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Trump's Humiliation: Begging China to Save Him from Iran War Disaster | Silk and Steel · UK Column Radio

0:03
Speaker 1: Hello, and welcome to another episode of the Silk and
0:06
Speaker 1: Steel Podcast. I'm your host Carl Za. Joining me is
0:10
Speaker 1: Professor Warwick Powell from Australia. Doctor Powell has been a
0:18
Speaker 1: astitute observer of international politics, particularly in regarding to China.
0:27
Speaker 1: We are now entering a very interesting times, uh, doctor Powell.
0:34
Speaker 1: A lot has happened since we last talked a week ago. Uh.
0:39
Speaker 1: You know, mister Trump is now uh demanding uh you know,
0:45
Speaker 1: China to help him to reopen the Strait of Hormuz
0:49
Speaker 1: and and he even threatened that he will postpone his
0:54
Speaker 1: trip to China if China does not comply. Please give
0:59
Speaker 1: give us your take.
1:02
Speaker 2: Well, the last I checked, the Straits of Hormus is open.
1:07
Speaker 2: A number of ships destined for China carrying oil are
1:13
Speaker 2: getting through without a problem. And I seem to recall
1:17
Speaker 2: that the Secretary of War Pete Hegsath also declared the
1:21
Speaker 2: straits open. So I'm not quite sure what President Trump's
1:23
Speaker 2: talking about. All jokes aside, All jokes aside. The fact
1:33
Speaker 2: is is that Iran has demonstrated the capacity now to
1:38
Speaker 2: control the Strait of Hermus and to do so indefinitely.
1:43
Speaker 2: There is no military capability of the United States, or Israel,
1:47
Speaker 2: or anyone else for that matter, that is in a
1:50
Speaker 2: position to change that. And the clear evidence of that
1:55
Speaker 2: constraint or limitation is that President Trump himself has been
2:01
Speaker 2: asking around and demanding others step up and come to
2:05
Speaker 2: America's aid. No one has no one substantial anyway. I
2:12
Speaker 2: think the Czech Republic might have decided to send Argentina to.
2:20
Speaker 1: Argentina.
2:21
Speaker 2: Argentina, of course, you know, it'll take a bit of
2:24
Speaker 2: time to get from Argentina to the Straits ofform moves.
2:28
Speaker 2: But Argentina has already also said that they'll send something.
2:33
Speaker 2: These are performative gestures, of course, because neither of those
2:36
Speaker 2: countries has any serious belief that their gesture can make
2:42
Speaker 2: a meaningful difference in a military sense. So what we
2:46
Speaker 2: have now is a it's actually a very significant moment.
2:49
Speaker 2: It's a transformation, if you will, in our understanding of
2:56
Speaker 2: the global balance of power. The United States, which has
3:00
Speaker 2: for many decades projected itself as the sole superpower able
3:06
Speaker 2: to push others into doing whatever the United States wanted
3:11
Speaker 2: for fear of being coerced or worse, has now confronted
3:15
Speaker 2: an adversary that pushed back to a point where the
3:19
Speaker 2: United States actually can't achieve what it's set out to
3:22
Speaker 2: achieve in any military sense. This has long term implications,
3:27
Speaker 2: of course, because it really sends a very clear message
3:31
Speaker 2: globally in lots of different ways that the United States
3:36
Speaker 2: or that the era of unipolar hegemony is over. It's
3:40
Speaker 2: also important because I think it sends a message to
3:46
Speaker 2: folk upstream and downstream of the Straits of Hormus. If
3:50
Speaker 2: you control the tap, the governor, then those upstream and
3:55
Speaker 2: downstream are compelled to pay some attention to you and
3:58
Speaker 2: perhaps take a little bit more seriously, stop treating you
4:03
Speaker 2: with disrespect, and actually engage with you in a meaningful way.
4:08
Speaker 2: If you're upstream, and by which I mean the golf states,
4:13
Speaker 2: the oil and gas monarchies that have long been the
4:19
Speaker 2: beneficiaries of the American protection umbrella. If you were those guys,
4:25
Speaker 2: I think you would now be seriously reflecting upon who
4:31
Speaker 2: will lead the outreach to Iran to begin some kind
4:37
Speaker 2: of a discussion as to what a post American golf
4:42
Speaker 2: modus vivendi looks like, because without that, the wealth and
4:49
Speaker 2: the power that came with it for the golf monarchies
4:51
Speaker 2: will rapidly erode. If you can't get your principal source
4:57
Speaker 2: of wealth through the gates controlled someone else, at some point,
5:03
Speaker 2: the riches that flow back upstream dry up on you
5:06
Speaker 2: as well. The attempt to shunt oil through the Red Sea,
5:12
Speaker 2: firstly going across ground with the pipelines is likely to
5:17
Speaker 2: run into the hooties at some point, and that will
5:21
Speaker 2: see the closure in effect of that part of the
5:24
Speaker 2: world as an energy source until a regional security architecture emerges,
5:30
Speaker 2: and one which takes into account the genuine security needs
5:37
Speaker 2: and expectations of Iran. It's amazing, isn't it, Carl. Where
5:41
Speaker 2: the two big conflicts in the world, and you know
5:44
Speaker 2: there are others where the United States is putting the
5:46
Speaker 2: squeeze on much smaller countries in ways that are I think,
5:51
Speaker 2: you know, frankly is unbecoming, even of a major power.
5:56
Speaker 2: You know, to starve people deliberately simply because you're much
6:00
Speaker 2: bigger than they are is frankly despicable. But Ukraine and
6:08
Speaker 2: this situation in the Persian Gulf both involve two major countries.
6:14
Speaker 2: So we're talking about a country of ninety odd million
6:18
Speaker 2: in the case of Iran, and one hundred and sixty
6:22
Speaker 2: odd million, hundred and forty odd million in the case
6:24
Speaker 2: of Russia. Both of these countries were basically shoved off
6:30
Speaker 2: to the edges, even though they have intimate connections into
6:34
Speaker 2: a particular region, and then treated as if their concerns
6:38
Speaker 2: and issues didn't matter at all and that they could
6:41
Speaker 2: be trampled upon. And four years ago we saw Russia's
6:46
Speaker 2: official reaction to all of this, or more comprehensive reaction
6:51
Speaker 2: if you will, after Crime year and before that Georgia,
6:56
Speaker 2: and of course, in this particular instance, the United States
6:59
Speaker 2: brought this on itself what about three weeks ago. So
7:04
Speaker 2: upstream we're going to have some implications. And I won't
7:08
Speaker 2: be surprised if a part of the settlement that emerges
7:13
Speaker 2: over the next so many months will be a modus
7:16
Speaker 2: for Vendi involving the Gulf States and Iran. This will
7:20
Speaker 2: be a total disaster for America. There is now talk,
7:24
Speaker 2: of course, that the Americans are going to send in
7:26
Speaker 2: ground troops, not just in relation to carg Island, but
7:30
Speaker 2: in relation to the mainland of Iran proper. Now, anybody
7:36
Speaker 2: who has done any military analysis historically will tell you
7:41
Speaker 2: that an attempt to invade and occupy a country of
7:45
Speaker 2: that size geographically and that size population wise, on top
7:50
Speaker 2: of which is a very complicated and difficult terrain and topography.
