:26.299
got a Jewish Nazi gay demon. Wow. Truth is always

00:20:26.299 --> 00:20:28.359
weirder than fiction. And the scary rumor is

00:20:28.359 --> 00:20:31.960
that Putin has cancer. Or Parkinson's is one

00:20:31.960 --> 00:20:33.819
I've heard as well. Oh, really? Yeah, I don't

00:20:33.819 --> 00:20:36.599
know what it is. He's clearly on steroids, but

00:20:36.599 --> 00:20:39.579
that could mean a whole lot of things. Like prednisone

00:20:39.579 --> 00:20:42.059
or something along those lines. And you say that

00:20:42.059 --> 00:20:44.099
because of his appearance? Yeah, he looks very,

00:20:44.200 --> 00:20:46.980
not just flushed, but puffy. And that's kind

00:20:46.980 --> 00:20:49.319
of a classic, too many steroids in your system.

00:20:50.509 --> 00:20:56.369
And this puffiness, these steroids are to battle

00:20:56.369 --> 00:20:59.529
this cancer somehow? In theory. You know, steroids

00:20:59.529 --> 00:21:01.210
keep you going in a time when you should probably

00:21:01.210 --> 00:21:03.210
be laying down is really kind of the bottom line.

00:21:03.829 --> 00:21:06.390
Whether he's medicated, over -medicated, or medicated

00:21:06.390 --> 00:21:08.750
because of medical reasons, we really don't know.

00:21:09.130 --> 00:21:11.670
He's not in great health. That is obvious. And

00:21:11.670 --> 00:21:14.740
for someone who has been the... the shirtless

00:21:14.740 --> 00:21:17.079
horseback rider in the propaganda videos, that's

00:21:17.079 --> 00:21:21.779
a real problem. He's visibly wearing... Bulletproof

00:21:21.779 --> 00:21:25.619
or bullet -resistant vests even around his own

00:21:25.619 --> 00:21:29.480
propaganda people. There was this great piece

00:21:29.480 --> 00:21:32.619
that came out that I saw last week where it was

00:21:32.619 --> 00:21:34.859
all the propaganda shots that he's taken with

00:21:34.859 --> 00:21:37.420
the soldiers' mothers and on the front and with

00:21:37.420 --> 00:21:39.740
the tech people and in the intelligence. And

00:21:39.740 --> 00:21:42.200
it was like the same 12 people were in every

00:21:42.200 --> 00:21:46.220
single shot just in different outfits. And even

00:21:46.220 --> 00:21:48.079
with those people, he's wearing his ballistic

00:21:48.079 --> 00:21:51.509
vest. You talk about his appearance that he's

00:21:51.509 --> 00:21:55.630
clearly unhealthy. Can you demonstrate that?

00:21:55.710 --> 00:21:58.150
Are there images that show him a couple of years

00:21:58.150 --> 00:22:00.750
ago versus now where you could see his appearance?

00:22:00.930 --> 00:22:02.730
Yeah, it's not much of a reach. Like I said,

00:22:02.789 --> 00:22:05.890
he likes to pose shirtless on horseback to show

00:22:05.890 --> 00:22:09.089
how virile he is. He didn't look good shirtless

00:22:09.089 --> 00:22:10.849
on horseback. Yeah, I know. You got to look at

00:22:10.849 --> 00:22:12.369
it from the Russian point of view. I mean, the

00:22:12.369 --> 00:22:14.670
standards are a little different. Are they? Oh,

00:22:14.670 --> 00:22:18.200
yeah. And he's got the shakes. That's one of

00:22:18.200 --> 00:22:21.519
the reasons why the Parkinson's analysis, I guess,

00:22:21.539 --> 00:22:24.460
has come out. I've never seen any of this. So

00:22:24.460 --> 00:22:27.619
there's video of him shaking? See if you can

00:22:27.619 --> 00:22:29.779
find any of that, Jim. See if you can find a

00:22:29.779 --> 00:22:32.119
comparison. Yeah, I got an article on like a

00:22:32.119 --> 00:22:34.519
timeline of his health. Here's the shakes part.

00:22:35.980 --> 00:22:41.420
He used to be a fairly animated speaker. Boy,

00:22:41.420 --> 00:22:44.700
he does look puffy. Now, whether or not he's

00:22:44.700 --> 00:22:47.480
actually sick or not, I have no idea. Could it

00:22:47.480 --> 00:22:50.339
just be that he's just drinking a lot? Technically,

00:22:50.359 --> 00:22:53.640
he says he's a teetotaler. Really? Which is pretty

00:22:53.640 --> 00:22:56.220
rare in Russian society. But, you know, he's

00:22:56.220 --> 00:22:58.440
still alive. And a lot of Russians make it to

00:22:58.440 --> 00:23:03.480
his age. How old is he now? Mid -60s. And...

00:23:03.759 --> 00:23:06.039
So it's just an appearance thing. We don't have

00:23:06.039 --> 00:23:08.240
any like real hard data that he's sick. Well,

00:23:08.380 --> 00:23:10.500
the folks in the intelligence world who are listening

00:23:10.500 --> 00:23:12.440
to his phone calls and reading his email might,

00:23:12.660 --> 00:23:15.539
but that has not been made public to my knowledge

00:23:15.539 --> 00:23:17.519
from the American side. So Ukrainian military

00:23:17.519 --> 00:23:20.599
intelligence chief claims Putin is very sick

00:23:20.599 --> 00:23:24.200
and a coup is underway. Yeah, but Donov has been

00:23:24.200 --> 00:23:26.460
saying that there's a coup underway since March.

00:23:26.619 --> 00:23:29.579
So he's kind of the Ukrainian propaganda guy.

00:23:29.660 --> 00:23:32.829
I wouldn't put too much. But what would even

00:23:32.829 --> 00:23:35.390
happen there? What if a coup did take place?

00:23:35.450 --> 00:23:40.269
Putin has so thoroughly purged what's left of

00:23:40.269 --> 00:23:42.150
the intelligentsia. There's only 130 of them.

00:23:42.150 --> 00:23:43.789
And there's probably only one of them who would

00:23:43.789 --> 00:23:47.329
have the guts to throw a coup. That's the Rosneft

00:23:47.329 --> 00:23:50.869
CEO. Rosneft is their oil monopoly. Igor Sechin

00:23:50.869 --> 00:23:52.730
is his name. He used to be a gunrunner during

00:23:52.730 --> 00:23:54.349
the Soviet period. He's got the guts to pull

00:23:54.349 --> 00:23:56.369
it off. But if there's anything that the other

00:23:56.369 --> 00:23:59.329
129 agree is that Sechin's an asshole and he

00:23:59.329 --> 00:24:01.480
should be shot on sight. if he kills Putin. Oh,

00:24:01.500 --> 00:24:04.119
Jesus. So there's no immediate pretender to the

00:24:04.119 --> 00:24:07.700
throne here. What a fucked up situation. Well,

00:24:07.779 --> 00:24:09.519
for the Europeans who have been dealing with

00:24:09.519 --> 00:24:11.799
the Russians for three centuries, this is kind

00:24:11.799 --> 00:24:15.460
of par for the course. It's just a modern version

00:24:15.460 --> 00:24:18.319
of it. Yeah. The Soviet period was kind of a

00:24:18.319 --> 00:24:20.220
relief because we actually had an institution

00:24:20.220 --> 00:24:22.500
that pushed their weird religion to the side

00:24:22.500 --> 00:24:25.380
and actually worked on technocracy and technology.

00:24:25.680 --> 00:24:27.380
And from the European point of view, that was

00:24:27.380 --> 00:24:30.720
a huge improvement. The belief in the post -Soviet

00:24:30.720 --> 00:24:32.680
period was that they would start from that and

00:24:32.680 --> 00:24:35.220
move forward and modernize and maybe even democratize.

00:24:35.299 --> 00:24:38.240
And people believed that for far too long, even

00:24:38.240 --> 00:24:40.240
when it was clear that Russia was degenerating

00:24:40.240 --> 00:24:43.099
rather than advancing itself. Now, the title

00:24:43.099 --> 00:24:44.740
of your book is The End of the World is Just

00:24:44.740 --> 00:24:48.500
the Beginning. That's the one. Why that? We are

00:24:48.500 --> 00:24:51.140
dealing with the end of the world that we know.

00:24:51.240 --> 00:24:53.680
Russia is more of a symptom of this than a cause.

00:24:54.119 --> 00:24:57.890
So to go back a little bit. In the world before

00:24:57.890 --> 00:25:02.170
World War II, if you had coal, oil, food, and

00:25:02.170 --> 00:25:04.150
iron ore, you could industrialize and try to

00:25:04.150 --> 00:25:06.710
make something of yourself. But if you failed

00:25:06.710 --> 00:25:09.950
to have one of those, you were probably a colony.

00:25:10.920 --> 00:25:13.480
At the end of the war, the Americans abolished

00:25:13.480 --> 00:25:15.460
the imperial system and patrolled the global

00:25:15.460 --> 00:25:18.500
oceans for everyone. And as a result, now you

00:25:18.500 --> 00:25:20.480
only needed one of those four and you could trade

00:25:20.480 --> 00:25:22.759
for the others. And so for the first time in

00:25:22.759 --> 00:25:25.240
human history, we were all on the same path,

00:25:25.259 --> 00:25:26.900
you know, from different starting points and

00:25:26.900 --> 00:25:29.180
going at different speeds. But we were all industrializing

00:25:29.180 --> 00:25:33.480
and we were all urbanizing. The problem, well,

00:25:33.559 --> 00:25:36.400
let's start with the opportunity. When you urbanize,

00:25:36.400 --> 00:25:38.940
you move from the farm and into town to take

00:25:38.940 --> 00:25:41.549
an industrial job. When you live on the farm,

00:25:41.710 --> 00:25:43.710
you have a lot of kids because they're free labor.

00:25:44.369 --> 00:25:46.769
You move into the city, you have a lot fewer

00:25:46.769 --> 00:25:48.730
kids because kids are no longer free. They're

00:25:48.730 --> 00:25:51.710
really expensive and noisy and annoying and dirty

00:25:51.710 --> 00:25:54.670
pieces of furniture. And you have fewer of them.

00:25:55.170 --> 00:25:57.809
And so your population starts to shift. It used

00:25:57.809 --> 00:26:00.029
to be that you have loads of children, a few

00:26:00.029 --> 00:26:03.269
young adults, fewer retirees. It's kind of a

00:26:03.269 --> 00:26:07.470
pyramid. But as you urbanize, your pyramid opens

00:26:07.470 --> 00:26:11.269
up into a column. because you have fewer kids,

00:26:11.289 --> 00:26:14.230
but everyone's living longer. And as long as

00:26:14.230 --> 00:26:16.269
your population is a column, economic growth

00:26:16.269 --> 00:26:18.630
is spectacular, because you don't have to spend

00:26:18.630 --> 00:26:21.170
a lot of money on your kids. You're not old enough

00:26:21.170 --> 00:26:23.390
that you have a lot of retirees, but you got

00:26:23.390 --> 00:26:25.269
a lot of people in their 20s and 30s to build

00:26:25.269 --> 00:26:27.430
things and buy things, and then a lot of people

00:26:27.430 --> 00:26:30.089
in their 40s and 50s to do the investing. And

00:26:30.089 --> 00:26:34.130
the rich world was a population column from 1945

00:26:34.130 --> 00:26:38.059
to 1992. And with the end of the Cold War, the

00:26:38.059 --> 00:26:40.640
developing world became a column in 1992 until

00:26:40.640 --> 00:26:44.220
now. The problem is that this is all temporary

00:26:44.220 --> 00:26:47.059
because birth rate keeps dropping, people keep

00:26:47.059 --> 00:26:49.660
living older, and your column eventually inverts

00:26:49.660 --> 00:26:53.119
into an open pyramid upside down. And now you

00:26:53.119 --> 00:26:54.940
no longer have children. You no longer have a

00:26:54.940 --> 00:26:58.119
replacement generation at all. And there aren't

00:26:58.119 --> 00:27:00.200
enough people in their 20s and 30s to buy everything.

00:27:00.619 --> 00:27:02.400
And there aren't enough people in their 40s and

00:27:02.400 --> 00:27:06.109
50s to pay for the retirees. So this decade was

00:27:06.109 --> 00:27:08.589
always going to be the decade that most of the

00:27:08.589 --> 00:27:10.950
advanced world moves into mass retirement and

00:27:10.950 --> 00:27:13.930
the economic model collapses. And next decade

00:27:13.930 --> 00:27:16.049
was always going to be the decade that that happened

00:27:16.049 --> 00:27:18.890
to the developing world. And we find out recently

00:27:18.890 --> 00:27:20.849
that the Chinese have jumped the ship, and this

00:27:20.849 --> 00:27:24.710
is their last decade too. So all of the globalized

00:27:24.710 --> 00:27:27.490
connections and consumptions that create the

00:27:27.490 --> 00:27:31.750
world we know, we are at the end of it. And we

00:27:31.750 --> 00:27:34.390
have to go back to a world where trade is more

00:27:34.390 --> 00:27:37.349
focused on the countries that have a better demographic

00:27:37.349 --> 00:27:40.230
and security infrastructure because the Americans

00:27:40.230 --> 00:27:42.309
are no longer patrolling the global oceans anymore.

00:27:43.049 --> 00:27:45.849
So we're losing the security ramifications of

00:27:45.849 --> 00:27:48.190
an open system. At the same time, we're losing

00:27:48.190 --> 00:27:50.289
the demographic capacity to support it in the

00:27:50.289 --> 00:27:52.509
first place. And that's all going down right

00:27:52.509 --> 00:27:56.509
now. So when you're saying that China has 10

00:27:56.509 --> 00:27:59.069
years to go. At most. What do you mean by that?

00:27:59.579 --> 00:28:01.420
Well, we now know that they've lied about their

00:28:01.420 --> 00:28:04.299
population statistics and they overcounted their

00:28:04.299 --> 00:28:06.519
population by over 100 million people, all of

00:28:06.519 --> 00:28:08.140
whom would have been born since the one -child

00:28:08.140 --> 00:28:10.720
policy was adopted. So this is one of those places

00:28:10.720 --> 00:28:12.240
where they've got more people in their 60s and

00:28:12.240 --> 00:28:13.779
their 50s and their 40s and their 30s and their

00:28:13.779 --> 00:28:16.180
20s. What was the logic behind the one child?

00:28:16.380 --> 00:28:19.099
Was it that they were overpopulating? Mao was

00:28:19.099 --> 00:28:22.119
concerned that as the country was modernizing,

00:28:22.180 --> 00:28:24.220
the birth rate wasn't dropping fast enough and

00:28:24.220 --> 00:28:26.099
that the young generation was literally going

00:28:26.099 --> 00:28:31.140
to eat the country alive. a breakneck urbanization

00:28:31.140 --> 00:28:33.059
program, which destroyed the birth rate. At the

00:28:33.059 --> 00:28:34.819
same time, they penalized anyone who wanted to

00:28:34.819 --> 00:28:36.700
have kids. And both of those at the same time

00:28:36.700 --> 00:28:38.420
have generated the demographic collapse we're

00:28:38.420 --> 00:28:41.480
in now. And the problem with that also was that

00:28:41.480 --> 00:28:43.759
they wanted male children. Yeah, there's a cultural

00:28:43.759 --> 00:28:46.200
aspect to that too. And obviously, men can't

00:28:46.200 --> 00:28:49.460
have kids on their own. And what is the ratio

00:28:49.460 --> 00:28:52.759
to men to women in the younger people in China

00:28:52.759 --> 00:28:57.339
now? Before the data revision with the last set

00:28:57.339 --> 00:29:01.059
of lies, it was about 1 to 1 .2. It was the most

00:29:01.059 --> 00:29:03.079
distorted in the world, even more than Sri Lanka

00:29:03.079 --> 00:29:04.759
where there had been a civil war for 30 years.

00:29:05.700 --> 00:29:08.599
Since then, we don't have good sex -by -sex data,

00:29:08.759 --> 00:29:12.279
but it's undoubtedly worse. And so what are the

00:29:12.279 --> 00:29:14.759
other problems that they're encountering that

00:29:14.759 --> 00:29:16.539
leads you to believe that they only have 10 years

00:29:16.539 --> 00:29:19.640
left? Well, without young people, we've seen

00:29:19.640 --> 00:29:21.980
their labor costs increased by a factor of 14

00:29:21.980 --> 00:29:24.539
since the year 2000. So Mexican labor is now

00:29:24.539 --> 00:29:27.640
one third the cost of Chinese labor. Their educational

00:29:27.640 --> 00:29:31.039
system focuses on memorization over skills. So

00:29:31.039 --> 00:29:33.519
despite a trillion dollars of investment in a...

00:29:33.680 --> 00:29:36.140
bottomless supply of intellectual property theft.

00:29:36.259 --> 00:29:37.940
They really haven't advanced technologically

00:29:37.940 --> 00:29:41.319
in the last 15 years. Mexican labor is probably

00:29:41.319 --> 00:29:43.359
about twice as skilled as Chinese labor now,

00:29:43.440 --> 00:29:46.519
even though it's one -third the cost. They've

00:29:46.519 --> 00:29:51.569
consolidated into an ethnic -based... paranoid,

00:29:51.569 --> 00:29:54.549
nationalistic cult of personality. And it's very

00:29:54.549 --> 00:29:57.430
difficult for the Xi administration to even run

00:29:57.430 --> 00:29:58.769
it because it's not an administration anymore.

00:29:58.849 --> 00:30:01.589
No one wants to bring Xi information on anything.

00:30:02.230 --> 00:30:04.950
So like Putin lied to his face, for example,

00:30:05.029 --> 00:30:07.589
last February about the war saying, why would

00:30:07.589 --> 00:30:10.230
I invade Ukraine? And you can see in some of

00:30:10.230 --> 00:30:12.930
the presses, the defense guys in the back of

00:30:12.930 --> 00:30:15.109
the room, like, they didn't want to say anything

00:30:15.109 --> 00:30:17.269
because Xi has a history of shooting people he

00:30:17.269 --> 00:30:21.150
doesn't like. And so the Chinese were the only

00:30:21.150 --> 00:30:23.289
country that was caught with their pants down

00:30:23.289 --> 00:30:26.529
when this all went down. The Biden administration

00:30:26.529 --> 00:30:28.730
is basically taking the trade policy of Donald

00:30:28.730 --> 00:30:30.630
Trump and running it through a grammar checker

00:30:30.630 --> 00:30:33.529
and putting it into institutions. So we now have

00:30:33.529 --> 00:30:36.670
tech barricades that prevent the Chinese from

00:30:36.670 --> 00:30:39.089
buying the equipment, the tools, or the software

00:30:39.089 --> 00:30:41.849
that's necessary to make semiconductors. In fact,

00:30:41.930 --> 00:30:44.009
he went so far as to say any Americans working

00:30:44.009 --> 00:30:46.289
in the sector have to either quit or give up

00:30:46.289 --> 00:30:49.109
their American citizenship. Every single one

00:30:49.109 --> 00:30:50.630
of them either quit or was transferred abroad

00:30:50.630 --> 00:30:54.210
within 24 hours. So the tech system is stalled.

00:30:54.349 --> 00:30:56.329
They don't have the young people to go consumption

00:30:56.329 --> 00:30:58.650
-led. They're completely dependent on the U .S.

00:30:58.650 --> 00:31:01.269
Navy to access international trade. They are

00:31:01.269 --> 00:31:03.769
the most vulnerable country in the world right

00:31:03.769 --> 00:31:07.029
now. And based on how things go with Russia,

00:31:07.329 --> 00:31:09.569
we're looking at a significant amount of raw

00:31:09.569 --> 00:31:12.930
materials falling off the map, specifically food

00:31:12.930 --> 00:31:15.960
and energy. And the Chinese are the world's largest

00:31:15.960 --> 00:31:18.539
importer of both of those things. So there's

00:31:18.539 --> 00:31:21.539
no version of this where China comes through

00:31:21.539 --> 00:31:24.319
looking good. And the challenge for the rest

00:31:24.319 --> 00:31:28.339
of us is to figure out how do we, in as smooth

00:31:28.339 --> 00:31:31.480
and quick as a process as possible, figure out

00:31:31.480 --> 00:31:33.619
how we can get along without them. Because they

00:31:33.619 --> 00:31:36.980
are going away. And they're going away this decade

00:31:36.980 --> 00:31:40.019
for certain. Well, if you say they're going away,

00:31:40.200 --> 00:31:43.019
clearly they're not just going to lay down. No,

00:31:43.079 --> 00:31:44.019
they'll die. They're going to try to adjust.

00:31:44.279 --> 00:31:48.400
Yeah, they'll die. But how so? Do you think this

00:31:48.400 --> 00:31:52.019
is because, like, what is, other than, well,

00:31:52.119 --> 00:31:55.359
here would be a big problem, right? Taiwan. Like,

00:31:55.440 --> 00:31:58.279
if we impose the kind of sanctions that we've

00:31:58.279 --> 00:32:02.440
imposed on Russia, if China decides to invade

00:32:02.440 --> 00:32:05.500
Taiwan and the world stands up and the world

00:32:05.500 --> 00:32:07.799
imposes sanctions on China, how does that go?

