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Trump’s Iran War Is Backfiring — China Is Ready | Silk and Steel · UK Column Radio

0:00
Speaker 1: He's a damn good friend of the show, and I
0:02
Speaker 1: appreciate him for joining me. Carl Jha, what's happening, my man?
0:06
Speaker 1: I'm digging that mic.
0:08
Speaker 2: Thank you. Thank you. I always had this mic for
0:11
Speaker 2: a while. It's out of sight as a view.
0:16
Speaker 1: Oh, okay.
0:16
Speaker 2: Get up, yeah.
0:18
Speaker 1: Because I got to be honest, I hate my color right.
0:20
Speaker 1: It's like I even got to perform and say, OK,
0:22
Speaker 1: I'm going to get another one of these. But there's
0:24
Speaker 1: nothing wrong with it, so I'm going to write that book.
0:27
Speaker 1: But Carl Shaw, man, thank you for joining me. And
0:29
Speaker 1: just for the audience, I always like to give a
0:31
Speaker 1: heads up on who a person is, even though I
0:35
Speaker 1: imagine at this point the audience knows you. Carl Shaw,
0:38
Speaker 1: he's host of Silk and Steel podcast focused on China,
0:40
Speaker 1: the surrounding regions, their history, culture and politics. You can
0:45
Speaker 1: follow Carl on Twitter at Carl Shaw. You can follow
0:48
Speaker 1: his podcast on Twitter at Steel, Silk, and Letter N.
0:51
Speaker 1: And you can subscribe and support the podcast on Patreon.com
0:56
Speaker 1: slash Silk and Steel. Carl, I'm glad that you could
1:00
Speaker 1: join me. And I suppose we should start with tragedy
1:03
Speaker 1: more than anything else. And that is the big disaster
1:07
Speaker 1: that took place on the border of Nepal and China.
1:11
Speaker 1: What do we know of this? I mean, I saw
1:14
Speaker 1: the footage of it, and it's... Terrifying. Basically, this kind
1:17
Speaker 1: of mudslide that took out, well, everything that was in
1:22
Speaker 1: front of it.
1:23
Speaker 2: It's actually a glacial runoff. An entire glacier on the
1:29
Speaker 2: Nepal side just dropped off the sheer face of the mountain.
1:33
Speaker 2: And because that entire glacier melted and suddenly the water
1:39
Speaker 2: level rose very fast. It's basically a glacier eruption. runoff
1:45
Speaker 2: slash landslide slash flash flood. So because the border between
1:51
Speaker 2: China and Nepal, it sits on a river valley in
1:56
Speaker 2: the Himalayas. Like you could see basically the whole border
2:02
Speaker 2: post was on the side of the river. China's on
2:05
Speaker 2: one side of the river, Nepal's on this other side
2:08
Speaker 2: of the river. What happened is a big chunk of
2:11
Speaker 2: glacier just melted off and slide off the mountainside and
2:15
Speaker 2: fell into the upstream of the river. And it added
2:20
Speaker 2: huge volume of water, mud, and with very high speed,
2:25
Speaker 2: just rushed down and you just wipe out everything in
2:27
Speaker 2: its path. And so far, we know at least several
2:31
Speaker 2: hundred people are missing or dead. The video was hard
2:38
Speaker 2: to watch because you can tell most of the people
2:42
Speaker 2: in there probably didn't make it. Because the whole border,
2:49
Speaker 2: it consists of a huge gate and there was a
2:54
Speaker 2: massive parking area. But as you can see on the video,
2:57
Speaker 2: all the entire structure got completely demolished when those like
3:03
Speaker 2: the glacial slide just kind of wiped the whole area clean.
3:10
Speaker 2: It actually triggered like a 5.0 earthquake when that glacier
3:14
Speaker 2: fell down the mountain. Yeah. And now it's likely going
3:19
Speaker 2: to block the river flow with all the mud and
3:23
Speaker 2: the debris. They're going to probably form a barrier lake,
3:27
Speaker 2: which is going to have to clear out because otherwise
3:29
Speaker 2: that's going to cause even more problems. And this is
3:34
Speaker 2: one reason, you know, there's actually the planned China-Nepal railway
3:41
Speaker 2: was supposed to go through that exact region. Jiarong was
3:47
Speaker 2: one of the major border crossing between China and Nepal.
3:51
Speaker 2: The proposed China-Nepal highway that would cross the Himalayas would
3:56
Speaker 2: have gone through there. But this is why I expect
3:59
Speaker 2: that Railway will probably be a more long-term project, just
4:03
Speaker 2: giving the tremendous difficulty to build through a geologically active area.
4:09
Speaker 2: One of the proposals for the railroad I saw was
4:13
Speaker 2: just basically tunnel through the mountains. They're going to build
4:17
Speaker 2: almost 90% of the rail under the mountains to avoid
4:22
Speaker 2: the surface conditions like landslides earthquake and all that kind
4:28
Speaker 2: of stuff. But it's going to take time. It's going
4:31
Speaker 2: to take time and a lot of money.
4:33
Speaker 1: I can imagine. I'm curious on something now that you
4:36
Speaker 1: brought this up. You know, when I was in Nepal,
4:39
Speaker 1: there was political upheaval in Nepal when I was in
4:43
Speaker 1: Nepal last year. And there was a lot of talk
4:46
Speaker 1: about what the political upheaval was about. Now, when I
4:51
Speaker 1: was on the ground, they were very specific that you know,
4:55
Speaker 1: police shot our kids. And so we burned down their buildings.
4:59
Speaker 1: It was very specific. And they made the point of saying,
5:02
Speaker 1: we have agency. We're not being pushed by anybody else,
5:04
Speaker 1: et cetera. But as I was having a conversation with
5:07
Speaker 1: some of the people on the ground, I pointed out
5:09
Speaker 1: to them that outside of Nepal, there was this belief
5:12
Speaker 1: that this was, let's say they were being maneuvered. And
5:16
Speaker 1: they were being maneuvered from the standpoint of trying to
5:20
Speaker 1: get a government that is more favorable to the United
5:22
Speaker 1: States and less favorable to China. I'm curious, did anything
5:27
Speaker 1: fundamentally change in the government, in the government, meaning did
5:31
Speaker 1: the relationship between Nepal and China change after the government changed?
