Latest / International Flavor: Where the Truth Tastes Better / Infrastructure Is Destiny: China Builds, War Breaks, Finance Bends—From Xi’s Poverty Drive to Kyiv Blackouts and Davos Confessionals

Transcript

Infrastructure Is Destiny: China Builds, War Breaks, Finance Bends—From Xi’s Poverty Drive to Kyiv Blackouts and Davos Confessionals · International Flavor: Where the Truth Tastes Better

• 0:00
  Hello, good morning. Welcome. I am Samuel Trapp. This is International Flavor. You
• 0:08
  are on damn radio this morning. Very glad to have you. Feel free to phone in today.
• 0:16
  Might even answer 573-746-8020 is the number. I'm all coffeed up this morning because I don't sleep
• 0:26
  well and last night was a bad night. Oh, it drives me freaking bananas not being able to sleep. It's
• 0:35
  been going on for years and I don't know. I don't like drugging up, you know, but I suppose that's
• 0:42
  neither here nor there. It doesn't matter. My theme for today, I got a theme and everybody
• 0:49
  knows that I talk quite a bit about infrastructure, global infrastructure. We talk quite a bit about
• 0:55
  economic and financial infrastructure on this program and the various regionalization
• 1:05
  of trade agreements going on in the world. We spoke last week about the economic
• 1:16
  forum in Davos, World Economic Forum that was held there and many of the speeches
• 1:22
  that were there today. I want to add a little bit of the commentary and interview of Elon Musk.
• 1:31
  There's been quite a bit of fallout. The world is still fixated on this because it's an enormous
• 1:37
  issue. We had a collapse yesterday. Collapse is probably too harsh word, but serious worry
• 1:48
  going on about the what? The bond market, the Japanese funding of that bond market as the largest
• 2:00
  holder of U.S. debt, which is ridiculously high. I talk about infrastructure and part of the
• 2:14
  financial infrastructure for decades. It really kicked off after World War II and Bretton Woods
• 2:25
  and creation of the World Bank and Japan being basically an economic vassal of America
• 2:37
  ever since that time and starting to make its own. Their economy has been tied to ours for quite a
• 2:45
  while. I've lectured before about how our debt is key. The dollar is no longer perceived, not
• 3:02
  necessarily as the safe haven. The dollar is strong for the most part. Not that it's not a
• 3:10
  safe haven, but it's no longer stable, let's call it, or no longer totally secure. Our credit rating
• 3:21
  is not mine. Mine is reasonably okay. Reasonably good. But the United States credit rating goes up
• 3:38
  and down. But I'm talking more about the stability of our system, I suppose you could call it,
• 3:48
  financial, political. And I heard a very interesting, I watched a video by a guy
• 3:54
  who I'd never heard before. And he's a, what did he call himself? A capital investor. That's his
• 4:06
  job. He's Chinese. He was very well spoken. And he said some things that I hadn't really
• 4:15
  considered before. And it was truly interesting. I talked about, and there's been some fallout
• 4:24
  from Carney visiting in Canada, talking about different trade deals with China a week before
• 4:32
  last, and then the World Economic Forum. And then this week, the big news, and I'm going to share
• 4:41
  this with you, because it's only a minute or two long, and I'm going to start with this.
• 4:48
  You know, well, you know what, I'm going to get to her in a second. Let me finish my train of
• 4:54
  thought. The train's going slow this morning, because I didn't sleep that much. And I did a
• 5:07
  I don't know. I'm, I'm trying to decide if I really want to start this way or the other way.
• 5:17
  And I think I do want to start here. I'm trying to build around the single idea. It sounds simple,
• 5:29
  but it explains far more than policy baits will ever be explained to us. The idea is infrastructure.
• 5:39
  And I don't mean infrastructure as like a buzzword, not infrastructure as the line
• 5:46
  item on on the budget, but infrastructure as kind of like the operating system. Okay.
• 5:55
  Because I, you know, what is the operating system in the financial market? It's the,
• 6:01
  it's the, the currencies, a stable system, safe stuff. It's roads, it's rail, it's ports,
• 6:11
  economically, it's power grids, water systems, digital and financial networks, you know, plumbing
• 6:20
  networks, basically, all this is just what goes on in the house to keep your house
• 6:25
  a warm, you know, the basics that, and that is infrastructure. And when you talk about
• 6:32
  infrastructure is things like high speed rail, things like new ports, things like all of that.
• 6:38
  I've railed about that from time to time on this show in America, because all of ours is,
• 6:44
  is driven by capital. And if you understand infrastructure of everything, you know,
• 6:53
  or you focus first on the fundamentals, the fundamentals are infrastructure. And,
• 7:00
  you know, I want to talk specifically about China, because I am not a China historian.
• 7:08
  I kind of wish I was, but I'm not. And so all we hear in America is China bad, America good.
• 7:18
  I mean, it's basically, you put on any news program, you know, China's the evil empire,
• 7:26
  and we are the good guys, you know, and the global order, you know, is threatened by China's rise.
• 7:35
  Okay. Now, for my part, I don't necessarily see it that way. And I'm not saying that I don't
• 7:40
  see it that way. I'm saying not necessarily, it depends on what we're talking about. So what I
• 7:45
  want to do is walk through the infrastructure world, slowly, slowly and carefully with that
• 7:53
  infrastructure world. Now, we already talked last week about World Economic Forum and about
• 7:59
  Davos. And prior to that, we talked about Carney and his two day, three day visit to China, with
• 8:12
  decent number of staff and businesses. They're trying to, the first time in, I can't remember
• 8:21
  what he said, six to eight years. Well, listen to this news report. And this just flashed on
• 8:32
  the screen on one of the TVs in here. And so I found it and saved it. And it's only two minutes
• 8:40
  long. So add this to the mix of what we are discussing, what we've been talking about the
• 8:47
  last, for a long time with me, infrastructure. But here comes how the global infrastructure,
• 8:54
  and especially post Davos, because there's been a lot of, I don't know what, a lot of turmoil
• 9:01
  afterward, you know, lots of fighting words by Trump and stuff like that. So I'm going to share
• 9:10
  this little news blurb with you. This comes from ABC News, Australia. Okay. And here we begin.
• 9:17
  This will be the first visit by a UK Prime Minister here in nearly a decade as it seeks
• 9:24
  to end what's been described as an ice age in the relationship with Beijing.
• 9:30
  Kirsten will be joined by companies and businesses, all hoping his government will be able to secure
• 9:35
  new trade deals with China to boost the UK's economy. And China is welcoming the UK back
• 9:42
  with open arms as it seeks to cement its place further on the global stage.
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  Since coming to power, the UK Labor government has expressed its willingness to develop a coherent,
• 9:55
  lasting and strategic bilateral relationship with China and actively promote dialogue and
• 10:00
  cooperation between the two countries. China is willing to take this opportunity to enhance
• 10:04
  mutual political trust and deepen pragmatic cooperation. This visit is going to be closely
• 10:10
  watched by Sino analysts coming just weeks after a pretty extraordinary trip here by the Canadian
• 10:16
  Prime Minister Mark Carney, where he also reset ties with Beijing, making significant trade
• 10:23
  deals and boldly declaring the new relationship between Canada and China was setting up a new
• 10:30
  world order, one that pushed aside the traditional power of the United States
• 10:35
  and ruptured a relationship with Washington and Donald Trump. Unlike his Canadian counterpart,
• 10:42
  the UK Prime Minister doesn't necessarily want this trip to be seen as a tilt away from the
• 10:47
  United States, even as he warns that the world is the most unstable it's been in a generation.
• 10:54
  Well, how do you like that? I think that is something quite important is actually taking
• 11:07
  place right now. And look how carefully after Trump beat up on Carney after Davos,
• 11:15
  the UK is being a little more careful in how they are allowing this to be talked about.
• 11:23
  You know, ABC is talking about it. I'm going to share with you. Jeffrey Sachs commentary last
• 11:31
  night and I was on CNN. So you can say it's twisted or whatever. I don't like watching CNN,
• 11:38
  but I like watching Jeffrey Sachs. And it's on a similar topic and it's short. So I'm going to
• 11:44
  share it all with you later in the show. But I think it's very important what is going on.