00:32:08.190 --> 00:32:10.910
Very ugly for the Chinese. So, you know, say

00:32:10.910 --> 00:32:12.750
what you will about the Russian economy. It's

00:32:12.750 --> 00:32:15.509
corrupt. It's inefficient. It's not very high

00:32:15.509 --> 00:32:18.809
value add. But it's a massive producer and exporter

00:32:18.809 --> 00:32:21.809
of food and energy. You put the sanctions that

00:32:21.809 --> 00:32:24.829
are on the Russians on Beijing and you get a

00:32:24.829 --> 00:32:27.529
deindustrialization collapse and a famine that

00:32:27.529 --> 00:32:30.390
kills 500 million people in under a year. And

00:32:30.390 --> 00:32:33.130
the Chinese know this. They can only push so

00:32:33.130 --> 00:32:40.809
hard. If the Russians succeed, they actually

00:32:40.809 --> 00:32:43.089
solve or at least address some of their problems.

00:32:43.910 --> 00:32:46.150
Even if the Chinese were able to capture Taiwan

00:32:46.150 --> 00:32:48.430
without firing a shot, it doesn't solve anything

00:32:48.430 --> 00:32:50.609
for them. They're still food importers. They're

00:32:50.609 --> 00:32:51.950
still dependent on the United States. They're

00:32:51.950 --> 00:32:53.990
still energy importers. And even if they take

00:32:53.990 --> 00:32:56.710
every single one of those semiconductor fab facilities

00:32:56.710 --> 00:32:59.369
intact, they don't know how to operate them because

00:32:59.369 --> 00:33:02.289
they can't operate their own. And their own are

00:33:02.289 --> 00:33:08.329
among the worst in the world, not the best. The

00:33:08.329 --> 00:33:11.049
only reason, in my opinion, to be concerned about

00:33:11.049 --> 00:33:15.029
a Taiwan war is because Xi is so isolated himself

00:33:15.029 --> 00:33:18.190
that when one person is making all the decisions

00:33:18.190 --> 00:33:21.130
and that one person refuses to access information

00:33:21.130 --> 00:33:24.230
to make the decisions, strange stuff happens.

00:33:24.549 --> 00:33:26.769
And when you say refuses to access, what do you

00:33:26.769 --> 00:33:30.119
mean by that? does not have normal information

00:33:30.119 --> 00:33:32.720
flows anymore. Like even at the height of the

00:33:32.720 --> 00:33:34.920
Trump administration, when Trump was basically

00:33:34.920 --> 00:33:37.099
isolated himself from the entire intelligence

00:33:37.099 --> 00:33:40.960
community, he was still getting the daily briefing.

00:33:41.099 --> 00:33:43.019
There was still information being put in front

00:33:43.019 --> 00:33:47.279
of him. But Xi is so isolated himself. He doesn't

00:33:47.279 --> 00:33:48.940
want to hear anything except for what he wants

00:33:48.940 --> 00:33:51.500
to hear. And since no one knows what the status

00:33:51.500 --> 00:33:53.359
of the conversation with the voices in his head

00:33:53.359 --> 00:33:55.200
in on any given day, no one wants to bring him

00:33:55.200 --> 00:33:56.779
anything unless they're ordered to. How do we

00:33:56.779 --> 00:33:59.109
know this about him? Because there's no one to

00:33:59.109 --> 00:34:01.009
listen to anymore. That's one of the fun things

00:34:01.009 --> 00:34:03.009
about Russia versus China right now is that the

00:34:03.009 --> 00:34:05.849
Russian information security is so poor that

00:34:05.849 --> 00:34:07.930
American intelligence is literally listening

00:34:07.930 --> 00:34:10.570
in on everything. But in China, we can hear into

00:34:10.570 --> 00:34:12.809
the office, but there are no conversations happening.

00:34:13.769 --> 00:34:15.960
What do you mean by that? What do you mean? So

00:34:15.960 --> 00:34:18.099
no one talks to him about anything? Anything.

00:34:18.639 --> 00:34:21.360
So he's just terrifying to people. Yeah, exactly.

00:34:21.639 --> 00:34:24.179
Because he murders dissidents. He murders anybody

00:34:24.179 --> 00:34:27.039
that— He doesn't murder everyone, but there's

00:34:27.039 --> 00:34:28.880
a lot of people in prison. Well, there's also

00:34:28.880 --> 00:34:30.820
a lot of billionaires that got disappeared, right?

00:34:31.460 --> 00:34:36.000
And any dissent. Yeah. You're either executed

00:34:36.000 --> 00:34:38.079
or exiled, intimidated into silence. There's

00:34:38.079 --> 00:34:40.599
a variety of options. And if you look at the

00:34:40.599 --> 00:34:42.719
third -party Congress that we had late last year,

00:34:42.860 --> 00:34:45.360
that's when they select the Politburo. Everyone

00:34:45.360 --> 00:34:47.619
on the Politburo now is a personal flunky. There

00:34:47.619 --> 00:34:49.800
is no one from a different faction. There is

00:34:49.800 --> 00:34:51.659
no one that has a history of being incompetent.

00:34:53.500 --> 00:34:56.840
And what is their plan? The Chinese? Yeah. Do

00:34:56.840 --> 00:34:59.300
we have any idea of what their plan to get out

00:34:59.300 --> 00:35:03.000
of this is? Nationalism. If you know that the

00:35:03.000 --> 00:35:06.309
economic situation is going to go to pot. then

00:35:06.309 --> 00:35:08.730
you have a couple of options. Option one is you

00:35:08.730 --> 00:35:11.449
try to cut a deal with a country that can help

00:35:11.449 --> 00:35:13.389
you out, but the only country that could do that

00:35:13.389 --> 00:35:16.309
is the United States. And the sort of strategic

00:35:16.309 --> 00:35:19.889
surrender that the Americans would require is

00:35:19.889 --> 00:35:22.429
not something that the Chinese would accept.

00:35:22.730 --> 00:35:26.489
So think about Germany in 1946. That's the scale

00:35:26.489 --> 00:35:29.130
of support and control that the Americans would

00:35:29.130 --> 00:35:32.750
insist upon for giving the Chinese a lease on

00:35:32.750 --> 00:35:36.480
life. But if you go with nationalism, give people

00:35:36.480 --> 00:35:39.179
a non -economic reason to support the state.

00:35:39.300 --> 00:35:41.260
So even if you lose your job, even if you can't

00:35:41.260 --> 00:35:43.260
feed your family, I'm Chinese, I'm Han, that's

00:35:43.260 --> 00:35:45.960
enough. That has been the strategy for the last

00:35:45.960 --> 00:35:48.960
couple of years. Will it be enough to preserve

00:35:48.960 --> 00:35:55.710
the CCP? Too soon to know. They're in the middle

00:35:55.710 --> 00:35:58.210
of the worst aspect of the pandemic for them

00:35:58.210 --> 00:36:01.769
ever, which is very strange for us because we're

00:36:01.769 --> 00:36:04.110
on the other end of it. Right. So what happened

00:36:04.110 --> 00:36:07.269
over there? Well, let me start by saying I think

00:36:07.269 --> 00:36:09.969
it's safe to say that no country has really figured

00:36:09.969 --> 00:36:13.170
out how to handle this well. Right. Second, I

00:36:13.170 --> 00:36:15.650
will say there are seven different variants circulated

00:36:15.650 --> 00:36:18.170
in Beijing right now or in China right now. Three

00:36:18.170 --> 00:36:20.349
of them did not exist two or three months ago.

00:36:20.989 --> 00:36:23.010
And it takes about six months of data for you

00:36:23.010 --> 00:36:25.130
to get good information on the are not and the

00:36:25.130 --> 00:36:28.030
lethality. So we just don't know. And then third,

00:36:28.190 --> 00:36:31.329
in part because of Xi, when you're a one -man

00:36:31.329 --> 00:36:35.170
state, all policy and all authority starts and

00:36:35.170 --> 00:36:37.650
stops with you. And unless you're providing very

00:36:37.650 --> 00:36:39.530
clear guidance on everything, which is impossible

00:36:39.530 --> 00:36:41.829
for one person to do for a whole country, especially

00:36:41.829 --> 00:36:44.769
one the size of China, the bureaucracy either

00:36:44.769 --> 00:36:47.989
goes into automatic or does nothing. Well, right

00:36:47.989 --> 00:36:50.909
now it's doing nothing. So the data decisions

00:36:50.909 --> 00:36:53.289
in China are not to gather data and figure out

00:36:53.289 --> 00:36:55.510
what we can do. It's to instead of gathering

00:36:55.510 --> 00:36:57.949
data and lying about it, we're just not going

00:36:57.949 --> 00:37:01.030
to gather any data at all. So we're not going

00:37:01.030 --> 00:37:04.889
to know how bad these strains are until they

00:37:04.889 --> 00:37:06.829
get out of China and circulate in the rest of

00:37:06.829 --> 00:37:11.949
the world for six months. So the lowest fatality

00:37:11.949 --> 00:37:14.269
estimate that I have seen that I consider credible

00:37:14.269 --> 00:37:16.289
is that they're going to lose a million and a

00:37:16.289 --> 00:37:18.849
half people. Just from COVID. Just from COVID.

00:37:18.929 --> 00:37:20.849
That assumes no broader breakdown in the health

00:37:20.849 --> 00:37:22.650
system, which we are already seeing. And is this

00:37:22.650 --> 00:37:24.769
because they don't have natural immunity because

00:37:24.769 --> 00:37:27.210
of the rigid lockdowns that they encountered?

00:37:27.489 --> 00:37:30.369
Yeah. From a plus point of view, they did keep

00:37:30.369 --> 00:37:32.590
the virus out of the population for almost three

00:37:32.590 --> 00:37:35.090
years. So no one has natural immunity. But we

00:37:35.090 --> 00:37:37.269
also know that their domestically generated vaccines

00:37:37.269 --> 00:37:40.489
aren't great. And most of the countries that

00:37:40.489 --> 00:37:42.409
used them in order to get their kind of first

00:37:42.409 --> 00:37:45.190
batch then moved on to a Western model that worked

00:37:45.190 --> 00:37:48.730
better. So they had a twofold problem. They did

00:37:48.730 --> 00:37:51.510
not have vaccines and they didn't develop natural

00:37:51.510 --> 00:37:53.349
immunity. And now everyone's getting hit all

00:37:53.349 --> 00:37:56.989
at once with a virus that has at least 50 % more

00:37:56.989 --> 00:38:01.530
communicability than the measles. And their overall

00:38:01.530 --> 00:38:05.690
health. is worse than ours. Diabetes as a percentage

00:38:05.690 --> 00:38:07.650
of the population is higher. They don't have

00:38:07.650 --> 00:38:10.730
a critical care system like we have. And their

00:38:10.730 --> 00:38:13.190
hospitals are really their only line of defense.

00:38:13.409 --> 00:38:15.010
They don't have a clinic and a doctor system

00:38:15.010 --> 00:38:17.909
in the towns like we do. And what about nutrition

00:38:17.909 --> 00:38:22.789
education and the understanding of - Yeah. When

00:38:22.789 --> 00:38:25.409
you industrialize very, very quickly, especially

00:38:25.409 --> 00:38:27.809
in a culture like China, where food is considered

00:38:27.809 --> 00:38:30.809
a sign of wealth, getting fat is the thing to

00:38:30.809 --> 00:38:33.699
do. So we've got a lot of diabetes, a lot of

00:38:33.699 --> 00:38:35.840
hypertension, a lot of overweight people, and

00:38:35.840 --> 00:38:37.960
over two -thirds of the population lives in the

00:38:37.960 --> 00:38:39.880
metro region and their air quality sucks too.

00:38:40.199 --> 00:38:42.900
So we're kind of seeing like the worst aspects

00:38:42.900 --> 00:38:44.900
of the Indian system and the American system

00:38:44.900 --> 00:38:50.400
all in one. So obviously the United States government

00:38:50.400 --> 00:38:52.489
is aware of all these things, correct? Well,

00:38:52.530 --> 00:38:54.750
let's not oversell it, but broadly. Broadly.

00:38:54.750 --> 00:38:57.969
Have you been brought in to talk to people? Because

00:38:57.969 --> 00:39:00.110
you have a very comprehensive view of this that

00:39:00.110 --> 00:39:04.510
includes energy and nitrogen, fertilizers, everything.

00:39:04.809 --> 00:39:07.389
Has anybody ever brought you in and said, Peter,

00:39:07.610 --> 00:39:10.670
can you give us an assessment of what we're really

00:39:10.670 --> 00:39:14.329
dealing with versus what each individual expert

00:39:14.329 --> 00:39:16.150
has to contribute to it? Because you're giving

00:39:16.150 --> 00:39:18.940
an overhaul. an overall sort of comprehensive

00:39:18.940 --> 00:39:22.039
view of this? I'm happy to say that I am doing

00:39:22.039 --> 00:39:24.039
some work with the Defense Department. I can't

00:39:24.039 --> 00:39:26.659
talk about the details, obviously, but I think

00:39:26.659 --> 00:39:29.690
it's... I think it's good to give credit where

00:39:29.690 --> 00:39:32.369
it's due. One of the many, many things about

00:39:32.369 --> 00:39:34.449
the war on terror that reshaped the US government

00:39:34.449 --> 00:39:37.449
is that we focus all of our intelligence apparatus

00:39:37.449 --> 00:39:39.469
on supporting the troops, which is reasonable.

00:39:40.150 --> 00:39:42.869
So instead of thinking, you know, it's 2045 and

00:39:42.869 --> 00:39:44.670
you're thinking over the horizon, who's our foe

00:39:44.670 --> 00:39:45.829
going to be and what kind of tank are they going

00:39:45.829 --> 00:39:48.070
to use so that we can start preparing, which

00:39:48.070 --> 00:39:50.829
is what we used to do. It instead became there's

00:39:50.829 --> 00:39:54.820
someone in the other side of this door. and the

00:39:54.820 --> 00:39:57.119
third floor of this building at the edge of town

00:39:57.119 --> 00:40:00.280
in Fallujah. What side of the door the hinges

00:40:00.280 --> 00:40:02.039
are, because we need to know if we need to blow

00:40:02.039 --> 00:40:04.760
it off the hinges or kick it in. So we focused

00:40:04.760 --> 00:40:08.579
all on that second thing for 20 years, which

00:40:08.579 --> 00:40:11.519
meant not only did we lose all the analysts who

00:40:11.519 --> 00:40:14.179
knew how to think forward, we lost all the people

00:40:14.179 --> 00:40:18.070
who trained them. 20 years is a long time. So

00:40:18.070 --> 00:40:20.510
even if everyone in DOD or the intelligence community

00:40:20.510 --> 00:40:23.750
disagrees with everything I have to say, and

00:40:23.750 --> 00:40:27.030
I have some friends, I have some colleagues,

00:40:27.130 --> 00:40:31.170
I have some non -friends who listen, the fact

00:40:31.170 --> 00:40:32.690
that they're trying to rebuild that capacity

00:40:32.690 --> 00:40:35.690
is a really good sign. And the fact that they

00:40:35.690 --> 00:40:38.809
started rebuilding that capacity so soon after

00:40:38.809 --> 00:40:41.110
the war on terror ended means that they recognize

00:40:41.110 --> 00:40:44.170
the hole in the system. This is a good sign.

00:40:46.309 --> 00:40:52.090
So if you play out China's collapse, how do you

00:40:52.090 --> 00:40:56.449
anticipate that that goes? First of all, what

00:40:56.449 --> 00:40:59.469
do you think is the first piece to drop? Well,

00:40:59.489 --> 00:41:02.570
Chinese history is rich with examples of how

00:41:02.570 --> 00:41:04.389
it all falls apart in a short period of time.

00:41:05.789 --> 00:41:08.969
If I were a betting man, I think that the two

00:41:08.969 --> 00:41:11.590
most vulnerable parts of the international system

00:41:11.590 --> 00:41:13.929
right now are energy transport and food production.

00:41:14.829 --> 00:41:17.829
About 80 % of the calories that humans produce

00:41:17.829 --> 00:41:21.869
are produced with at least one imported input,

00:41:21.989 --> 00:41:23.869
whether it's, you know, pesticide, fertilizer,

00:41:24.130 --> 00:41:26.769
fuel, tractors, whatever. And with the Chinese,

00:41:26.789 --> 00:41:32.150
it's more like 90%. 90 % is imported? Yeah. Well,

00:41:32.170 --> 00:41:33.829
no, no, not their food is imported, the inputs.

00:41:34.010 --> 00:41:36.210
The inputs. The input strain. And 90 % of the

00:41:36.210 --> 00:41:38.170
calories they produce are dependent upon a foreign

00:41:38.170 --> 00:41:41.550
support system. In the United States, it's less

00:41:41.550 --> 00:41:44.679
than 10. We produce most of what we need locally

00:41:44.679 --> 00:41:47.619
and most of the rest comes from Canada. But you

00:41:47.619 --> 00:41:50.400
interrupt the food supply chain in any meaningful

00:41:50.400 --> 00:41:52.539
way. And China is only one of a host of countries

00:41:52.539 --> 00:41:54.039
that has some very real problems. Now, China

00:41:54.039 --> 00:41:55.840
faces the biggest one in absolute terms because

00:41:55.840 --> 00:42:00.139
of the size of their population. But with the

00:42:00.139 --> 00:42:02.300
Russians having their problems, the Russian space

00:42:02.300 --> 00:42:04.579
is the world's largest single supplier fertilizer

00:42:04.579 --> 00:42:10.019
of all types. So we are already knee deep in

00:42:10.019 --> 00:42:13.449
a fertilizer crisis globally. And we're seeing

00:42:13.449 --> 00:42:15.590
industrial accidents in the Russian space that

00:42:15.590 --> 00:42:17.570
are so big you can see them from orbit because,

00:42:17.690 --> 00:42:19.809
you know, a lot of petroleum stuff explodes if

00:42:19.809 --> 00:42:22.269
it doesn't go right. And the Russian facility

00:42:22.269 --> 00:42:23.989
has been held together with duct tape and Western

00:42:23.989 --> 00:42:27.340
tech for a while now. That's all gone now. So,

00:42:27.340 --> 00:42:31.239
China being kind of the last man in line to get

00:42:31.239 --> 00:42:33.539
a lot of this stuff is in a very vulnerable position.

00:42:34.119 --> 00:42:37.059
We're probably going to see about a million barrels

00:42:37.059 --> 00:42:39.480
a day of Russian crude fall offline within the

00:42:39.480 --> 00:42:42.199
next few weeks as part of the price cap that

00:42:42.199 --> 00:42:44.480
the Europeans are putting into place. But more

00:42:44.480 --> 00:42:46.059
important, all the insurance firms have said

00:42:46.059 --> 00:42:47.219
they're not going to deal with Russia anymore.

00:42:47.860 --> 00:42:51.400
So, you're not supposed to sail at all with your

00:42:51.400 --> 00:42:54.090
ship if you don't have an insurance policy. So

00:42:54.090 --> 00:42:56.230
countries like China and India are stepping in

00:42:56.230 --> 00:42:58.570
and offering sovereign indemnifications, but

00:42:58.570 --> 00:43:00.570
that's something they've never done before. And

00:43:00.570 --> 00:43:03.250
so if there's ever a case where a ship, for whatever

00:43:03.250 --> 00:43:05.070
reason, needs to file a claim, it's going to

00:43:05.070 --> 00:43:07.250
immediately go to international arbitration because

00:43:07.250 --> 00:43:09.570
they have no method for the payout. As soon as

00:43:09.570 --> 00:43:10.989
that happens, no one's going to take an Indian

00:43:10.989 --> 00:43:13.909
insurance policy again. That's another million

00:43:13.909 --> 00:43:15.730
to two million barrels a day that goes offline.

00:43:16.369 --> 00:43:18.650
And then all the crude that the Chinese get from

00:43:18.650 --> 00:43:20.289
eastern Siberia is from fields that the Russians

00:43:20.289 --> 00:43:22.289
never developed themselves. That was all BP.