7:56
Speaker 2: We're talking upwards of eight hundred thousand to a million
8:00
Speaker 2: troops or more. Right, this, this has all the hallmarks
8:07
Speaker 2: of America's twenty first century Vietnam, where hundreds of thousands
8:14
Speaker 2: of mainly working class kids will be sent to fight
8:19
Speaker 2: the battles of the political and economic elite, you know,
8:24
Speaker 2: and that's a tragedy in and of itself. Now, why
8:28
Speaker 2: would a President Trump do this? Well, what off ramp
8:32
Speaker 2: as they say, does he now have You can't you know,
8:36
Speaker 2: laterally declare victory and pack up because this war doesn't
8:40
Speaker 2: end just because of America say so or what or
8:45
Speaker 2: President Trump say so. This war ends when Iran says so.
8:51
Speaker 2: And so you know, you've got a President Trump scarring
8:56
Speaker 2: around the world looking for, you know, ways in which
8:59
Speaker 2: he can tilt the balance and maybe Spinny's way out
9:03
Speaker 2: of this. None of the serious European powers have come
9:06
Speaker 2: to play. Japan even has has rejected his overtures for
9:11
Speaker 2: the time being. Let's see what happens when Taki visits Washington.
9:16
Speaker 2: And I think the overtures to China. I don't think,
9:21
Speaker 2: from what I've seen so far, that China has actually
9:23
Speaker 2: even bothered dating it with a formal response. It's simply
9:29
Speaker 2: made a indirect remark about it being a question of
9:33
Speaker 2: national sovereignty and moved on. I don't think Beijing sees
9:37
Speaker 2: this request, come, demand, or what have you as a
9:41
Speaker 2: serious proposition. And in any case, I'm sure that there
9:45
Speaker 2: are plenty of people scratching their heads Carlin Beijing, wondering
9:50
Speaker 2: why China would come to America's assistance in this particular quagmire.
9:58
Speaker 2: Let's not forget that what fifteen years or so ago,
10:01
Speaker 2: after the global financial crisis, which frankly was a transatlantic
10:05
Speaker 2: financial crisis in the main, China came to the aid
10:09
Speaker 2: of the global financial system and the American economy in
10:12
Speaker 2: substantial terms. In fact, one of the reasons why the
10:16
Speaker 2: Chinese economy ended up with a bloated property sector is
10:20
Speaker 2: because of half the of the injection of liquidity that
10:24
Speaker 2: emerged as China assisted the United States in boosting global liquidity. Again,
10:32
Speaker 2: so and it'd got no thanks for that. In fact,
10:35
Speaker 2: they've got sanctions, technology restrictions, tariffs and the rest. So
10:42
Speaker 2: you know, once bitten twice shy, right, So I'm not
10:46
Speaker 2: sure that China's overly keen. I think that there's another issue,
10:49
Speaker 2: a couple of other issues, just very quickly, and then
10:51
Speaker 2: perhaps we can delve into them a little bit more
10:54
Speaker 2: clearly in the short term. Well maybe there's three things.
10:59
Speaker 2: In time. I think China isn't set up anyway to
11:03
Speaker 2: go around the world intervening in the way that Americans do,
11:07
Speaker 2: so it's not really an outfit that has the means
11:13
Speaker 2: to do the kind of interventions that the Americans sort
11:16
Speaker 2: of think is what big countries ought to do. The
11:21
Speaker 2: second thing is is that I think China is weary,
11:24
Speaker 2: as I mentioned for some of those other reasons, but
11:26
Speaker 2: also because it is still trying to work out how
11:33
Speaker 2: best it is that it can provide a stabilizing outlet
11:43
Speaker 2: that can absorb some of this destabilizing energy in the world,
11:49
Speaker 2: whilst at the same time being able to keep what
11:53
Speaker 2: is at the moment a very fragile show on as
11:57
Speaker 2: even a keel as possible. And to do that, it's
12:00
Speaker 2: treading quite cautiously in quite typical Chinese fashion, considered cautious,
12:06
Speaker 2: nothing rash. But I think that There's a third thing,
12:10
Speaker 2: and that is, if you project yourself for ten, twenty
12:13
Speaker 2: thirty years, I think the calculation in Beijing is that
12:19
Speaker 2: a long term civilizational prosperity cannot be founded on a
12:29
Speaker 2: dependence on hydrocarbon as your principal energy source. And so
12:35
Speaker 2: some fifteen years or so ago, China began in earnest
12:39
Speaker 2: very significant efforts to electrify its economic structure, that the
12:46
Speaker 2: entire machine, if you will. That's not to say it
12:49
Speaker 2: doesn't use hydrocarbons, right, so people shouldn't misunderstand that for
12:52
Speaker 2: the time being, but as a proportion of its total
12:56
Speaker 2: energy structuretrification from a variety of sources is playing an
13:04
Speaker 2: even greater role than it's ever done before and will
13:06
Speaker 2: continue to do so, and hydrocarbons will play a proportionately
13:10
Speaker 2: smaller role going forward. And because of that, I think
13:15
Speaker 2: the people in Beijing have come to a view that
13:20
Speaker 2: at a strategic level, China's own security instability, together with
13:24
Speaker 2: its ability to deepen its networks globally through the export
13:30
Speaker 2: of energy related capabilities batteries, solar renewables all the way
13:36
Speaker 2: through eventually to nuclear infusion, hydrogen, et cetera, et cetera.
13:42
Speaker 2: Because of its capabilities in those areas. It's actually in
13:45
Speaker 2: a very solid strategic position as the sort of twentieth
13:53
Speaker 2: century hydrocarbon based economies begin to unravel. And what's going
13:59
Speaker 2: on in the Persian Golf in some respects is a
14:02
Speaker 2: reflection of all of that.
14:08
Speaker 1: What about Donald Trump's claim that, well says, China is
14:12
Speaker 1: depending on it's an oil flow from the golf more
14:16
Speaker 1: than the United States. Really, it's really it's China's bobble,
14:19
Speaker 1: you know, it's China that should try to unplug the
14:23
Speaker 1: flow of oil through the Gulf.
14:27
Speaker 2: Well before the United States went into the Persian Golf
14:30
Speaker 2: and attacked Iran a few weeks ago. The ships move freely,
14:36
Speaker 2: so if there is a blockage, it's been caused by
14:39
Speaker 2: American action. Secondly, as I mentioned right at the outset,
14:45
Speaker 2: tankers destined for China are moving through the Straits of
14:49
Speaker 2: Hermus anyway. So in that regard, I don't think there's
14:53
Speaker 2: any sense that the that the governance of the Straits
14:58
Speaker 2: of Hermus is in anyway whatsoever disadvantageous to China's economic
15:04
Speaker 2: requirements in so far as oil flows are concerned. So
15:09
Speaker 2: what is there to reopen we see data in the
15:14
Speaker 2: Financial Times. I think it was that shows that Iranian
15:18
Speaker 2: exports today are greater than they were a month ago
15:23
Speaker 2: through the straits of Formos. So in that sense, China
15:28
Speaker 2: itself doesn't have a problem. The other issue, which is
15:34
Speaker 2: a bit of a cartoon trope, is that somehow the
15:37
Speaker 2: Chinese economy is excessively dependent upon oil from the Straits
15:43
Speaker 2: of for Moos or the oil from Venezuela, and therefore
15:47
Speaker 2: if you can cripple these two supply sources, you'll somehow
15:51
Speaker 2: cripple China's economy. And that's based on I think a
15:57
Speaker 2: pretty simplistic understanding of the structure of the Chinese economy
16:01
Speaker 2: in terms of its energy systems. Oil has been playing
16:06
Speaker 2: a progressively lesser role from an energy point of view
16:10
Speaker 2: in terms of China's economic model. The other thing about
16:13
Speaker 2: oil is that it's not just being used for energy.