• 11:51
  And I may share bits and pieces of it with you. I doubt it because it was a long track
• 11:58
  and I couldn't really get to the parts that I wanted to. Too many tracks, too many cuts in it
• 12:08
  in order to do it. It's a couple hours long and I just watched it and I don't want to go search for
• 12:13
  all the topics and too hard to do. But let's talk about China for a minute, because one of the most
• 12:18
  important points. There's a guy named Eric Lee, L-I, Eric Lee. And he's the capitalist,
• 12:26
  venture capitalist that I was talking about. And he's Chinese. And it wasn't really an ideological
• 12:35
  discussion. It was more of a fact based discussion. And he was being careful because he wasn't at the
• 12:44
  World Economic Forum. It was somewhere else. But it was a small conference with a group of people
• 12:51
  and he was addressing a large auditorium. But I didn't get where it was. I just watched it last
• 12:57
  night with great interest. And he made a statement that sometimes gets glossed over because it's
• 13:06
  almost, it's almost, well, it's hard to figure out, okay. And what he said was that he is aware
• 13:25
  that in the last 10 years since, well, since 2012, I think is when Xi Jinping came to power,
• 13:31
  that they have lifted, in China, they, their system economically has lifted 100 million people
• 13:42
  out of poverty, more than 100 million, and created more billionaires than the rest of the world
• 13:50
  combined. So, although it's a, and he said something very interesting about the Chinese
• 13:57
  system. If you get a chance, his name is Eric Lee. And you might go and hunt him out. It'll take
• 14:03
  you an hour to watch the thing, but he's on YouTube, on wherever, whatever forum he was in,
• 14:08
  or channel this was on, I don't recall. But, and I'll find it. I got it in my playlist here
• 14:14
  somewhere. But Eric Lee, L-I, an Eric with a C, you know, just E-R-I-C. And he gave some interesting
• 14:24
  facts and commentary about Xi Jinping, about the world as it is today. And many of the things
• 14:36
  that he discussed were systemic. He talked about one of the key points that he brought out that
• 14:45
  really struck me and got me on this infrastructure. And it's something that I talked about.
• 14:50
  I did a full program on China's belts and roads, and how it's helping develop the global south,
• 14:56
  and how they're making partnerships around the globe with other countries, right? And
• 15:05
  what, you know, he points out that China is the top trading partner, China, top trading partner
• 15:13
  for more than 100 countries worldwide. And I tried to find the exact quote. I think he said
• 15:21
  130, something like that. There's under 200 countries on the planet. And, you know,
• 15:31
  the point is that this doesn't happen because of slogans. It happens because trade follows
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  infrastructure, ports, rails, belt and roads, energy corridors, logistics hubs,
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  finance arrangements. They all create gravity. Once those systems exist,
• 15:54
  trade doesn't need persuasion. You know, you're not going to create trade. It'll create itself.
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  And what he said, one of the direct quotes he said, and this is, he said it's a saying in China.
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  Now, think about this. He said, if you want to make money or build your economy,
• 16:11
  don't build a bank, build a road. Build a road. Shortened. You want to produce your,
• 16:18
  you know, you want to bring people out of poverty. Now, remember, in 1990, roughly,
• 16:25
  1980s and 90s, China was extremely rural and agrarian. And now, absolutely not the case.
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  And that has been like sort of a motto, according to what he was saying, is that
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  they built roads and infrastructure. He was talking specifically about belts and roads,
• 16:46
  but he was saying a lot of people don't realize that this is how the Chinese think. Plus,
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  they haven't exported all of their capital. They've helped build infrastructure elsewhere,
• 17:00
  and they are investing their money elsewhere, but they have financed, I mean, they don't have the
• 17:10
  debt like everybody else. They were the largest holder of American debt now, and they're unloading
• 17:16
  it quick. And this is causing problems, okay? So, but this is the part that Western commentators
• 17:23
  consistently seem to miss. You don't become the primary trade partner for 100 countries by
• 17:29
  exporting ideology or by changing regimes or seizing Greenland or Venezuela or the 50 plus
• 17:41
  regime change operations that the United States has been involved in since World War II.
• 17:48
  So, it's, this fact is important because it explains why Belt and Road's initiative matters.
• 17:56
  It explains why sanctions lose their effectiveness. It explains the de-risk
• 18:03
  that I talk about all the time by people not abandoning the dollar, but creating alternatives,
• 18:10
  not by abandoning the dollar, but by trading in their own currency.
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  The same guy said something, and all these things, you know how you can find out if something
• 18:21
  is intelligent? It actually makes sense. He said he had a discussion with a European economist
• 18:28
  that was saying, that was saying that the Euro, oh gee, everybody likes to have Euro and people
• 18:35
  are flooding to the Euro, and he says he's against that. Now, I don't necessarily agree
• 18:40
  with this, but it's an interesting concept. He says, well, I think that you actually have destroyed
• 18:48
  the cultural identity of all of the countries in the Euro zone. Now, Greece, I used to love to
• 18:57
  travel to Greece because, geez, it was so cheap. Their currency, I mean, geez, you live over there
• 19:03
  like a king for a hundred bucks a week. Now, you can't afford it. It's horrible over there now
• 19:09
  to travel there. You know, it's a great country, and I really liked the Isle of Crete. I spent a
• 19:15
  week, 10 days there. It was really cool, and I went to Spinalongo, which is an old
• 19:21
  leper colony. It's on an island, Spinalongo. It was pretty cool. Anyway, I digress. It explains
• 19:29
  why countries are hedging their bets. It explains why countries are creating other scenarios,
• 19:36
  right, and so China's infrastructure-led model is making it the top trading partner for more than
• 19:43
  100 countries. Now, contrast this with what the West is and has been doing forever. We go in,
• 19:57
  we steal resources, not steal, we usurp the resources of other countries, and I shouldn't
• 20:04
  say we because it wasn't me, but we as America have taken, and by the way, not just us, all the
• 20:16
  colonial powers before us, you know, but we've, there I go again, America has perfected this
• 20:24
  strategy, regime change operations, covert CIA missions, you know, stuff like that to get rid of
• 20:34
  unfriendly actors. We're going through it right now. You know, I'm not saying you have to disagree
• 20:40
  with it. I mean, you might think this is great, you know, to take over Venezuela, as it were,
• 20:46
  or to, you know, let's go get Greenland, you know, more power to you, but I think it's foolish
• 20:52
  long-term. So, let's go back to Mr. Li, okay, what he was talking about, that the 100 million
• 21:04
  people lifted out of extreme poverty, not projected, not promised, but actually done,
• 21:11
  they lifted them out. Now, you can argue whatever the definition is, whatever the metrics, the
• 21:16
  political framing, he showed some graphs on it that said that throughout China, which they have
• 21:24
  more than, the numbers were from 15 to 20 times the income level of, excuse me, of the average
• 21:35
  Chinese person over the last 30 years. Now, the U.S. has gone up too, as far as GDP goes. Now,
• 21:43
  we're talking about GDP, and China is number one in purchase power parity, as far as GDP goes,
• 21:52
  and Russia is number four. America is no longer number one. We're number one if you go straight
• 21:58
  dollars, but you can't afford to live over here either, and what has been stagnant for us over
• 22:04
  the last 30 years or so has been wage growth. Inflation has gone way up, but wage growth has
• 22:10
  not kept up, not remotely, but in places like China, it is definitely, it's gone up 15 to 20
• 22:18
  times. In America, four to six times is what he was saying, four to, however the percentage goes
• 22:24
  out on there. So, and we can argue about definitions all day, but this isn't done by accident. It's not
• 22:31
  done, when's the last time you heard about China regime changing anyone, okay? And I'm not here to,
• 22:39
  you know, to advertise for China. I'm not doing that. I'm not here to argue against America,
• 22:47
  except to the extent that we engage in economic, as well as real warfare, political warfare,
• 22:55
  regime change, that has been the model, and we've talked about this globalism, and globalism helped
• 23:01
  lift China up as well, because they're part of the global markets now, but now, with Davos last week,
• 23:09
  China's been doing it for a little while now, that nobody likes the sanctions talk, more people
• 23:15
  are talking about this alleged globalized rules-based order that no longer exists. Well,
• 23:22
  the rules of space order, as Carney said, never existed. Well, they all knew it was twisted toward
• 23:28
  one side and to the disadvantage of everyone else, and now world leaders are starting to say it
• 23:34
  openly. Now, Canada, most of the EU, and now England, has all been recently in China,
• 23:46
  making, hedging their bets, hedging their bets. They don't like what America is doing, okay? Now,
• 23:54
  I don't, I don't know, I don't necessarily totally disagree. I disagree with the methods.