00:43:22.920 --> 00:43:25.840
BP is gone. So we don't know how long the Russians

00:43:25.840 --> 00:43:28.179
can keep it operating, but we know it's going

00:43:28.179 --> 00:43:29.860
to go to zero. We just don't know how long it's

00:43:29.860 --> 00:43:32.699
going to take. And the Chinese are the last in

00:43:32.699 --> 00:43:36.019
line for all of this stuff. And if you have a

00:43:36.019 --> 00:43:38.380
food or an energy crisis, or God forbid, both

00:43:38.380 --> 00:43:40.500
at the same time, on top of a health crisis,

00:43:40.539 --> 00:43:43.539
on top of government incompetence, there is no

00:43:43.539 --> 00:43:45.539
way a central government holds together in that

00:43:45.539 --> 00:43:49.710
sort of environment. Like I said, Chinese history

00:43:49.710 --> 00:43:52.190
is rich with ways that can all fall apart. Oftentimes

00:43:52.190 --> 00:43:54.489
it's based on having this hyper centralization

00:43:54.489 --> 00:43:57.789
and an incompetent leader or an incompetent leader

00:43:57.789 --> 00:44:00.389
cadre maybe is a better way to phrase that. But

00:44:00.389 --> 00:44:03.849
how it usually goes is that the north kind of

00:44:03.849 --> 00:44:07.150
falls in on itself. It falls into famine. It

00:44:07.150 --> 00:44:09.510
falls into tyranny. You get hundreds of millions

00:44:09.510 --> 00:44:12.070
of people suffering from malnutrition and then

00:44:12.070 --> 00:44:17.119
ultimately dying. The coast. goes one way, the

00:44:17.119 --> 00:44:20.800
interior kind of breaks off and shatters. And

00:44:20.800 --> 00:44:24.159
then the cities of the coast in the south, your

00:44:24.159 --> 00:44:26.360
Shanghai, your Fujian, your Guangzhou, your Hong

00:44:26.360 --> 00:44:29.079
Kong, they basically become independent city

00:44:29.079 --> 00:44:32.880
-states and integrate with foreign powers primarily

00:44:32.880 --> 00:44:35.460
in order to get food. And if you look back at

00:44:35.460 --> 00:44:38.079
the last 14 centuries, for almost that entire

00:44:38.079 --> 00:44:42.079
period until 1945, the city -states have been

00:44:42.079 --> 00:44:43.619
dependent upon foreigners to keep themselves

00:44:43.619 --> 00:44:47.679
alive. So we're really just reverting to a historical

00:44:47.679 --> 00:44:51.219
mean here. Now, one of the things that's really

00:44:51.219 --> 00:44:53.960
disturbing to the West is watching what's happened

00:44:53.960 --> 00:44:56.400
to Hong Kong. Sure. That Hong Kong has essentially

00:44:56.400 --> 00:44:59.039
been taken over by the CCP and they've imposed

00:44:59.039 --> 00:45:03.760
their rule of law on people that had existed

00:45:03.760 --> 00:45:06.460
in more or less a westernized democracy. Right.

00:45:07.119 --> 00:45:10.739
Like, how do they control that? The Chinese?

00:45:10.960 --> 00:45:13.139
Well, Hong Kong would probably be one of those

00:45:13.139 --> 00:45:16.019
cities that splits off. But for that to happen,

00:45:16.079 --> 00:45:18.019
you first have to have the northern section basically

00:45:18.019 --> 00:45:20.500
fall in on itself. As long as there are security

00:45:20.500 --> 00:45:22.940
services, these southern cities can't go their

00:45:22.940 --> 00:45:26.130
own way. But as soon as something happens to

00:45:26.130 --> 00:45:27.869
those security services and they're focused on

00:45:27.869 --> 00:45:30.489
the homeland in the north, then the southern

00:45:30.489 --> 00:45:32.889
cities are going to bolt. Now, what does China

00:45:32.889 --> 00:45:35.469
think about? Did they have an understanding of

00:45:35.469 --> 00:45:38.389
this collapse or is it just because of Xi's power

00:45:38.389 --> 00:45:40.789
over everyone that none of this gets discussed?

00:45:40.809 --> 00:45:45.489
This is one of the beautiful things about authoritarianism

00:45:45.489 --> 00:45:47.289
is they start telling stories and eventually

00:45:47.289 --> 00:45:49.050
they believe them. It happened in Russia. It's

00:45:49.050 --> 00:45:51.949
happening in China. Chinese academics as recently

00:45:51.949 --> 00:45:55.769
as 10 years ago were very… very aware of this,

00:45:55.889 --> 00:45:58.789
and it shaped government policy. They wanted

00:45:58.789 --> 00:46:03.530
to make sure that the Democrats, little d, in

00:46:03.530 --> 00:46:05.650
Hong Kong didn't get too uppity. They tried to

00:46:05.650 --> 00:46:07.389
make sure that there were people from the South

00:46:07.389 --> 00:46:09.969
on the Politburo. But as we've gotten into a

00:46:09.969 --> 00:46:12.170
more ossified and centralized decision -making

00:46:12.170 --> 00:46:14.349
system, all of the lessons of the past are going

00:46:14.349 --> 00:46:16.730
away, and it's all about central control. And

00:46:16.730 --> 00:46:19.650
once again, because this is another trend that

00:46:19.650 --> 00:46:21.789
pops up in China over and over again, they're

00:46:21.789 --> 00:46:24.579
forgetting their own history. But China has always

00:46:24.579 --> 00:46:26.679
been thought of as a country, at least the narrative

00:46:26.679 --> 00:46:29.940
has always been that they plan long game. Yeah,

00:46:29.980 --> 00:46:32.380
it's a bunch of crap. Is it? Yeah. No, the Chinese

00:46:32.380 --> 00:46:35.059
are just as bad as everyone when it comes to

00:46:35.059 --> 00:46:37.739
ideological blinders and short -term decision

00:46:37.739 --> 00:46:40.940
-making. And the more isolated and concentrated

00:46:40.940 --> 00:46:43.400
the decisions – I'm sorry, the tools of power

00:46:43.400 --> 00:46:46.780
become. The more problematic that becomes. So

00:46:46.780 --> 00:46:49.440
what is their plan on getting through what you

00:46:49.440 --> 00:46:52.840
think is a 10 -year timeline for their demise?

00:46:53.239 --> 00:46:56.599
Beat the nationalist drum so that when the food

00:46:56.599 --> 00:46:59.500
and the energy run out, everyone is banding together

00:46:59.500 --> 00:47:02.360
simply because they're Han Chinese. That's it?

00:47:02.820 --> 00:47:04.920
That's as good as it's going to get because there

00:47:04.920 --> 00:47:07.460
is no trade option out of this without the United

00:47:07.460 --> 00:47:10.239
States. What do you think the world looks like

00:47:10.239 --> 00:47:14.880
in 10 years? I think we'll have a system of regional

00:47:14.880 --> 00:47:18.199
trade where you've got certain regional powers

00:47:18.199 --> 00:47:21.119
who have actually benefit from the environment.

00:47:21.320 --> 00:47:22.820
So one of the fun things about the United States

00:47:22.820 --> 00:47:25.760
is that we've got more navigable waterways than

00:47:25.760 --> 00:47:27.139
everyone else in the world put together, about

00:47:27.139 --> 00:47:29.760
13 ,000 miles. And it's about one -tenth the

00:47:29.760 --> 00:47:31.820
cost to move things by water as it is to move

00:47:31.820 --> 00:47:35.139
it by truck. So with that sort of environment

00:47:35.139 --> 00:47:37.880
and ocean moats, the United States is an economic

00:47:37.880 --> 00:47:40.820
power, whoever is in charge. I mean, we've had

00:47:40.820 --> 00:47:42.920
decades of bipartisan effort to try to screw

00:47:42.920 --> 00:47:44.440
this up, and we haven't pulled it off yet. We're

00:47:44.440 --> 00:47:46.059
not going to do it under Biden. He doesn't have

00:47:46.059 --> 00:47:50.480
the energy. Which means that globalization from

00:47:50.480 --> 00:47:52.280
our point of view, from an economic point of

00:47:52.280 --> 00:47:54.530
view, was a problem. Because we had one of the

00:47:54.530 --> 00:47:57.590
world's best geographies. And we deliberately

00:47:57.590 --> 00:48:00.769
sublimated that in order to support our allies

00:48:00.769 --> 00:48:02.849
against the Soviets in the Cold War. We basically

00:48:02.849 --> 00:48:05.590
paid people with globalization to be on our side.

00:48:05.949 --> 00:48:08.969
And it worked. But we're getting away from that.

00:48:09.250 --> 00:48:12.210
And now geography is going to have a much bigger

00:48:12.210 --> 00:48:14.769
role to play. And if you layer demographics on

00:48:14.769 --> 00:48:17.269
top of that, if you have a country with a decent

00:48:17.269 --> 00:48:19.730
geography and a decent demography, they can kind

00:48:19.730 --> 00:48:21.469
of write their own ticket in the world we're

00:48:21.469 --> 00:48:25.079
going to. And there are... A few of those. The

00:48:25.079 --> 00:48:28.059
United States is at the top of the list. Argentina

00:48:28.059 --> 00:48:30.300
looks really good. France and Turkey look great.

00:48:30.480 --> 00:48:33.360
And then Japan is kind of a consolation prize

00:48:33.360 --> 00:48:35.460
because they've managed to cut a deal with both

00:48:35.460 --> 00:48:37.800
the American right and the American left and

00:48:37.800 --> 00:48:39.760
get themselves invited into kind of an American

00:48:39.760 --> 00:48:42.329
friends and family plan. So you get these spheres

00:48:42.329 --> 00:48:46.489
of influence that don't necessarily cooperate

00:48:46.489 --> 00:48:48.849
or compete with one another but are kind of in

00:48:48.849 --> 00:48:51.590
their own little worlds. And anything outside

00:48:51.590 --> 00:48:54.329
of those spheres of influence is probably a territory

00:48:54.329 --> 00:48:57.550
that is not very economically viable. And most

00:48:57.550 --> 00:48:59.269
of them don't have demographic structures that

00:48:59.269 --> 00:49:02.349
are sustainable at all. This really is the end

00:49:02.349 --> 00:49:03.789
of the world. The end of the world we understand,

00:49:04.010 --> 00:49:05.610
yeah. We're going back to something that's a

00:49:05.610 --> 00:49:08.130
lot more similar to the world as it existed in

00:49:08.130 --> 00:49:14.800
the early 1900s. How does China come through

00:49:14.800 --> 00:49:17.519
this, though? They don't. So what happens to

00:49:17.519 --> 00:49:19.219
them if they don't? Well, I mean, this is one

00:49:19.219 --> 00:49:21.679
of the wild things and the hard parts of my job

00:49:21.679 --> 00:49:26.239
is we have never faced a demographic collapse

00:49:26.239 --> 00:49:29.809
that wasn't caused by war. The closest would

00:49:29.809 --> 00:49:31.829
be the Black Plague. But the Chinese are going

00:49:31.829 --> 00:49:33.610
to lose a greater percentage of their population

00:49:33.610 --> 00:49:35.489
in the next 20 years than Europe did during the

00:49:35.489 --> 00:49:39.130
Black Plague. And you think by famine? This assumes

00:49:39.130 --> 00:49:41.929
no famine. This is just aging. Just aging. Yeah.

00:49:41.989 --> 00:49:43.909
If you have an energy breakdown or a food breakdown,

00:49:44.010 --> 00:49:47.750
it happens a lot faster. And they have energy

00:49:47.750 --> 00:49:49.829
issues and they have food issues. They are the

00:49:49.829 --> 00:49:52.150
world's largest importer of energy, about 14

00:49:52.150 --> 00:49:54.289
million barrels a day. Remember, we're a net

00:49:54.289 --> 00:49:57.340
exporter. And they are the world's largest importer

00:49:57.340 --> 00:50:00.719
of food and food inputs. And are we the only

00:50:00.719 --> 00:50:04.940
major superpower that can generate its own natural

00:50:04.940 --> 00:50:08.039
resources in terms of natural gas, shale oil?

00:50:08.679 --> 00:50:10.139
We're the only ones that can do it at scale.

00:50:10.219 --> 00:50:11.980
I would argue that Argentina can do a pretty

00:50:11.980 --> 00:50:17.119
good job of it by Argentine standards. So we're

00:50:17.119 --> 00:50:19.880
fairly safe in that regard? Yeah. I mean, we'll

00:50:19.880 --> 00:50:22.300
always find things to stress about. I don't mean

00:50:22.300 --> 00:50:23.960
to suggest that the next five years are just

00:50:23.960 --> 00:50:26.500
going to be a picnic. We're going to have to

00:50:26.500 --> 00:50:28.980
double the size of the industrial plant as the

00:50:28.980 --> 00:50:31.039
Chinese system and the German system both fall

00:50:31.039 --> 00:50:36.480
offline. But that's an opportunity. You double

00:50:36.480 --> 00:50:38.599
the size of the industrial plant. Obviously,

00:50:38.599 --> 00:50:42.489
that's inflationary. But at the other side, you're

00:50:42.489 --> 00:50:45.010
building things at home using local resources

00:50:45.010 --> 00:50:47.769
and local workers. You're using less energy and

00:50:47.769 --> 00:50:50.989
less water. It's cleaner. You're selling to locals.

00:50:51.469 --> 00:50:54.409
And your supply chains are simpler and safer

00:50:54.409 --> 00:50:57.429
and shorter. And you're largely become immune

00:50:57.429 --> 00:51:00.510
to shocks beyond the horizon. This is a good

00:51:00.510 --> 00:51:03.750
challenge. It won't be easy. But to be perfectly

00:51:03.750 --> 00:51:05.909
blunt, we've done it before. We can do it again.

00:51:06.860 --> 00:51:08.659
Well, one of the things that came up during COVID

00:51:08.659 --> 00:51:12.460
was our understanding, really for the first time,

00:51:12.460 --> 00:51:15.059
of the supply chain and what happens when it

00:51:15.059 --> 00:51:17.920
gets cut off. When medicine, so much medicine

00:51:17.920 --> 00:51:21.460
is produced in China, so many computer chips,

00:51:21.599 --> 00:51:23.659
so many different things are made over there,

00:51:23.739 --> 00:51:27.340
that there's been a real conversation about the

00:51:27.340 --> 00:51:30.960
need to have all that stuff here and for the

00:51:30.960 --> 00:51:33.840
United States to be self -sustaining. With the

00:51:33.840 --> 00:51:35.619
inflation, I mean, I don't want to come across

00:51:35.619 --> 00:51:37.440
as a partisan here, but the Inflation Reduction

00:51:37.440 --> 00:51:40.699
Act, while from an inflation point of view, is

00:51:40.699 --> 00:51:42.420
ridiculous. There's nothing about that that addresses

00:51:42.420 --> 00:51:45.679
inflation. It did put together a nationalist

00:51:45.679 --> 00:51:48.739
economic policy that we probably did need in

00:51:48.739 --> 00:51:51.059
terms of pushing the reindustrialization on some

00:51:51.059 --> 00:51:54.559
specific sectors. It'll probably be the first

00:51:54.559 --> 00:51:57.059
of a series of things that are coming. And a

00:51:57.059 --> 00:51:59.860
lot of this stuff is not particularly complicated.

00:52:00.119 --> 00:52:03.960
So take the medication issue. It's 1950s technology

00:52:03.960 --> 00:52:06.380
for the most part. The medicines that we import

00:52:06.380 --> 00:52:09.639
from China and India are not the biologics or

00:52:09.639 --> 00:52:14.030
the cutting edge stuff or the cancer drugs. maintenance

00:52:14.030 --> 00:52:17.630
things that a lot of us use. And it is not particularly

00:52:17.630 --> 00:52:19.769
expensive or time -consuming to build out the

00:52:19.769 --> 00:52:22.329
capacity here. It's basic chemistry. But there

00:52:22.329 --> 00:52:24.590
has not been an economic incentive to do it yet.

00:52:25.070 --> 00:52:27.349
So you get one act of Congress and splash a little

00:52:27.349 --> 00:52:30.130
cash on it, and it might cost us $0 .08 for a

00:52:30.130 --> 00:52:33.130
pill instead of $0 .04. But we can argue whether

00:52:33.130 --> 00:52:35.809
or not that is worth the price. You get into

00:52:35.809 --> 00:52:37.989
more sophisticated manufacturing, and it kind

00:52:37.989 --> 00:52:41.440
of does this weird split. So the United States

00:52:41.440 --> 00:52:45.500
is a world leader at the very high end, whether

00:52:45.500 --> 00:52:48.699
it's semiconductors or vehicles or machinery

00:52:48.699 --> 00:52:53.780
or software. But we're also a world leader on

00:52:53.780 --> 00:52:57.000
the low end if it's input intensive. So energy

00:52:57.000 --> 00:53:01.059
products and food products, fuel, processed foods.

00:53:01.840 --> 00:53:04.920
Our problem is in the middle, places where it's

00:53:04.920 --> 00:53:07.099
not the natural bounty of North America that

00:53:07.099 --> 00:53:09.380
helps us out, and it's not the ingenuity and

00:53:09.380 --> 00:53:10.840
the skill of the American workforce that helps

00:53:10.840 --> 00:53:13.239
us out. The stuff in the middle. To be perfectly

00:53:13.239 --> 00:53:15.780
blunt, for that, we've got Mexico, and they're

00:53:15.780 --> 00:53:20.019
great at it. The American -Mexican trade relationship

00:53:20.019 --> 00:53:22.739
is already the largest in the world, and they're

00:53:22.739 --> 00:53:24.440
going to be our largest trading partner moving

00:53:24.440 --> 00:53:27.039
forward for at least the next 30 years, probably

00:53:27.039 --> 00:53:30.710
a lot more. Are there hiccups? Oh, yeah. Plenty

00:53:30.710 --> 00:53:32.309
of hiccups. Well, I'm sure you're paying attention

00:53:32.309 --> 00:53:34.429
to the cartel wars that are going on right now.

00:53:34.449 --> 00:53:37.070
Yeah, it would be so much better if Americans

00:53:37.070 --> 00:53:40.989
did not like cocaine. I would just solve half

00:53:40.989 --> 00:53:44.710
of this overnight. Or if cocaine was legal. The

00:53:44.710 --> 00:53:47.489
health studies that I have seen suggest that

00:53:47.489 --> 00:53:50.889
that is not the way forward. But do you really

00:53:50.889 --> 00:53:53.269
think that it would change the consumption? Oh,

00:53:53.289 --> 00:53:54.690
it would definitely alter the consumption. How,

00:53:54.809 --> 00:53:56.230
I don't know. This is not something I'm an expert

00:53:56.230 --> 00:53:57.949
at. But most of the people that I've seen who

00:53:57.949 --> 00:54:00.150
have done the assessments suggest that any gain

00:54:00.150 --> 00:54:02.670
in terms of law enforcement and criminal activity

00:54:02.670 --> 00:54:06.130
would be lost in terms of work days and sickness.

00:54:06.650 --> 00:54:10.030
So from a purely economic point of view, at best,

00:54:10.030 --> 00:54:12.309
it looks like it might be a wash. So the legalization

00:54:12.309 --> 00:54:15.909
of cocaine, in your opinion, would cause more

00:54:15.909 --> 00:54:19.849
use and more problems. Probably. Just different

00:54:19.849 --> 00:54:22.000
ones. But wouldn't it stop? all these fentanyl

00:54:22.000 --> 00:54:26.519
overdose? Because this is an issue with the illegalization.

00:54:26.880 --> 00:54:29.239
See, that's the problem. We ask people why they're

00:54:29.239 --> 00:54:32.150
taking what drug. To say that if cocaine was

00:54:32.150 --> 00:54:33.650
immediately available that they'd stop taking

00:54:33.650 --> 00:54:35.010
fentanyl, I don't know. But they're not taking

00:54:35.010 --> 00:54:37.289
fentanyl on purpose. Oh, you're talking about

00:54:37.289 --> 00:54:38.050
the stuff that's cut in. A lot of the fentanyl

00:54:38.050 --> 00:54:41.030
deaths is cut. Like cocaine fentanyl deaths are

00:54:41.030 --> 00:54:42.670
very high. Well, then you're talking about a

00:54:42.670 --> 00:54:44.670
regulatory issue. And just keep in mind that

00:54:44.670 --> 00:54:46.469
whenever you move something in from an illegal

00:54:46.469 --> 00:54:48.489
to a regulatory point of view, there is a, how

00:54:48.489 --> 00:54:51.260
should we call this, an adjustment process. So

00:54:51.260 --> 00:54:53.260
I live in Colorado now, which was the first state

00:54:53.260 --> 00:54:57.139
to legalize pot. And what we discovered was that,

00:54:57.179 --> 00:54:59.519
yes, you solve some problems and you bring a

00:54:59.519 --> 00:55:02.159
lot of money in for the government, but it has

00:55:02.159 --> 00:55:04.940
criminalized a lot of economic activity in Colorado.

00:55:04.980 --> 00:55:09.059
Because think about what happened with pot. It's

00:55:09.059 --> 00:55:10.980
still controlled from a financial point of view

00:55:10.980 --> 00:55:13.840
at the federal level. So banks won't touch it.

00:55:14.360 --> 00:55:17.719
So all the pot dispensaries have a walk -in safe

00:55:17.719 --> 00:55:20.659
where they keep all the cash. So the Federal

00:55:20.659 --> 00:55:23.019
Reserve is like, this is a theft issue. This

00:55:23.019 --> 00:55:24.960
is a security issue. We can't allow this to happen.

00:55:25.079 --> 00:55:28.519
So what we're going to do is we're going to hire

00:55:28.519 --> 00:55:31.300
out a bunch of armored cars and trucks. And we're

00:55:31.300 --> 00:55:32.800
going to send these to these pot dispensaries

00:55:32.800 --> 00:55:35.400
after hours. And with armored guards, we're going

00:55:35.400 --> 00:55:36.659
to come in and we're going to take all your cash.

00:55:36.739 --> 00:55:38.019
We're going to spray a lot of Febreze on it.

00:55:38.099 --> 00:55:39.539
We're going to take it back to the Federal Reserve

00:55:39.539 --> 00:55:41.699
building. We're going to count it and give you

00:55:41.699 --> 00:55:45.940
a digital deposit. The Sinaloa cartel is like,

00:55:45.980 --> 00:55:48.199
whoa, whoa, whoa, whoa, whoa. Let me get this

00:55:48.199 --> 00:55:51.929
right. The Federal Reserve of the United States

00:55:51.929 --> 00:55:54.650
of America is now in the business of money laundering.