16:16
Speaker 2: It's also an input for other things as well. So
16:20
Speaker 2: and those things are about manufacturing stuff that's petroleum based,
16:25
Speaker 2: and so there is some impact unless those things can
16:28
Speaker 2: be substituted. But as an energy source in and of itself,
16:32
Speaker 2: the Chinese economic structure is no longer as oil dependent
16:37
Speaker 2: as it once was from memory, some twenty percent or
16:41
Speaker 2: so of the Chinese economic system is based on oil
16:45
Speaker 2: as an input. The other thing to remember is that
16:51
Speaker 2: a coal liquefication, which is creating oil from coal, is
16:57
Speaker 2: actually a very mature technology with a substantial infrastructure footprint
17:02
Speaker 2: across China, and China's got a lot of coal twenty
17:07
Speaker 2: years ago. I was actually talking to a colleague of
17:08
Speaker 2: mine last night in China from this industry specifically, and
17:13
Speaker 2: we were going through some of the engineering and cost
17:16
Speaker 2: issues and the evolution over the last twenty years. Twenty
17:20
Speaker 2: years ago, much of the technology for the coal gas
17:24
Speaker 2: coal equification, so coal to oil infrastructure was premised on
17:32
Speaker 2: important technologies, and that meant that for Chinese domestic coal
17:42
Speaker 2: to oil projects to be competitive, oil prices had to
17:46
Speaker 2: be at about seventy dollars US dollars a barrel. Today,
17:53
Speaker 2: talking to my colleagues in China about this, because of
17:57
Speaker 2: the developments of indigenous technical capability in this particular industry,
18:03
Speaker 2: the break even point is around fifty US dollars a barrel,
18:13
Speaker 2: and so for the past so many years, when international
18:18
Speaker 2: oil prices have hovered around that mark a little bit more,
18:21
Speaker 2: a little bit less, it's been difficult for this particular
18:25
Speaker 2: industry domestically to crank up. But mark my words, when
18:31
Speaker 2: prices sustain themselves at one hundred dollars a barrel, then
18:36
Speaker 2: the coal liquification industry will kick in the gear and
18:40
Speaker 2: replace a bunch of the imported oil. In any case, Now,
18:45
Speaker 2: there are some adverse environmental consequences as a result of that,
18:50
Speaker 2: but China is not really going to suffer a dramatic
18:56
Speaker 2: shortage of energy coming from oil, as perhaps those sitting
19:02
Speaker 2: in the White House looking at their sheets of paper
19:05
Speaker 2: and reading the cartoonish kind of tropes it you see
19:09
Speaker 2: around the place, that these interventions in Venezuela and Iran
19:13
Speaker 2: are going to somehow cripple China's economy. So it may
19:19
Speaker 2: well be part of their calculation, Carl, that you know,
19:22
Speaker 2: this is what this is all about. If it is
19:25
Speaker 2: part of their calculation, it's premised on some pretty outdated
19:29
Speaker 2: views about China's economic structure number one, and a very
19:32
Speaker 2: shallow understanding of how China's energy mix actually works in
19:36
Speaker 2: any case, So you know, if you're relying on this
19:41
Speaker 2: as a strategy to bring China's economy to heal, then
19:44
Speaker 2: you're going to be very, very disappointed.
19:48
Speaker 1: Do you think the expected Trump visit to China will
19:53
Speaker 1: still take place, because it looks like Trump is signaling
19:58
Speaker 1: that he might not go to China either, probably because
20:03
Speaker 1: he does not want to go at this particular time,
20:06
Speaker 1: given you know that he got us into this quagmire,
20:10
Speaker 1: and he will go to China with a much weaker hand.
20:14
Speaker 1: I mean, there's a lot of neo conservative think tank
20:17
Speaker 1: like Hudson Institute that has been reporting you know, the
20:20
Speaker 1: whole reason Trump go after Venezuela or you're wrong, is
20:24
Speaker 1: to get the leverage on China. You know, so the
20:27
Speaker 1: US will have his hands on the energy supply lines
20:30
Speaker 1: to China that will allow Trump to go to shijimping,
20:36
Speaker 1: you know, with much a stronger hand at the negotiation table.
20:41
Speaker 2: Well, as I said, Kyle, if that was the theory,
20:44
Speaker 2: I don't think the reality actually supports it. Venezuelan oil
20:50
Speaker 2: and Iranian oil or oil from the Gulf of that matter,
20:56
Speaker 2: represents a relatively small proportion of total oil and oil
21:02
Speaker 2: large is about twenty percent or so of energy of
21:06
Speaker 2: China's energy, So you know, yeah, look, taking two supply
21:10
Speaker 2: sources out of a mix is always inconvenient. But if
21:16
Speaker 2: somehow people think that that means China just doesn't get
21:19
Speaker 2: oil to meet its needs. Let's say that these two
21:23
Speaker 2: sources were taken off the table. There is a thing
21:25
Speaker 2: called the global oil market. Now what none of these
21:28
Speaker 2: other places actually meaning the rest of the world. They've
21:33
Speaker 2: been fortunate that China has been securing some of its
21:36
Speaker 2: oil from these two sanctioned places, because otherwise China is
21:41
Speaker 2: going to be in the global market buying it, and
21:43
Speaker 2: that will of course push prices up. So the fact
21:47
Speaker 2: that China has actually been taking some of its oil
21:49
Speaker 2: from these two places has alleviated upward price pressure in
21:54
Speaker 2: the global oil market. Today, the Trump visit to Beijing schedule,
22:01
Speaker 2: or Trump announced it for the thirty first of March
22:04
Speaker 2: to the third of April, is likely to be postponed.
22:08
Speaker 2: I think that's certainly the noises. And there's a few
22:12
Speaker 2: interesting observations I think people have made and we can
22:16
Speaker 2: make about it. One is that the Chinese side has
22:19
Speaker 2: actually never confirmed a date at all. They've always spoken
22:23
Speaker 2: about we're in discussions with the American side about the
22:27
Speaker 2: dates of the visit. It's the Americans of an ounce
22:30
Speaker 2: states that's the first thing. We've had some trade talks
22:33
Speaker 2: in over the last week between the major representatives of
22:39
Speaker 2: both sides. The readout suggests that not much headway was
22:43
Speaker 2: made in so far as either side was concerned. Very
22:47
Speaker 2: status quo. But perhaps in the current environment, no change
22:52
Speaker 2: is better than anything at all at the moment. But
22:55
Speaker 2: there's nothing there that represents any significant breakthroughs that could
23:00
Speaker 2: on the basis of any major announcements. There's been some
23:03
Speaker 2: talk about things like a board of Trade and a
23:05
Speaker 2: board of investment, but you know, they're sort of made
23:09
Speaker 2: for social media kind of statements rather than substantive agreements
23:14
Speaker 2: that I think leaders, particularly Chinese leaders would be willing
23:20
Speaker 2: to sign off on. You know, they're not just in
23:22
Speaker 2: this business to be ceremonial. They're in this business to
23:27
Speaker 2: achieve tangible and enforceable outcomes. The other thing too, of course,
23:33
Speaker 2: as you say, is that we've got this unfinished around
23:38
Speaker 2: war now, and whilst that continues to play out, I
23:45
Speaker 2: think President Trump has some problems. One is that, as
23:51
Speaker 2: commander in chief, leaving Washington in the middle of a
23:55
Speaker 2: war is arguably, if nothing else, a very bad look.