5:37
Speaker 2: The thing is, you know, color revolution, regime change, these
5:42
Speaker 2: are still the kind of the strong suit of United
5:46
Speaker 2: States at this point, you know, like this. And this
5:50
Speaker 2: is one of the avenues that U.S. will increasingly rely
5:54
Speaker 2: on as its military power proving increasingly unreliable. But the
5:59
Speaker 2: thing is, what we have seen is because the sheer
6:03
Speaker 2: gravity of China's economy, a lot of this U.S. mechanization,
6:09
Speaker 2: it doesn't really bear fruit in the long term. The
6:13
Speaker 2: United States did this in Myanmar, for example, when... Everyone
6:17
Speaker 2: knows Aung San Suu Kyi is a West woman. It's
6:21
Speaker 2: West women for Myanmar. And the hope was when Myanmar
6:25
Speaker 2: would open up and Aung San Suu Kyi was put
6:28
Speaker 2: in power, that Myanmar would pivot away from China and
6:33
Speaker 2: turn to West. But that didn't happen because Aung San
6:36
Speaker 2: Suu Kyi's first trip abroad after she came into power,
6:42
Speaker 2: it was to see Xi Jinping in Beijing. But then,
6:46
Speaker 2: you know, very soon after that insurgency intensified in Myanmar,
6:51
Speaker 2: Aung San Suu Kyi got overthrown in a coup. So,
6:55
Speaker 2: same thing in Nepal. Like, there are different factions vying
6:59
Speaker 2: for power. Nepal is a deeply divided society because, you know,
7:04
Speaker 2: they had a 30-year, decade-long Maoist insurgency in the countryside
7:11
Speaker 2: that was only ended not that long ago, you know,
7:16
Speaker 2: by first by getting rid of the monarchy. And then
7:20
Speaker 2: the Maoists was brought into kind of the power sharing agreement.
7:25
Speaker 2: And now they're part of the government. And so there's
7:30
Speaker 2: all these forces jockeying for power in Nepal. And obviously,
7:34
Speaker 2: there are many outside powers have an interest to have
7:38
Speaker 2: a say. I'm talking about both US and India, right?
7:42
Speaker 2: They're all very much interested to keep Nepal in their
7:46
Speaker 2: own orbit. But the Nepal and China relationship is such
7:51
Speaker 2: that no matter what government comes into power, they will
7:55
Speaker 2: want to maintain a friendly relationship with China. Now, one
7:59
Speaker 2: of the thing is Nepal has a very heavy dependency
8:03
Speaker 2: on India right now, just because of geography. More than
8:09
Speaker 2: 80% of its trade has to go through India. This
8:13
Speaker 2: is why Nepal was very interested to see the Nepal-China
8:17
Speaker 2: railway materialize, because that means they can get more goods
8:22
Speaker 2: across the Himalayan border. But which, again, as I mentioned,
8:26
Speaker 2: would be a gigantic engineering feat. And Nepal did experience
8:36
Speaker 2: a blockade of energy supply by India a few years
8:40
Speaker 2: ago when India India just stopped shipping fuels across to Nepal.
8:48
Speaker 2: And that actually led Nepal to install a lot of
8:55
Speaker 2: hydro solar panels. So now Nepal's coverage of EV, the
9:03
Speaker 2: new vehicle sales in EV, is one of the highest
9:06
Speaker 2: in the region. I think it's like 70%, like 70%
9:10
Speaker 2: of new vehicles sold in Nepal is EV. And of course,
9:15
Speaker 2: most of those are Chinese EVs because they desperately need
9:20
Speaker 2: energy independence and they desperately need like alternative to the
9:26
Speaker 2: over-reliance on India. So this is why they always need China.
9:30
Speaker 2: That's why... No matter which government comes to power in Nepal,
9:35
Speaker 2: they will have to remain, make sure they remain unfriendly
9:39
Speaker 2: towards China because that's just the reality.
9:42
Speaker 1: Yeah, no, I get it. Basically, facts are facts. People
9:48
Speaker 1: need things. And regardless of the government, that's not going
9:52
Speaker 1: to change. And the big player in that is China. No,
9:55
Speaker 1: I do get it. You know what's wild about it?
9:58
Speaker 1: As you were saying, this, I was sitting here realizing
10:01
Speaker 1: I was there for both of those events. I was
10:04
Speaker 1: there for the government, for the monarchy dissolving. And I
10:08
Speaker 1: was there for the color revolution that took place last year.
10:13
Speaker 2: You're old school, man.
10:14
Speaker 1: You're old school. I went bungee jumping in 2008. I
10:17
Speaker 1: was 30 years old. Wow. And when I jumped into
10:22
Speaker 1: the country, there was a question of whether or not
10:25
Speaker 1: the monarch was going to leave. They weren't sure. And
10:29
Speaker 1: so the country was in this kind of tense standoff
10:33
Speaker 1: where they had given their ultimatum to the king. And
10:37
Speaker 1: it was wild.
10:39
Speaker 2: The royal family took care of itself.
10:42
Speaker 1: He said that the king killed his brother. but nobody
10:47
Speaker 1: could see anything because it was the king. I was like, what?
10:52
Speaker 1: It was a wild time.
10:54
Speaker 2: And the prince just decided, you know what? I'm just
10:56
Speaker 2: going to take out everybody.
11:01
Speaker 1: You're talking about a heady country. Everybody was on pins
11:06
Speaker 1: and needles. Nobody knew what was going to happen. It
11:08
Speaker 1: was wild. I guess we have to get to the big, splashy,
11:16
Speaker 1: D-Day that puts in terror across the world where Scott
11:22
Speaker 1: Benson comes out with Operation Outlaw, even up to the
11:27
Speaker 1: point of taking people off the dollar. And of course,
11:30
Speaker 1: this was a dog that didn't bark because for all
11:33
Speaker 1: intents and purposes, this was a threat. And Scott Benson
11:37
Speaker 1: himself even pointed out when a reporter pressed him, like,
11:39
Speaker 1: why don't you just do it now? What was funny
11:42
Speaker 1: about it was the reporter seemed just kind of like,
11:45
Speaker 1: why am I here? But he was like, why don't
11:48
Speaker 1: you just do it now? And he was like, well,
11:50
Speaker 1: I don't want to wreck the world's economy or shake
11:52
Speaker 1: up the world's economy or global order or whatever he said.
11:56
Speaker 1: What is China's response to this? I mean, I imagine
12:00
Speaker 1: Russia's response is going to be no. I haven't imagined it.
12:03
Speaker 1: I have an idea in my head what China's response
12:04
Speaker 1: is going to be.
12:05
Speaker 2: Well, China's foreign ministry already issued an official statement that
12:10
Speaker 2: basically said trade relationship between China and Iran It's a
12:16
Speaker 2: matter of sovereignty. It's an issue between China and Iran.
12:20
Speaker 2: And China will not let anybody else to dictate who
12:24
Speaker 2: it does or does not do business with. This is
12:26
Speaker 2: the same statement China put out when Washington and its
12:30
Speaker 2: European vassal tried to pressure China to sanction Russia. And
12:35
Speaker 2: that's exactly what China said. Now, China-Russia relationship is a
12:39
Speaker 2: normal trading relationship. We are going to pursue it to
12:43
Speaker 2: our own national interest. This is a matter of our
12:46
Speaker 2: own sovereign rights and nobody can tell us what to do.
12:50
Speaker 2: And so this is exactly that. And because China is
12:54
Speaker 2: the largest trading partner of Iran, this U.S. sanction has
13:00
Speaker 2: no tooth. If China has no intention to comply, because
13:07
Speaker 2: China is still going to buy continue to buy Iranian oil.
13:12
Speaker 2: You know, like last time Washington tried to sanction some
13:16
Speaker 2: Chinese refineries for taking Iranian oil. China says, no, no, no,
13:21
Speaker 2: no company is going to comply with that U.S. sanction
13:26
Speaker 2: unless you want to be put on our blacklist. Everybody
13:29
Speaker 2: got to keep on doing business with those sanctioned Chinese refiners.