00:55:55.690 --> 00:55:59.630
Count us in. And so now they are laundering their

00:55:59.630 --> 00:56:03.610
money through the pot industry of Colorado. And

00:56:03.610 --> 00:56:06.590
it's generated just a different problem. This

00:56:06.590 --> 00:56:08.949
is a gentleman named John Norris, and he started

00:56:08.949 --> 00:56:12.909
out his career as a game warden, a guy who checks

00:56:12.909 --> 00:56:15.469
fishing licenses and stuff. And along the way,

00:56:15.469 --> 00:56:19.449
he discovered that because of the legalization

00:56:19.449 --> 00:56:22.329
of marijuana in California, they decriminalize

00:56:22.329 --> 00:56:25.710
it to the point where growing it is a misdemeanor.

00:56:25.789 --> 00:56:28.449
And so people are growing it on federal land,

00:56:28.550 --> 00:56:32.280
on state land. And so these state forests. in

00:56:32.280 --> 00:56:34.400
federal forests in California are filled with

00:56:34.400 --> 00:56:37.599
cartels. They're growing marijuana. So he had

00:56:37.599 --> 00:56:42.500
to form a tactical unit. To combat these cartels.

00:56:42.500 --> 00:56:46.639
So they're wearing tactical gear. And this guy

00:56:46.639 --> 00:56:49.400
was a game warden. And now they've got Belgian

00:56:49.400 --> 00:56:52.659
Malinois and fucking machine guns. And they're

00:56:52.659 --> 00:56:55.159
going in there and they're fighting off cartels.

00:56:55.219 --> 00:56:58.039
And he wrote this book called Hidden Wars. It's

00:56:58.039 --> 00:57:00.780
fucking crazy. There's rarely a silver bullet,

00:57:00.820 --> 00:57:03.980
unfortunately. But this is the problem that you

00:57:03.980 --> 00:57:07.039
have when you have it illegal. I mean this is

00:57:07.039 --> 00:57:10.239
literally what propped up organized crime during

00:57:10.239 --> 00:57:13.460
the prohibition. This is what funded the mafia.

00:57:13.739 --> 00:57:17.300
They ran booze illegally because it was illegal.

00:57:17.559 --> 00:57:20.820
So criminals are going to be in charge of things

00:57:20.820 --> 00:57:24.400
that there's a demand for when there's an enormous

00:57:24.400 --> 00:57:27.719
economic incentive. I think the mafia is a great

00:57:27.719 --> 00:57:30.820
example for why you shouldn't look for the silver

00:57:30.820 --> 00:57:34.289
bullet. Because, yes, that in the 1920s during

00:57:34.289 --> 00:57:36.889
Prohibition was one of the big reasons it got

00:57:36.889 --> 00:57:40.010
going. But the mafia didn't waste any time in

00:57:40.010 --> 00:57:43.570
diversifying and neither of the cartels. So one

00:57:43.570 --> 00:57:46.010
of the many problems in Mexico today is that

00:57:46.010 --> 00:57:47.670
the cartels have diversified. They've gotten

00:57:47.670 --> 00:57:50.389
into cargo theft and kidnapping and avocados

00:57:50.389 --> 00:57:52.989
and limes and real estate and local government.

00:57:53.550 --> 00:57:59.440
And criminality is always going to exist. The

00:57:59.440 --> 00:58:01.239
attractiveness of gutting them of some of their

00:58:01.239 --> 00:58:04.039
primary income, should we look at that? Of course.

00:58:05.079 --> 00:58:08.000
But it's not so simple as removing one and it

00:58:08.000 --> 00:58:11.019
just all stops. Because of the limes and avocados

00:58:11.019 --> 00:58:12.840
and all these other things. These are things

00:58:12.840 --> 00:58:15.260
that are obviously legal. But the cartels have

00:58:15.260 --> 00:58:16.860
found a way to take it over and make it their

00:58:16.860 --> 00:58:21.110
own. The problem was initially because of illegal

00:58:21.110 --> 00:58:23.369
drugs. So that's where they got their enormous

00:58:23.369 --> 00:58:26.449
resources. And then that allowed them to expand

00:58:26.449 --> 00:58:29.869
into other semi -legal or legal. I'd say the

00:58:29.869 --> 00:58:31.929
problem was lack of rule of law. And that goes

00:58:31.929 --> 00:58:34.590
to Chicago as well. And the way we ultimately

00:58:34.590 --> 00:58:38.110
got past that is after Prohibition ended, it

00:58:38.110 --> 00:58:42.070
still took 20 to 30 years to kind of ground down

00:58:42.070 --> 00:58:45.710
the mob. And we welcomed them into politics to

00:58:45.710 --> 00:58:49.829
normalize it. So careful what you wish for. So

00:58:49.829 --> 00:58:52.610
do you anticipate that happening with Mexico?

00:58:53.510 --> 00:58:55.670
Mexico is, to be perfectly honest, really early

00:58:55.670 --> 00:58:58.369
in this process. The challenge we're seeing in

00:58:58.369 --> 00:59:01.409
Mexico right now is that the... air quotes, good

00:59:01.409 --> 00:59:04.369
cartel, the one that saw drugs as a business,

00:59:04.469 --> 00:59:06.550
is being broken up. If you remember El Chapo.

00:59:06.550 --> 00:59:09.030
That's the good cartel? Yeah. Remember El Chapo,

00:59:09.130 --> 00:59:13.030
Sinaloa cartel? Yeah. He thought of himself as

00:59:13.030 --> 00:59:16.030
a Korean conglomerate president. So it's like,

00:59:16.070 --> 00:59:18.550
we smuggle drugs. That's our business. You don't

00:59:18.550 --> 00:59:20.050
mess with things that mess with the business.

00:59:20.329 --> 00:59:22.510
So you don't trip the old lady. You don't steal

00:59:22.510 --> 00:59:24.650
her purse. You don't shoot at the cops. These

00:59:24.650 --> 00:59:26.750
are people who live where we operate. We want

00:59:26.750 --> 00:59:28.449
them to be on our side. So maybe even throw a

00:59:28.449 --> 00:59:32.460
party every once in a while. You focus on the

00:59:32.460 --> 00:59:36.460
business. We got El Chapo. We removed him from

00:59:36.460 --> 00:59:39.340
circulation. The guy who died or got captured

00:59:39.340 --> 00:59:40.960
yesterday was his son, one of the Los Tepitos.

00:59:41.199 --> 00:59:44.239
And his cartel as a result is fracturing because

00:59:44.239 --> 00:59:48.480
his leadership's gone. The replacement cartel

00:59:48.480 --> 00:59:51.820
is Jalisco New Generation. They're led by a former

00:59:51.820 --> 00:59:55.480
Mexican military officer who thinks that rather

00:59:55.480 --> 00:59:57.940
than don't shit where you sleep so that the people

00:59:57.940 --> 01:00:00.500
on your side, whenever you move into a town,

01:00:00.599 --> 01:00:03.659
you shoot it up. You do kick over the old lady.

01:00:03.739 --> 01:00:06.360
You do take her purse. You make the people scared

01:00:06.360 --> 01:00:09.219
of you. That's the point of this. Drug running

01:00:09.219 --> 01:00:14.650
is a side gig. We are here to be powerful. And

01:00:14.650 --> 01:00:15.909
drug running is just one of the ways we make

01:00:15.909 --> 01:00:18.530
that happen. And he has taken the fight to every

01:00:18.530 --> 01:00:20.969
cartel and the Mexican government. And they're

01:00:20.969 --> 01:00:22.489
in the process of trying to break into the United

01:00:22.489 --> 01:00:26.610
States. Break in in what? Economically? Yeah.

01:00:26.730 --> 01:00:29.750
El Chapo and the Sinaloa became the largest drug

01:00:29.750 --> 01:00:32.429
trafficking organization in America under the

01:00:32.429 --> 01:00:34.570
Obama administration. And one of the reasons

01:00:34.570 --> 01:00:37.110
our birth rate went down so far so fast is they

01:00:37.110 --> 01:00:40.289
basically either co -opted or killed American

01:00:40.289 --> 01:00:42.489
gangs. So they killed the people who were doing

01:00:42.489 --> 01:00:44.449
the killing. Not a lot of Americans got killed

01:00:44.449 --> 01:00:49.159
after that. All of the other cartels control

01:00:49.159 --> 01:00:51.559
the access points in the United States, but Jalisco

01:00:51.559 --> 01:00:53.519
New Generation now is challenging every single

01:00:53.519 --> 01:00:55.679
one of them, trying to break through. And if

01:00:55.679 --> 01:00:58.800
they do, and they bring their business acumen,

01:00:58.820 --> 01:01:00.579
if you will, north of the border, they're going

01:01:00.579 --> 01:01:03.340
to start killing white chicks named Sheila in

01:01:03.340 --> 01:01:05.139
Phoenix, and then we're going to have a very

01:01:05.139 --> 01:01:06.960
different conversation in this country about

01:01:06.960 --> 01:01:09.760
the drug war and about trade with Mexico. So

01:01:09.760 --> 01:01:12.679
when you say that they've killed the gangs, in

01:01:12.679 --> 01:01:14.940
what way? Because that is an interesting thing

01:01:14.940 --> 01:01:17.639
that you don't hear a lot about American gangs

01:01:17.639 --> 01:01:19.519
anymore. Well, that's because they're not there

01:01:19.519 --> 01:01:22.900
to the same degree. So the Sinaloa, they co -opted

01:01:22.900 --> 01:01:25.099
the Hispanic gangs, especially the Mexican gangs,

01:01:25.199 --> 01:01:26.760
because there wasn't a language barrier there.

01:01:27.420 --> 01:01:30.340
And they really targeted and gutted a lot of

01:01:30.340 --> 01:01:32.820
the African -American gangs. They took over drug

01:01:32.820 --> 01:01:34.780
smuggling and distribution from them to deny

01:01:34.780 --> 01:01:37.280
them income. And then they just shot a lot of

01:01:37.280 --> 01:01:40.150
people. And when did this take place? That happened

01:01:40.150 --> 01:01:43.949
during the 2000s. It was pretty much completed

01:01:43.949 --> 01:01:46.409
by the time we got to 2013. But we weren't really

01:01:46.409 --> 01:01:49.389
kind of – this narrative didn't really go around.

01:01:49.550 --> 01:01:51.230
This is not something that I've heard before.

01:01:51.329 --> 01:01:53.030
Oh, yeah. Look at the murder. It's making sense

01:01:53.030 --> 01:01:54.630
when you're saying it. Look at the violent crime

01:01:54.630 --> 01:01:56.130
rates in the United States. They've been trending

01:01:56.130 --> 01:02:01.690
down really significantly since about 2004. And

01:02:01.690 --> 01:02:04.670
the drop from 2004 to roughly 2014 was amazing.

01:02:05.230 --> 01:02:09.199
That's largely Sinaloa. So they have silently

01:02:09.199 --> 01:02:13.119
sort of invaded and taken over the distribution

01:02:13.119 --> 01:02:15.539
and taken over the gang activity. Right. And

01:02:15.539 --> 01:02:17.500
this is El Chapo's cartel that is now getting

01:02:17.500 --> 01:02:21.340
broken up. And as soon as you have more players,

01:02:21.460 --> 01:02:23.719
more violence is going to happen, especially

01:02:23.719 --> 01:02:25.340
against one another. And that's one of the reasons

01:02:25.340 --> 01:02:27.760
that the murder rate in Mexico has skyrocketed

01:02:27.760 --> 01:02:31.260
in the last three years. Do you know who Ed Calderon?

01:02:31.420 --> 01:02:33.960
Have you ever followed Ed Manifesto on Instagram?

01:02:34.380 --> 01:02:38.730
He used to work. For the government in Mexico

01:02:38.730 --> 01:02:41.789
and, you know, to fight off the cartels. And

01:02:41.789 --> 01:02:43.690
now he's made his way to America. And he just

01:02:43.690 --> 01:02:46.170
does a great job of highlighting all this stuff.

01:02:46.469 --> 01:02:47.969
But one of the things he was showing is they

01:02:47.969 --> 01:02:50.210
were using .50 caliber rifles to try to shoot

01:02:50.210 --> 01:02:52.530
down planes yesterday. Yeah. Have you seen that?

01:02:52.670 --> 01:02:56.349
I have. I mean, what the fuck is going on over

01:02:56.349 --> 01:02:59.179
there? I mean, it seems like. We concentrate

01:02:59.179 --> 01:03:01.900
so much on these conflicts that are happening

01:03:01.900 --> 01:03:04.360
all around the world. And there's a massive one

01:03:04.360 --> 01:03:06.480
happening in a place where we could walk to.

01:03:06.599 --> 01:03:09.099
It's the disintegration of the Sinaloa cartel.

01:03:09.099 --> 01:03:13.519
So back in 2019, the Los Chapitos, I can't remember

01:03:13.519 --> 01:03:15.380
his name. I keep wanting to say Octavian. That's

01:03:15.380 --> 01:03:16.940
not it because that's a girl's name. Anyway,

01:03:16.960 --> 01:03:21.019
it begins with an O. He was captured in 2019.

01:03:22.000 --> 01:03:24.219
And they weren't able to get him out of town

01:03:24.219 --> 01:03:27.239
fast enough. So all of his homies basically got

01:03:27.239 --> 01:03:29.980
together with assault weapons and descended upon

01:03:29.980 --> 01:03:31.760
the police units that did it, and they were forced

01:03:31.760 --> 01:03:34.239
to let the guy go. Yeah, I remember that. This

01:03:34.239 --> 01:03:36.219
time, they were able to get him to the airport

01:03:36.219 --> 01:03:38.079
fast enough, and he's already in Mexico City.

01:03:39.000 --> 01:03:43.059
So there was a clash, but not nearly to the degree

01:03:43.059 --> 01:03:44.840
that we had a couple years back. Look at this

01:03:44.840 --> 01:03:51.239
here. Oh, yeah. One of the things, this is a

01:03:51.239 --> 01:03:55.139
guy shooting at airplanes. Which is fucking bonkers.

01:03:55.179 --> 01:03:56.980
I mean, what kind of airplanes are those? Those

01:03:56.980 --> 01:04:00.320
are probably civilian. And why is he doing this?

01:04:02.309 --> 01:04:06.449
We're seeing a change in heart of the administration

01:04:06.449 --> 01:04:09.650
in Mexico. Lopez Obrador, for the first couple

01:04:09.650 --> 01:04:12.369
of years of his presidency, followed what he

01:04:12.369 --> 01:04:15.650
called hugs, not drugs. The idea that if we don't

01:04:15.650 --> 01:04:18.530
bother the cartels, they'll just be nice. Yeah,

01:04:18.590 --> 01:04:21.590
so that didn't work out. And now he's taken a

01:04:21.590 --> 01:04:24.389
much more direct approach. And since most of

01:04:24.389 --> 01:04:26.150
the security services at the local level have

01:04:26.150 --> 01:04:27.789
been infiltrated by the cartels, he's tapped

01:04:27.789 --> 01:04:30.230
the military to do it. So the military is now

01:04:30.230 --> 01:04:32.130
taking active steps against the cartels. cartels.

01:04:32.510 --> 01:04:35.050
And if you are in a cartel, that means you need

01:04:35.050 --> 01:04:37.590
heavier weaponry to fight back. And that's why

01:04:37.590 --> 01:04:39.230
the 50 cals and things like them are starting

01:04:39.230 --> 01:04:41.409
to pop up a lot more. And so what is the Mexican

01:04:41.409 --> 01:04:44.630
strategy in terms of utilizing the military and

01:04:44.630 --> 01:04:47.409
dealing with the cartels? What are they trying

01:04:47.409 --> 01:04:51.260
to do? I would argue that the AMLO administration

01:04:51.260 --> 01:04:53.699
isn't to the point yet that they have a strategy.

01:04:53.780 --> 01:04:56.179
But they realize that the murder rate has reached

01:04:56.179 --> 01:04:58.480
the point that Hugs Not Drugs is no longer a

01:04:58.480 --> 01:05:01.639
viable option. And so they're trying to militarize

01:05:01.639 --> 01:05:04.320
the equation in the hopes that the Mexican military

01:05:04.320 --> 01:05:08.400
is more capable than this or that cartel. You

01:05:08.400 --> 01:05:10.860
can kind of break the cartel world into three

01:05:10.860 --> 01:05:14.039
groups. You've got Jalisco New Generation, the

01:05:14.039 --> 01:05:18.969
hyper -violent ones. You've got... The Los Chapitos

01:05:18.969 --> 01:05:21.030
and the associated groups that are what's left

01:05:21.030 --> 01:05:23.130
of Sinaloa, they're the most capable ones for

01:05:23.130 --> 01:05:25.670
smuggling drugs. That's where the money is. And

01:05:25.670 --> 01:05:28.329
so that is where AMLO seems to be focusing his

01:05:28.329 --> 01:05:30.650
efforts. And then you've got what's left of the

01:05:30.650 --> 01:05:32.949
Zetas and the Gulf cartels, which is a very twilight

01:05:32.949 --> 01:05:37.210
2000 dog -eat -dog world out in eastern Mexico,

01:05:37.269 --> 01:05:39.550
which everyone's just kind of ignoring because

01:05:39.550 --> 01:05:43.179
it's not strategic. It's just violent. But it

01:05:43.179 --> 01:05:46.139
appears, and I don't want to oversell this because

01:05:46.139 --> 01:05:48.400
AMLO is clearly making this up as he goes. It

01:05:48.400 --> 01:05:50.420
appears that they think if they can put a pinch

01:05:50.420 --> 01:05:54.559
in the income, that maybe they can turn Sinaloa

01:05:54.559 --> 01:05:57.099
into the next Zetas and just break it apart.

01:05:58.000 --> 01:06:00.940
I don't think that's a very good plan, but it's

01:06:00.940 --> 01:06:02.500
better than what they've been doing for the last

01:06:02.500 --> 01:06:04.559
two and a half years. And what's worst case scenario

01:06:04.559 --> 01:06:08.000
with Mexico? Worst case scenario would be if

01:06:08.000 --> 01:06:10.119
Jalisco New Generation penetrates north of the

01:06:10.119 --> 01:06:12.659
border and it changes our political discussion

01:06:12.659 --> 01:06:16.559
to be very anti -Mexico. One of the great achievements,

01:06:16.659 --> 01:06:18.980
in my opinion, of the Trump administration is

01:06:18.980 --> 01:06:21.539
convincing America's hard right that Mexicans

01:06:21.539 --> 01:06:24.019
are part of the family and taking one of the

01:06:24.019 --> 01:06:26.119
biggest looming racial issues in the United States

01:06:26.119 --> 01:06:29.469
and just dissolving it. If Americans start to

01:06:29.469 --> 01:06:31.750
think of Mexicans as drug runners again, regardless

01:06:31.750 --> 01:06:34.889
of why, that damages our most productive trading

01:06:34.889 --> 01:06:38.110
relationship and our most brilliant opportunity

01:06:38.110 --> 01:06:41.369
for our future right out of the gate. But what

01:06:41.369 --> 01:06:43.590
is the worst case scenario in terms of the cartels

01:06:43.590 --> 01:06:48.530
overwhelming the Mexican military? Because it

01:06:48.530 --> 01:06:50.269
does seem they have unlimited— You're asking

01:06:50.269 --> 01:06:53.750
all the fun, cheery questions. Well, that's why

01:06:53.750 --> 01:06:56.420
you're here, bro. I'm here to get freaked out.

01:06:56.500 --> 01:06:59.639
Our advantage with Mexico so far is because they

01:06:59.639 --> 01:07:01.300
haven't had to fight a war in a long time, that

01:07:01.300 --> 01:07:03.500
the military is not particularly competent, but

01:07:03.500 --> 01:07:06.480
it's still armed. And so when you bring it into

01:07:06.480 --> 01:07:08.360
the system, they hit with a punch that compared

01:07:08.360 --> 01:07:10.719
to the normal local security services is really

01:07:10.719 --> 01:07:16.099
impressive. But every time a armed group of the

01:07:16.099 --> 01:07:18.500
state has been brought into the fight, the cartels

01:07:18.500 --> 01:07:20.599
have found a way to corrupt it. And if you do

01:07:20.599 --> 01:07:24.300
that to the military. we could have a very real

01:07:24.300 --> 01:07:27.719
problem here. Think Chicago at the height of

01:07:27.719 --> 01:07:30.860
Al Capone, but on a national scale. Jesus Christ.

01:07:32.460 --> 01:07:35.139
We're not there yet, but that would be the concern.

01:07:35.320 --> 01:07:38.420
Now, how much effort is the United States putting

01:07:38.420 --> 01:07:43.730
to mitigate this? How much policy is directed

01:07:43.730 --> 01:07:46.590
towards trying to steer this in the right direction?

01:07:46.849 --> 01:07:49.389
This is one of those where being a border country

01:07:49.389 --> 01:07:51.949
is a negative because, you know, we may be great

01:07:51.949 --> 01:07:54.449
trading partners and to a degree friends and

01:07:54.449 --> 01:07:56.829
integrated economically and demographically.