24:02
Speaker 2: The second thing is is that there are possibly some
24:06
Speaker 2: very significant decisions that President Trump is going to have
24:10
Speaker 2: to make very soon, and they go to whether or
24:14
Speaker 2: not the United States commits to ground troops, and if
24:21
Speaker 2: it commits to ground troops again, I think a president
24:26
Speaker 2: making that decision in absentia is a bad look politically
24:33
Speaker 2: and in a midterm election cycle, sending American young American
24:41
Speaker 2: men and women into war when I think everybody knows
24:44
Speaker 2: that a large proportion of those young men and women
24:47
Speaker 2: will only come back in coffins, and for the commander
24:54
Speaker 2: in chief to make that decision outside of the country
24:57
Speaker 2: and not be in the country explaining that the fusion
25:01
Speaker 2: again very very bad look. Just because it's a bad look,
25:04
Speaker 2: of course, is not a reason why President Trump would
25:07
Speaker 2: be persuaded one way or the other. But I think
25:10
Speaker 2: that there is an incredible amount of pressure now for
25:15
Speaker 2: President Trump to stay in Washington whilst this self induced
25:20
Speaker 2: crisis engulfs Washington. The other thing, too, is that it's
25:26
Speaker 2: not just a political problem with the Democrats. It's a
25:31
Speaker 2: political problem inside the Republicans and inside the Mega movement itself,
25:35
Speaker 2: where we are seeing clear divisions emerge and to a
25:42
Speaker 2: point where there are historically strongmager voices now calling for
25:51
Speaker 2: Vice President Advance to distance himself from this debacle and
25:56
Speaker 2: position himself as the alternative to keep the megaflame, you know,
26:04
Speaker 2: burning so far Advances largely equivocated and been silent, missing
26:11
Speaker 2: in action, perhaps, some would say. But in that kind
26:16
Speaker 2: of environment, I think it becomes increasingly difficult for President
26:20
Speaker 2: Trump to be in Beijing, possibly with very very few
26:26
Speaker 2: cards to play, possibly with no capacity to make meaningful
26:32
Speaker 2: agreements on anything, with a crisis unfolding that is uncontrollable,
26:38
Speaker 2: whilst possibly getting a good dressing down in Jung nan
26:45
Speaker 2: Hai or in the Great Hall of the People. None
26:49
Speaker 2: of that I think plays well for America, and so
26:55
Speaker 2: it is. I don't think anybody would say that it
26:58
Speaker 2: would be imprudent or Trump to postpone this treep. What
27:02
Speaker 2: I found was funny was when first there was the well,
27:08
Speaker 2: I won't go unless they send boats into open up
27:11
Speaker 2: or moves. Then you had Bessent saying that that's not
27:15
Speaker 2: the reason at all. The reasons the war, you know.
27:19
Speaker 2: The messaging itself is a complete dog's breakfast. It says
27:24
Speaker 2: something about the state of the administration at the moment,
27:27
Speaker 2: or should I call it the regime, The the the
27:32
Speaker 2: pederist protection regime in Washington, perhaps, but the regime is
27:40
Speaker 2: all over the shop. And you know, I mean, if
27:46
Speaker 2: I was President Trump, the thing that one of the
27:50
Speaker 2: things that I would be most worried about in the
27:53
Speaker 2: back of my mind is being in Beijing when something
27:59
Speaker 2: catastrophic happens on the battlefield that would be militarily disastrous
28:07
Speaker 2: and reputationally humiliating. Now, if that happened whilst you were
28:13
Speaker 2: there in Beijing, you know, I'm not sure you'd be
28:17
Speaker 2: able to leave any of that down again, and avoiding
28:20
Speaker 2: that seems to make some sense.
28:25
Speaker 1: Yeah, Actually, war is made that the US five thousand
28:29
Speaker 1: US Marines have already left Okinawa and right now they're
28:33
Speaker 1: actually very close to make the transit through the Strait
28:38
Speaker 1: of Malacca heading it heading toward the theater of operation.
28:45
Speaker 1: Because the thing that worries me is it takes two weeks.
28:49
Speaker 1: It's going to take them approximately two weeks to move
28:51
Speaker 1: into position. That means they expect the war to go
28:56
Speaker 1: on for at least now there two weeks, which is
28:59
Speaker 1: uh really inconceivable given the current situation in Hormuz. Because
29:05
Speaker 1: this is causing a huge disruption in the global supply chain.
29:10
Speaker 1: You know, while China is best position to whether the storm,
29:15
Speaker 1: there's there are countries, uh, you know who are heavily
29:18
Speaker 1: depending on the golf oil. You know, there's countries.
29:21
Speaker 2: Like oil as we talked about last week, how there's
29:24
Speaker 2: all the fertilizers and other temical parts. You know, this
29:28
Speaker 2: this this is a it's a global disaster of cause
29:35
Speaker 2: by the United States and Israel.
29:40
Speaker 1: Yeah, and and there are countries like US allies in
29:43
Speaker 1: East Asia, like Japan, South Korea, Philippines, Australia, there are
29:48
Speaker 1: very heavily dependent on the oil exports from the golf
29:56
Speaker 1: and and China for its part, has already eddies span
30:01
Speaker 1: export of refined patrolling products like gasoline and diesel, and Australia,
30:09
Speaker 1: for one, depending on thirty two percent of shet fuel
30:14
Speaker 1: from China. That that's thirty two percent is just gone
30:17
Speaker 1: right now. And and to think that this this whole
30:21
Speaker 1: thing will go on for another two weeks. You know,
30:23
Speaker 1: Japan might be a little bit buffer because they do
30:25
Speaker 1: have a large strategic oil reserve. The other countries, I'm
30:30
Speaker 1: not so sure.
30:31
Speaker 2: It's gonna oil reserves, agricultural food production. And you know,
30:40
Speaker 2: obviously at the front of the impact areas. But I
30:46
Speaker 2: think this could go on for more than two weeks, because,
30:49
Speaker 2: in addition to the plans of time for the Marines
30:54
Speaker 2: to even get there, the ability for the United States
31:00
Speaker 2: to continue bombing Iran is likely to go on for
31:07
Speaker 2: a few more months. At current tempo, it has the
31:11
Speaker 2: ability to do that, and it'll need to do more
31:15
Speaker 2: than that if it wants to interdict Iranian capabilities and
31:21
Speaker 2: ultimately reduce it. It has reached a point where the
31:27
Speaker 2: Iranians are also leveling out and attacking with a relatively
31:32
Speaker 2: consistent rhythm, and I suspect it's a rhythm that they
31:35
Speaker 2: can sustain from a production and repair replenishment point of
31:39
Speaker 2: view for a long time. I've seen analysts who estimate
31:45
Speaker 2: that at the current tempo of drones and missiles, particularly
31:50
Speaker 2: some of the short range missiles, that Iran can keep
31:52
Speaker 2: this game for years. And the challenge for the United
31:57
Speaker 2: States is that for the United States to keep up
32:00
Speaker 2: this temp home, it's basically delivering much of this at
32:05
Speaker 2: the moment from a distance, and it's going to need
32:07
Speaker 2: to get closer. So as it gets closer, as the
32:10
Speaker 2: planes need to start flying over Iranian airspace, those planes
32:14
Speaker 2: become exposed to being hit by missiles. Right, So for
32:21
Speaker 2: America to sustain this, it will need to take greater risks.