• 24:00
  I disagree with the methods of what we're doing, and always have, so I'm pretty consistent in that,
• 24:06
  as far as that goes. Regime change, I've never been for. So, but Li's explanation for the outcome
• 24:13
  of talking about systems is consistent and really not romanticized at all. China didn't
• 24:23
  treat development as an abstract, you know, moral project. They didn't call it democracy. They
• 24:29
  didn't, you know, they didn't go that way. It treated it as a logistical and an infrastructural
• 24:34
  project, like Belts and Roads is going now, globally. Roads, railways, power grids,
• 24:42
  urbanization, industrial clusters, digital connectivity, ports, weren't treated as secondary
• 24:49
  to politics. They're treated as the foundation upon which everything else rests, and that is
• 24:55
  absolutely true. Now, one thing he said is that the problem in the West, according to him,
• 25:05
  and I had never heard this theory before. Well, you get it. You'll understand it as soon as I say
• 25:11
  it. I got it as soon as he said it. He said that economically, in a capitalist country,
• 25:18
  the political class is controlled by the top 100 richest men in America.
• 25:31
  Now, think about that, because it's probably true when you think about it. Think about how
• 25:37
  anything happens. It's not done for us. It sure as hell ain't done for us. The people with the
• 25:43
  control it all because they control who gets elected and who doesn't by putting the money
• 25:48
  the advertising behind them. He says, I can't verify this, but he seemed pretty freaking
• 25:57
  certain of it. He goes, that isn't how it is in China. He said, in China, there is absolutely
• 26:04
  no correlation between what the government is doing and what the richest 100 people
• 26:11
  are doing. They have capitalism, but in a different style. Most of the means of production
• 26:21
  and all that stuff, of course, is government controlled. He said, but people are able to
• 26:26
  get rich in that environment as well. It was an interesting concept, and I liked it. I really
• 26:32
  like to listen to this guy. This is where the Chinese saying that Li was referencing was pretty
• 26:42
  critical. If you want to get rich, build a road. That sentence encapsulates, according to him, an
• 26:50
  entire Chinese worldview. Roads connect people to markets. Rails connect regions to ports.
• 26:57
  Power grids allow it to scale up. AI and power. China and India are building some of the biggest
• 27:05
  nukes, and Trump actually talked about it. I forget where, but recently, he talked about
• 27:11
  building nuclear power plants here in the US, that it's now safe and they're not totally against it,
• 27:17
  and he's trying to build these things and use it to control AI. Roads connect people to markets
• 27:28
  and all that stuff. When you don't have any of those things, nothing else matters, does it?
• 27:36
  But when you do have them, when these things exist, when the infrastructure exists,
• 27:41
  productivity follows. I'm not here to say that in America, we don't have any.
• 27:44
  I'm saying that we lack focus on some of these things. This is where the 100 million figure
• 27:52
  matters, the 100 million people lifted out of poverty. It talks about outcomes rather than
• 28:00
  intentions. Trump's saying, I'm putting a trillion dollars in the economy.
• 28:04
  You think any of that will ever reach your pocket? Ever? I mean, will you get any of it,
• 28:13
  or is it going to be all except 100,000 of it to a couple of investors, and the rest might
• 28:23
  get a pay raise of five bucks an hour in 10 years, something like that? This is potentially why
• 28:32
  people misunderstand why the Belt and Road Initiative that China is doing all over the
• 28:37
  world, and why China is the primary or most important trading nation with virtually two
• 28:49
  thirds of the globe. Two thirds. America, by contrast, we only are the primary trading
• 28:57
  country or partner with about 60, and that is going down, not up.
• 29:03
  So, I don't know. It isn't because of rhetoric, but because systems are built. We don't have any.
• 29:10
  I mean, when's the last time you heard of a new port in America? When's the last time you heard
• 29:14
  about a high-speed rail? I've lectured on that in prior shows. You can go back and check them out.
• 29:22
  They're well titled. So hold on to this framework, because infrastructure is kind of the theme today.
• 29:29
  So, take that, this infrastructure that we're talking about. Then, I told you yesterday,
• 29:36
  I would bring you back to figure out where we are, where Ukraine is right now. Once again,
• 29:44
  we had talks. We had discussions about settling the dispute. Ukraine, of course, we're not going
• 29:53
  to make any territorial concessions, and they're losing their butts, but
• 30:00
  okay, that doesn't matter. Somebody has to step in for Zelensky. He can't force Russia to its
• 30:08
  knees. That's not going to happen. And so, the dispute or the war will continue. More people
• 30:17
  will die, because Ukraine doesn't want to face reality. And the important thing to note is,
• 30:28
  over the last week, two weeks, and last night in particular, well, on the Russian side of the
• 30:38
  border, but in the last two weeks, the targeting of infrastructure in Ukraine in the coldest month
• 30:48
  of the year is targeting what? They're targeting electric grids. They're targeting water pumping.
• 30:58
  They're targeting infrastructure. That's what they're targeting. On the other side, by the way,
• 31:06
  this means last night there was a huge gas port that they said they're not going to be able to
• 31:13
  ship gas out of there for a couple of years, or ship any petrol out of there for a couple years
• 31:20
  in western Ukraine. And now, Kiev has more than a thousand homes without power, and the mayor said
• 31:32
  they will not be able to have power for a long time. Those people need to figure out what they're
• 31:38
  going to do, because it won't be restored. Now, how would you like that? Your mayor says,
• 31:44
  mayor of Lake Kosar gets up and says, hey, well, sorry, we've lost power at, you know, a thousand
• 31:52
  homes. Sorry, you got to go, you know, figure out what you're going to do, but power's not going to
• 31:58
  be restored. That'd be a wake-up call, wouldn't it? So they're having these problems in Kiev,
• 32:04
  in Krivoy Rog, and in, which means curved horn. I don't know. I've always liked the name of that
• 32:10
  city, Krivoy Rog. And then Odessa. They've all lost serious infrastructure. In Krivoy Rog,
• 32:23
  they had videos, quite a few of them, where they had people on the streets daily, they are on the
• 32:32
  streets, and cars, you know, on the roads, and there are cars blocking up all the roads, and
• 32:39
  having protests. They're only getting two hours of electricity, and there's no continuity at all
• 32:49
  to when you're getting the two hours, or if you're getting the two hours of electricity,
• 32:54
  and it is cold over there right now. You think it's cold here, you know. These aren't random
• 33:01
  targets. Krivoy Rog sits at the heart of Ukraine's industrial and mining sector, right? Odessa is a
• 33:10
  large port city, a logistics hub, and a gateway through the Black Sea, through Istanbul. And
• 33:23
  they must keep it together, and they cannot. You know, the shipping isn't good. Disrupting
• 33:28
  these cities disrupts all production, all export, all employment, all revenue.
• 33:34
  Infrastructure destruction cascades through this economy, or lack thereof, for a long time
• 33:42
  after the damage is done. And so, they also talked about, and by the way, last night, they said that
• 33:51
  in last night's bombardment on Kiv, 147 missiles and drones were shot toward Kiv,
• 34:05
  and of those, Ukraine, according to Ukraine's numbers, they were able to take out 104. So,
• 34:14
  that means one-third of them got through and hit their targets. That's what it means.
• 34:22
  And I mean, imagine that. 44, 43, whatever it is, last night, missiles and bombs got through
• 34:32
  to the targets in Kiv. How long does that take to recover, especially if it's every night?
• 34:38
  It's, this is, I don't know that people are taking it seriously enough over here.