13:34
Speaker 2: I mean, just imagine Scott Besson put major Chinese banks
13:39
Speaker 2: on secondary sanction. I mean, that's taking a blowtorch to
13:43
Speaker 2: the world financial system, right? I mean, China is the
13:47
Speaker 2: world's largest trading power. A lot have to go through
13:52
Speaker 2: the Chinese banks. And so... I don't think that's not
13:57
Speaker 2: going to happen. What the United States structured the sanction
14:02
Speaker 2: to be is to be like the Caesar sanction against Syria. Now,
14:06
Speaker 2: the Caesar sanction worked against Syria because Syria was a
14:10
Speaker 2: small country, isolated and fragmented. The Syrian government, before its collapse,
14:16
Speaker 2: controlled only two-thirds of its territory. It controlled most of
14:20
Speaker 2: the population, but it didn't control the most resource-rich region.
14:25
Speaker 2: The most resource-rich one-third of Syria that produced all its hydropower,
14:31
Speaker 2: its oil and gas and food was under occupation by U.S.
14:37
Speaker 2: proxy forces. And so that sanction was able to cause
14:42
Speaker 2: the collapse of the Syrian government. But Iran retains full
14:47
Speaker 2: control of all its territory. Iran retains full control of
14:51
Speaker 2: its natural resources. And guess what? people still need to
14:55
Speaker 2: buy oil. I mean, like people, oil is a precious
14:59
Speaker 2: commodity right now. And there's more than enough people, and
15:03
Speaker 2: especially China will continue to buy Iranian crude. So there's
15:08
Speaker 2: nothing U.S. could do about it. Now, the reason that
15:12
Speaker 2: they're doing this maximum pain and pressure campaign against Iran
15:16
Speaker 2: is because, remember, this is because before their illegal war
15:21
Speaker 2: against Iran started in February, They said their maximum economic
15:25
Speaker 2: pressure on Iran's strategy has failed to yield results. So
15:29
Speaker 2: they had to resort to military action. The military option
15:34
Speaker 2: also failed. So now they're going back to the original
15:38
Speaker 2: plan for the regime collapse. But this is not going
15:41
Speaker 2: to work because they have been sanctioning Iran as far
15:45
Speaker 2: as I can remember. I was born in 1976. They
15:49
Speaker 2: put Iran under sanction after 1979. the Islamic revolution. So
15:55
Speaker 2: as long as I have memory, Iran has been under
15:58
Speaker 2: sanction by the United States. So Iran has decades of
16:02
Speaker 2: experience to live through this. This is not like a
16:05
Speaker 2: new shock to the system. And Russia and China also
16:11
Speaker 2: have every incentive to continue to support Iran. So Yeah,
16:18
Speaker 2: this is a non-siccatory. They're just so desperate right now.
16:22
Speaker 2: They throw fishies on the wall to see what sticks.
16:25
Speaker 2: And I don't think this one will stick.
16:28
Speaker 1: Yeah, I agree with you on this. I mean, we've
16:31
Speaker 1: seen this before. As you pointed out, they did this
16:35
Speaker 1: with Russia, where they were like, we're going to pass
16:38
Speaker 1: secondary sanctions for anybody that's dealing with Russia or dealing
16:42
Speaker 1: with Russian oil. And I think India might have paused
16:45
Speaker 1: for a short period of time, but then within a
16:47
Speaker 1: month or two, they were back up to normal, if
16:49
Speaker 1: not doing that much more business. It didn't work the
16:53
Speaker 1: first time. And now here we are again. And to
16:56
Speaker 1: make this even wilder, and I want to get your
16:58
Speaker 1: take on why do you think they are retreading this?
17:04
Speaker 1: Like meaning when they did this with when Trump first
17:07
Speaker 1: came in the office, Trump added this tariff war. I'm
17:11
Speaker 1: going to sanction everybody. He had sanctions on, or tariffs,
17:15
Speaker 1: I'm sorry, on China up to 250%, some insane number, right?
17:20
Speaker 1: It didn't work. It all fell apart. And now it's like,
17:26
Speaker 1: this is the third time. He tried it with Russia,
17:29
Speaker 1: and now he's trying it with Iran. And you think
17:31
Speaker 1: to yourself, okay, if it didn't work the other two times,
17:33
Speaker 1: why are you doing it now? Is there something he's
17:35
Speaker 1: trying to get out of this?
17:36
Speaker 2: There's an expected upcoming Xi's visit to the United States.
17:44
Speaker 2: This is actually very typical of Trump. He's always trying
17:47
Speaker 2: to offset his opponent, offset his opponents before a summit.
17:55
Speaker 2: They did this before Trump was to arrive in Beijing
18:01
Speaker 2: for the first summit. Like this is Trump's preferred method
18:08
Speaker 2: of negotiation. This is his art of deal. It's like, oh, okay.
18:12
Speaker 2: I got you complacent. You think you got a deal?
18:15
Speaker 2: Watch this. I mean, this is getting, this is getting predictable, man.
18:21
Speaker 2: I mean, like, so China just like, okay, show me
18:24
Speaker 2: what you got. Let's see. Let's see what you got.
18:28
Speaker 2: And then we'll respond in the corresponding way. So they're, they're, they're,
18:34
Speaker 2: China is very patient. They're not making... Right now, they
18:38
Speaker 2: already made their intention clear about their relationship with Iran.
18:42
Speaker 2: They're just waiting to see what the United States will
18:44
Speaker 2: actually do. My guess is they won't do much.
18:49
Speaker 1: I want them to do it. I'm curious. As you
18:53
Speaker 1: pointed out, this will take a blowtorch to the financial...
18:58
Speaker 1: They would have to take Russia, China, India. They would
19:01
Speaker 1: have to take all of these people off the payment system.
19:03
Speaker 1: which I don't believe they're going to do, or shut
19:05
Speaker 1: off their access to dollars, which also I don't believe
19:07
Speaker 1: they're going to do. I'm curious on what they're going
19:12
Speaker 1: to do.
19:13
Speaker 2: I mean, talk about the one who preserved the dollar hegemony.
19:17
Speaker 2: I mean, this is the fastest way to destroy the
19:20
Speaker 2: dollar hegemony by kicking China off the SWIFT system. Can
19:24
Speaker 2: you imagine? I mean, they thought they would collapse Russia's
19:30
Speaker 2: economy by kicking Russia off the SWIFT system. That didn't happen.
19:34
Speaker 2: And in return, we saw the Chinese alternative, the SIP system.
19:39
Speaker 2: And you're just going to see more adoption of that
19:43
Speaker 2: in the coming days, coming years. And Brazil has already
19:48
Speaker 2: switched to borrow in Chinese yuan instead of dollar because
19:54
Speaker 2: they can incur less interest on yuan payment than dollar.
20:01
Speaker 2: And there's an upcoming BRICS summit too that's going to
20:07
Speaker 2: take place. So Everything they do right now is, you know,
20:13
Speaker 2: everything they do trying to preserve the U.S. hegemony is
20:17
Speaker 2: actually to accelerate its decline. It's a beautiful sight to watch.