32:24
Speaker 2: It doesn't have bases in the Persian Gulf from which
32:28
Speaker 2: it can launch much of its attacks, and so it
32:32
Speaker 2: will be coming from a long, long way away. Last week,
32:36
Speaker 2: Iran took out a couple of airborne refueling planes of
32:43
Speaker 2: the Americans. And again, you know, you start taking out
32:46
Speaker 2: that kind of infrastructure, and the ability to sustain a
32:49
Speaker 2: certain tempo of bombardment diminishes. And without that, the Americans
32:55
Speaker 2: are going to struggle to even try to turn this
33:02
Speaker 2: situation around. I think it's going to be very, very difficult.
33:07
Speaker 2: And where we're heading. An American political scientist, Robert Paper's
33:12
Speaker 2: talked about in previous research work and continues to talk
33:16
Speaker 2: about it in relation to this particular war, the risk
33:19
Speaker 2: of an escalation trap that the United States has actually
33:23
Speaker 2: created and has entered into an escalation trap. It can't
33:27
Speaker 2: get out of this escalation spiral for fear of not
33:33
Speaker 2: only reputational damage but actually material power diminution globally, and
33:38
Speaker 2: so it has to keep going. And as it keeps
33:43
Speaker 2: on going, it will take greater risks. It will put
33:46
Speaker 2: the lives of even more young Americans on the line.
33:51
Speaker 1: And.
33:53
Speaker 2: That then leads people to talk about this as potentially
33:58
Speaker 2: the twenty first century Vietnam the United States. I mean,
34:01
Speaker 2: we know through the Pentagon files that were leaked that
34:06
Speaker 2: those inside the American state actually knew well in advance
34:12
Speaker 2: that the United States could not defeat the North Vietnamese.
34:17
Speaker 2: And yet, for years after that knowledge, the United States
34:23
Speaker 2: continued fighting this unwinnable war, in fact, the war that
34:26
Speaker 2: they would inevitably lose. They knew this, but there wasn't
34:31
Speaker 2: the political courage from anyone inside the system to actually
34:37
Speaker 2: accept defeat, and so they poured more lives in, diverted
34:43
Speaker 2: more national resources into war as opposed to internation building,
34:49
Speaker 2: and hope that they could push the problem to the
34:53
Speaker 2: next presidency. The risk we have now is that President
34:58
Speaker 2: Trump will seek to push this to the next presidency. Now,
35:04
Speaker 2: whether that's viable or not, I think, you know, we
35:08
Speaker 2: can debate about that. At the moment, I don't have
35:10
Speaker 2: a strong view at all as to whether or not
35:14
Speaker 2: this war can be sustained by the Americans, even though
35:17
Speaker 2: it can't win, you know, for another three years But
35:20
Speaker 2: the risk of these things, these escalation traps, is that
35:24
Speaker 2: the political dynamics means that Washington will do this. They'll
35:29
Speaker 2: just keep pouring men in and come up with whatever excuses.
35:34
Speaker 2: The media will, you know, from time to time write
35:37
Speaker 2: something critical, but by and large will continue to create
35:41
Speaker 2: the impression that headways being made. Surprise, surprise. Similar pattern
35:47
Speaker 2: has been going on in Ukraine as well. Ukraine's not
35:49
Speaker 2: a winnable war, but nobody wants to actually accept the
35:54
Speaker 2: consequences of well initiating the war, let alone wrapping one up.
35:58
Speaker 2: Because wrapping one up me accepting the feat.
36:04
Speaker 1: Well, that's a depressing thought because you know what I
36:09
Speaker 1: had hope, you know, a quick climb down for Trump,
36:14
Speaker 1: because this is what Trump liked to do, is to
36:17
Speaker 1: spin everything as a victory for himself. And then, uh,
36:22
Speaker 1: you know, there were indication of that, you know, when
36:24
Speaker 1: he said this is not US's problem, and what happened
36:29
Speaker 1: You go straight, hor moose is the problem for the
36:33
Speaker 1: Europeans and Asians.
36:36
Speaker 2: Yeah, well, let's say let's say he does that. Right,
36:41
Speaker 2: Let's view this in a pro life kind of way,
36:48
Speaker 2: which is that he brings American aggression in this war
36:52
Speaker 2: to a halt sooner rather than later, declares Victorian Goes.
36:56
Speaker 2: Let's say he does that, Well, what does around him? Well,
37:01
Speaker 2: I don't think Iran stops until Iran gets what it wants. Now,
37:05
Speaker 2: what's Iran's concerns? Well, Iran's principal concerns is that the
37:10
Speaker 2: Americans will come back and have another chop later. So
37:13
Speaker 2: that's its first concern. How do you mitigate against that? Well,
37:17
Speaker 2: the Americans say we're not we won't do it again.
37:20
Speaker 2: That's probably not good enough given the bad track record
37:23
Speaker 2: of American deal making. So Iran will insist that the
37:28
Speaker 2: Americans have no presence in the region. That's something they're
37:34
Speaker 2: clearly pushing very hard to achieve today. What else does
37:39
Speaker 2: Iran want? Well, Iran's also made clear that it wants
37:41
Speaker 2: reparations to finance the rebuilding of cities that have been
37:51
Speaker 2: bombed by the Americans and to compensate those families who
37:58
Speaker 2: have lost loved ones. Now, how are they going to
38:03
Speaker 2: get that? You know, this sort of doesn't end neatly
38:09
Speaker 2: just because President Trump says, well, we killed the political leader,
38:17
Speaker 2: the spiritual leader, We've taken out the head of security.
38:25
Speaker 2: Job done, let's go. Well, it takes two to tango.
38:33
Speaker 2: And once you create this kind of a security problem
38:38
Speaker 2: for a state like Iran, it does want to seek
38:41
Speaker 2: a solution to this. Again, we can draw parallels with
38:44
Speaker 2: what's happening in Ukraine, where you know the Russians. Again,
38:50
Speaker 2: whether you like it or not, the Russians have been
38:53
Speaker 2: articulating of you that they have legitimate security concerns and
38:59
Speaker 2: that they want those concerns to be acknowledged and baked
39:04
Speaker 2: in to the agreements and the architecture right of a region.