01:07:57.269 --> 01:07:59.769
But we're always going to be titchy about the

01:07:59.769 --> 01:08:03.250
other one telling us what to do. Trump and AMLO

01:08:03.250 --> 01:08:05.289
got along great because Trump really never asked

01:08:05.289 --> 01:08:07.559
anything of AMLO. He said, like, as long as you

01:08:07.559 --> 01:08:09.599
take steps to limit Central American immigration

01:08:09.599 --> 01:08:12.139
into the United States, I'm going to be hands

01:08:12.139 --> 01:08:14.179
off on everything else. And so relations were

01:08:14.179 --> 01:08:16.779
pretty warm. Biden comes in and takes a much

01:08:16.779 --> 01:08:19.140
more traditional American approach. So it's about

01:08:19.140 --> 01:08:21.760
immigration. It's about drugs. It's about rule

01:08:21.760 --> 01:08:26.859
of law. It's about investment. And AMLO is like

01:08:26.859 --> 01:08:32.460
a really, really angry Trump. And he sees this

01:08:32.460 --> 01:08:35.619
all as unnecessary challenges to him personally.

01:08:35.819 --> 01:08:40.060
So the relationship between Biden and AMLO is

01:08:40.060 --> 01:08:44.260
really poor. And in that sort of environment,

01:08:44.399 --> 01:08:47.140
it's been very, very difficult for anyone in

01:08:47.140 --> 01:08:50.239
the U .S. bureaucracy to have a productive relationship

01:08:50.239 --> 01:08:53.000
with anyone south of the border. So most drug

01:08:53.000 --> 01:08:55.539
extraditions have stopped. Most law enforcement

01:08:55.539 --> 01:08:58.260
cooperation has stopped. Most intelligence sharing

01:08:58.260 --> 01:09:02.539
has stopped. So we're just leaving that and watching

01:09:02.539 --> 01:09:03.819
it play out. Well, because the Mexicans shut

01:09:03.819 --> 01:09:06.140
the door on us. Yeah. Well, AMLO specifically.

01:09:06.199 --> 01:09:07.939
I don't want to put credit for that anywhere

01:09:07.939 --> 01:09:11.020
but on him. What's the best case scenario? Well,

01:09:11.180 --> 01:09:14.220
there's term limits in Mexico. AMLO will be gone

01:09:14.220 --> 01:09:17.460
in a year and a half. So we will get a new person.

01:09:17.720 --> 01:09:20.539
Now, who will that person be? Way too soon to

01:09:20.539 --> 01:09:23.260
know. But you can only serve for five years as

01:09:23.260 --> 01:09:25.460
president of Mexico. That's it? Yeah. So they've

01:09:25.460 --> 01:09:27.779
got a very, very bad one right now. We'll see

01:09:27.779 --> 01:09:32.189
who's next. Oh, Jesus. And that's right there.

01:09:32.430 --> 01:09:34.850
Yep. So the whole world's fucked. That's a bit

01:09:34.850 --> 01:09:36.789
of an overstatement, but we've got some challenges.

01:09:38.229 --> 01:09:41.770
But it's making me more optimistic about America.

01:09:42.170 --> 01:09:44.310
Yeah. I mean, our economic system is broadly

01:09:44.310 --> 01:09:46.229
positive. We've got a great partner for the most

01:09:46.229 --> 01:09:49.810
part. Energy. A great partner? Mexico's got our

01:09:49.810 --> 01:09:51.850
largest trading partner, and they have what we

01:09:51.850 --> 01:09:55.390
need. So this is a relationship of partners that's

01:09:55.390 --> 01:09:57.250
facing challenges. I think we'll get through

01:09:57.250 --> 01:09:59.689
this. Remember that one in every six Americans

01:09:59.689 --> 01:10:02.810
now has genetic links into Mexico. So this is

01:10:02.810 --> 01:10:06.310
a family argument. This is a good argument, believe

01:10:06.310 --> 01:10:08.779
it or not. We're never going to have a food crisis.

01:10:08.819 --> 01:10:10.600
We're the world's largest food exporter. We're

01:10:10.600 --> 01:10:11.760
never going to have an energy crisis. We're the

01:10:11.760 --> 01:10:14.439
world's largest energy producer. And we're bit

01:10:14.439 --> 01:10:17.960
by bit by bit bringing in countries to our kind

01:10:17.960 --> 01:10:20.460
of a friends and family plan. So Japan is already

01:10:20.460 --> 01:10:22.239
on board. Hopefully the Brits will be there before

01:10:22.239 --> 01:10:25.960
long. How do you sleep at night? Easily. But

01:10:25.960 --> 01:10:28.199
do you really with all this information? I would

01:10:28.199 --> 01:10:31.319
imagine that this would keep me up. I imagine

01:10:31.319 --> 01:10:34.680
it'll keep me up tonight. yeah just thinking

01:10:34.680 --> 01:10:36.720
about if you focus on the negative you're never

01:10:36.720 --> 01:10:40.789
gonna sleep um How do you manage? Are you medicated?

01:10:41.010 --> 01:10:42.890
Oh, well, I get migraines. There's no doubt there.

01:10:43.670 --> 01:10:46.369
But I focus on the fact that we've got the greatest

01:10:46.369 --> 01:10:49.430
opportunity for economic expansion in the history

01:10:49.430 --> 01:10:52.930
of our country. And it's not just us. It's Canada

01:10:52.930 --> 01:10:56.270
and it's Mexico as well. This is going to be

01:10:56.270 --> 01:10:58.590
a great story. We're going to emerge from this

01:10:58.590 --> 01:11:01.350
in 10 years in so much of a better place. And

01:11:01.350 --> 01:11:04.229
we're hopefully within 10 years, probably more

01:11:04.229 --> 01:11:07.229
like 15 or 20, be able to then go back and reintegrate

01:11:07.229 --> 01:11:09.750
with the world. and, you know, share what we've

01:11:09.750 --> 01:11:12.890
learned and remake the human condition. This

01:11:12.890 --> 01:11:15.909
is a once, not in a generation, this is a once

01:11:15.909 --> 01:11:19.489
in a century opportunity to overhaul what being

01:11:19.489 --> 01:11:23.029
human means. And I'm really excited about where

01:11:23.029 --> 01:11:25.390
this leads us. I just wish we could bring more

01:11:25.390 --> 01:11:29.159
countries with us. Now, is there any possibility

01:11:29.159 --> 01:11:33.640
of regime change in China that would facilitate

01:11:33.640 --> 01:11:37.659
this in a more peaceful way? I mean, when you've

01:11:37.659 --> 01:11:39.619
got a one -man government, you're talking a popular

01:11:39.619 --> 01:11:44.500
uprising with leaders that don't exist to displace

01:11:44.500 --> 01:11:47.779
an old paranoid guy who has all the guns. That's

01:11:47.779 --> 01:11:50.880
a tall order. I don't think so. And how strong

01:11:50.880 --> 01:11:53.380
is his control over there? I mean, how much dissent

01:11:53.380 --> 01:11:57.329
is there against Xi? There's definitely a lot

01:11:57.329 --> 01:11:59.560
of unhappiness with the system. But because Xi

01:11:59.560 --> 01:12:02.100
has systematically removed everyone with an opinion

01:12:02.100 --> 01:12:05.159
or competence, if Xi were to die tomorrow, I

01:12:05.159 --> 01:12:07.319
don't think there is a replacement system in

01:12:07.319 --> 01:12:09.899
the wings. It's basically a system of cronies.

01:12:10.079 --> 01:12:12.439
So if you look back to what happened after Mao

01:12:12.439 --> 01:12:14.399
died, you had the Gang of Four and you had a

01:12:14.399 --> 01:12:16.859
period of just absolute chaos until Ding Xiaoping

01:12:16.859 --> 01:12:19.260
took over. But Ding Xiaoping was part of the

01:12:19.260 --> 01:12:22.800
system. Xi is far more paranoid and far more

01:12:22.800 --> 01:12:26.260
isolated and far more consolidated than Mao ever

01:12:26.260 --> 01:12:35.750
was. Jesus. So how old is he now? He's also late

01:12:35.750 --> 01:12:38.550
60s, I believe. Yeah, most of the people in the

01:12:38.550 --> 01:12:39.970
New Pollard Bureau technically aren't supposed

01:12:39.970 --> 01:12:44.050
to serve because they're too old. He waived that

01:12:44.050 --> 01:12:48.069
rule. What is their requirement before that?

01:12:48.329 --> 01:12:51.829
I'm not positive. I want to say it was 66. And

01:12:51.829 --> 01:12:55.149
so he is at the... He's right at that age, I

01:12:55.149 --> 01:12:59.060
believe. And there's no threat to his reign.

01:12:59.300 --> 01:13:02.659
None. Well, none within the system. And as long

01:13:02.659 --> 01:13:06.020
as he stays alive, he will maintain power. Right.

01:13:06.390 --> 01:13:09.310
And he'll be constantly surrounded by cronies.

01:13:09.369 --> 01:13:12.229
And he has insulated himself from any criticism

01:13:12.229 --> 01:13:15.029
or any bad news. We've been going this way for

01:13:15.029 --> 01:13:17.270
a while. So when Ding took over, he realized

01:13:17.270 --> 01:13:19.909
that one -man government was awful. So he worked

01:13:19.909 --> 01:13:22.310
out a series of secession and 10 -year increments

01:13:22.310 --> 01:13:23.949
that different parts of the country, different

01:13:23.949 --> 01:13:27.010
factions would have time in government and rule.

01:13:27.409 --> 01:13:29.489
And then when they were not the ones who were

01:13:29.489 --> 01:13:30.890
making the big decisions, they'd still be in

01:13:30.890 --> 01:13:33.449
the Politburo. So we got our third generation

01:13:33.449 --> 01:13:36.800
and our fourth generation in the form of Jiang

01:13:36.800 --> 01:13:41.399
Zemin and Hu Jintao. But Ding realized when he

01:13:41.399 --> 01:13:43.779
set the system up around 1980 that he wasn't

01:13:43.779 --> 01:13:45.300
going to be there forever and he wasn't going

01:13:45.300 --> 01:13:46.659
to be able to predict what was going to happen

01:13:46.659 --> 01:13:49.960
in the 2000s. So he told these two factions,

01:13:50.220 --> 01:13:52.920
you then have to pick a compromise candidate

01:13:52.920 --> 01:13:56.699
for who comes next. And they went with Xi because

01:13:56.699 --> 01:13:59.420
he's from the South, but his family is with the

01:13:59.420 --> 01:14:02.260
Maoists and he had a foot in all camps. Well,

01:14:02.439 --> 01:14:05.520
Xi spent his first five years purging the system

01:14:05.520 --> 01:14:08.159
of all the other factions. And then the second

01:14:08.159 --> 01:14:10.920
five years of his reign and making sure that

01:14:10.920 --> 01:14:13.020
everyone realized it was him and him only who

01:14:13.020 --> 01:14:16.420
was in charge. After 10 years of that, there's

01:14:16.420 --> 01:14:19.239
no one left. And so there is no secession plan

01:14:19.239 --> 01:14:21.439
post -Xi. There is no one waiting in the wings.

01:14:21.539 --> 01:14:24.039
And the old factions as they once existed have

01:14:24.039 --> 01:14:26.460
basically been sledgehammered. This is such a

01:14:26.460 --> 01:14:29.960
wild perspective on world economics and international

01:14:29.960 --> 01:14:34.060
relations. Welcome to my world. But do you feel

01:14:34.060 --> 01:14:37.560
isolated in that? You're the guy who's like explaining

01:14:37.560 --> 01:14:43.239
it this way? I'm adopted. That's not new. What

01:14:43.239 --> 01:14:49.939
led you down this road to sort of developing

01:14:49.939 --> 01:14:52.579
this comprehensive view of the future of the

01:14:52.579 --> 01:14:56.380
world? Well, I'm adopted, so I really have always

01:14:56.380 --> 01:14:58.520
been on the outside looking in. That is definitely

01:14:58.520 --> 01:15:01.539
a part of my worldview. But my background is

01:15:01.539 --> 01:15:03.619
in economic development. So figuring out what

01:15:03.619 --> 01:15:06.619
works where and why. And once you kind of get

01:15:06.619 --> 01:15:09.000
the ideology out of it, you can look for patterns.

01:15:09.220 --> 01:15:10.899
And that took me to Stratfor and that took me

01:15:10.899 --> 01:15:14.279
to geography. And so just combining the data

01:15:14.279 --> 01:15:16.739
patterns with the American strategy for World

01:15:16.739 --> 01:15:20.649
War II and beyond with the demographic. developments

01:15:20.649 --> 01:15:22.149
that have happened because of that strategy,

01:15:22.270 --> 01:15:25.149
it leads you some pretty unavoidable conclusions.

01:15:25.590 --> 01:15:28.750
And then it's merely an issue of filling in the

01:15:28.750 --> 01:15:30.850
blanks. And most of my career now has been filling

01:15:30.850 --> 01:15:35.130
in the blanks for the last 10 years. Do you have

01:15:35.130 --> 01:15:37.630
dissenters? How much pushback do you have about

01:15:37.630 --> 01:15:39.930
these ideas? Do people think you're full of shit?

01:15:40.109 --> 01:15:44.840
All kinds of people think I'm full of shit. I

01:15:44.840 --> 01:15:48.739
am very sector and goal agnostic in my work,

01:15:48.899 --> 01:15:52.220
which means I don't really care what your investment

01:15:52.220 --> 01:15:55.500
strategy is. If it doesn't play against demography

01:15:55.500 --> 01:15:58.800
and geography in a comprehensive way, at best

01:15:58.800 --> 01:16:00.479
you're hoping that everyone just kind of sways

01:16:00.479 --> 01:16:02.699
in your general direction. And so there's no

01:16:02.699 --> 01:16:04.560
shortage of people in a room when I'm speaking

01:16:04.560 --> 01:16:06.579
who get really upset because they have an investment

01:16:06.579 --> 01:16:09.220
thesis or maybe they've bet their company on

01:16:09.220 --> 01:16:12.460
something that. I just see as a non -issue. So,

01:16:12.520 --> 01:16:14.319
you know, obviously the folks in the crypto world

01:16:14.319 --> 01:16:17.840
have never liked me. And I dropped a video last

01:16:17.840 --> 01:16:20.239
night about how EVs are just a disaster that

01:16:20.239 --> 01:16:22.199
aren't going to be with us very much longer.

01:16:22.560 --> 01:16:24.699
And I got some... I've gotten some interesting

01:16:24.699 --> 01:16:27.359
communications because of that one. Things like

01:16:27.359 --> 01:16:29.319
this happen with me with almost every presentation,

01:16:29.539 --> 01:16:33.140
and last year I gave 179 presentations. What

01:16:33.140 --> 01:16:36.500
is your perspective on EVs? They're not nearly

01:16:36.500 --> 01:16:39.779
as good on carbon as people think. Most of the

01:16:39.779 --> 01:16:42.119
data that exists doesn't take into the fact that

01:16:42.119 --> 01:16:44.199
most of this stuff is processed in China where

01:16:44.199 --> 01:16:46.520
it's all coal -driven, and it does not take into

01:16:46.520 --> 01:16:51.819
account the fact that most grids that they run

01:16:51.819 --> 01:16:54.119
on are also majority -fired. fossil fuels. And

01:16:54.119 --> 01:16:57.159
that extends the break -even time for carbon

01:16:57.159 --> 01:16:59.039
from one year to either five or 10 based on what

01:16:59.039 --> 01:17:01.359
model you're talking in. Cybertruck's far worse

01:17:01.359 --> 01:17:04.680
than EVs. But the bigger problem is we're just

01:17:04.680 --> 01:17:06.039
not going to be able to make it much longer.

01:17:06.619 --> 01:17:09.479
If we really do want to electrify everything,

01:17:09.840 --> 01:17:12.239
that doesn't just mean EVs. That means the entire

01:17:12.239 --> 01:17:14.960
system that feeds into the EVs. We need twice

01:17:14.960 --> 01:17:17.060
as much copper and four times as much chromium

01:17:17.060 --> 01:17:19.399
and four times as much nickel and 10 times as

01:17:19.399 --> 01:17:24.350
much lithium and so on. in any decade in human

01:17:24.350 --> 01:17:27.470
history, doubled the amount of a mainline material

01:17:27.470 --> 01:17:31.130
production in 10 years ever. And we need all

01:17:31.130 --> 01:17:35.350
of this by 2030? No. It's just not technically

01:17:35.350 --> 01:17:39.069
possible. So how does the government, say, of

01:17:39.069 --> 01:17:42.229
California justify these mandates when they're

01:17:42.229 --> 01:17:45.680
saying something like by 2035? All combustion

01:17:45.680 --> 01:17:48.800
vehicles must stop being sold in the state of

01:17:48.800 --> 01:17:52.100
California. Let's put the ideology to the side

01:17:52.100 --> 01:17:53.920
because I'm not going to try to explain that.

01:17:54.520 --> 01:17:57.699
I will give a little bit of defense for California,

01:17:57.939 --> 01:17:59.859
though, because I do consider myself a green.

01:17:59.960 --> 01:18:01.439
I just think of myself as a green who can do

01:18:01.439 --> 01:18:03.560
math. So I don't get invited to any of the parties.

01:18:07.159 --> 01:18:09.420
California's state legislature gives a lot of

01:18:09.420 --> 01:18:12.039
authority to their state bureaucracy. So the

01:18:12.039 --> 01:18:16.199
bureaucracy will set. the goalposts, no ICEs

01:18:16.199 --> 01:18:20.520
by 2035, knowing that the technology doesn't

01:18:20.520 --> 01:18:22.699
exist, knowing that the supply chains don't exist,

01:18:22.800 --> 01:18:25.479
but they will set the goalposts. If we get closer

01:18:25.479 --> 01:18:28.659
to that date, say 2027, and it's... apparent

01:18:28.659 --> 01:18:31.659
that the technology is not proceeding at a pace

01:18:31.659 --> 01:18:33.619
that will allow that target to be reached. They

01:18:33.619 --> 01:18:36.119
have the authority already to move the goalposts.

01:18:36.399 --> 01:18:39.340
And they do this on clean air issues. They do

01:18:39.340 --> 01:18:41.319
this on toxicity. They've done it on nuclear

01:18:41.319 --> 01:18:43.800
power. They undoubtedly will end up doing it

01:18:43.800 --> 01:18:45.920
on EVs. So do you think it's one of those things

01:18:45.920 --> 01:18:48.039
where there's a bunch of green people who don't

01:18:48.039 --> 01:18:51.140
do the math? Oh, yeah. And it just sounds great.

01:18:51.199 --> 01:18:53.500
It falls in line with the progressive ideology.

01:18:54.039 --> 01:18:56.619
We need to, you know, carbon neutral. We can

01:18:56.619 --> 01:18:59.779
do this. Everyone goes. electric. Yeah. And there's

01:18:59.779 --> 01:19:01.979
going to be, well, there is a fascinating discussion

01:19:01.979 --> 01:19:03.779
happening in the environmental community right

01:19:03.779 --> 01:19:05.479
now because they're being confronted with reality.

01:19:05.979 --> 01:19:10.180
So California and Germany have very similar green

01:19:10.180 --> 01:19:13.039
tech policies, but the Germans have spent three

01:19:13.039 --> 01:19:15.699
times as much as California, but are only getting

01:19:15.699 --> 01:19:17.840
about a fifth as much power. Because I don't

01:19:17.840 --> 01:19:18.920
know if you've ever been to Germany, but the

01:19:18.920 --> 01:19:22.039
sun doesn't shine in Germany. And now with the

01:19:22.039 --> 01:19:25.079
Russians on the warpath and their clean -ish

01:19:25.079 --> 01:19:27.359
energy from natural gas going away, they're going

01:19:27.359 --> 01:19:29.859
back to lignite coal in force. It was already

01:19:29.859 --> 01:19:33.039
their number one source of power. The idea that

01:19:33.039 --> 01:19:35.340
Germany is green is ridiculous because they rely

01:19:35.340 --> 01:19:37.380
on really, really dirty coal now especially.

01:19:37.720 --> 01:19:40.819
But there's now a conversation going on between

01:19:40.819 --> 01:19:43.140
the German environmentalists and the Californian

01:19:43.140 --> 01:19:45.939
environmentalists about why California in relative

01:19:45.939 --> 01:19:47.840
terms is doing so well at this while Germany

01:19:47.840 --> 01:19:51.579
is not. And the answer is simple geography. But

01:19:51.579 --> 01:19:53.739
that's never been part of the conversation in

01:19:53.739 --> 01:19:56.760
the environmental community before. Now it is.

01:19:56.800 --> 01:19:59.319
They should have had this conversation 15, 20

01:19:59.319 --> 01:20:02.020
years ago. But they're having it now. And as

01:20:02.020 --> 01:20:04.840
soon as they come to the conclusion, unwillingly,

01:20:04.840 --> 01:20:07.479
but they'll get there, that we have to choose

01:20:07.479 --> 01:20:10.680
where we put our copper and our lithium and our

01:20:10.680 --> 01:20:14.159
nickel, EVs are not going to make the cut at

01:20:14.159 --> 01:20:16.819
all. Where will the copper and the nickel and

01:20:16.819 --> 01:20:20.739
where will all that go? It'll be focused on the

01:20:20.739 --> 01:20:23.859
green techs that actually work in the geographic

01:20:23.859 --> 01:20:27.079
areas where it can be applied. So you put solar

01:20:27.079 --> 01:20:30.399
panels outside of Tucson. You put wind turbines

01:20:30.399 --> 01:20:32.979
outside of Tulsa. That works with the technology

01:20:32.979 --> 01:20:36.319
we have now. You do not put solar panels in Connecticut.