• 34:45
  I really don't. And I'm not sure how there isn't more pressure on the old Z monster to do
• 34:52
  more than he is doing. And more people are saying it now. They're saying the same thing that I said
• 34:59
  long ago. If we wouldn't fund it, this would have been over extremely quickly if we weren't the ones
• 35:05
  funding it. So, there you have it. So, when you talk about this image in Ukraine
• 35:15
  and the mirror of China's development, you know, we have instead this destruction,
• 35:21
  the logic is clear. If China's model is build infrastructure to generate prosperity and
• 35:27
  independence, which now they're saying they're going to do with Canada and England, they're
• 35:32
  increasing these in the last couple of weeks. They've done it with Europe over the last month
• 35:37
  or two. And they've done it all over the world. And Trump knows this. Why did he go to Venezuela?
• 35:45
  Why is he saying that China is going to take over Greenland with Russia? Why is he trying to boot
• 35:51
  them out and take the hundred billion that they invested in Venezuela and steal all the oil down
• 35:56
  there? Because he knows that financially, we are in trouble. He's a businessman and a deal maker,
• 36:05
  okay? And I wanted to make one more point about the infrastructure because it does go both ways.
• 36:11
  And now, Kiev sent over some 30 or 40 drones and missiles into southwestern, well, the port side
• 36:25
  of the Black Sea, Sevastopol and places like that, over on the Black Sea, the Russian side
• 36:31
  over there. And Russia says they took them all out. I don't know that I believe that necessarily,
• 36:37
  but they are certainly much better suited to take them out than Ukraine is. Ukraine is basically
• 36:44
  without air defenses these days. So, you know, if China's model is to build infrastructure to
• 36:53
  generate prosperity and independence, the war model for both sides is destroy infrastructure.
• 37:01
  What are we doing with sanctions? We're trying to eliminate the ability to, for Russia,
• 37:07
  fund Russia's war. That's what Zelensky's all about, is Russia's war. Yeah, nothing to do with
• 37:12
  him. He's nothing. He's just innocent, you know, standing over there. The West didn't do anything
• 37:20
  to provoke this. This is just started one day in February 2022 and nothing else.
• 37:27
  These, you know, the war's model is destroy infrastructure to generate vulnerability and
• 37:34
  dependence upon other people because what's Ukraine? Dependent upon others completely.
• 37:41
  These aren't metaphors. These are operational strategies and they work. They work on both ends.
• 37:46
  China's works because they're building infrastructure worldwide. And one of the,
• 37:51
  another example he gave was in Indonesia. He said that they had huge projects going on in Indonesia
• 37:57
  and then they had a, an election and the new person, new prime minister, whatever he's called
• 38:05
  over there that was elected, said that he, that these weren't necessarily positive for Indonesia.
• 38:13
  This is from Eric Lee's very interesting commentary. He said that the Chinese immediately
• 38:23
  went into it. They didn't go in and try to, you know, sanction them out or say, here's the
• 38:29
  contract. They went and renegotiated. They renegotiated and got the deal going to continue
• 38:34
  the path forward. That sounds reasonable to me. You don't go sanction the hell out of them or say,
• 38:44
  what we're doing to, what, what Trump said yesterday, one of the quotes from Trump,
• 38:49
  and I haven't, I haven't gotten it right in front of me, but to paraphrase, he's like beaten up on
• 38:53
  Carney for going over to China and he's doing the same, you know, going, well, you know,
• 39:01
  China's going to take over Canada now, basically. Now you're going to be subject to, to China. Good
• 39:07
  move, you know, basically. And I don't believe that at all. People are creating alternatives.
• 39:12
  That's what's happening. Economically, that's what people do. Just because you can't afford
• 39:23
  a Lamborghini, you know, or a Porsche, that's probably too extreme. Let's say you can't afford
• 39:29
  a sports car, a sports car convertible doesn't mean that you don't try to go out and find a
• 39:35
  convertible you can afford. You make alternatives. You create alternatives, things that you can
• 39:42
  live with. People can't live with what America is doing right now. And I don't think that the
• 39:48
  end result necessarily will give you what you think it's going to give you. And, you know,
• 39:56
  all right, it's a financial transaction, but people don't make all decisions based on transaction,
• 40:04
  transactional profit. They make it on political profit too, systemic profit,
• 40:12
  infrastructural profit as well. Right. And let's talk about the invisible system, which is the
• 40:19
  financial structure right now, because the, you know, the physical structure doesn't exist all
• 40:27
  on its own. It's financed, it's insured, it's sustained through a second layer of infrastructure
• 40:33
  that is very, at least as decisive, if not even more so, the financial infrastructure,
• 40:42
  bond markets, interest rates, currency, settlement systems, trade finance. These are all pipelines
• 40:50
  through which capital flows. Okay. They demonstrate whether long-term projects are even viable,
• 40:57
  whether states can borrow affordably, and whether rebuilding after destruction is even possible at
• 41:04
  all. And last night, or this morning, there are a number of commentaries going on about the
• 41:13
  Japanese bond market specifically, and how it is being taxed because they are starting to look
• 41:24
  inward into China. I mean, I'm sorry, into Japan, and change their processes because they're trying
• 41:32
  to save their own market. Well, what does that do when the largest loan shark to America is
• 41:44
  changing its interest rate policies inside their own country? That means it's no longer profitable
• 41:50
  to borrow money in Japan and use it to finance trade and investment in America,
• 41:58
  because your rates are no longer profitable for that. And so you bring it back to Japan because
• 42:05
  the rates are higher. And the dollar is weaker this morning, quite a bit. And so this is why
• 42:12
  developments in places like Japan's bond market matter far beyond Japan. And for decades, Japan
• 42:19
  has functioned as the stabilizer of long-term money, because they held it long-term. Ultra-low
• 42:26
  yields and predictable behavior made the Japanese government bond cornerstone of global finance.
• 42:33
  But infrastructure financing depends upon that sort of predictability. But when long-term rates
• 42:40
  are volatile, when bond markets reprice risk all of a sudden, infrastructure is harder to fund.
• 42:48
  Projects are delayed. Costs rise. Governments face sharp trade-offs between debt, service,
• 42:56
  and investment. And Japan is having the same trouble that we have, financing their debt,
• 43:03
  funding it, debt service. In America, I forget which senator it was, but I was listening to one
• 43:10
  last week. He said that very soon, our interest payments each year will be more than our GDP.
• 43:21
  That's a shocker. We're approaching $40 trillion. $40 trillion. And the interest is about half of
• 43:31
  that. It's nonsense. So layer on top of this the role of the dollar on top of all of these things.
• 43:39
  Dollar isn't just a currency. It's a core, has been the core of global settlements. But that is
• 43:46
  changing too. It's been the road on which international trade has traveled. That's why
• 43:53
  Donald Trump says things like, if you start creating an alternative system, we'll sanction
• 44:03
  the hell out of you. That's it. That's what we're going to do. When access to the financial
• 44:11
  roads are conditioned, restricted, or weaponized through sanctions and financial coercion,
• 44:19
  it ceases to function as a neutral infrastructure and becomes a control mechanism,
• 44:25
  you know, for like we're doing. We just seize countries. And
• 44:33
  when infrastructure is a control mechanism, all of these international actors begin to build
• 44:40
  alternative structures. It's not an ideological rebellion. It's risk management, which everybody
• 44:49
  engages in, right? I wanted to add to this what Musk was talking about. His segment, and I listened
• 44:57
  to only 20 minutes of the 30. I didn't finish. It was starting to get a little repetitive to me.
• 45:03
  But him being present at Davos mattered, not only because he's a celebrity, but also because of the
• 45:11
  contrast. Musk operates in a financial, physical world, electricity generation, battery storage,
• 45:20
  capacity of grids, satellite networks, launch systems. I read an article yesterday that
• 45:27
  he's allowing Russia to start using Starlink again. And I told you that Russia is creating
• 45:33
  their own 300 satellite system to launch as well. I forget what it's called, but I told you about
• 45:41
  that a couple of days ago. But Elon Musk was there talking about infrastructure as well.
• 45:49
  Much of the conversation was around transition of values, coordination. And he talked about
• 45:57
  fundamentally capacity, electrification and generation and AI power grid density,
• 46:05
  digital economies with stable grids and stable data infrastructure. These aren't optional.
• 46:13
  They're required prerequisites. You don't finance them, you're not going to get the business.