20:25
Speaker 1: That's what happens when you don't have a plan, right? Like,
20:29
Speaker 1: we should be very clear. This is a fallback of
20:32
Speaker 1: a fallback of a fallback. Like, this is not success.
20:37
Speaker 1: This is something else. we are seeing, just as an
20:43
Speaker 1: aside on this, I don't have the answer to it.
20:46
Speaker 1: The energy shocks that are taking place, I mean, these
20:48
Speaker 1: are wreaking havoc through Asia, from my understanding. Correct me
20:52
Speaker 1: if I'm wrong, though. I mean, like, Malaysia, Indonesia, etc.,
20:56
Speaker 1: they're taking the brunt, or they're taking a heavy hit
21:00
Speaker 1: from what is taking place from the standpoint of Iran,
21:02
Speaker 1: or even in the Ukraine-Russia war, where the United States
21:07
Speaker 1: is I stand to be behind both. What is Asia
21:11
Speaker 1: going through currently?
21:13
Speaker 2: Yeah, most of Asia, especially East Asia, they heavily depend
21:19
Speaker 2: on the energy coming from Persian Gulf. Even Indonesia, Indonesia
21:24
Speaker 2: is an oil producer, but Indonesia only produce 600,000 barrels
21:28
Speaker 2: of oil per day. But Indonesia's consumption is 1.6 million
21:35
Speaker 2: barrels of oil per day. So there's a gap of
21:38
Speaker 2: 1 million barrels of oil per day that Indonesia need
21:41
Speaker 2: to import from elsewhere. And traditionally, that is from the
21:46
Speaker 2: Persian Gulf. Same deal. The figure is even larger for
21:53
Speaker 2: economies like Japan, Korea, India. And all of them are
22:00
Speaker 2: reeling right now because now they have to seek alternatives,
22:04
Speaker 2: more expensive alternatives. Because one of the reasons they import
22:11
Speaker 2: from Middle East is also it's a geographic proximity. Now
22:16
Speaker 2: they have to go much further to shipping more expensive
22:20
Speaker 2: fuel from elsewhere, either further from Africa or from Americas.
22:28
Speaker 2: It's just because Russia is still under sanction. Whereas Russia
22:35
Speaker 2: and China, they just recently piloted the Polar Silk Express,
22:43
Speaker 2: the Polar Silk Road, because now it's the summer season,
22:48
Speaker 2: the polar ice melted. Now you can travel from Shanghai
22:52
Speaker 2: to Murmansk in the Arctic region of Russia. that takes
22:58
Speaker 2: less time than travel through the Red Sea and the
23:02
Speaker 2: Swiss Canal. And that route mostly goes through coastal water
23:09
Speaker 2: of Russia, a friendly territory for Chinese fleet. So that's
23:16
Speaker 2: gonna be increasingly important marine time route for China to
23:22
Speaker 2: reach Europe. And yeah, so like this said, It kind
23:28
Speaker 2: of just shows the whole Strait of Malacca choking point
23:33
Speaker 2: against Chinese energy supply is bunk at this point. You
23:40
Speaker 2: can see what the Strait of Hormuz block right now
23:44
Speaker 2: is kind of trial run for a block of Strait
23:49
Speaker 2: of Malacca against the Chinese energy.
23:52
Speaker 1: Yes.
23:53
Speaker 2: It didn't work. It didn't work. I mean, China is
23:55
Speaker 2: still getting plenty of energy. It needs China's switch to
23:59
Speaker 2: coal because China has the most advanced coal-to-oil technology. They
24:06
Speaker 2: can convert coal to synthetic oil profitably at $ 75 per
24:12
Speaker 2: barrel of oil. Well, right now, the oil price is
24:16
Speaker 2: much higher than $ 75 per barrel of oil. So now
24:20
Speaker 2: they just... switch to coal and China make most of
24:24
Speaker 2: its chemical fertilizers and plastics from coal right now. So
24:29
Speaker 2: Chinese farmer has no lack of fertilizers and they have
24:33
Speaker 2: enough to supply the fellow BRICS countries. India was begging
24:38
Speaker 2: China to sell urea to India. And China was also
24:43
Speaker 2: exporting urea to Brazil, another fellow BRICS member and friendly country. Yeah,
24:51
Speaker 2: China is fine. China is doing fine in this energy blockade,
24:56
Speaker 2: but the other countries in Asia are suffering. South Korea, Japan, Philippines, Indonesia.
25:04
Speaker 2: This is why all these countries' currency has been in
25:08
Speaker 2: decline against the U.S. dollar in the more recent month
25:14
Speaker 2: because the oil is pricing the dollar and all these
25:18
Speaker 2: countries need to import oil.
25:22
Speaker 1: And from China's point of view, I don't know if
25:25
Speaker 1: China analysts who are looking at this, or military analysts,
25:29
Speaker 1: do they come away with the assessment that this war
25:32
Speaker 1: was ultimately about China? Or do they think this war
25:35
Speaker 1: was ultimately about Israel? And I mean this in a.
25:39
Speaker 2: They don't think that way. They just think, how can
25:42
Speaker 2: we protect, further protect China's energy supply? They already made
25:49
Speaker 2: the contingency when they... This is the whole reason for
25:53
Speaker 2: Belt and Road Initiative is to build many points of connection, many,
25:58
Speaker 2: many connection points. So there's not a single point of failure,
26:01
Speaker 2: you know, because U.S. Navy has identified Strait of Malacca
26:06
Speaker 2: as one single point of failure to choke off Chinese
26:09
Speaker 2: energy supply. And China's like, OK, what if we, you know,
26:13
Speaker 2: take the Arctic route? What if we build ports there?
26:17
Speaker 2: you know, in Africa, in other parts of Southeast Asia
26:24
Speaker 2: and in America. And so we don't, but the United
26:28
Speaker 2: States Navy cannot be at all points at all time,
26:33
Speaker 2: as we have seen in this conflict. So that was
26:37
Speaker 2: the Chinese strategy. And a lot of the reason behind
26:43
Speaker 2: Golden Road Project is also strategic, is to create alternatives,
26:49
Speaker 2: but also, you know, to build China's own energy independence,
26:55
Speaker 2: you know, like, so that China has internally done by
27:01
Speaker 2: developing sustainable energy supplies through expansion of solar, wind, and hydropower,
27:08
Speaker 2: and also massive transition to EVs, you know, like, For China,
27:15
Speaker 2: switching to EV, the environmental benefit is just a bonus.
27:20
Speaker 2: The real goal is energy independence. Because you can generate
27:26
Speaker 2: electricity from solar, wind, hydro, or coal. So you don't
27:33
Speaker 2: need oil. You don't need oil. And so that's why
27:37
Speaker 2: right now the only thing you need oil for is
27:40
Speaker 2: jet fuel. But everything else, like you can power your
27:44
Speaker 2: trains on electricity that's generated from other sources. So China has,
27:51
Speaker 2: it looks like China's strategy paid off.
27:54
Speaker 1: It sounds like you're saying that they identified that the U.S.
27:59
Speaker 1: is potentially looking for choke points. I forget the name
28:02
Speaker 1: of the policy paper.