01:20:36.439 --> 01:20:38.859
That's stupid. That actually increases your carbon

01:20:38.859 --> 01:20:41.739
footprint. Because there's no sun. There's not

01:20:41.739 --> 01:20:43.479
enough sun to generate enough electricity to

01:20:43.479 --> 01:20:45.100
pay down the carbon debt that it took to build

01:20:45.100 --> 01:20:47.579
the stuff in the first place. There's an ideology

01:20:47.579 --> 01:20:51.399
in this country that is we must act against climate

01:20:51.399 --> 01:20:54.420
change or we will die. And there's a lot of people

01:20:54.420 --> 01:20:56.960
that haven't done the research and haven't really

01:20:56.960 --> 01:20:59.359
looked into this and really don't know what the

01:20:59.359 --> 01:21:02.520
numbers are. And they repeat that over and over

01:21:02.520 --> 01:21:05.020
again like it's a mantra. It's become a new religion.

01:21:05.279 --> 01:21:09.220
Yeah. Like I said, I'm a Green, so I broadly

01:21:09.220 --> 01:21:10.880
believe in the science. When you say you're a

01:21:10.880 --> 01:21:12.819
Green, what do you mean by that? Well, I believe

01:21:12.819 --> 01:21:15.300
that climate change is real, and I believe it's

01:21:15.300 --> 01:21:19.340
caused by human action. Some of it, right? The

01:21:19.340 --> 01:21:22.460
bulk of it. The bulk? Oh, yeah. The bulk of climate

01:21:22.460 --> 01:21:24.500
change you think is caused by humans? Yeah, I

01:21:24.500 --> 01:21:26.640
know. I mean, the science of it was settled in

01:21:26.640 --> 01:21:29.319
the 1890s. It's not particularly crazy. Different

01:21:29.319 --> 01:21:31.640
gases have different albedos and absorption rates.

01:21:33.319 --> 01:21:35.960
To think that we can predict on a local level

01:21:35.960 --> 01:21:38.119
what that looks like, we don't have the math

01:21:38.119 --> 01:21:39.880
for that. We don't have the case studies for

01:21:39.880 --> 01:21:42.319
that. We do have weather data going back 130

01:21:42.319 --> 01:21:44.359
years, which shows some pretty clear trends.

01:21:44.520 --> 01:21:47.260
We've heated up by about 1 .1 degrees Celsius

01:21:47.260 --> 01:21:49.500
over that time frame. But that has different

01:21:49.500 --> 01:21:52.000
impacts based on where you are. If you're in

01:21:52.000 --> 01:21:54.340
the upper Midwest, it's extended growing seasons

01:21:54.340 --> 01:21:57.180
and gotten rid of some frost. So pretty soon

01:21:57.180 --> 01:21:59.260
we're going to be double cropping. But if you're

01:21:59.260 --> 01:22:01.640
in a drier climate like, say, Phoenix or Australia,

01:22:01.880 --> 01:22:04.079
it's led to wildfires and a breakdown of the

01:22:04.079 --> 01:22:07.000
agricultural system. So climate change is change.

01:22:07.199 --> 01:22:09.060
It's not a disaster. It depends on where you

01:22:09.060 --> 01:22:12.279
are. So why do you think this ideology has been

01:22:12.279 --> 01:22:14.920
so pervasive, this ideology that it is a disaster,

01:22:15.020 --> 01:22:16.960
we're all going to die? Well, now we're getting

01:22:16.960 --> 01:22:21.130
into cultural debates. One of the many, many,

01:22:21.130 --> 01:22:24.609
many aspects of modernization is that people

01:22:24.609 --> 01:22:26.789
become more connected but live in smaller units.

01:22:27.050 --> 01:22:30.050
As you urbanize, you have fewer kids. And that

01:22:30.050 --> 01:22:31.850
means that people are looking for other ways

01:22:31.850 --> 01:22:34.130
to belong because the old traditional methods

01:22:34.130 --> 01:22:37.510
of family and farm aren't as tight as they used

01:22:37.510 --> 01:22:39.369
to be. And so this is much more further advanced

01:22:39.369 --> 01:22:41.630
in places like Japan or Europe than it is in

01:22:41.630 --> 01:22:42.989
the United States. But it's happening here too.

01:22:45.860 --> 01:22:48.819
Social opportunities, politics are a way that

01:22:48.819 --> 01:22:51.180
can reach across the geographic distances no

01:22:51.180 --> 01:22:53.180
matter where you happen to be. And you can use

01:22:53.180 --> 01:22:55.659
social media and tech to communicate with people

01:22:55.659 --> 01:22:58.319
who have a belief system that you find attractive

01:22:58.319 --> 01:23:01.359
for whatever reason. And so the same thing that

01:23:01.359 --> 01:23:03.859
makes the environmental community more potent,

01:23:03.960 --> 01:23:07.960
if less informed, is exactly the same thing that

01:23:07.960 --> 01:23:09.640
brought Donald Trump to power. Because you got

01:23:09.640 --> 01:23:11.180
people who felt like they were on the outside

01:23:11.180 --> 01:23:13.380
of a society who all of a sudden could link into

01:23:13.380 --> 01:23:17.130
one another. Technology conversation from my

01:23:17.130 --> 01:23:22.770
point of view. So do you drive an electric vehicle?

01:23:23.029 --> 01:23:25.869
No. God, no. I live at 7 ,500 feet in Colorado.

01:23:25.869 --> 01:23:28.050
That would be suicide. Why is it bad up there

01:23:28.050 --> 01:23:31.390
at 7 ,500 feet? They don't deal well with inclement

01:23:31.390 --> 01:23:34.109
weather. They don't deal well with cold. Right.

01:23:34.170 --> 01:23:38.310
Yeah. It's fun to drive, though. No. For people

01:23:38.310 --> 01:23:40.810
who enjoy it for the driving experience. Go for

01:23:40.810 --> 01:23:43.090
it. Just don't pretend that you're being an environmentalist.

01:23:43.210 --> 01:23:44.810
What do you think? Have you paid attention to

01:23:44.810 --> 01:23:48.510
Porsche's, what they're trying to do now with

01:23:48.510 --> 01:23:51.930
hydrogen? They're trying to build a new type

01:23:51.930 --> 01:23:55.750
of carbon neutral fuel. I don't want to condemn

01:23:55.750 --> 01:23:57.909
any technology that has not been through its

01:23:57.909 --> 01:24:01.170
development process. But what I have seen from

01:24:01.170 --> 01:24:03.850
hydrogen at the moment suggests that it is far

01:24:03.850 --> 01:24:07.500
dirtier than gasoline. In what way? You have

01:24:07.500 --> 01:24:09.399
to get the hydrogen from somewhere. And right

01:24:09.399 --> 01:24:12.180
now we pluck it from natural gas. So you've got

01:24:12.180 --> 01:24:14.619
a carbon input there. Then you have to build

01:24:14.619 --> 01:24:18.140
out a transmission system for it. And the hydrogen

01:24:18.140 --> 01:24:19.979
molecules are tiny. They're the smallest molecules

01:24:19.979 --> 01:24:22.800
that we have. And the seals have to be perfect.

01:24:22.840 --> 01:24:24.300
Otherwise, you're just hemorrhaging the stuff.

01:24:24.439 --> 01:24:26.239
So you're generating something from fossil fuels

01:24:26.239 --> 01:24:28.039
and they're hemorrhaging it all along the way.

01:24:28.119 --> 01:24:30.380
And I got to say, if they don't do it right,

01:24:30.579 --> 01:24:32.920
a car accident where hydrogen is involved is

01:24:32.920 --> 01:24:36.119
really exciting. Oh, Jesus. You got a Hindenburg

01:24:36.119 --> 01:24:38.960
type situation. Yeah. No, I'm not saying they

01:24:38.960 --> 01:24:41.260
can't make it work. I'm saying they haven't made

01:24:41.260 --> 01:24:43.979
it work. Is that what Porsche is using? Do they

01:24:43.979 --> 01:24:47.439
have some sort of experimental fuel that they

01:24:47.439 --> 01:24:51.899
have in production? I don't know. But I know

01:24:51.899 --> 01:24:54.319
that they're, I mean, obviously they've created

01:24:54.319 --> 01:24:58.659
electric vehicles. They call it e -fuel. Act

01:24:58.659 --> 01:25:02.810
like gasoline. It could provide gas alternative

01:25:02.810 --> 01:25:06.909
amid EV push. Porsche said Tuesday that a pilot

01:25:06.909 --> 01:25:10.310
plant in Chile started production of an alternative

01:25:10.310 --> 01:25:13.130
fuel as it aims to produce millions of gallons

01:25:13.130 --> 01:25:15.989
by mid -decade. Officials say e -fuels act like

01:25:15.989 --> 01:25:19.470
gasoline, allowing vehicle owners a more environmentally

01:25:19.470 --> 01:25:22.829
friendly way to drive. Porsche officials celebrated

01:25:22.829 --> 01:25:25.069
the beginning of the e -fuel production with

01:25:25.069 --> 01:25:27.789
the filling of a Porsche 911 with the first synthetic

01:25:27.789 --> 01:25:31.340
fuel produced at the site. I am unfamiliar with

01:25:31.340 --> 01:25:34.359
the chemistry for this one. Portia and several

01:25:34.359 --> 01:25:36.439
partners have started production of a climate

01:25:36.439 --> 01:25:41.279
neutral. Do you believe that? Not really. E -fuel

01:25:41.279 --> 01:25:44.500
aimed at replacing gasoline in vehicles with

01:25:44.500 --> 01:25:46.680
traditional internal combustion engines. The

01:25:46.680 --> 01:25:49.699
German automaker owned by Volkswagen said Tuesday

01:25:49.699 --> 01:25:52.300
that a pilot plant in Chile started commercial

01:25:52.300 --> 01:25:55.760
production of the alternative fuel by mid -decade.

01:25:55.760 --> 01:25:57.239
Porsche is planning on producing millions of

01:25:57.239 --> 01:26:01.420
gallons. We already said that. Yeah, there are

01:26:01.420 --> 01:26:03.560
some versions of this technology where they're

01:26:03.560 --> 01:26:07.090
hoping they can get... Here it is. Yeah, so e

01:26:07.090 --> 01:26:09.270
-fuels are a type of synthetic methanol produced

01:26:09.270 --> 01:26:12.750
by a complex process using water, hydrogen, and

01:26:12.750 --> 01:26:16.369
carbon dioxide. Companies say they enable the

01:26:16.369 --> 01:26:20.149
nearly CO2 neutral operation of a gas -powered

01:26:20.149 --> 01:26:23.689
engine. Vehicles would still need to use oil

01:26:23.689 --> 01:26:26.649
to lubricate the engine. In the pilot phase,

01:26:26.989 --> 01:26:29.869
Porsche expects to produce around 130 ,000 liters.

01:26:30.779 --> 01:26:33.819
of e -fuel. Plans are to expand that to almost

01:26:33.819 --> 01:26:37.300
55 million liters by mid -decade, around 550

01:26:37.300 --> 01:26:40.159
million liters roughly two years later. The Chilean

01:26:40.159 --> 01:26:42.739
plant was initially announced with Porsche in

01:26:42.739 --> 01:26:46.199
late 2020 when the automaker said it would invest

01:26:46.199 --> 01:26:49.500
$24 million in the development of the plant and

01:26:49.500 --> 01:26:51.779
the e -fuel's partners include Chilean operating

01:26:51.779 --> 01:26:56.060
company, highly innovative fuels, renewable energies.

01:26:56.180 --> 01:26:58.760
Let me slap some science on that real quick.

01:26:58.920 --> 01:27:03.210
The three basements Water, carbon dioxide, and

01:27:03.210 --> 01:27:06.189
oxygen are three of the most stable molecules

01:27:06.189 --> 01:27:09.130
in the natural world. And so to break them apart

01:27:09.130 --> 01:27:10.989
with electricity to make something else is a

01:27:10.989 --> 01:27:14.090
massive power suck. If you're going to do that

01:27:14.090 --> 01:27:16.250
with a conventional fuel system like we have

01:27:16.250 --> 01:27:18.069
in pretty much every part of the world, you're

01:27:18.069 --> 01:27:19.810
talking about a carbon footprint that's at least

01:27:19.810 --> 01:27:22.430
triple what we do with gasoline right now. The

01:27:22.430 --> 01:27:24.390
idea would be that if we can do it with green

01:27:24.390 --> 01:27:27.090
tech, solar in Chile, for example, that maybe

01:27:27.090 --> 01:27:29.930
we can make that footprint carbon -free or at

01:27:29.930 --> 01:27:32.289
least carbon -neutral and then use the electricity

01:27:32.289 --> 01:27:34.449
to generate this stuff in a relatively green

01:27:34.449 --> 01:27:37.930
way. That's a lot of solar power. And all of

01:27:37.930 --> 01:27:40.409
that to get, in their best -case scenario, 550

01:27:40.409 --> 01:27:46.250
million gallons. We use almost 10 million barrels

01:27:46.250 --> 01:27:49.069
of liquid fuels in just the United States every

01:27:49.069 --> 01:27:52.770
day. So you need to expand that by a factor of

01:27:52.770 --> 01:27:58.430
a couple hundred. What about nuclear? I am broadly

01:27:58.430 --> 01:28:01.630
pro -nuclear. The problem is time frame. If there

01:28:01.630 --> 01:28:05.050
were no regulations at all, it takes seven years

01:28:05.050 --> 01:28:07.649
to build one of those suckers. We don't have

01:28:07.649 --> 01:28:10.569
that kind of time. honestly. And if we start

01:28:10.569 --> 01:28:12.890
right now, we won't see first output this decade.

01:28:13.569 --> 01:28:17.869
There are small modular reactors that look really

01:28:17.869 --> 01:28:19.430
promising. You can basically put them on the

01:28:19.430 --> 01:28:22.189
back of a semi -flatbed, but they don't exist

01:28:22.189 --> 01:28:25.250
yet. And once we build one of those, then it's

01:28:25.250 --> 01:28:27.130
probably a 10 -year process to build out the

01:28:27.130 --> 01:28:29.289
manufacturing supply chain to produce them in

01:28:29.289 --> 01:28:32.899
volume. But wouldn't... it be wise to start moving

01:28:32.899 --> 01:28:35.859
in that direction now if you're broadly pro -nuclear?

01:28:36.000 --> 01:28:41.720
The issue is until we solve the fuel containment

01:28:41.720 --> 01:28:44.920
issue on the back end once it's spent. So the

01:28:44.920 --> 01:28:48.720
chemistry of taking a spent nuclear rod and refurbishing

01:28:48.720 --> 01:28:52.060
it for a new reactor, it's relatively inexpensive.

01:28:52.279 --> 01:28:57.899
It's relatively easy. But it has a side effect

01:28:57.899 --> 01:29:01.079
of producing weapons -grade plutonium. So to

01:29:01.079 --> 01:29:04.840
do this at scale, we have to produce a civilian

01:29:04.840 --> 01:29:12.380
plutonium weapons quality plutonium disposal

01:29:12.380 --> 01:29:15.619
and management system. We haven't figured out

01:29:15.619 --> 01:29:18.460
how to do that. What do they do with it now?

01:29:18.739 --> 01:29:20.819
They don't process it. They just leave it in

01:29:20.819 --> 01:29:22.619
the spent fuel rods and they put it into a pond

01:29:22.619 --> 01:29:27.359
until the end of time. Oh, boy. Yeah. No silver

01:29:27.359 --> 01:29:30.560
bullets. So is it just that they don't know how

01:29:30.560 --> 01:29:33.140
to do it or do they have theories on how to do

01:29:33.140 --> 01:29:35.920
it? Well, you have to basically take the rod.

01:29:36.060 --> 01:29:38.819
You go through a chelating dissolving chemistry

01:29:38.819 --> 01:29:42.060
process and you separate out the various isotopes

01:29:42.060 --> 01:29:45.699
of uranium from the plutonium. But then what

01:29:45.699 --> 01:29:46.819
do you do with the plutonium? Because you have

01:29:46.819 --> 01:29:50.340
now purified it because of this process. What

01:29:50.340 --> 01:29:52.199
do they do? They just put it in a pond. They

01:29:52.199 --> 01:29:55.039
don't even separate it. I was reading about some

01:29:55.039 --> 01:29:56.800
technology where they think they could take nuclear

01:29:56.800 --> 01:29:59.819
waste and convert it into batteries. I have not

01:29:59.819 --> 01:30:02.680
heard that one. See if you can find that. There

01:30:02.680 --> 01:30:07.260
was a process of processing nuclear waste and

01:30:07.260 --> 01:30:11.720
converting it into a renewable resource. That's

01:30:11.720 --> 01:30:14.920
a nice thought. Great thought. If the aliens

01:30:14.920 --> 01:30:17.590
could come down and give us some new tech. But

01:30:17.590 --> 01:30:19.909
as of what we have right now, you're not aware

01:30:19.909 --> 01:30:21.630
of anything that could do that? No, no. I mean,

01:30:21.649 --> 01:30:23.470
don't get me wrong. I think solar and wind, especially

01:30:23.470 --> 01:30:25.710
wind, are great in the places where they work.

01:30:25.949 --> 01:30:28.109
Here it says radioactive waste can be recycled

01:30:28.109 --> 01:30:30.510
to create diamond batteries. Scientists involved

01:30:30.510 --> 01:30:33.069
at American Startup for the Development of Nanodiamond

01:30:33.069 --> 01:30:35.689
Batteries are trying to turn radioactive waste

01:30:35.689 --> 01:30:39.449
into batteries. NDB is a perpetual green self

01:30:39.449 --> 01:30:41.609
-charging battery made from recycled nuclear

01:30:41.609 --> 01:30:45.510
waste isotope combined with layers of nanodiamonds

01:30:45.510 --> 01:30:48.779
in a battery cell. Extremely good thermal conductivity

01:30:48.779 --> 01:30:52.399
of microdiamonds causes heat removal from radioactive

01:30:52.399 --> 01:30:55.399
isotopes, so the process of generating electricity

01:30:55.399 --> 01:30:58.880
is fast. NDB generates electricity similar to

01:30:58.880 --> 01:31:01.859
that obtained from solar panels, but uses radioactive

01:31:01.859 --> 01:31:05.380
decay energy instead of sunlight. An NDB battery

01:31:05.380 --> 01:31:08.159
usually consists of three main components, an

01:31:08.159 --> 01:31:11.109
isotope, a converter, and a storage unit. Due

01:31:11.109 --> 01:31:15.149
to the decay, isotope radiation is transformed

01:31:15.149 --> 01:31:17.770
into electrical energy in the converter. The

01:31:17.770 --> 01:31:20.770
storage unit accumulates energy for future use.

01:31:20.930 --> 01:31:23.090
We're problem solved, bro. Yeah, just keep in

01:31:23.090 --> 01:31:24.989
mind that this is radioactive decay, and that's

01:31:24.989 --> 01:31:27.390
what turns you into goo. So you're not going

01:31:27.390 --> 01:31:29.109
to put this in your watch. You're not going to

01:31:29.109 --> 01:31:30.310
have it in your car. You're going to have it

01:31:30.310 --> 01:31:33.170
at a fixed, secured location. Now, will that

01:31:33.170 --> 01:31:38.210
be like a power plant? Maybe, but wow, I hope

01:31:38.210 --> 01:31:41.930
nothing goes wrong. So these radioactive diamonds.

01:31:42.569 --> 01:31:45.569
It's a diamond layer over the waste, and then

01:31:45.569 --> 01:31:47.250
the waste is decaying, and then they conduct

01:31:47.250 --> 01:31:51.189
the heat somehow. So the decay is inside the

01:31:51.189 --> 01:31:53.810
diamond as long as the diamond doesn't get broken.

01:31:53.869 --> 01:31:55.829
I'm guessing that the diamond is there to absorb

01:31:55.829 --> 01:31:59.770
things like beta and gamma radiation. Hmm. But

01:31:59.770 --> 01:32:02.550
this, you believe, also very dangerous. Well,

01:32:02.630 --> 01:32:05.250
it would require some very serious security issues.

01:32:05.289 --> 01:32:07.210
But at least from a chemical point of view, it

01:32:07.210 --> 01:32:09.710
sounds theoretically possible. The patented NDB

01:32:09.710 --> 01:32:12.609
universal self -charging battery provides a charge

01:32:12.609 --> 01:32:16.029
of up to 28 ,000 years of battery life. No more

01:32:16.029 --> 01:32:19.220
worried about your phones, bro. The half -life

01:32:19.220 --> 01:32:20.760
of most of this stuff is in the thousands of

01:32:20.760 --> 01:32:22.539
years, so yeah, I guess technically that's true.

01:32:23.079 --> 01:32:25.020
Nanodiamond batteries will be able to charge

01:32:25.020 --> 01:32:28.800
devices and machines of any size, from aircrafts

01:32:28.800 --> 01:32:31.840
and rockets to electric vehicles, hearing aids,

01:32:32.079 --> 01:32:35.420
smartphones, sensors, and more. I'm going to

01:32:35.420 --> 01:32:37.779
go with a hard no on that one. Really? Why? You're

01:32:37.779 --> 01:32:39.579
going to put something that is powered by radioactive

01:32:39.579 --> 01:32:46.350
decay in your ear? But is this an oversimplification?