• 46:22
  Build a road, you'll make a lot of people rich, right? That's your economic function,
• 46:28
  is building the pathways. So when you talk about digitization, how are you going to digitize in a
• 46:37
  blackout in Ukraine, in Kiev, Krivoy Rog, in Odessa? How are they going to connect to
• 46:46
  the internet without power? What difference does the internet make? And your phone,
• 46:51
  you can use it for a day, but how are you going to charge it? You can't run your car without fuel.
• 46:56
  You know, so you can't innovate around a dead grid. And so you can't transition without energy,
• 47:04
  you know, without infrastructure, what are you going to negotiate? How are you going to do it?
• 47:09
  So I wanted to bring this back now to less than 10 minutes about Jeffrey Sachs. And I told you
• 47:19
  I was going to play this. And he's not an outsider, he's somebody who helped design
• 47:27
  in depth, the post Cold War economic architecture. When he talks about sanctions, tariffs,
• 47:34
  financial coercion, as economic warfare, he's diagnosing a system that has turned its own
• 47:42
  infrastructure and its own infrastructure woes into a weapon. We talked yesterday a little bit
• 47:52
  about Severny Potok Nord Stream pipelines, and how that was destroyed, right? His warning isn't
• 48:02
  a moral warning, it's a structural warning from Jeffrey Sachs. It was a pretty cool,
• 48:10
  uh, you know, what he talked about. And I'm going to share that whole thing with you.
• 48:16
  Unpredictability, raising risk premiums, higher risk premiums increase the cost of capital,
• 48:22
  higher capital reduces investment in long-term infrastructure, and the entire system
• 48:28
  starts to eat itself. So when he says countries are moving away from dollar dependence,
• 48:34
  he's describing an infrastructure problem. If the main road is dangerous, traffic will go on
• 48:40
  other streets, you know? New payment systems, currency swaps, trade arrangements, they're not
• 48:48
  rebellion, they're creating alternatives. That's what they are. So I'm going to play that for you
• 48:56
  here. Let me, I have it teed up here somewhere. Reasonably simple to find.
• 49:05
  But I had to play that other one first. There were a couple of other interesting ones. There
• 49:10
  was another Russian discussion. And by the way, the Eric Lee one was pretty good. There's another
• 49:20
  girl called World Affairs in Context, that channel, she gave something good on the Japanese
• 49:26
  bond markets and all of that as well. And let's see here. There was an interesting Carney discussion,
• 49:33
  which I might throw in a little bit, but I doubt it. Let's, let us.
• 49:40
  Now it's not going to be in my history. Here he is. Jeffrey Sachs.
• 49:47
  Now President Trump is threatening stiff new tariffs on.
• 49:49
  Let's see here. Here we go. If I can figure out how to play this.
• 49:57
  Oh, I already had the, I never turned it off from last time. Sorry about that. Friends and
• 50:02
  neighbors. Here we go. On Canada, if it enters a trade deal with China, Canadian Prime Minister
• 50:06
  Mark Carney said his recent talks with Beijing comply with a deal signed by the US and Mexico.
• 50:12
  Listen. Canada respects our engagements, our commitments. We have commitments under
• 50:19
  Kuzma that not to pursue free trade agreements with non-market economies without prior
• 50:27
  notification. We have no intention of doing that with China or any other non-market economy.
• 50:34
  Now Trump's latest threats follow Carney's warning last week in Davos that we're experiencing a global
• 50:39
  rupture. He said the rules-based order has given way to geoeconomics, a combination of economic
• 50:45
  and geographic factors relating to international trade, and specifically how countries wield that
• 50:51
  economic power to achieve their political, not just their economic goals. Economic economist
• 50:58
  Jeffrey Sachs is the president of UN Sustainable Development Solutions Network and he joins us now.
• 51:04
  Good to have you here as we heard so much in the last few days about global economics and
• 51:11
  geoeconomics in particular. You point out that in the last few days, the Trump administration
• 51:16
  has started to call this, in your words, economic statecraft. You say it's economic warfare. How so?
• 51:24
  Okay, before she gets to that, I wanted to point out that what she was saying about
• 51:29
  Carney and his commentary in Davos wasn't exactly accurate. He talked about the old
• 51:41
  economic order and the rules-based and how we weren't even following it anymore. He was more
• 51:50
  harsh than she put on here. I'd go a little bit harsher than she said. But listen to how Jeffrey
• 51:55
  Sachs responds here. Well, that's actually the phrase, economic statecraft, that Secretary
• 52:02
  Besant used. He said that the U.S. is waging an economic war, in essence, against Iran.
• 52:11
  He talked about the fact that during the past year, the U.S. went out to crush the Iranian
• 52:18
  economy. It went out to drive the currency to collapse and to bring people out onto the streets.
• 52:26
  And that happened. There was tremendous unrest. And Secretary Besant said, well,
• 52:32
  things are moving in a good direction. This is really extraordinary. I thought
• 52:39
  MAGA meant looking after the United States, not going out to destroy other governments
• 52:46
  and other countries. But right now, we have a kind of lawlessness in the U.S. approach.
• 52:54
  It's very personalistic. The president just does what he wants to do. There's no congressional
• 53:04
  role. There's no claim to law. And other countries are reacting and the markets are reacting
• 53:12
  because this unpredictability is actually extremely dangerous for the U.S. as well as for
• 53:19
  the world economy. Why did Trump back down on the threat about Greenland last week? Well,
• 53:26
  the main factor was the stock market plummeted the day before he got to Davos. And he listened.
• 53:34
  He can't control the stock market. So he was making chaos in the international markets.
• 53:40
  So you call it lawless, to use your words. Prime Minister McCarney called it a rupture
• 53:45
  in the world order at the instigation of the United States, even though he didn't
• 53:50
  name it that way. You know, ECB President Christiane Lagarde said she disagreed that
• 53:54
  she thought that was going too far. Does she have a point?
• 53:59
  No. If you are trying to create mass unrest, bring people out on the streets and create chaos
• 54:09
  and then say that's going in a good direction. No, you're not going too far to call that economic
• 54:17
  warfare and to say that that's lawless. It's lawless in two senses. It's lawless in the
• 54:23
  domestic law of the United States. We have a constitution. The power to put on tariffs is
• 54:31
  in Article one, Section eight of our constitution. It's not a whim of the president, but he's
• 54:38
  treating it as a whim. That issue is before the U.S. Supreme Court right now. It's definitely
• 54:45
  lawless in terms of international law, which is the U.N. charter. Unfortunately,
• 54:51
  this administration sneers at the U.N. charter. They forget that the United States
• 54:57
  ratified the U.N. charter. It's a treaty of the United States. It is the law of the land
• 55:03
  under our constitution, a ratified treaty. So it's not to be sneered at. And it is definitely
• 55:11
  illegal under international law for a country to use force to bring down another government.
• 55:18
  And this economic strangulation is precisely that. And you mentioned there the Supreme Court.
• 55:24
  We will see whether or not Congress will ever step in at this point. I do want to get to the issue,
• 55:29
  though, of those sanctions. And you've written extensively, you've studied this extensively in
• 55:33
  the past few decades, not just the last few months, the power of sanctions. Now, the primacy
• 55:39
  of the U.S. currency to wage that economic warfare, that is key. But on their face, sanctions against
• 55:45
  Russia, Iran, Venezuela, and I've just named three. They've hurt those countries. Right.
• 55:50
  But principally, they've hurt the citizens in those countries. They've not really affected
• 55:54
  change. What explains that regime change, I should say? Yes, that's a very good point.
• 56:02
  I would say the sanctions on Russia have mainly hurt the European Union. They cut themselves off
• 56:09
  from low cost energy. Maybe Trump and his friends like that because now Europe buys
• 56:18
  liquefied natural gas from the United States at six times the price that it was paying for
• 56:24
  Russian gas. But the sanctions just meant that Russia rerouted its oil and gas towards Asia. So
• 56:31
  it did not bring down the Russian economy, but it did bring down German industry. The threats that
• 56:39
  Trump made threatened the U.S. economy. They scared the wits out of the international markets.