28:04
Speaker 2: Well, I mean, United States, U.S. Navy has been publishing like,
28:09
Speaker 2: Papers after papers about choking the straighter of Malacca for
28:14
Speaker 2: like last 20 years. I'm pretty sure Chinese government took notice,
28:18
Speaker 2: you know. Which is funny to me, right?
28:20
Speaker 1: It's like they would write it in English they would
28:23
Speaker 1: never know. And they did the same thing for Iran, right?
28:26
Speaker 1: Witchcraft to Persia. And I think to myself, how do
28:30
Speaker 1: you write this down and just publish? Like, don't you
28:34
Speaker 1: think that the people who you're doing this against are
28:37
Speaker 1: going to be reading the documents, apparently they don't think that.
28:43
Speaker 1: They don't think that. Yeah, I agree with you. I mean,
28:46
Speaker 1: it seems that China just identified, okay, this is a weakness.
28:49
Speaker 1: This is what they're looking at. Let's build around it.
28:52
Speaker 2: Yeah, because everything revolves around energy, even AI. AI is
28:58
Speaker 2: very energy hungry. But China actually has much cheaper electricity
29:04
Speaker 2: rate than the United States. So they One of the
29:08
Speaker 2: reasons the Chinese AI is being competitive because their power
29:14
Speaker 2: is much, much cheaper Chinese energy than what the US
29:20
Speaker 2: has to do. Even a lot of the US AI build-out,
29:25
Speaker 2: they depend on import of Chinese equipment, like the transformer
29:30
Speaker 2: switchers and all these things. this, this tools that help
29:35
Speaker 2: them to build power centers. uh yeah but like that
29:41
Speaker 2: right now us is putting all the bets on ai
29:47
Speaker 2: that somehow is going to preserve the us hegemony for
29:50
Speaker 2: the next thousand years i just don't see that's uh
29:53
Speaker 2: that's going to work. But if you take away all
29:57
Speaker 2: the investment into AI in the US economy right now,
30:01
Speaker 2: there will be no growth. Basically, all the recent economic
30:07
Speaker 2: activity in the United States, all the economic growth comes
30:10
Speaker 2: from the investment into AI. You take away all the
30:14
Speaker 2: activity around building data centers and US growth is flat
30:19
Speaker 2: or even negative.
30:21
Speaker 1: Yeah, and it's a very incestuous relationship at that. And
30:24
Speaker 1: speaking about winning the AI race, I'm just going to
30:27
Speaker 1: read this. This is Sputnik. This is deep sea beat
30:31
Speaker 1: anthropic Chinese open source AI dominates US platforms. Chinese open
30:36
Speaker 1: weight models accounted for a record 62% of token value
30:40
Speaker 1: on Versailles AI gateway in late August, up from 28%
30:44
Speaker 1: in June as developers increasingly opt for cheaper alternatives, the
30:49
Speaker 1: SCMP reports. DeepSeek V4 Flash was the most usable model
30:55
Speaker 1: by token value. Chinese models took four of the top
30:58
Speaker 1: five spots. Think about that.
31:00
Speaker 2: That's amazing.
31:02
Speaker 1: Like we're we've spent like trillions or we will spend
31:05
Speaker 1: trillions on data centers and AI and everything else. And
31:08
Speaker 1: as you point out, they're expecting we're going to win
31:11
Speaker 1: the AI race. OK, it doesn't look like it. Openweight
31:15
Speaker 1: model surpassed propriety systems on Tuesday, accounting for 54% of
31:18
Speaker 1: token usage. Anthropix Fable 5 accounted for only 6% of
31:22
Speaker 1: business token purchases in the month after its release, despite
31:26
Speaker 1: the company's being the most expensive model. Basically, and this is,
31:33
Speaker 1: I would argue, infinitely foreseeable. If you tell people you
31:37
Speaker 1: can do this for $ 5 or you can do this
31:40
Speaker 1: for $ 0. 25, you get the same results. Which one are
31:44
Speaker 1: you going to use? This is the most basic thing
31:47
Speaker 1: in the world. They're spending trillions and China is able
31:50
Speaker 1: to do this for less. And as they point out,
31:54
Speaker 1: offer proprietary models which people ultimately prefer. That's not good
32:00
Speaker 1: for AI in America. It's not good. Before I let
32:07
Speaker 1: you go, there was a story about the chemical explosion
32:09
Speaker 1: between China and Russia. It was a chemical factory.
32:14
Speaker 2: I think I have. It's a petrochemical plant that was
32:21
Speaker 2: used to process Russian natural gas. It was built in
32:24
Speaker 2: the Russian Far East. It's a joint China-Russia project that
32:29
Speaker 2: the site has been building for the last six years.
32:33
Speaker 2: It's near completion. The whole project was about to come online,
32:39
Speaker 2: but they suffered a fire and a huge explosion. This
32:42
Speaker 2: is just happened like yesterday or the day before um
32:47
Speaker 2: so it just happened um.
32:50
Speaker 1: Is there the belief that anything nefarious took place or
32:53
Speaker 1: the investigation is ongoing at this point.
32:57
Speaker 2: Yeah we'll just have to wait and see i mean
32:59
Speaker 2: it is possible it's it's sabotage uh just because the
33:03
Speaker 2: timing is kind of suspicious like yeah just pull off.
33:14
Speaker 1: Jeez. Yeah. And they've been building this for six years.
33:19
Speaker 2: Yeah, it's... Wow.
33:26
Speaker 1: Yeah. I mean, obviously with the war going on, there's
33:30
Speaker 1: a suspicion about any kind of these explosions or anything
33:34
Speaker 1: like that at this point.
33:35
Speaker 2: I mean, even if it's an act of sabotage, this
33:38
Speaker 2: is just like the other Ukrainian attacks on Russian refineries.
33:43
Speaker 2: It's like a... nuisance you know it's like mosquitoes stealing
33:48
Speaker 2: an elephant I mean it's kind of annoying it's still
33:51
Speaker 2: annoying I mean make no mistake but it's not going
33:56
Speaker 2: to fundamentally change the game it's just going to make
34:00
Speaker 2: the elephant more irritated and.
34:03
Speaker 1: Angry well and everything more expensive I mean we're in
34:07
Speaker 1: an energy crunch and in the US I mean speaking
34:13
Speaker 1: of Asia Our, what is it called, Strategic Petroleum Reserve,
34:17
Speaker 1: it's at its lowest that it's, from my understanding, ever been.
34:22
Speaker 1: We've been putting that stuff out like water, trying to.
34:24
Speaker 2: Depreciate the price. It's not getting higher. It's not going
34:27
Speaker 2: to get refilled anytime soon. That's the only reason they
34:32
Speaker 2: have been releasing... the inventory from the strategic petroleum reserve
34:37
Speaker 2: like crazy in the past few months, just to keep
34:41
Speaker 2: the oil price from like skyrocketing beyond 125, right? But
34:47
Speaker 2: once that strategic oil reserve runs dry, man, hey, the
34:52
Speaker 2: sky is the limit. Sky is the limit for the
34:54
Speaker 2: oil price after that.