39:10
Speaker 2: Same for Iran. Now there will be insistence on a
39:15
Speaker 2: whole raft of agreements. I think about American basing in
39:19
Speaker 2: other words, no basis. They will need to have agreements
39:22
Speaker 2: with the golf monarchies because the golf monarchies will want
39:26
Speaker 2: to ensure that they've got safe passage for gas and oil,
39:31
Speaker 2: and we're going to see a dramatic change in the
39:33
Speaker 2: security architecture of the region. This is a monstrous defeat,
39:36
Speaker 2: by the way for the Americans, and this is why
39:40
Speaker 2: just walking away and saying I've won is not going
39:44
Speaker 2: to complete the issue. The other thing, of course, is
39:50
Speaker 2: President Trump in a sense can say whatever he wants,
39:55
Speaker 2: but if no one else in the world buys the
39:59
Speaker 2: claim that I've won, Well, you've still got the same problem,
40:04
Speaker 2: because everybody can see that the United States has not
40:08
Speaker 2: prevailed in this particular combat, that it has been severely
40:13
Speaker 2: debilitated in some respects. We've all seen reports of the
40:22
Speaker 2: proportion of its arsenal that has been consumed in three
40:26
Speaker 2: weeks total arsenal. This isn't getting replaced tomorrow. A colleague
40:33
Speaker 2: of mine has been crunching some numbers, and he goes
40:39
Speaker 2: by the name of policy Tensor on X and he's
40:46
Speaker 2: been running some interesting numbers and developed some models on
40:50
Speaker 2: the drone warfare dimensions, and he's published those which clearly
40:55
Speaker 2: indicates that the Iranians can keep this going for a
40:59
Speaker 2: long time and the Americans are in no position to
41:03
Speaker 2: bring it to a whole. I've actually supplemented some of that,
41:06
Speaker 2: though it's unpublished at the moment because I don't think
41:08
Speaker 2: it's I don't think the raw data is good enough.
41:11
Speaker 2: But which is looking at the missiles situation and develop
41:17
Speaker 2: some mathematical models around missiles depletion, interdiction rates, et cetera,
41:23
Speaker 2: et cetera, And all of this paints a very grim
41:30
Speaker 2: picture from an American point of view. And so I'm
41:36
Speaker 2: sure that for those who actually have access to much
41:39
Speaker 2: better information, namely the Americans themselves about their own inventories,
41:44
Speaker 2: the serious people as opposed to folk in the White House,
41:48
Speaker 2: the serious people have actually been doing the sums as well,
41:52
Speaker 2: and they know that they are not in a position
41:55
Speaker 2: to keep this going in a meaningful way with any
41:59
Speaker 2: hope of changing them trajectory. And the only thing that
42:02
Speaker 2: keeps this going is actually politics, right, and as the
42:06
Speaker 2: politics of the midterm elections, the politics of a presidency
42:10
Speaker 2: that doesn't want to be responsible for not just a
42:15
Speaker 2: humiliating defeat in a generic sense, as Vietnam ultimately proved
42:21
Speaker 2: to be a humiliating defeat, as Afghanistan was a defeat,
42:24
Speaker 2: et cetera, et cetera. But this is potentially actually an
42:27
Speaker 2: era defining defeat that literally draws a line under the
42:34
Speaker 2: thirty five year era of American unipolarity, the seventy eighty
42:40
Speaker 2: year era of the political West, the post war political
42:46
Speaker 2: West era, and arguably four fifty five era of the
42:52
Speaker 2: colonial West. I'm not sure that that's the legacy that
42:56
Speaker 2: President Trump wants to leave behind.
43:02
Speaker 1: Yeah, which means this more likely will drag on longer
43:08
Speaker 1: than anybody would have holl for. This is very grim
43:14
Speaker 1: because the whole world is basically being pushed toward precipitous abyss,
43:22
Speaker 1: and and we are it's just on autopilot, but the
43:27
Speaker 1: train is going on out the pilot.
43:29
Speaker 2: Well. I hope three things can happen in the short term.
43:33
Speaker 2: One is, given that Iran controls the governor and has
43:39
Speaker 2: clearly been willing to let ships through that countries will
43:46
Speaker 2: ultimately arrive at agreements with Iran for the safe passage
43:50
Speaker 2: not just of oil to keep a lot of this
43:52
Speaker 2: stuff going, because that one's going to be held quite tight,
43:56
Speaker 2: but fertilizers, right, I mean, because in the end, ensuring
44:02
Speaker 2: that the world has the capacity to feed itself matters,
44:06
Speaker 2: and I think from a reputational point of view, it
44:09
Speaker 2: would be in Iran's own broader diplomatic reputational interests to
44:17
Speaker 2: enable that to happen. The second thing I think that
44:20
Speaker 2: I think this catalyzes is actually the acceleration of electrification.
44:27
Speaker 2: It's not to say that hydrocarbons disappears tomorrow. It will
44:33
Speaker 2: continue to play a role, but more effort's going to
44:35
Speaker 2: be made to transition to hydrocarbon based systems. More effort's
44:42
Speaker 2: going to be made to hasten the need development of
44:47
Speaker 2: new technologies, you know, whether it's in as I said,
44:50
Speaker 2: you know, the renewable energy space. Electrification of passenger mode
44:55
Speaker 2: vehicle transport China leads that electrification of freight trans bought.
45:01
Speaker 2: Come twenty thirty thirty percent of China's heavy road freight
45:05
Speaker 2: vehicles will be actually electrified. I mean that's amazing because
45:09
Speaker 2: ten years ago, if somebody said, look, you know, freight
45:12
Speaker 2: transport is going to no longer be diesel based but electric,
45:16
Speaker 2: people would laugh at you. The idea that transport could
45:21
Speaker 2: be dissociated from hydrocarbons was unthinkable ten years ago. And
45:26
Speaker 2: yet this is exactly what's going to happen. And so
45:30
Speaker 2: we're going to see a lot more of that. So
45:34
Speaker 2: and this is accelerating something that I think was happening anyway.
45:38
Speaker 2: But you know what country that does not have its
45:43
Speaker 2: own oil would leave itself structurally exposed to future oil
45:51
Speaker 2: risks such as those were you know, witnessing today. I
45:56
Speaker 2: don't think anybody would do that, given the availability of alternatives.
46:02
Speaker 2: In nineteen seventies, when the first oil shop took place,
46:08
Speaker 2: there were very few alternatives. There are alternatives today, and
46:14
Speaker 2: what that means is that China in particular is in
46:19
Speaker 2: a position to play an outsized role globally, but not
46:26
Speaker 2: in a way that oil rich countries were able to
46:29
Speaker 2: because they controlled the upstream. The nature of renewable energy
46:34
Speaker 2: technologies and energy sovereign technologies and energy storage technologies is
46:39
Speaker 2: that once you've got them, other people can't turn them
46:44
Speaker 2: off on you, and that is going to be incredibly
46:48
Speaker 2: attractive to countries around the world, particularly in the Global South,
46:54
Speaker 2: but not just the Global South. I'll look at a
46:56
Speaker 2: country like Australia where I am, and Australia is now
47:02
Speaker 2: in the middle of a re energized debate about what
47:05
Speaker 2: the energy profile of the country looks like in ten
47:08
Speaker 2: years time. There are those who argue that Australia needs
47:12
Speaker 2: to build a few more refineries. Others are our saying, actually,
47:15
Speaker 2: we can electrify our commercial fleets within two to three
47:19
Speaker 2: years if we actually had the political will to do so.