• 56:46
  It's strange. The United States borrows from the rest of the world heavily. We're running huge
• 56:53
  budget deficits and our interest rates are rising in part because the U.S. is not a good bet. And
• 57:03
  then what is also happening that's very important for people to understand is other countries are
• 57:09
  shifting away from using dollars. The privilege that the U.S. has, that our industry and economy
• 57:18
  has by the use of the dollar globally is going away. Now Trump thunders about that. Anybody that
• 57:26
  threatens the U.S. dollar, they're going to hear from us. But he can't stop that because there is
• 57:32
  no way to compel third countries to use the dollar when it has been weaponized in this way.
• 57:38
  Yeah. And people are really waiting to see if that comes to fruition on those markets,
• 57:43
  especially when we talk about things like long bonds and what those long term interest rates
• 57:46
  are going to do. Jeffrey Sachs, we do have to leave it there. We will have you back. Appreciate
• 57:49
  it. And that is the end. Now, granted, in some respects, people do talk to whoever their
• 58:00
  audience is and especially when they're questioning someone. And CNN, I don't usually
• 58:06
  watch. I don't I don't like any of their commentators. I think they're extremely twisted
• 58:11
  and extremely negative. Trump, you know, negative. I don't know. Normal folks
• 58:21
  is what it seems like to me. I don't like CNN in general, but I'm not a fan of any of the large
• 58:28
  media outlets. But sometimes that's where you get Jeffrey Sachs will be interviewed by a lot
• 58:33
  of different people and he's been on a lot of different channels. I like to listen to him and.
• 58:38
  This is a knowledgeable guy, whether you fully back what he's saying or not, he is definitely
• 58:48
  an expert on international financial and economic policies and what they have done. And
• 58:58
  one of the notable things is is one of the ones that I've always talked about is that
• 59:06
  people are. Creating alternatives to. The dollar. And unfortunately, that.
• 59:21
  The speed at which they are doing that is increasing dramatically and the speed at which
• 59:29
  people are not purchasing U.S. debt any longer is going up. Everyone is hedging in every other
• 59:42
  country, England, going to China. Some of the things that I have discussed here with you today,
• 59:48
  they are very important to at least attempt to understand where they are. So let's talk about
• 59:58
  this. About the infrastructure and legitimacy like. Sachs was putting out there that people are
• 1:00:08
  are not abandoning, but creating alternatives. To the U.S. hegemony or the Western hegemony,
• 1:00:17
  the globalist. Theory, the liberal Democrat. Liberal democracy, not Democrat, but the liberal
• 1:00:27
  democracies that have dominated the financial systems for the last 80 years. Not happening.
• 1:00:42
  Let's see. At the end of the line, though, it's about whether lights will stay on,
• 1:00:51
  whether heat works in the winter, whether transport routes and data routes and communication
• 1:01:00
  routes function, whether currency can hold its value, whether the future feels like something
• 1:01:07
  you can build upon or whether you need to hedge your bets. And a lot more people are hedging these
• 1:01:13
  days than feel. And I mean worldwide. And they're hedging against the United States or creating
• 1:01:24
  alternatives to have alternatives to the United States because we are our country is perceived as
• 1:01:34
  not as stable as it should be. Now, a lot of that is internal to us because it's always been that
• 1:01:41
  way. We change direction every four years anyway or every eight and things just turn. It's dependent
• 1:01:47
  upon one guy. That's part of the beauty of our system. It's also part of the shortcomings of our
• 1:01:53
  system. It's you don't create something. Somebody comes in and this happens in other societies as
• 1:02:00
  well, mostly in democracies where where a new person comes in. You don't have the stability
• 1:02:06
  that you would otherwise have with, I don't know, Vladimir Putin. And you can say a lot of things
• 1:02:12
  like that. The fact that it's been stable for the most part in Russia and you can have a
• 1:02:22
  predictable result means that people can feel comfortable making a decision that isn't going
• 1:02:28
  to be changed based on somebody else's activity or some other person coming into an election.
• 1:02:36
  Or bond rates in China. I'm sorry, in Japan, the the rate of interest going up, which means that
• 1:02:43
  Japanese people are going to bring their money home when they haven't done so for 80 years,
• 1:02:49
  because it's cheaper to borrow money there and invest it in other places because of the low
• 1:02:57
  rates of borrowing, which are changing and had a big hit yesterday. So if you don't follow that
• 1:03:04
  stuff, it's it's a it's an interesting topic to discuss. This is why the global order recently
• 1:03:12
  feels very unstable, not because people are disagreeing about values or disagreeing about
• 1:03:19
  democracy versus socialism or whatever, but because multiple layers of infrastructure,
• 1:03:27
  physical infrastructure, financial and technological infrastructure are all
• 1:03:33
  under simultaneous stress everywhere. So the future isn't going to be decided by,
• 1:03:41
  you know, Davos conferences. You know, it's not going to be decided upon rhetoric of,
• 1:03:47
  geez, I'm taking Greenland and I already took Venezuela and they're going to get in line and
• 1:03:53
  their people better fall in line behind us and behind whoever we appoint, because it's my country
• 1:04:00
  now. It's not going to be decided by that. It's going to be decided by who can build, protect,
• 1:04:10
  finance and fund and maintain infrastructure reliably in a world where these sorts of things
• 1:04:20
  are increasingly targeted. And it's it's I tell you what, I believe it's time for folks to
• 1:04:35
  buckle in. It's going to be a bumpy ride is what I think over the next at least three years,
• 1:04:44
  more if people don't pull their heads out of their rear ends. And I always say that
• 1:04:51
  America doesn't play well with others. And it would be better, in my opinion, if we did or
• 1:05:01
  attempted to, at least. And I don't think we do that very well. And I not necessarily from a
• 1:05:11
  militaristic or military or a war point of view or anything like that, although I'm definitely
• 1:05:17
  anti regime change anywhere. I don't think that's our function. And it's not our job to change the
• 1:05:25
  leader of Iraq never has been. You know, it's not our job to change the leader in Venezuela,
• 1:05:32
  whether you agree or disagree. It's not your job to take over that country. I disagree
• 1:05:38
  fundamentally with that concept and always have, by the way. So it's not, you know, when I was in
• 1:05:47
  the military, had they sent me to Iraq, which I was in the army for both desert storms, you know,
• 1:05:55
  one and two, I was in the military. And, you know, what good's a Russian interpreter going to do over
• 1:06:01
  there? They didn't send me there. I was a diplomatic interpreter, never went. And but had they sent me,
• 1:06:08
  I would have done what, you know, I agreed to do when I signed the contract. But that doesn't mean
• 1:06:15
  I would have necessarily liked it, you know, that because I disagree fundamentally with regime change
• 1:06:23
  operations. And by the way, I didn't believe there were any mass weapons of mass destruction anywhere.
• 1:06:30
  I never did believe that. That sounds like a really good story, but I don't believe that.
• 1:06:40
  All righty. Well, I want to go to a few of the events of today that have come up as well. We've
• 1:06:48
  had an announcement about the next set of trilateral meetings later this week. Dmitry Peskov
• 1:07:01
  announced today, he's a Kremlin spokesman, that the next meeting between Russia, U.S. and Ukraine
• 1:07:10
  will take place later this week on February 1st is when it's going to take place. And speaking
• 1:07:17
  of reporters, Peskov said that the meeting will take place on Sunday, but noted that it's a rough
• 1:07:22
  estimate of the timeframe, but that we're working with that for now. Previously, the date was subject
• 1:07:29
  to speculation by a bunch of different outlets. The first rounds, the three-way rounds, Moscow,
• 1:07:36
  Washington and Kiev took place last week in Abu Dhabi. And this was the first time that all three
• 1:07:40
  sides sat down at the same table and the talks lasted for two days. In part, some people say
• 1:07:50
  they were productive, but not many specifics were made public. And negotiators noted that there's a
• 1:07:56
  lot more work to be done. And Zelensky immediately afterwards said there isn't going to be any
• 1:08:01
  territorial concessions by Ukraine again. And so, as I said earlier in the program, I think it's
• 1:08:07
  nuts to think that it will be. By the start of 2026, the Ukraine conflict, you know,
• 1:08:17
  it's the same, you know, it's still proceeding. There's been a year, 2025 was a year of pretty
• 1:08:25
  intense warfare, grinding battles for key logistics hubs and cities, and the steady
• 1:08:36
  loss of Ukrainian reserves and people, you know, regular soldiers, equipment,
• 1:08:48
  destruction of hardware, and certainly of the front line, you know, it's once again,
• 1:08:57
  it's collapsing, you know, but there is an operational kind of a, I don't want to call it
• 1:09:04
  a pause, but I don't want to call it any sort of de-escalation. Periods of calm have consistently
• 1:09:12
  served as an interval for regrouping. And I say they're also a time period when
• 1:09:23
  heavy missile and drone strikes and stuff like that is, are being conducted. You know, they're
• 1:09:31
  trying to, and they're preparing for the next big moves. So a similar pattern came up last year
• 1:09:37
  around the same time. The fighting was lessened during winter months. It's very, very cold. And
• 1:09:43
  in spring, there was a large scale Russian offensive that defined most of 2025. And that
• 1:09:50
  was concluded by the year's end, you know, that what they did, it's going to happen again.