34:58
Speaker 1: Sky is the limit.
35:01
Speaker 2: Yeah.
35:02
Speaker 1: I mean, it's earned. Like this idea, I mean, and
35:07
Speaker 1: this is a bit of a departure, but this idea
35:09
Speaker 1: that the United States should be able to go and
35:12
Speaker 1: attack other countries and there not be a consequence is insane.
35:18
Speaker 1: I mean, we've gone broke and, you know, thank God
35:22
Speaker 1: Iran was able to maintain itself.
35:25
Speaker 2: But Jamar, but this is good for the oil companies
35:29
Speaker 2: because the big oil majors are going to make a killing.
35:33
Speaker 2: It's good for them. I mean, this is a feature,
35:38
Speaker 2: not a bug. The whole idea is to follow money
35:42
Speaker 2: and profit to these mega corporations who fund the campaigns
35:49
Speaker 2: of Donald Trump. This is doing exactly what- And make
35:54
Speaker 2: the rest of us poor, yes. I mean, we're always.
35:58
Speaker 1: Whether you're talking about just us paying extra money, we're
36:04
Speaker 1: just being poor.
36:05
Speaker 2: Right. Privatize the profit and socialize the cost. You know?
36:13
Speaker 2: That's a feature. That's a feature, not a bug.
36:17
Speaker 1: And then we blame China. It was like, oh, you
36:19
Speaker 1: guys are making us poor. No. It's not China.
36:23
Speaker 2: No.
36:24
Speaker 1: I don't know if you heard Trump when they were
36:25
Speaker 1: pointing out about the farmers here in the U.S., basically
36:28
Speaker 1: saying that the farmers were taking a hit because of
36:31
Speaker 1: the price of fertilizer or that the cows, for example,
36:36
Speaker 1: were the farmers. Basically, everything is more expensive because gas
36:39
Speaker 1: is more expensive. They use diesel for their farming equipment.
36:42
Speaker 1: And Trump is out here making this argument for why
36:45
Speaker 1: we need Argentine beef and screw our own farmers. He
36:49
Speaker 1: was even making the argument that, well, $ 4 gas cost
36:51
Speaker 1: is necessary because, you know, Iran was trying to get
36:53
Speaker 1: a bomb. So, you know, there's that.
36:56
Speaker 2: You know, he's trying to save Mellie's ass because China
37:02
Speaker 2: recently put a restriction on import of Argentinian beef because
37:07
Speaker 2: of some health code issues.
37:08
Speaker 1: Right, right.
37:12
Speaker 2: So Trump is trying to save his buddy down south.
37:15
Speaker 2: But again, at the cost of everybody else, at the
37:18
Speaker 2: cost of average Americans. Well, nobody said Trump is working
37:23
Speaker 2: for the average Americans, right?
37:28
Speaker 1: You'd be surprised at the 10% or 15% that believe
37:32
Speaker 1: Trump is sent by God. He is obviously working in
37:38
Speaker 1: the best interest. He's fighting the Iranians for the Americans.
37:42
Speaker 1: He's helping Malay because Malay is a man of God.
37:44
Speaker 1: They can make up any, you know.
37:46
Speaker 2: You know, there's a hit viral tweet I saw a
37:51
Speaker 2: few months ago that said, my Chinese exchange student buddy
37:56
Speaker 2: was telling me his evangelical Chinese dad said Trump was
38:01
Speaker 2: sent to God, but to punish the United States. Yeah.
38:10
Speaker 1: Oh, that is hilarious. And by the way, they do
38:12
Speaker 1: believe that. I'm not saying all evangelicals, but I have
38:17
Speaker 1: a friend of mine, Robbie, who I work with, and
38:19
Speaker 1: he would make the point of saying when a country
38:23
Speaker 1: doesn't do right by God, God punishes them by bad leadership.
38:28
Speaker 1: And that Trump is that guy. Trump is the one
38:31
Speaker 1: that's punishing America because God is the law's favorite. I
38:36
Speaker 1: don't know. Either way, it's bad. It's bad. Before I
38:40
Speaker 1: let you go, India and China. So 25th round of
38:44
Speaker 1: talks between India and China on the issue of the border.
38:49
Speaker 1: What's going on with this? It seems if we're at
38:52
Speaker 1: the 25th round of talks, something has been going right.
38:57
Speaker 2: Both sides try to stabilize the border situation. I mean,
39:00
Speaker 2: because this is one of the crux of the constant
39:04
Speaker 2: friction of China-India bilateral relationship is the border issue. And
39:11
Speaker 2: And one of the problem is both sides couldn't even
39:15
Speaker 2: agree where the border, not even the actual border, but
39:19
Speaker 2: where the border of actual control is. So this is
39:24
Speaker 2: why they sent patrols to patrol what they think is
39:29
Speaker 2: is a line of control and then the two two
39:32
Speaker 2: patrol team would meet in the middle and then there
39:34
Speaker 2: will be conflict and this is why this conflict keep
39:37
Speaker 2: on flaring up so uh i think i expect the
39:40
Speaker 2: the they're gonna work out some uh rule of engagement
39:43
Speaker 2: you know like maybe some uh the conflict uh zone
39:48
Speaker 2: maybe create some buffer area, demilitarized area, to avoid this
39:54
Speaker 2: kind of friction that's constantly bubbling up. Because right now,
39:57
Speaker 2: India is in trouble. India is in trouble because it's
40:02
Speaker 2: losing access to Persian Gulf energy. And this is why
40:08
Speaker 2: now it's trying to repair damage in its relationship with China.
40:14
Speaker 2: especially like I mentioned, now India relies on China for fertilizers,
40:19
Speaker 2: for example. And so one of the way to kind
40:25
Speaker 2: of repair the damage is to first to cool down
40:30
Speaker 2: the biggest irritant in the bilateral relationship, which is the
40:33
Speaker 2: border issue. I expect Like now you're seeing a lot
40:38
Speaker 2: more voice in Indian media, which traditionally has been very anti-China,
40:43
Speaker 2: to talk about now we need to work with China
40:46
Speaker 2: to bring investment into India, to help India industry upgrade.
40:51
Speaker 2: So the reason is prompted actually by the current crisis,
40:56
Speaker 2: because now India has nowhere to turn.
41:01
Speaker 1: Does any of these conversations have to do with Pakistan,
41:03
Speaker 1: like a de-confliction between India? Pakistan and India.
41:07
Speaker 2: Well, partly because, because Pakistan has been gaining a lot of, uh, uh, hype,
41:14
Speaker 2: you know, has been getting a lot more, uh, diplomatic
41:19
Speaker 2: high profile recently for their role in facilitating the, the
41:23
Speaker 2: negotiation between Iran and United States. And recently Pakistan signed
41:29
Speaker 2: a defense pact between Turkey, Pakistan, and Saudi Arabia. Um,
41:35
Speaker 2: So India, yeah, of course, they feel like they got
41:39
Speaker 2: to do something to match that. And, you know, but anyway,
41:44
Speaker 2: so they, but India have its own biggest reason to
41:49
Speaker 2: improve Thai with China. Really, it's because of the current crisis.