47:22
Speaker 2: But this is a debate that's going to accelerate all
47:25
Speaker 2: across the world, and so you know, I think we're
47:29
Speaker 2: going to start to see some transitions. We're going to
47:31
Speaker 2: start to see the acceleration of electrification not necessarily a
47:36
Speaker 2: bad thing. And on the food front, I think in
47:40
Speaker 2: the short term, I certainly hope that the Iranian government
47:44
Speaker 2: will see that it can play actually a constructive and
47:48
Speaker 2: responsible role in terms of fertilizers. But the other thing
47:53
Speaker 2: I think we're likely to see as a result is
47:58
Speaker 2: a change in the way that many places actually think
48:02
Speaker 2: about their food systems and their own agricultural systems that
48:07
Speaker 2: have over the course of the last one hundred years
48:09
Speaker 2: become increasingly dependent upon these sorts of fertilizers. But again
48:14
Speaker 2: we have to ask the question, is this system, which
48:20
Speaker 2: has these risks the kind of food systems that were
48:26
Speaker 2: as different societies want to have going forward, or do
48:30
Speaker 2: we want to reimagine our national food security in entirely
48:36
Speaker 2: different ways. I don't know where this will go, but
48:40
Speaker 2: this is these events, no doubt, will provoke these debates.
48:45
Speaker 1: Yeah, I have no doubt the entire world will move
48:49
Speaker 1: toward that direction. The question is can they move fast enough,
48:54
Speaker 1: you know, before the oil wrongs out, you know, because
48:59
Speaker 1: right now the the problem there are still you know,
49:03
Speaker 1: even as you're wrong, is allowing some ships to go
49:07
Speaker 1: through the Streethorn moves. I mean the traffic is still
49:11
Speaker 1: fairly late, very light. Yes, And.
49:17
Speaker 2: You take one little country as a case in point Australia.
49:22
Speaker 2: Australia has what less than thirty days of gasoline and diesel.
49:30
Speaker 2: That's not a lot of time, and at some point
49:34
Speaker 2: in time that if this persists, then available stocks run out.
49:43
Speaker 2: You know, there's already talk now actually about whether or
49:47
Speaker 2: not Australia needs to have what what what's the word, well,
49:55
Speaker 2: regulations basically in rules about who gets priority to use
49:58
Speaker 2: things and whether it should be prioritized by industry. Rationing
50:05
Speaker 2: is the word. I'm trying to resk rationing. There's already
50:08
Speaker 2: talk today now, not coming from the government. I might add,
50:12
Speaker 2: the government's trying to play the everything will be okay,
50:15
Speaker 2: we've got things under control position. The opposition, of course
50:19
Speaker 2: is you know, the chicken little You know, the government's
50:22
Speaker 2: not that enough. You know it's all going to go
50:25
Speaker 2: terribly wrong. But there are also serious people saying, well,
50:30
Speaker 2: if we've got twenty five thirty days of fuel, and
50:35
Speaker 2: if this conflict persists, then at some point we are
50:39
Speaker 2: going to face supply side constraints, and if those supply
50:44
Speaker 2: side constraints become material literally in four to six weeks time.
50:49
Speaker 2: And we can foresee that because it takes a couple
50:52
Speaker 2: of weeks for the ships, you know, three weeks for
50:54
Speaker 2: the ships to come through they come through. Well, it's
50:57
Speaker 2: actually very easy to see into the future at what
51:01
Speaker 2: point you're going to start to have insufficient stocks of
51:06
Speaker 2: fuel in Australia and the decisions will then have to
51:11
Speaker 2: be made about prioritizations in the short term and then
51:16
Speaker 2: what does the place do medium term? All right, and
51:23
Speaker 2: that those decisions I think are potentially ones that need
51:27
Speaker 2: to be made inside the next three to four weeks.
51:33
Speaker 2: Now you asked the question, right, you know, can can
51:38
Speaker 2: can we solve all of this in time before the
51:41
Speaker 2: oil runs out? Well, it depends on the country. But Australia,
51:46
Speaker 2: you know, as just an example, doesn't have a long
51:49
Speaker 2: lead time on this. Japan has a long lead time,
51:53
Speaker 2: Philippines doesn't. Mainland China has a long lead time. The
52:00
Speaker 2: little province of Taiwan does not have a long lead time.
52:05
Speaker 2: South Korea does not have a long lead time. So
52:08
Speaker 2: that's just our region, right. I think Malaysia, Malaysia is
52:13
Speaker 2: actually in that exporter, so I think it's probably going
52:15
Speaker 2: to have a little bit more buffer. Right, As we've
52:17
Speaker 2: discussed before, a place like India does not have long
52:22
Speaker 2: lead times. I mean, India's got you know, not not
52:27
Speaker 2: any problems with liquid fuels. It's also got problems on
52:31
Speaker 2: the gas front as well. Right, restaurants is already shutting
52:37
Speaker 2: and you know, having limits placed on them. You know
52:41
Speaker 2: where you can run run your kitchens for an hour.
52:45
Speaker 1: This is why India ass went to Washington to ask
52:49
Speaker 1: for a waiver to continue to buy Russian oil and gas.
52:53
Speaker 1: And this is actually why Washington has temporarily suspended the
52:57
Speaker 1: sanction on Russian oil and gas because they needed the
53:00
Speaker 1: Even Washington know they need to increase the oil supply
53:03
Speaker 1: to the world. And this is why you know, when
53:06
Speaker 1: stupid people like Gordon Chance says or why do we
53:09
Speaker 1: allow Uranian oil tanker to sell to China? Well, even
53:15
Speaker 1: United States government has realized they need to do whatever
53:20
Speaker 1: they can to make sure the oil continue to flow.
53:25
Speaker 1: You know, the more Uranian oil goes to China, that
53:29
Speaker 1: means the less oil China needs to buy from elsewhere
53:32
Speaker 1: to free up more oil supply.
53:35
Speaker 2: Yeah. Absolutely. The other thing is the United States also
53:41
Speaker 2: imports oil too. You know, this is the thing that
53:46
Speaker 2: I think all of this talk about the US having
53:48
Speaker 2: lots of oil, it does is one of the world's
53:52
Speaker 2: in facts, the world's largest producer, really it is. But
53:57
Speaker 2: it doesn't mean that doesn't import stuff because there are
53:59
Speaker 2: many different of oils, and to process and distill and things,
54:05
Speaker 2: you do need different kinds of inputs. So the United
54:09
Speaker 2: States also is exposed to the dynamics in a material
54:14
Speaker 2: sense and inn a financial sense to the global oil markets.