• 1:09:56
  And so there's little reason to assume that the Russian general staff has abandoned this
• 1:10:03
  approach. On the contrary, the current pause is less of an endpoint. This is not the end,
• 1:10:10
  even though they are having negotiations, the three ways that I talked about.
• 1:10:16
  Against this, the key question is not whether the front's going to heat up again, but where
• 1:10:22
  and how. The configuration of forces, the condition of Ukrainian defenses, or lack thereof,
• 1:10:28
  and the logic of Russian operational planning all point to several new axes of advance,
• 1:10:36
  each with their own strategic value. So let's look first up at Sumy. Now, Sumy
• 1:10:42
  is south of Belgrade, and it's the northern part, northern province
• 1:10:49
  in Ukraine. Okay. And what Putin said a year ago was they're going to create, they want to
• 1:10:55
  create a buffer zone that will make it much tougher for anybody to hit Moscow from either
• 1:11:02
  of those regions, right? So there is a bit of a buffer zone now, which never would have happened
• 1:11:11
  without the Kursk offensive when the Ukrainians went into Kursk and messed around in there,
• 1:11:18
  wanted to go up to the Kursk nuclear power plant and take that over. You know, there's a new front
• 1:11:26
  that has opened up in there, and there's a large village called Grabovskaya with, there hasn't been
• 1:11:33
  much huge fighting up there, just a steady advance of the Russians coming down there to create this
• 1:11:39
  buffer zone. So Sumy is probably going to continue to see some action to create this buffer zone.
• 1:11:49
  And next to that, there's a region called Kharkov, and that will also have a lot of, you know,
• 1:12:01
  that's going to, they're pushing hard from the east, the Russians are, and I believe they want
• 1:12:08
  to get all the way into Kharkov, which is south of Belgrade. They're tired of Belgrade being
• 1:12:18
  pounded from the south. And so I, you know, there's plenty of ways to go. And I told you about
• 1:12:26
  Seversk, Chasov Yar, Konstantinovka, and they're going towards Slavyansk and Kramatorsk. And this
• 1:12:32
  is one of the active areas in January. So from Seversk, the south group of forces is pushing
• 1:12:37
  west along Seversky Donetsk River to Slavyansk. And the key settlements, you know, like Zakotnaya
• 1:12:45
  have been captured. And the major next objective is Raya Alexandrovka. And so fighting is also
• 1:12:52
  continuing in Konstantinovka. And there's, you know, semi-encirclement again, classic,
• 1:12:59
  Russians create these things they like to call cauldrons. And these are still ongoing. It means
• 1:13:05
  it's slow, but Kramatorsk and Slavyansk and Druzhkovo and the big cities to the left of
• 1:13:15
  Konstantinovka. And these are places in eastern, on the eastern front side that are the cauldron or
• 1:13:27
  this big pocket is being created. And then Russia closes the pocket and then you end up like what
• 1:13:35
  you had in a couple of, in the Pokrovsk and Myrnograd regions. And so now Pokrovsk and Myrnograd
• 1:13:42
  are completely under Russian control and you don't hear anything about it anymore. And those are
• 1:13:47
  fairly large cities, you know, and I always said, like, this is going to go all the way to the Dnepr
• 1:13:55
  River. That's what I believe. And Gulyai-Polya and Dnepr River are the last strongholds on the way
• 1:14:01
  to the city of Zaporizhia, right? According to the Russian constitution, the whole region of
• 1:14:09
  Zaporizhia and its capital, which is a city by the same name, are occupied by Ukrainian forces.
• 1:14:16
  And the advance of the eastern group of forces in Dnepropetrovsk and Zaporizhia and the effective
• 1:14:22
  collapse of the Ukraine front near that area and the capture of the city at the end of last year
• 1:14:28
  have all created a solid foundation for them to continue to advance and take over the rest
• 1:14:34
  of Zaporizhia. So at the same time, the Dnepr River is now active. All of the front lines
• 1:14:41
  are on the Dnepr. And so the main Ukrainian stronghold on the way to Zaporizhia is the city
• 1:14:48
  of Orekhov, which is the center of Ukrainian counteroffensive in 2023. And so approaching
• 1:14:54
  Orekhov from the south is pretty challenging because there's, you know, plenty of forces up
• 1:15:02
  in there in Orekhov, but they've already gone past the other parts in Zaporizhia and they're
• 1:15:08
  doing the same sort of thing down there, creating these cauldrons. The only reason I bring all this
• 1:15:13
  up is because it appears to me that the cauldrons are forming in those two key pocket areas. And
• 1:15:22
  these are big cauldrons or encirclements. And Russia, it's been classic. I've watched this
• 1:15:32
  five, 10 times as they get into cities. They basically surround the city, force the Ukrainians
• 1:15:39
  to do something. And most of the time, the Ukrainians don't. They don't leave. And they end
• 1:15:46
  up instead surrounded because Russia cuts off all supply to them. And then we argue about whether
• 1:15:52
  or not Russia really has control or doesn't have control. And a couple of months later,
• 1:15:57
  you just go, oh, yeah, you know, Pokrovsk and Mirnagrad, those were taken by the Russians.
• 1:16:04
  But you don't want the whole time it's occurring, nobody wants to admit that this is what's
• 1:16:11
  happening. But right now, they're clearly under Russian control. And there was when I started
• 1:16:18
  talking about it back in, what was it, October. It was, well, Russia claims that they got some
• 1:16:24
  10,000 Ukrainian soldiers surrounded in there. And they offered to let Western journalists come in
• 1:16:30
  and see what was going on and prove it. You want to come see it? Come on in. And they wouldn't
• 1:16:37
  let them. And then they had those fake videos that were posted on the Ukrainian side that were
• 1:16:42
  clearly AI'd, where Zelensky was going to go up, stand in front of a, you know, like a central town
• 1:16:49
  park. But it was clear that it was done, you know, that it was an old, old picture of it. And it
• 1:16:55
  wasn't done properly. So I don't know, there's, this war is not going well. And, you know,
• 1:17:02
  I wanted to bring that up. And let's see. And I also wanted to talk a little bit about where is
• 1:17:16
  that story. Hungary, Hungary has launched a national petition, Hungary, to tell EU officials
• 1:17:30
  that they are not willing to foot the bill for funding Ukraine and are tired of the higher
• 1:17:38
  domestic costs caused by Kiev's conflicts with Moscow. So in a statement Monday,
• 1:17:45
  the Hungarian government said that the petition is intended to send a message to Brussels
• 1:17:52
  that Hungary will not pay for Ukraine's military expenses or prop up Kiev for the next decade
• 1:18:02
  while suffering higher utility bills at home. Because they used to get low cost gas and oil
• 1:18:09
  through the pipeline that ran through Ukraine, which they had funded with Russia. Now it costs
• 1:18:14
  more because they have to go down through Turk Stream, through Turkey, and or through the,
• 1:18:19
  whatever the Greek route is. I forget that they have to come up through that way. And so this
• 1:18:26
  ballot, which is a kind of a referendum, offers a chance to vote on three items. So a parliamentary
• 1:18:35
  state secretary for Prime Minister Viktor Orban accused the EU of pouring money into Ukraine
• 1:18:42
  without consulting any of the citizens of the bloc. He claimed that Brussels has already spent
• 1:18:50
  170 billion euro or 204 billion dollars supporting Kiev. And now Brussels wants more. They want 800
• 1:19:01
  billion for Ukraine's state financing and another 700 billion to fund the conflict. And officials
• 1:19:09
  are warning that this funding is going to require further austerity for taxing your own citizens to
• 1:19:18
  fund citizens of another country. And it's going to end up forcing the citizens to pay higher
• 1:19:26
  household utility prices. And he said it would be enforced because Hungary is just a puppet
• 1:19:34
  Brussels compliant government comes to power if Orban doesn't stay in power. So Orban's
• 1:19:41
  government has repeatedly clashed with the EU over support for Kiev since the escalation of
• 1:19:46
  Ukraine conflict in 2022. And they criticize sanctions on Russia as detrimental to the entire
• 1:19:52
  bloc. And they refuse to send weapons to Kiev. Budapest opposes Kiev's ambitions to join the EU
• 1:19:59
  and NATO. And they say that this would drag the bloc into a direct conflict with Moscow,
• 1:20:08
  which nobody sees as positive. I saw something yesterday or late last night that said that
• 1:20:17
  there was discussions about Russia threatening Poland, Lithuania, Latvia, Estonia, those four
• 1:20:28
  up in there. And there was some commentary. I went and listened to it. But most of it was,
• 1:20:34
  these people are nuts. They're so Russophobic. And everything they say is they're trying to
• 1:20:40
  get the rest of Europe all whipped up to go after Russia. And a lot of these people end up in power
• 1:20:47
  in the EU organization, like Ursula von der Leyen's puppets or henchmen. So it's a strange old
• 1:21:01
  world we're living in. Let's see. There were a couple of opinion pieces that I wanted to
• 1:21:11
  talk about. And one of them was pretty funny how, and I like, maybe I will, I think I have enough
• 1:21:20
  time to share this because it was, I read it actually. And I think I'm going to share it with
• 1:21:26
  you. This is written by, he's a literary critic, a guy named Dmitry Samoylov. And here's the
• 1:21:36
  article. The article is called, and it came out on the 24th of January, several days ago.