41:52
Speaker 2: They're going to be more dependent on goodwill from China
41:57
Speaker 2: to continually provide them with chemical fertilizers that the farmers need.
42:03
Speaker 2: And And they will also need Chinese investment to continually
42:09
Speaker 2: come in because now, obviously, the Gulf countries are not
42:14
Speaker 2: investing in India at this point because Kuwait hasn't sold
42:18
Speaker 2: oil in months. Which also means there's no Gulf money
42:24
Speaker 2: coming to fuel the AI bubble in the United States
42:29
Speaker 2: like they wanted. Actually, a lot of Gulf money, they
42:32
Speaker 2: have been flowing to East Asia, Southeast Asia, and Southeast Asia,
42:39
Speaker 2: like Singapore, Hong Kong, that's where a lot of the
42:42
Speaker 2: golf money has been seeking safe haven. This is why
42:46
Speaker 2: Hong Kong has surpassed Switzerland for top-digit destination for foreign
42:52
Speaker 2: capital inflow. Because they're looking for places to park their money,
42:59
Speaker 2: and they also... look at what Scott Besson is doing,
43:03
Speaker 2: decided maybe parking U.S. Treasury is not the best idea. Because, yeah,
43:10
Speaker 2: that $ 40 trillion debt, man, that's not sustainable.
43:15
Speaker 1: No, we spend more on the debt than we do
43:18
Speaker 1: on our military every year. That's going to get worse.
43:24
Speaker 1: And by the way, it's not like they're doing anything
43:26
Speaker 1: to stop it, right? Like Joe Biden was spending like
43:28
Speaker 1: $ 2 trillion a year. Trump, comes in and puts that
43:31
Speaker 1: on steroids.
43:32
Speaker 2: They have to borrow new money to pay off the
43:35
Speaker 2: old debt. They keep on borrowing more and more. And
43:40
Speaker 2: the reason they were able to do that, as long
43:44
Speaker 2: as the interest rate is low, they could continually do that.
43:48
Speaker 2: But now they have to keep the interest rate at
43:51
Speaker 2: a certain level to fight inflation because there's already a
43:53
Speaker 2: lot of inflation coming through the system. because Trump's policies.
43:59
Speaker 2: And now, so they have to keep the interest rate steady.
44:03
Speaker 2: But by keeping the interest rate at a certain level,
44:07
Speaker 2: it makes the U.S. interest payment on its debt going
44:11
Speaker 2: up the roof because the total debt continues to balloon.
44:16
Speaker 2: So the interest rate, when the interest payment, when the
44:18
Speaker 2: interest rises, the interest payment continued to bloom. So this
44:23
Speaker 2: is why the U.S. debt went from, you know, the
44:25
Speaker 2: last time we were talking about it was still like
44:27
Speaker 2: $ 37 trillion and then suddenly it's $ 39 trillion and now
44:31
Speaker 2: it's $ 40 trillion. That's why it's growing very fast.
44:35
Speaker 1: And, you know, it makes this so bad, it would
44:37
Speaker 1: make this even worse. The Treasury has been buying Treasuries
44:41
Speaker 1: just to keep them off the market. Like when Japan
44:45
Speaker 1: dumped all of those Treasuries, the U.S. has a policy
44:48
Speaker 1: plan where it would Borrow money or use accumulated money
44:52
Speaker 1: at the treasury to buy those treasuries or to buy
44:55
Speaker 1: those bonds, keep those bonds from, let's say, making the
44:59
Speaker 1: interest rate that much higher, which is wild when you
45:01
Speaker 1: think about it. It's like, whoa, wait, you're borrowing money
45:04
Speaker 1: to buy back money from? Oh, buy back bonds from
45:08
Speaker 1: other countries?
45:10
Speaker 2: Scott Besson is an ultimate currency manipulator. He knows everything
45:15
Speaker 2: about currency manipulation. That's how he made his money under
45:19
Speaker 2: George Soros. But this is why he realized that the
45:25
Speaker 2: Japanese bond market issue is going to be going to
45:29
Speaker 2: buy U.S. Treasury in the ass. And this is why
45:33
Speaker 2: he tried to intervene.
45:34
Speaker 1: But you know what?
45:35
Speaker 2: His intervention failed like after less than a month. So,
45:40
Speaker 2: you know, let's see. Let's see what happens. I mean,
45:42
Speaker 2: I'm just, I'm enjoying this, by the way. One last.
45:46
Speaker 1: You're enjoying the ride down. Watching that roller coaster just
45:52
Speaker 1: go straight down to the arm thing.
45:55
Speaker 2: Yeah.
45:55
Speaker 1: And American public just stands by and just kind of
45:57
Speaker 1: watches it as it happens. I guess the last point,
46:00
Speaker 1: I was reading one of the articles, I forget the article,
46:04
Speaker 1: but they point out there's a big concern because of
46:08
Speaker 1: all the missile systems and all the weapon systems that
46:11
Speaker 1: the United States used against Iran, that they may not
46:14
Speaker 1: be able to defend Taiwan. And I'm like, they're still
46:18
Speaker 1: writing these articles. They're still writing these articles. I saw
46:23
Speaker 1: the one that you put up where I think it
46:24
Speaker 1: was a British, I don't know the gender, I don't
46:27
Speaker 1: remember the I think it was a woman, but I'm
46:29
Speaker 1: not certain where she was, again, makes this argument about, well,
46:34
Speaker 1: if we ran out of these weapons with Iran, imagine
46:38
Speaker 1: running out with China. And so we need to have
46:41
Speaker 1: our own inventory because we get much of our inventory
46:44
Speaker 1: from China. And they may just tell us, no, if
46:46
Speaker 1: we're at war with China. And it's like, are we
46:50
Speaker 1: really still having this conversation? They still have these fantasies.
46:56
Speaker 2: They have they have to i mean this is what
46:59
Speaker 2: these these think tanks are paid to pump out these
47:03
Speaker 2: kind of articles i mean they're getting paid to write
47:05
Speaker 2: such things so even if they put themselves don't believe
47:08
Speaker 2: it their pay dictate what they think how they think
47:12
Speaker 2: right uh so you know it is what it is.
47:16
Speaker 1: It's madness we like look it's one thing if it's
47:19
Speaker 1: conceptual right like where it's The U.S. may go after,
47:23
Speaker 1: or China may, Taiwan, China may go after Taiwan and
47:27
Speaker 1: the U.S. is going to defend Taiwan. We're going to
47:29
Speaker 1: get into this epic war and blah, blah, blah, blah, blah. Conceptual.
47:33
Speaker 1: I get it. You can write oceans of ink on
47:36
Speaker 1: things that are conceptual. But the physical matter reality of
47:40
Speaker 1: things is that the U.S. got humbled by Iran and
47:44
Speaker 1: ran out of weapon systems within the course of, what,
47:46
Speaker 1: six months? And after trillions of dollars spent in order
47:50
Speaker 1: to reshape the Middle East, In six months, it was
47:53
Speaker 1: up in smoke. How do you turn around and say,
47:57
Speaker 1: China's next?