01:32:46.729 --> 01:32:51.130
I mean, if you were really well versed in this

01:32:51.130 --> 01:32:53.649
technology, do you think there's always a chance

01:32:53.649 --> 01:32:55.329
that if you prevent me with the facts, I'm going

01:32:55.329 --> 01:32:57.649
to change my mind. But radioactive decay is not

01:32:57.649 --> 01:33:00.270
something you fuck with. You're certainly not

01:33:00.270 --> 01:33:02.439
going to have it on your person. So you think

01:33:02.439 --> 01:33:04.659
this is all just pipe dreams? I think in that

01:33:04.659 --> 01:33:06.840
interpretation it's a pipe dream. Because think

01:33:06.840 --> 01:33:09.180
about what would happen if this is real. And

01:33:09.180 --> 01:33:10.699
you can get a sizable one of these like for a

01:33:10.699 --> 01:33:13.159
car. All it takes is a pickaxe and all of a sudden

01:33:13.159 --> 01:33:19.460
somebody has a dirty bomb. Jesus. Yeah. Having

01:33:19.460 --> 01:33:21.460
it in a secured location where it provides energy

01:33:21.460 --> 01:33:25.699
to a grid? Maybe. Maybe. Maybe. Have a good security

01:33:25.699 --> 01:33:29.340
system. So you're not a believer. But are you

01:33:29.340 --> 01:33:32.109
just basing this on your instincts? I mean, do

01:33:32.109 --> 01:33:34.010
you think that you should maybe reserve judgment?

01:33:34.689 --> 01:33:37.310
That's fair. But they did say specifically powered

01:33:37.310 --> 01:33:41.109
by radioactive decay of spent nuclear fuel. Right.

01:33:41.489 --> 01:33:43.750
That's what turns you to goo. And so you just

01:33:43.750 --> 01:33:46.789
think just because it's encased, this presents

01:33:46.789 --> 01:33:48.909
all sorts of damage if the case is broken. If

01:33:48.909 --> 01:33:52.029
the case is broken, anyone locally screwed. Yeah.

01:33:52.069 --> 01:33:54.489
So if you drop your smartphone and it starts.

01:33:54.939 --> 01:33:56.699
leaking radioactive decay into your pocket. We

01:33:56.699 --> 01:33:58.600
all know that smartphones are indestructible,

01:33:58.640 --> 01:34:02.000
so I'm not worried about that. Jesus, Peter.

01:34:03.659 --> 01:34:06.279
I'm an equal opportunity bubble popper. You must

01:34:06.279 --> 01:34:09.380
be a real problem at parties. When someone starts

01:34:09.380 --> 01:34:10.800
talking out of school. I bring the bourbon, everybody

01:34:10.800 --> 01:34:16.840
gets over it. So if you were the king of the

01:34:16.840 --> 01:34:20.819
world, how would you navigate us out of this

01:34:20.819 --> 01:34:23.279
situation? Oh, like the whole thing, not just

01:34:23.279 --> 01:34:25.119
the nuclear waste issue? Well, let's start with

01:34:25.119 --> 01:34:27.859
the nuclear waste issue. We need a central repository

01:34:27.859 --> 01:34:30.300
where the stuff can be processed and the plutonium

01:34:30.300 --> 01:34:32.720
can be disposed of or at least incarcerated forever.

01:34:33.279 --> 01:34:36.300
That is the idea behind Yucca Mountain. But because

01:34:36.300 --> 01:34:38.439
the U .S. is a federal system with the state

01:34:38.439 --> 01:34:40.319
and the local authorities having as much power

01:34:40.319 --> 01:34:42.399
as the federal, it's been locked up in courts

01:34:42.399 --> 01:34:44.779
ever since it started. Because nobody wants that

01:34:44.779 --> 01:34:46.279
stuff in their neighborhood. Right, which is

01:34:46.279 --> 01:34:47.779
why we want to put it in Nevada, because aside

01:34:47.779 --> 01:34:50.359
from Vegas, there's nobody in Nevada. Sorry,

01:34:50.359 --> 01:34:55.340
Reno. Sorry, Reno. So when you – it's like if

01:34:55.340 --> 01:34:58.199
you did – if somebody said, hey, Peter, how do

01:34:58.199 --> 01:35:02.199
we handle this? What would be your steps? Well,

01:35:02.199 --> 01:35:04.199
if you want to look at American history, we'd

01:35:04.199 --> 01:35:06.340
probably put it someplace like Guantanamo where

01:35:06.340 --> 01:35:09.560
American federal law doesn't apply. I'm not saying

01:35:09.560 --> 01:35:11.000
I recommend that. I'm just saying that's the

01:35:11.000 --> 01:35:13.880
easy solution. Really, we need a place like northern

01:35:13.880 --> 01:35:16.500
Nevada that the federal government just buys

01:35:16.500 --> 01:35:20.810
and shoves it through. And if they did that,

01:35:20.850 --> 01:35:22.989
do you think that's feasible? I think that's

01:35:22.989 --> 01:35:26.170
what other countries who have experienced this

01:35:26.170 --> 01:35:28.750
problem have done. There aren't a lot of them

01:35:28.750 --> 01:35:30.710
because most of the nuclear industries of the

01:35:30.710 --> 01:35:33.050
world are linked into the American system when

01:35:33.050 --> 01:35:34.949
we don't allow it because we don't want the plutonium

01:35:34.949 --> 01:35:40.000
processing. So that's not really. That would

01:35:40.000 --> 01:35:42.260
be the best approach if you want nuclear power

01:35:42.260 --> 01:35:44.279
to be a meaningful part of our future. But it

01:35:44.279 --> 01:35:46.260
would take a radical restructuring of law. Right.

01:35:46.260 --> 01:35:47.859
And it would probably take Congress literally

01:35:47.859 --> 01:35:50.699
ramming it through the courts. They'd have to

01:35:50.699 --> 01:35:52.979
change the law so that the states can't fight

01:35:52.979 --> 01:35:55.079
it. And that triggers a legal fight, which in

01:35:55.079 --> 01:35:56.520
the United States, as we all know, we love to

01:35:56.520 --> 01:35:59.239
do. But the conversation about nuclear has not

01:35:59.239 --> 01:36:00.960
been very positive in this country. No, it's

01:36:00.960 --> 01:36:03.279
not. We've only built one new facility in the

01:36:03.279 --> 01:36:09.229
last 45 years. Outside of that, how do you think

01:36:09.229 --> 01:36:12.000
we should handle it? Wind, wind, wind. Wind,

01:36:12.159 --> 01:36:14.619
really? The new turbines are pushing 1 ,000 feet

01:36:14.619 --> 01:36:17.800
tall. And as you go up, you tap stronger and

01:36:17.800 --> 01:36:20.560
more reliable wind currents. So right now, our

01:36:20.560 --> 01:36:23.119
good wind territory is the Great Plains, so western

01:36:23.119 --> 01:36:26.180
Texas up to North Dakota. But as you go higher

01:36:26.180 --> 01:36:28.939
and higher and higher, you can spread that out.

01:36:29.060 --> 01:36:32.960
And I would argue a third of the population of

01:36:32.960 --> 01:36:35.220
the United States can get at least a third of

01:36:35.220 --> 01:36:37.140
their electricity from wind if it's done at scale.

01:36:37.300 --> 01:36:40.140
And we're moving that direction. subsidies. It's

01:36:40.140 --> 01:36:42.279
just that the economics of the turbines as they

01:36:42.279 --> 01:36:44.899
go up get better and better. What about the possibility

01:36:44.899 --> 01:36:48.220
of solar getting more efficient? It can. The

01:36:48.220 --> 01:36:50.520
big problem with solar is not just the efficiency,

01:36:50.539 --> 01:36:53.880
though. It's the timing. Peak demand for electricity

01:36:53.880 --> 01:36:57.239
in most places is after sunset in the winter.

01:36:57.840 --> 01:37:00.500
And solar will never be part of that solution.

01:37:01.279 --> 01:37:04.199
Right. Because sun's not out at night. So we

01:37:04.199 --> 01:37:07.300
need a lot of money into tertiary education and

01:37:07.300 --> 01:37:09.220
research grants to find a better battery than

01:37:09.220 --> 01:37:11.220
lithium. Because we don't want something that

01:37:11.220 --> 01:37:13.140
can store power for an hour, two, three, four

01:37:13.140 --> 01:37:15.020
hours. We need something that can store power

01:37:15.020 --> 01:37:19.039
for a week, a month. We're never going to do

01:37:19.039 --> 01:37:21.039
that with lithium. And is there anything on the

01:37:21.039 --> 01:37:23.800
horizon that holds promise in that regard? There's

01:37:23.800 --> 01:37:26.380
nothing that at this point is promising that

01:37:26.380 --> 01:37:28.880
has reached the prototype stage. There are things

01:37:28.880 --> 01:37:31.600
like flow batteries and iron batteries that,

01:37:31.619 --> 01:37:33.399
you know, the chemistry looks intriguing, but

01:37:33.399 --> 01:37:35.439
none of it's been tested out in a meaningful

01:37:35.439 --> 01:37:39.739
way yet. So if you were going to guide our energy

01:37:39.739 --> 01:37:42.100
policy. I would say let's invest a trillion dollars

01:37:42.100 --> 01:37:44.899
in material science solutions before we start

01:37:44.899 --> 01:37:47.000
applying them at scale and we know already that

01:37:47.000 --> 01:37:50.260
they don't work. And would that be effective?

01:37:50.439 --> 01:37:52.060
I mean, even if you just throw a lot of money

01:37:52.060 --> 01:37:54.920
at it? Until we have the material science breakthroughs,

01:37:54.920 --> 01:37:57.239
the rest of it is kind of just spinning in the

01:37:57.239 --> 01:38:01.000
mud. So you think that an approach in that regard

01:38:01.000 --> 01:38:04.140
would be wise because we're spending a lot of

01:38:04.140 --> 01:38:06.079
money on a lot of things anyway. Right. Spending

01:38:06.079 --> 01:38:09.000
it on that, at least you have the promise of

01:38:09.000 --> 01:38:11.979
possibly coming up with some sort of a feasible

01:38:11.979 --> 01:38:14.619
solution. I'd rather see us spend a trillion

01:38:14.619 --> 01:38:17.039
dollars on figuring out what might work rather

01:38:17.039 --> 01:38:18.880
than us spending a trillion dollars on things

01:38:18.880 --> 01:38:23.539
that we know already don't work. Okay. So that's

01:38:23.539 --> 01:38:26.020
our energy problem. What about our food problem?

01:38:26.439 --> 01:38:28.439
In the United States, we don't have one. We don't.

01:38:28.439 --> 01:38:31.279
No. Don't we have a problem with our topsoil

01:38:31.279 --> 01:38:33.880
where there's only like 60 seasons left of the

01:38:33.880 --> 01:38:35.859
topsoil? Yeah, I've been hearing that for 40

01:38:35.859 --> 01:38:37.859
years and it hasn't happened yet. I don't mean

01:38:37.859 --> 01:38:40.039
to suggest that soil fertility isn't an issue,

01:38:40.159 --> 01:38:42.439
but when it comes to crop rotation and the fact

01:38:42.439 --> 01:38:44.380
that your fertilizer is made within North America,

01:38:44.579 --> 01:38:47.760
it's a manageable issue. I mean, we're not Brazil

01:38:47.760 --> 01:38:50.420
where there's zero soil fertility. And if something

01:38:50.420 --> 01:38:53.079
happens to one season of fertilizer supply, you

01:38:53.079 --> 01:38:55.060
just don't grow anything. They have zero soil

01:38:55.060 --> 01:38:57.529
fertility? Yeah, it's all reclaimed tropics.

01:38:57.630 --> 01:38:59.609
So they have to basically rip out the vegetation,

01:39:00.029 --> 01:39:01.930
poison the land with lime to get rid of the acid,

01:39:01.989 --> 01:39:03.670
and you get left with something like beach sand.

01:39:04.069 --> 01:39:06.010
And then you just throw fertilizer on it. And

01:39:06.010 --> 01:39:08.109
without the fertilizer, nothing grows. Now, with

01:39:08.109 --> 01:39:09.890
the fertilizer, you can get two, maybe even three

01:39:09.890 --> 01:39:12.010
crops. So it's not a horrible business model,

01:39:12.069 --> 01:39:14.529
or at least it hasn't been to this point. But

01:39:14.529 --> 01:39:17.630
that was before the Ukraine War. And Ukraine

01:39:17.630 --> 01:39:19.470
is where we get a lot of our fertilizer. Russia

01:39:19.470 --> 01:39:23.989
specifically. Russia, yeah. So what would you

01:39:23.989 --> 01:39:27.789
advise us to do about that? There's not a lot

01:39:27.789 --> 01:39:30.729
we can do about that. There are things that you

01:39:30.729 --> 01:39:33.670
can do with genomics and with precision agriculture

01:39:33.670 --> 01:39:37.090
to more target the inputs to each individual

01:39:37.090 --> 01:39:41.050
plant. That can work with corn and soy. It probably

01:39:41.050 --> 01:39:43.069
can't work with wheat because, you know, if you

01:39:43.069 --> 01:39:45.729
see a corn stalk, you do a digital photo of it.

01:39:45.789 --> 01:39:48.369
The computer decides whether it's hungry or thirsty

01:39:48.369 --> 01:39:50.670
or has bugs and it squirts it appropriately.

01:39:52.010 --> 01:39:54.829
Stock, stock, stock, stock. But wheat is just

01:39:54.829 --> 01:39:57.390
a maze of tiny, tiny little plants. There are

01:39:57.390 --> 01:39:59.689
too many of them for you to economically treat

01:39:59.689 --> 01:40:02.729
each individual one differently. And unfortunately,

01:40:02.869 --> 01:40:05.149
wheat is our number one crop in terms of calories.

01:40:07.609 --> 01:40:12.560
So it's genomics or nothing for wheat. And we're

01:40:12.560 --> 01:40:14.239
better off than a lot of other countries. We're

01:40:14.239 --> 01:40:16.659
the world's largest food producer and exporter.

01:40:16.760 --> 01:40:18.920
We are not going to starve. We might have some

01:40:18.920 --> 01:40:20.960
problems with out -of -season avocados, but I

01:40:20.960 --> 01:40:22.439
think we can live with that. But the rest of

01:40:22.439 --> 01:40:24.939
the world, it seems like, according to your model,

01:40:25.039 --> 01:40:28.859
is in real dire straits. Over half of the world's

01:40:28.859 --> 01:40:32.920
population is food threatened now. And that's

01:40:32.920 --> 01:40:36.479
before we have fertilizer shortages. And what

01:40:36.479 --> 01:40:39.779
was the cause of this? Like, why has there been

01:40:39.779 --> 01:40:44.970
so... Runaway success. Since the Cold War ended,

01:40:45.130 --> 01:40:48.850
we've brought huge new swaths of humanity into

01:40:48.850 --> 01:40:51.630
the globalized system. And the integration of

01:40:51.630 --> 01:40:53.510
Russia and China and Brazil, that is the story

01:40:53.510 --> 01:40:55.310
of the post -World War. I'm sorry, of the post

01:40:55.310 --> 01:40:59.479
-Cold War era. The reason that these parts of

01:40:59.479 --> 01:41:01.319
the world weren't in the first round wasn't just

01:41:01.319 --> 01:41:03.819
ideology. It was that their geography isn't as

01:41:03.819 --> 01:41:06.520
good. So Brazil's land sucks without fertilizer.

01:41:06.840 --> 01:41:08.939
The Russian territories has very low productivity,

01:41:09.060 --> 01:41:11.359
and China has some of the worst land in the world.

01:41:11.460 --> 01:41:15.239
It took globalization and the access to all of

01:41:15.239 --> 01:41:18.220
the resources of the globalized world in order

01:41:18.220 --> 01:41:21.220
to make these places do very well from an agricultural

01:41:21.220 --> 01:41:24.159
point of view. We're now seeing that unwind.

01:41:24.159 --> 01:41:26.199
We're only in the very early stages of this.

01:41:27.050 --> 01:41:31.090
And as it unwinds, what can be done to mitigate

01:41:31.090 --> 01:41:34.189
this oncoming crisis that you're describing?

01:41:34.289 --> 01:41:36.909
Because it sounds quite terrifying. We're going

01:41:36.909 --> 01:41:38.949
to have to pick winners and losers, unfortunately.

01:41:39.090 --> 01:41:42.539
There's just not enough. if we do start a significant

01:41:42.539 --> 01:41:44.420
build -out of the fertilizer system, it takes

01:41:44.420 --> 01:41:46.939
about three years to bring new nitrogen or phosphate

01:41:46.939 --> 01:41:49.560
systems online, but it takes like 10 years for

01:41:49.560 --> 01:41:52.279
potash. Now, the Canadians, after the Russians,

01:41:52.420 --> 01:41:54.840
are the world's leader, and they have started.

01:41:54.960 --> 01:41:56.520
They've seen the writing on the wall, and they're

01:41:56.520 --> 01:41:58.760
trying to speed it up however they can, but they

01:41:58.760 --> 01:42:00.159
still think they're going to need seven years.

01:42:00.619 --> 01:42:04.100
And what is potash? Potash is a mineral that

01:42:04.100 --> 01:42:07.159
you mine, and I'm grossly oversimplifying here,

01:42:07.260 --> 01:42:08.939
but you basically crush it and dissolve a little

01:42:08.939 --> 01:42:10.800
bit of acid and turn it into a pellet form that

01:42:10.800 --> 01:42:12.760
you can distribute on a field. It's potassium

01:42:12.760 --> 01:42:18.529
fertilizer. And this is just one. It's one of

01:42:18.529 --> 01:42:21.369
the three. Potash is potassium and then phosphate

01:42:21.369 --> 01:42:24.369
and nitrogen. Nitrogen, as a rule, is made out

01:42:24.369 --> 01:42:26.489
of natural gas. And the United States is the

01:42:26.489 --> 01:42:28.250
world's largest producer of natural gas. And

01:42:28.250 --> 01:42:29.970
we're in the process of building out our nitrogen

01:42:29.970 --> 01:42:32.890
capacity in part because of this. And when you

01:42:32.890 --> 01:42:35.670
say winners and losers, like what do you anticipate

01:42:35.670 --> 01:42:37.869
happens to the losers? Well, I mean, if you only

01:42:37.869 --> 01:42:39.970
have enough fertilizer to support a half a billion

01:42:39.970 --> 01:42:42.489
people, that means you get to choose who gets

01:42:42.489 --> 01:42:46.350
it. Do you let the market do it? Do you pick

01:42:46.350 --> 01:42:49.689
your friends? Do you pick yourselves? These are

01:42:49.689 --> 01:42:51.329
decisions we're going to have to make in the

01:42:51.329 --> 01:42:53.250
not -too -distant future. And when you say we,

01:42:53.329 --> 01:42:55.569
you mean globally? Well, it depends upon who

01:42:55.569 --> 01:42:57.930
has it in the first place. So the Canadians are

01:42:57.930 --> 01:43:03.350
the world's largest single producers of potash.

01:43:03.689 --> 01:43:07.470
We are their number one customer. They also supply

01:43:07.470 --> 01:43:11.029
potash to Japan and Australia and New Zealand.

01:43:11.609 --> 01:43:13.270
After that, they have to make some really hard

01:43:13.270 --> 01:43:17.600
choices. Do we try to save just the Chinese or

01:43:17.600 --> 01:43:23.920
everyone else? It's really that hard. Yeah. We

01:43:23.920 --> 01:43:26.640
can't support our current population without

01:43:26.640 --> 01:43:29.420
industrialized inputs for agriculture. And without

01:43:29.420 --> 01:43:32.119
those inputs, on average, yields will drop by

01:43:32.119 --> 01:43:35.420
more than half. And, like, what kind of time

01:43:35.420 --> 01:43:37.279
frame are we talking about until this global

01:43:37.279 --> 01:43:40.800
collapse? That, of course, is the billion -dollar

01:43:40.800 --> 01:43:43.840
question. Because of what's going on in China,

01:43:43.920 --> 01:43:46.000
we don't know because the decision -making process

01:43:46.000 --> 01:43:49.039
has become so opaque. But the United States is

01:43:49.039 --> 01:43:52.000
pushing the trade dispute issue to the hilt,

01:43:52.100 --> 01:43:54.079
which is a really big problem if you're concerned

01:43:54.079 --> 01:43:55.640
about global stability. But if you think it was

01:43:55.640 --> 01:43:58.079
all going to break down anyway, there's something

01:43:58.079 --> 01:44:01.060
to be said for pulling the cord earlier. The

01:44:01.060 --> 01:44:04.880
Russian system could break tomorrow. We're at

01:44:04.880 --> 01:44:08.680
that point. And that is not just wheat. That

01:44:08.680 --> 01:44:11.479
is barley. That is potash. That is nitrogen.

01:44:11.640 --> 01:44:14.600
That is ammonia. That is lithium. That is nickel.

01:44:14.760 --> 01:44:19.760
That is copper. Pieces are falling out. And the

01:44:19.760 --> 01:44:24.199
risk here is that something will fall out that

01:44:24.199 --> 01:44:27.680
will then domino. And I think the issue to watch

01:44:27.680 --> 01:44:30.920
for that this coming year is the energy question.