54:19
Speaker 2: And so yeah, look this touches absolutely everybody. And I
54:25
Speaker 2: mean we've seen gas prices in the US now rise
54:27
Speaker 2: to what four dollars a gallon, And I saw in
54:34
Speaker 2: the last twenty four hours data on the average diesel
54:39
Speaker 2: retail price which has hit just on five dollars a
54:43
Speaker 2: gallon in the United States. In fact, it's only the
54:47
Speaker 2: second time historically that it's gone over five. Last time
54:51
Speaker 2: was during the COVID pandemic. So you know, this is
54:56
Speaker 2: a very substantial spike. I was contacted last night, I
55:00
Speaker 2: buy out of the Blue, somebody who runs a small
55:06
Speaker 2: town depot where they just had diesel delivered, and the
55:11
Speaker 2: new retail price is four dollars eighty two US. So
55:14
Speaker 2: that's nudging up to that average of five, essentially confirming
55:18
Speaker 2: what's going on. So you know, United States businesses and
55:22
Speaker 2: consumers won't be immune, and you think about the households
55:26
Speaker 2: are affected, of course, But when diesel prices go up
55:31
Speaker 2: to the five dollar mark a gallon, two big industries
55:36
Speaker 2: are affected straight away. One's obviously agriculture. A lot of
55:39
Speaker 2: the machinery, of course, runs using diesel, on top of
55:42
Speaker 2: which they've got the fertilizer challenges now. But the second
55:46
Speaker 2: one is freight. So moving goods around the United States,
55:53
Speaker 2: including food, is dependent upon diesel. And you bring these
56:00
Speaker 2: things together and you've literally got a general cost increase
56:07
Speaker 2: across the board because everything gets transported and anything to
56:12
Speaker 2: relate to food is going to be hit. What a
56:17
Speaker 2: farmer's going to do? Are they going to absorb this
56:18
Speaker 2: increase in diesel costs? I doubt it. They're in enough
56:24
Speaker 2: pain as it is, and so we're going to start
56:27
Speaker 2: to see this happen. Now. Who are the beneficiaries, Well,
56:30
Speaker 2: there are beneficiaries, of course. President Trump made that very
56:33
Speaker 2: clear when oil prices go up really high. You know,
56:37
Speaker 2: he says America makes a lot of money. What he
56:39
Speaker 2: means is American oil companies make a lot of money.
56:43
Speaker 2: And we've seen this happen before during the pandemic when
56:46
Speaker 2: prices went through the roof, American oil companies made a
56:49
Speaker 2: lot of money. Ordinary households and small businesses and other
56:55
Speaker 2: businesses lost as a consequence, but big oil did very,
57:00
Speaker 2: very well. Again, We've got these dynamics of play, and
57:04
Speaker 2: the American economy is already under a lot of pressure,
57:08
Speaker 2: and these increased transport cost pressures and food production cost
57:12
Speaker 2: pressures are just going to make things worse in the
57:15
Speaker 2: context of a midterm election, right, I mean, this is
57:19
Speaker 2: creating a what's the word a cyclone or a whirlpool,
57:28
Speaker 2: or you know, it's a political storm all coming together.
57:33
Speaker 2: And in that environment. What worries me calm is the
57:40
Speaker 2: fact that this war is likely to go on longer
57:42
Speaker 2: than two weeks. I can sort of see clearer. Not
57:48
Speaker 2: that I've got a crystal ball or anything, but I
57:49
Speaker 2: think anybody who can exercise their brain can sort of
57:53
Speaker 2: see that there's a good chance this lasts a bit.
57:57
Speaker 2: But who can predict what madness comes out of Washington
58:01
Speaker 2: when these political forces are let loose.
58:06
Speaker 1: But I mean, I'm it's actually pretty shameful in the
58:14
Speaker 1: United States. You know, there's there's even markers, fashions and
58:19
Speaker 1: against the war. But the Democrats has set relatively little.
58:24
Speaker 1: They have they have largely stood on the sidelines. You know.
58:29
Speaker 2: It's it's what's so disappointing about all of this is, look,
58:36
Speaker 2: there is no anti war movement to speak of. That's
58:38
Speaker 2: the first thing which you know to me, you know,
58:42
Speaker 2: having participated in Palm Sunday marches, you know, in the
58:45
Speaker 2: late seventies and early nineteen eighties, I sort of still
58:48
Speaker 2: have memories of you know, peace movements and things. But
58:53
Speaker 2: it is that political silence right where a political judgment
58:58
Speaker 2: has been made, which is, you know, I say anything
59:00
Speaker 2: when your political opponents doing so much damage to themselves.
59:04
Speaker 2: But that's not the point. The point is to actually
59:07
Speaker 2: articulate a substantive position, which is that come November, should
59:14
Speaker 2: this still be going on, we will do something about it.
59:17
Speaker 2: And if you elect us, we are going to use
59:22
Speaker 2: the powers that we have as members of Congress to
59:26
Speaker 2: do X, Y and Z, because this war is a
59:32
Speaker 2: disaster for Americans first and foremost American reputation globally. Secondly,
59:42
Speaker 2: and of course if America pretends to have any sense
59:45
Speaker 2: of status as a global leader, the negative effects across
59:55
Speaker 2: the world on wealthy countries and poor countries alike. You know,
1:00:00
Speaker 2: it should be something that an American political class has
1:00:04
Speaker 2: the guts to say something about. And it doesn't. It
1:00:09
Speaker 2: doesn't have the guts to say anything about it. They
1:00:12
Speaker 2: just sit there whilst President Trump acts unilaterally, surrounded by
1:00:18
Speaker 2: yes men. And when and when people resign, clearly someone
1:00:24
Speaker 2: with some capability, this is the counter Terrorism Bureau head.
1:00:34
Speaker 2: The first thing that happens is that it gets attacked
1:00:35
Speaker 2: for being soft. I mean, it's truly remarkable watching this
1:00:49
Speaker 2: from Afar that a political system actually makes it possible
1:00:55
Speaker 2: for something to go this far and to go this
1:00:58
Speaker 2: much off the rails. Right, This is why is a
1:01:01
Speaker 2: systemic problem. If the system can't bring this sort of irrational, destructive,
1:01:09
Speaker 2: self destructive behavior to heal, then what chance does it have?
1:01:16
Speaker 2: What chance does anyone else have? And I'll go out
1:01:20
Speaker 2: on a limb. The only chance that people have at
1:01:23
Speaker 2: the moment, the only chance, will like it or not,
1:01:27
Speaker 2: is to throw a rope and hope that China grabs
1:01:30
Speaker 2: it and pulls you in tight. Because it's the only
1:01:34
Speaker 2: stable ship at the moment on this crazy stormy sea.
1:01:41
Speaker 1: I On that note, I think, thank you very much,
1:01:47
Speaker 1: Professor Powell for sharing your insights. So every time I
1:01:52
Speaker 1: have you on my show, I'm always learning something new.
1:01:56
Speaker 1: If people want to follow you, where would they go?
1:02:00
Speaker 2: Yeah, my substack Warrickpalell dot substack dot com. Firstly, Secondly,
1:02:06
Speaker 2: I've just published a book which is available on Amazon.
1:02:11
Speaker 2: It's called Thermoeconomics in a Time of Monsters. Paperback, hardback
1:02:17
Speaker 2: and kindle formats available. And thirdly, I have my own
1:02:23
Speaker 2: little special channel Special because it tends to bring voices
1:02:29
Speaker 2: from the global South to a global audience on YouTube
1:02:33
Speaker 2: t Io Talks with Warwick Powell. So they're the three things.
1:02:38
Speaker 2: Appreciate it if you followed it.
1:02:41
Speaker 1: Thank you very much, doctor polp for making your time
1:02:44
Speaker 1: to speak to us. And you know you're you're preaching
1:02:48
Speaker 1: to the choir when you say the system is broken.
1:02:51
Speaker 1: And I know I know that American system has been
1:02:54
Speaker 1: broken for a very very long time. Now is it
1:02:58
Speaker 1: just now we're seeing in the disastrous consequences and we'll
1:03:03
Speaker 1: have to see where this takes us. And so thanks
1:03:08
Speaker 1: for my audience for sticking with us until next time, Bye, bye,