• 1:21:43
  And he goes, here's the thing. Oh, the article is called Sex is Gone. Why? And he said, here's the
• 1:21:53
  thing. The world many of us grew up in has vanished, not because of geopolitics, but because
• 1:22:00
  of sex. No, this is not a personal confession. It's an observation about culture. Sex, once
• 1:22:07
  treated as central to modern life, is quietly retreating. And the shift is so broad that it
• 1:22:14
  tells us something uncomfortable about where society has gone. And the guy writing the story,
• 1:22:21
  Dmitry, he says, I came of age in the 90s when sex was everywhere, not just in private life,
• 1:22:28
  but in public space. Advertising ran on the formula that sex sells. Some products logically
• 1:22:36
  lent themselves to erotic imagery and others did not. Yet a sexualized female body could be used
• 1:22:43
  to sell almost anything, including a glass of water. Newspapers, car magazines, even publications
• 1:22:51
  about the paranormal, carried nude or semi-nude photo shoots. Television, long before late night,
• 1:22:59
  included bedroom scenes as routine. Youth series revolved around the first sexual experiences.
• 1:23:06
  Schools distributed brochures about contraception. Words once whispered were now spoken on the air.
• 1:23:14
  Orgasm, masturbation, intercourse. That reminds me of a Monty Python skit,
• 1:23:21
  which I won't share with you because I want to finish this article.
• 1:23:25
  The message was clear. Sex was not only normal, it was valuable, exciting, a permanent feature
• 1:23:32
  of modern life. 30 years later, we are told almost casually that sex is overrated.
• 1:23:43
  This is not anecdotal. Surveys do reflect a real shift. Research by the NAFI Analytical Center
• 1:23:55
  showed that 22% of people aged 18 to 25 are not sexually active. More than half of respondents
• 1:24:05
  report problems in their intimate lives. 40% cannot discuss sexual issues with their partner.
• 1:24:14
  Large numbers report dissatisfaction, lack of desire, or pain. Among women,
• 1:24:21
  the figures are especially stark. More revealing still are value rankings. Among people in long
• 1:24:29
  term relationships, sex comes last on the list for what is necessary for well-being. For many
• 1:24:39
  young people, it does not appear as a value at all. Health, money, status, travel, and peace of
• 1:24:47
  mind. These now dominate. Sex has slipped off of the agenda. Given how problematized the intimate
• 1:24:57
  sphere has become, this is hardly surprising. Sex today competes with the entire digital universe.
• 1:25:06
  Short video, streaming platforms, games, endless online content. Why invest emotional and physical
• 1:25:15
  effort when easier form of stimulations are available on demand? Add to this anxiety.
• 1:25:23
  Choosing a partner now feels like navigating a field of red flags. Fear of manipulation, abuse,
• 1:25:30
  psychological labels, then practical concerns. What if it leads to commitment, marriage,
• 1:25:36
  a mortgage? In such a climate, withdrawal looks rational. How did we get here?
• 1:25:44
  That's a good question. How did we get here? The period we remember as sexually liberated
• 1:25:50
  may have been a historical exception. Roughly from the 50s onward, a unique combination of
• 1:25:57
  factors aligned. Contraception was widespread. Living standards rose. Housing conditions
• 1:26:03
  improved. Education expanded. Sexual behavior began to separate from reproduction and marriage.
• 1:26:10
  This was the so-called second demographic transition. Sex could exist for pleasure,
• 1:26:16
  independent of family formation. For a few decades, sex was both accessible and culturally
• 1:26:24
  celebrated. We assumed this was a permanent achievement. But across most of human history,
• 1:26:31
  sex was not a sphere of self-expression. For the majority, it was tied to necessity, reproduction,
• 1:26:38
  and obligation. Hygiene, privacy, comfort, the conditions that make mutual pleasure possible,
• 1:26:44
  were luxuries. Ideas like female orgasm or emotional compatibility were not central concerns
• 1:26:51
  for ordinary people. We like to point to ancient erotic arts and texts such as the Kama Sutra,
• 1:27:00
  yet these represent elite or symbolic cultures, not the daily experience of most people. What the
• 1:27:06
  20th century did was briefly place sex at the center of mass culture. That moment appears to
• 1:27:14
  be passing. Now, sex competes not only with digital entertainment but with broader ethos
• 1:27:20
  of individual optimization. Time is a resource. Energy is limited. People prioritize career,
• 1:27:27
  fitness, mental stability, travel, consumption. Sex, with its uncertainties and vulnerabilities,
• 1:27:34
  looks inefficient. The result is paradoxical. A society saturated with sexual imagery in the
• 1:27:42
  recent past is producing generations less interested in sexual practice. The language
• 1:27:49
  of desire remains in advertising and media, but lived reality is shifting toward disengagement.
• 1:27:56
  Perhaps this is not decline but rebalancing. Sex, having enjoyed a period of cultural
• 1:28:02
  overexposure, returns to being one element among many, no longer the organizing principle
• 1:28:09
  of youth culture. Yet the contrast with the 90s is striking enough to feel like a rupture.
• 1:28:15
  That earlier era left a vast archive of film, novels, memories depicting a world in which sex
• 1:28:21
  was easy, central, almost guaranteed. We end up studying that period in a way we study other
• 1:28:28
  brief cultural phases, through art and nostalgia rather than personal experience. It turns out
• 1:28:34
  that the age when sex was treated as a universal value may have been an interlude, not a destination.
• 1:28:42
  And we are now living through the correction. This article was first published by the online
• 1:28:48
  newspaper Gazeta.ru Russia and was translated and edited here. So I think that was pretty cool.
• 1:29:01
  At any rate, I wanted to share that with you and I actually managed to get it in before the end
• 1:29:06
  of the show. This is International Flavor. I'm very glad you were with me here today. You can
• 1:29:12
  join me every day from 7.30. Oh, today is the longest day on radio, isn't it? It's Wednesday,
• 1:29:19
  isn't it? All day today. And we have plenty of shows here. Coming up next is the damn schwag.
• 1:29:26
  And JR will be later. I don't even have the schedule in front of me. But you can see our
• 1:29:31
  schedule by going to damradio.com forward slash schedule. And you can listen to all the old
• 1:29:37
  podcasts by going to damradio.com forward slash podcasts or go out to internationalflavor.com.
• 1:29:44
  I hope you have a wonderful day. See you tomorrow.