01:44:31.609 --> 01:44:33.229
Because now that we have insurance companies

01:44:33.229 --> 01:44:34.850
saying just no, we're not going anywhere near

01:44:34.850 --> 01:44:37.250
the Russian space at all, it doesn't take much

01:44:37.250 --> 01:44:40.670
imagination for someone to think that something's

01:44:40.670 --> 01:44:42.489
going to go wrong in a war zone where energy

01:44:42.489 --> 01:44:45.149
has already been weaponized. And once Russian

01:44:45.149 --> 01:44:47.090
stuff goes offline for whatever reason, pressure

01:44:47.090 --> 01:44:49.270
builds up back into the pipe all the way to Siberia,

01:44:49.270 --> 01:44:51.390
and then the wells freeze shut, and you have

01:44:51.390 --> 01:44:53.670
to redrill them. And the last time it took the

01:44:53.670 --> 01:44:57.250
Russians 30 years to redrill everything. So when

01:44:57.250 --> 01:44:59.710
we lose Russian crude this time, it's gone for

01:44:59.710 --> 01:45:07.000
good. Holy shit, dude. So if you look ahead 25

01:45:07.000 --> 01:45:11.029
years from now, how do you see the world? 25

01:45:11.029 --> 01:45:12.550
years from now, we're going to be on the other

01:45:12.550 --> 01:45:14.630
side of this. So we're going to see a significant

01:45:14.630 --> 01:45:17.149
breakdown in a lot of systems over the course

01:45:17.149 --> 01:45:21.810
of this decade into next. But after that, my

01:45:21.810 --> 01:45:23.609
bet is we're going to see a number of technological

01:45:23.609 --> 01:45:26.989
advantages be developed in the United States

01:45:26.989 --> 01:45:29.470
and within its group that allow us to do more

01:45:29.470 --> 01:45:31.909
with less and which transform the economy into

01:45:31.909 --> 01:45:34.949
a more sustainable footing. will also have had

01:45:34.949 --> 01:45:38.710
30 years, 25 years, for this demographic situation

01:45:38.710 --> 01:45:40.710
to play out. And we will find out what is next.

01:45:40.770 --> 01:45:43.609
One of the big mysteries right now is we've never,

01:45:43.689 --> 01:45:47.630
ever in any era had a country with more retirees

01:45:47.630 --> 01:45:50.369
than working age population. We don't know really

01:45:50.369 --> 01:45:52.710
what that leads to. We know they're not growing

01:45:52.710 --> 01:45:55.130
food. We know they're not producing goods. But

01:45:55.130 --> 01:45:57.569
25 years from now, that big retiree class is

01:45:57.569 --> 01:46:01.109
mostly gone. And then we get to see, after 25

01:46:01.109 --> 01:46:03.189
years of experimentation, what sort of economic

01:46:03.189 --> 01:46:06.989
model might replace that. Now, hopefully for

01:46:06.989 --> 01:46:09.090
the United States and Mexico and Canada, we're

01:46:09.090 --> 01:46:11.510
going to learn something from all these experimentations.

01:46:11.569 --> 01:46:12.989
Because the Germans are probably going to be

01:46:12.989 --> 01:46:15.170
at the leading edge of this. And they're not

01:46:15.170 --> 01:46:16.850
going to go quietly into that good night. They're

01:46:16.850 --> 01:46:19.890
going to try to survive. Some countries are going

01:46:19.890 --> 01:46:23.890
to pull it off. But I don't think anyone has

01:46:23.890 --> 01:46:26.819
an idea of what that system looks like. N equals

01:46:26.819 --> 01:46:30.640
zero. We've never been through this before. We're

01:46:30.640 --> 01:46:34.239
making it up as we go. And I've heard you talk

01:46:34.239 --> 01:46:38.020
about the generations that are upcoming in this

01:46:38.020 --> 01:46:40.539
country and not with a very rosy perspective.

01:46:41.399 --> 01:46:46.859
You have a lot of concern about just the temperament,

01:46:46.859 --> 01:46:49.979
the ideology, the way these kids have been raised

01:46:49.979 --> 01:46:53.920
that doesn't lead itself well to adapt to this.

01:46:54.450 --> 01:46:57.710
looming future? Well, I'm a Gen Xer, so I'm always

01:46:57.710 --> 01:46:59.729
going to belittle and look down on the millennials,

01:46:59.850 --> 01:47:02.729
mostly because they deserve it. My big concern

01:47:02.729 --> 01:47:05.069
moving forward, though, is not so much the millennials,

01:47:05.170 --> 01:47:06.909
because the millennials exist in large number.

01:47:07.069 --> 01:47:08.829
They're providing the consumption ballast of

01:47:08.829 --> 01:47:11.710
today, the investment ballast of tomorrow. They're,

01:47:11.710 --> 01:47:13.390
to be perfectly blunt, going to save us all.

01:47:14.210 --> 01:47:16.850
My concern is with the Zoomers, the younger kids,

01:47:16.930 --> 01:47:20.390
kids 22 and under. There aren't a lot of them.

01:47:20.840 --> 01:47:23.840
They're our smallest generation ever. By what

01:47:23.840 --> 01:47:29.279
factor? There are about 30 % fewer of them than

01:47:29.279 --> 01:47:31.159
there were millennials at the same age. And what

01:47:31.159 --> 01:47:33.060
do you attribute that to? Well, their parents

01:47:33.060 --> 01:47:35.920
were Gen X. We were a small generation too. So

01:47:35.920 --> 01:47:37.659
a small generation generates a small generation.

01:47:38.329 --> 01:47:41.229
And they were raised in an era of digitization.

01:47:41.689 --> 01:47:45.010
So an iPad was part of their childhood experience,

01:47:45.430 --> 01:47:47.329
which means they're a little bit more socially

01:47:47.329 --> 01:47:50.250
awkward and they date less and they are less

01:47:50.250 --> 01:47:52.510
comfortable around other people. So they are

01:47:52.510 --> 01:47:55.590
likely to also generate very few children. Now,

01:47:55.649 --> 01:47:57.670
this is something that the Germans and the Chinese

01:47:57.670 --> 01:47:59.409
and the Italians have been dealing with for 70

01:47:59.409 --> 01:48:01.630
years, smaller and smaller generations. But this

01:48:01.630 --> 01:48:04.729
is new for us. How do you see that playing out?

01:48:06.640 --> 01:48:09.619
The technology changes. It changes you. You change

01:48:09.619 --> 01:48:12.680
it. And the Zoomers are the generation who's

01:48:12.680 --> 01:48:14.399
going to decide what all this interconnectivity

01:48:14.399 --> 01:48:16.659
means. And if they can figure out how to do that

01:48:16.659 --> 01:48:19.680
and still have families, we'll be fine. And if

01:48:19.680 --> 01:48:22.779
they can't, we are starting down the German path.

01:48:23.399 --> 01:48:25.760
Now, worst case scenario, we still have another

01:48:25.760 --> 01:48:34.470
60 years. Crypto. Yeah, it was always a hot dumpster

01:48:34.470 --> 01:48:37.470
fire. Always? Yeah, I'm not going to say that

01:48:37.470 --> 01:48:39.630
it was all fraud. Some of it was a pyramid scheme.

01:48:40.329 --> 01:48:44.229
There's never been anything there. It serves

01:48:44.229 --> 01:48:46.710
no purpose. It's not a store of value. It's not

01:48:46.710 --> 01:48:49.189
a medium in exchange. And as we have seen, if

01:48:49.189 --> 01:48:51.229
you want it decentralized and not under government

01:48:51.229 --> 01:48:53.829
control, it is a haven for fraudsters. And now

01:48:53.829 --> 01:48:55.869
it is in the process of going to zero, except

01:48:55.869 --> 01:48:57.630
for Bitcoin, which will probably go negative.

01:48:57.970 --> 01:48:59.949
Because if we're moving into a world with carbon

01:48:59.949 --> 01:49:02.449
taxes, you have to take into account the energy

01:49:02.449 --> 01:49:04.010
that it took to produce it in the first place.

01:49:06.670 --> 01:49:09.930
Well, that's certainly playing out with like

01:49:09.930 --> 01:49:13.239
FTX. Where you're finding out that it's a house

01:49:13.239 --> 01:49:16.340
of cards. Do you feel like that's just sort of

01:49:16.340 --> 01:49:18.399
opened the door for people to examine all of

01:49:18.399 --> 01:49:21.039
crypto now? Oh, yeah. Absolutely. It's like as

01:49:21.039 --> 01:49:23.039
soon as you have one of the big ones go down,

01:49:23.199 --> 01:49:25.119
it's just a matter of - And just go down catastrophically

01:49:25.119 --> 01:49:27.680
within a week. Yeah. I mean, there's no intrinsic

01:49:27.680 --> 01:49:31.359
value to this asset. And now it's starting to

01:49:31.359 --> 01:49:33.359
be priced appropriately. So it has a, you know,

01:49:33.380 --> 01:49:35.819
what's Bitcoin at? 16 ,000? It has another 17

01:49:35.819 --> 01:49:40.409
,000 to go down. Duh. Yeah. There's no intrinsic

01:49:40.409 --> 01:49:43.779
value to this product. And do you think that

01:49:43.779 --> 01:49:47.100
people just inherently lost faith in the idea

01:49:47.100 --> 01:49:49.619
behind crypto because of FTX? Well, it became

01:49:49.619 --> 01:49:52.939
an ideology. And whenever you invest based on

01:49:52.939 --> 01:49:54.800
an ideology, you're going to make some decisions

01:49:54.800 --> 01:49:57.060
that are a little divorced from math. And what

01:49:57.060 --> 01:49:59.699
do you mean by ideology? Well, the people who

01:49:59.699 --> 01:50:01.699
really like crypto are convinced that it's the

01:50:01.699 --> 01:50:03.920
currency of the future and that a decentralized

01:50:03.920 --> 01:50:06.979
ledger is the way to go and that anything that

01:50:06.979 --> 01:50:09.939
is controlled by a government entity is by definition

01:50:09.939 --> 01:50:12.140
a negative. And if it's done by the private sector,

01:50:12.600 --> 01:50:14.640
freely, it will be better. And that's just not

01:50:14.640 --> 01:50:18.279
how currency works. Currency is a method of exchange

01:50:18.279 --> 01:50:20.939
and a store of value. And for that, there has

01:50:20.939 --> 01:50:23.539
to be a degree of trust and you have to have

01:50:23.539 --> 01:50:25.600
it managed in terms of volume. I mean, one of

01:50:25.600 --> 01:50:29.119
the craziest things about Bitcoin is that there

01:50:29.119 --> 01:50:31.659
will never be more than X number of units of

01:50:31.659 --> 01:50:34.739
Bitcoin. Well, by default, that means it can't

01:50:34.739 --> 01:50:37.359
be used for trade because the whole idea of economic

01:50:37.359 --> 01:50:40.840
activity is that there's expansion. which means

01:50:40.840 --> 01:50:43.140
you need more currency to lubricate and manage

01:50:43.140 --> 01:50:45.720
that expansion. If currency is locked into a

01:50:45.720 --> 01:50:48.399
specific number, you get monetary inflation.

01:50:48.539 --> 01:50:51.279
And that is one of the fastest ways to destroy

01:50:51.279 --> 01:50:54.680
an economic model. So because of the lack of

01:50:54.680 --> 01:50:56.579
Bitcoin, because there's a certain controlled

01:50:56.579 --> 01:50:59.159
number, the only thing that can happen is Bitcoin

01:50:59.159 --> 01:51:01.859
becomes more expensive. Right. And that means

01:51:01.859 --> 01:51:03.420
that the people who hold it are the ones that

01:51:03.420 --> 01:51:05.220
make the money, but everyone else suffers. I'm

01:51:05.220 --> 01:51:08.270
sorry, that's not viable. The alternative is

01:51:08.270 --> 01:51:10.529
you have some private dude out there who generates

01:51:10.529 --> 01:51:14.029
the coins on a whim. How is that different from

01:51:14.029 --> 01:51:16.090
the monetary reserve or the monetary authorities

01:51:16.090 --> 01:51:17.909
that we have at the Federal Reserve, except for

01:51:17.909 --> 01:51:20.270
the point that there's no accountability? No,

01:51:20.430 --> 01:51:23.899
no. Now, a lot of people have concern that the

01:51:23.899 --> 01:51:26.220
United States is trying to generate a centralized

01:51:26.220 --> 01:51:28.920
digital currency. They will control. The Federal

01:51:28.920 --> 01:51:31.319
Reserve disagrees with that statement. What do

01:51:31.319 --> 01:51:33.779
you mean? Well, they don't see a purpose. They

01:51:33.779 --> 01:51:37.800
don't see what need it fills. So there may be

01:51:37.800 --> 01:51:40.020
an argument for the Chinese doing a digital yuan

01:51:40.020 --> 01:51:42.079
so they can monitor each and every transaction.

01:51:43.949 --> 01:51:46.270
You know, conspiracy theorists are going to conspiracy.

01:51:46.649 --> 01:51:47.729
That's just what they do. No, I was reading like

01:51:47.729 --> 01:51:50.750
mainstream articles about the United States confirming

01:51:50.750 --> 01:51:52.850
that they're trying to develop a centralized

01:51:52.850 --> 01:51:54.029
digital currency. Now, if you're talking about

01:51:54.029 --> 01:51:58.189
a digital exchange system, then I can see that.

01:51:58.510 --> 01:51:59.649
See if you can find something like that. But

01:51:59.649 --> 01:52:03.369
something separate from the USD? No. This is

01:52:03.369 --> 01:52:07.029
what – I only looked at the headlines of it because

01:52:07.029 --> 01:52:08.550
someone was sending it around and I didn't have

01:52:08.550 --> 01:52:11.189
the time because it was yesterday. But this –

01:52:11.659 --> 01:52:14.359
The idea of a centralized digital currency is

01:52:14.359 --> 01:52:16.380
something that Maxine Waters talked about. She

01:52:16.380 --> 01:52:17.979
said that we have to do that in order to compete

01:52:17.979 --> 01:52:20.720
with China. Yeah, Maxine Waters is not exactly

01:52:20.720 --> 01:52:23.699
the brightest person in Congress. That's not

01:52:23.699 --> 01:52:25.680
saying a lot. Yeah, I know it's a low bar, but

01:52:25.680 --> 01:52:27.680
she passes it. I don't know if this is a – I'm

01:52:27.680 --> 01:52:29.560
just pulling up to see if this is what you're

01:52:29.560 --> 01:52:31.800
talking about. Digital dollar is something that

01:52:31.800 --> 01:52:34.300
makes sense. The idea of smoothing the connections

01:52:34.300 --> 01:52:36.739
within the plumbing of the financial system.

01:52:37.149 --> 01:52:39.609
or moving beyond a physical currency at all,

01:52:39.729 --> 01:52:41.289
you know, that all makes sense. That's kind of

01:52:41.289 --> 01:52:44.449
like the next step. But a separate currency where

01:52:44.449 --> 01:52:47.090
everything is mitigated or managed by the Fed,

01:52:47.270 --> 01:52:48.810
that's not something the Federal Reserve has

01:52:48.810 --> 01:52:53.390
an interest in. Let me go to Tim Kennedy's Instagram

01:52:53.390 --> 01:52:55.390
because he was the one who posted it a couple

01:52:55.390 --> 01:52:58.550
of days ago. White House releases first ever

01:52:58.550 --> 01:53:01.529
comprehensive framework for responsible development

01:53:01.529 --> 01:53:05.250
of digital assets. Yeah, this happened right

01:53:05.250 --> 01:53:08.630
after Bitcoin really started a nosedive. And

01:53:08.630 --> 01:53:11.630
the question is how do you bring crypto into

01:53:11.630 --> 01:53:15.670
the regulatory environment? But this is a framework

01:53:15.670 --> 01:53:18.109
for responsible development of digital assets.

01:53:18.149 --> 01:53:20.390
It doesn't mean a centralized digital currency

01:53:20.390 --> 01:53:22.670
the United States creates. If you just go to

01:53:22.670 --> 01:53:26.130
Tim Kennedy's, there's an article that describes

01:53:26.130 --> 01:53:28.550
it, and he's talking about the dangers of this.

01:53:31.130 --> 01:53:35.119
Yeah. You got to go? Yeah, sorry. This is fun,

01:53:35.119 --> 01:53:37.159
though. It's been a lot of fun. You scared the

01:53:37.159 --> 01:53:39.500
shit out of me. You're welcome. But you're used

01:53:39.500 --> 01:53:41.079
to that. Yeah, you throw some bourbon in me,

01:53:41.140 --> 01:53:43.000
I get really lively. It's official. The United

01:53:43.000 --> 01:53:45.680
States is developing a bank -to -bank digital

01:53:45.680 --> 01:53:50.960
currency. Take that headline and just Google

01:53:50.960 --> 01:53:54.859
that headline and find out what that means. The

01:53:54.859 --> 01:53:56.779
United States is developing a bank -to -bank

01:53:56.779 --> 01:53:59.220
digital currency. I'm concerned with the United

01:53:59.220 --> 01:54:02.119
States having that along with a social credit

01:54:02.119 --> 01:54:04.939
score system. No, we don't have the math for

01:54:04.939 --> 01:54:07.760
that. We don't have the math for that. Well,

01:54:07.819 --> 01:54:09.319
the Chinese have proven that their social credit

01:54:09.319 --> 01:54:11.640
score system broke. They didn't have the processing

01:54:11.640 --> 01:54:14.479
capacity to keep track of it. And that is with

01:54:14.479 --> 01:54:16.579
a near bottomless supply of resources and full

01:54:16.579 --> 01:54:19.659
control. of the political system. So we certainly

01:54:19.659 --> 01:54:21.720
don't. For those who thought the United States

01:54:21.720 --> 01:54:24.619
was behind the digital currency space race, the

01:54:24.619 --> 01:54:27.020
news was welcome. In a subsequent white paper

01:54:27.020 --> 01:54:30.260
on the project named Project Cedar, the New York

01:54:30.260 --> 01:54:33.539
Fed explained that it has already completed stage

01:54:33.539 --> 01:54:36.720
one of testing and proved that international

01:54:36.720 --> 01:54:39.460
currency transactions can be done both quickly

01:54:39.460 --> 01:54:42.159
and safely through the blockchain. But buried

01:54:42.159 --> 01:54:44.899
in the technical details was a revealing line

01:54:44.899 --> 01:54:47.960
on the ambitions of the project. The goal of

01:54:47.960 --> 01:54:51.279
the new network is to reduce settlement risk

01:54:51.279 --> 01:54:53.859
in cross -border, cross -currency transactions.

01:54:54.220 --> 01:54:57.000
The message, we see what the world is doing with

01:54:57.000 --> 01:55:01.140
CBDCS, and the United States is not going to

01:55:01.140 --> 01:55:03.720
be left behind. So the way trade finance works

01:55:03.720 --> 01:55:05.840
is if you're in Korea and you want to sell something

01:55:05.840 --> 01:55:10.359
to Chile, you sell it in won. It's transferred

01:55:10.359 --> 01:55:12.500
into U .S. dollars, and then the U .S. dollars

01:55:12.500 --> 01:55:15.159
are transferred into pesos. There's a three -step

01:55:15.159 --> 01:55:17.539
process, and each of those requires a transaction.

01:55:18.180 --> 01:55:20.939
But if you can digitize it, then it's click,

01:55:21.000 --> 01:55:23.840
click, and you're done. That's what that's talking

01:55:23.840 --> 01:55:27.060
about. So you don't think that the fear of a

01:55:27.060 --> 01:55:28.979
centralized digital currency that the United

01:55:28.979 --> 01:55:31.579
States controls, you're not worried about that?

01:55:31.579 --> 01:55:34.539
Honestly, the Federal Reserve, that's not what

01:55:34.539 --> 01:55:36.199
they're good at, and that's not what they're

01:55:36.199 --> 01:55:37.539
trying to do, and it's not what they have an

01:55:37.539 --> 01:55:39.659
interest in doing. If they were to inject themselves

01:55:39.659 --> 01:55:41.439
into each individual transaction, that would

01:55:41.439 --> 01:55:45.180
be a nightmare for them. Well, Peter, I appreciate

01:55:45.180 --> 01:55:46.859
your time. I know that you have to get out of

01:55:46.859 --> 01:55:48.720
here to catch a flight. And I appreciate you

01:55:48.720 --> 01:55:51.300
scaring the shit out of everybody. And this view

01:55:51.300 --> 01:55:55.140
of the world and what you've laid out is not

01:55:55.140 --> 01:55:57.140
that nice. Well, I'll bring some diapers next

01:55:57.140 --> 01:55:58.800
time. How about that? I don't think that's going

01:55:58.800 --> 01:56:02.000
to help. But I appreciate all of your research

01:56:02.000 --> 01:56:04.479
and your time and your insight. It was very interesting.

01:56:05.000 --> 01:56:07.239
Glad you enjoyed yourself. I know I did. If people

01:56:07.239 --> 01:56:09.960
want to find out more about your stuff, what

01:56:09.960 --> 01:56:12.359
is your social media if you have it? Sure. On

01:56:12.359 --> 01:56:15.760
Twitter, I'm at Peter Zion. That's Z -E -I -H

01:56:15.760 --> 01:56:18.520
-A -N. Or you can go to Z -E -I -H -A -N .com

01:56:18.520 --> 01:56:20.199
and sign up for the newsletter, which is free

01:56:20.199 --> 01:56:22.560
and will always be free. Well, thank you very

01:56:22.560 --> 01:56:24.319
much. I really appreciate your time. My pleasure.

01:56:24.420 --> 01:56:24.939
Bye, everybody.