47:58
Speaker 2: Jamar, Jamar. You understand. The U.S. is all about jobs
48:03
Speaker 2: and careers. Their pay level dictate what they can or
48:07
Speaker 2: cannot understand. Right.
48:11
Speaker 1: Right. It's just....
48:14
Speaker 2: I'm not paid enough to say stuff like that. So
48:18
Speaker 2: this is why we are just a bunch of YouTubers.
48:22
Speaker 2: But these guys are actually getting paid to produce the
48:25
Speaker 2: exact kind of bullshit you see all the time.
48:27
Speaker 1: Yeah, you'd think that they would be like, this seems ridiculous.
48:31
Speaker 1: But as you point out, they're paid very well, very
48:34
Speaker 1: handsomely to write stuff like this. Carl, man, I thank you.
48:39
Speaker 1: By the way, is there anything that we should be
48:41
Speaker 1: paying attention to that we may be unaware of. We
48:44
Speaker 1: don't know what we don't know, but you covered this stuff.
48:48
Speaker 2: Well, I mean, yeah, I mean, like one thing to
48:52
Speaker 2: watch out for is the upcoming BRICS summit, right? Like
48:56
Speaker 2: to see what, how the BRICS countries will coordinate to
49:00
Speaker 2: deal with the current crisis and the U.S. sanction. Oh,
49:06
Speaker 2: the U.S., U.S., okay, it's not Asia, but the U.S.,
49:12
Speaker 2: fight with Canada is going to have a spillover effect
49:17
Speaker 2: as well because now Canada, they can pivot to Asia.
49:24
Speaker 2: Now Canada can pivot to Asia because whereas traditionally, United
49:31
Speaker 2: States actually depend on the Canadian oil because they need
49:34
Speaker 2: the Canadian heavy crude to process it into making, because U.S.
49:41
Speaker 2: refineries are set up to process heavy crude. So they
49:44
Speaker 2: need the Canadian heavy crude so they can make more money,
49:48
Speaker 2: you know, because there's big oil companies that buy heavy
49:53
Speaker 2: crude at a cheaper price than they buy from, like, say,
49:57
Speaker 2: light sweet oil that you get from fracking or from
50:03
Speaker 2: importing from Middle East. And then when they process a
50:06
Speaker 2: heavy crew into gasoline and diesel, the... This is their
50:14
Speaker 2: war video.
50:16
Speaker 1: The Canadian war video. Oh, dude, I was laughing my
50:21
Speaker 1: ass off at this video.
50:23
Speaker 2: But, you know, like, one of my favorite... RPG game
50:28
Speaker 2: of all time is Fallout. I love the Fallout series.
50:32
Speaker 2: The intro of Fallout 1 is United States invasion of
50:37
Speaker 2: Canada to grab the Canadian oil resources. I think we're
50:42
Speaker 2: on the timeline. We're on the Fallout timeline right now.
50:47
Speaker 1: It's like the mountains, the bears having firefights. Yeah, that
50:53
Speaker 1: is something to watch out for. Agreed. Because Carnie doesn't
50:55
Speaker 1: seem to be backing down. They seem to be pissed off.
50:58
Speaker 1: And they seem to have political cohesion about it. Meaning,
51:02
Speaker 1: regardless if they hated Carnie or not, they're still backing up.
51:05
Speaker 2: I mean, Canada, now they can export their oil to China.
51:12
Speaker 2: Just cross the Pacific. They don't have to rely on
51:15
Speaker 2: the pipeline to the United States. So they have other buyers.
51:20
Speaker 2: And You know, Canada was a very important part of
51:28
Speaker 2: Washington's plan to develop a China-free critical mineral supply chain, right? Well,
51:37
Speaker 2: guess what? You know, one critical mineral is gallium. Gallium,
51:44
Speaker 2: China put the export control on. And gallium is not
51:48
Speaker 2: something you just produce because it's produced as a byproduct
51:51
Speaker 2: of aluminum. And the one limiting factor of aluminum production
51:56
Speaker 2: is actually electricity. And as I mentioned, electricity in the
52:00
Speaker 2: United States is not cheap. Now you have to fight,
52:03
Speaker 2: compete against all these data centers that also consume electricity.
52:07
Speaker 2: So this is why Alcoa had been placing their aluminum
52:12
Speaker 2: plant in Canada to take advantage of the cheap hydropower
52:17
Speaker 2: that Canada has, right? To make more aluminum. And then,
52:20
Speaker 2: you know, from aluminum production production, you can get some galleon.
52:24
Speaker 2: And galleon is used in all sort of military industrial
52:29
Speaker 2: complex products. And well, they can kiss that option goodbye.
52:35
Speaker 2: It's the new fight against Canada. So there's no way
52:39
Speaker 2: they're going to have a China-free critical mineral supply chain
52:44
Speaker 2: in the next 10, 15 years. Good luck.
52:47
Speaker 1: Do you think this is going to make other countries stiffen?
52:52
Speaker 1: I mean, Canada is standing up to look the EU
52:55
Speaker 1: with all the powers or let's say with all of
52:57
Speaker 1: the resources at their disposal. They didn't do it. Canada
53:02
Speaker 1: said enough. Canada said enough.
53:06
Speaker 2: Right.
53:07
Speaker 1: I mean, look at the war video. Right. These are Mounties.
53:09
Speaker 1: These adorable bears are going to war. That's what they're
53:13
Speaker 1: having as a war video.
53:14
Speaker 2: Right.
53:14
Speaker 1: It's Canada. Does this bode well? Does this mean anything
53:19
Speaker 1: for other states, other countries?
53:20
Speaker 2: Well, I don't know. I don't have too much hope
53:23
Speaker 2: for Europe. The European leaders have no spines. No, they don't.
53:32
Speaker 2: The fact that they have to all look at, and
53:35
Speaker 2: people are surprised that Carney actually could say no to
53:39
Speaker 2: Trump is because, in contrast, the other vassal states' leaders
53:44
Speaker 2: are just completely spineless. And so I don't expect much
53:49
Speaker 2: from them. And, you know, another country is Australia. They
53:53
Speaker 2: do whatever the U.S. wants, despite their largest customers being China.
54:00
Speaker 2: So they're sabotaging, shooting themselves in the foot to stay
54:03
Speaker 2: in the good graces of their big white brother, the
54:05
Speaker 2: United States. But, you know, it is what it is.
54:11
Speaker 1: Their big white brother. Their big white brother. Carl, man,
54:16
Speaker 1: I always enjoy these conversations. I always learn something in
54:19
Speaker 1: these conversations. Carl Jha, host of Silk and Steel podcast
54:23
Speaker 1: focused on China and surrounding regions, their history, culture, politics.
54:27
Speaker 1: You can follow Carl on Twitter at Carl Jha. You
54:30
Speaker 1: can follow this podcast on Twitter at SteelSilk, the letter N.
54:34
Speaker 1: You can subscribe, support the podcast on Patreon.com slash Silk
54:38
Speaker 1: and Steel. Carl, you be safe. I thank you, man.
54:42
Speaker 1: You be. Have a good night. All right. Shout out
54:47
Speaker 1: to Carl, man. Always enjoy having a conversation with Carl. Look,
54:53
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54:56
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