Latest / Breaking Points with Krystal and Saagar / 4/2/26: US Allies Turn On Trump, Israel Takes Massive Fire, Iran War Ending US Dominance, AI Bubble

Transcript

4/2/26: US Allies Turn On Trump, Israel Takes Massive Fire, Iran War Ending US Dominance, AI Bubble · Breaking Points with Krystal and Saagar

• 0:00
  Speaker 1: Hey, guys, Saga and Crystal here.
• 0:01
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• 0:34
  Speaker 2: So I mentioned earlier some of the talk in Trump's
• 0:37
  Speaker 2: speech about the straight of hor moves, and he's still
• 0:39
  Speaker 2: on this whole thing of leg Well, we did all
• 0:41
  Speaker 2: the hard part, and so now you all who really
• 0:43
  Speaker 2: use the straight of hor moves, it's your job to
• 0:45
  Speaker 2: come in and take it back. Let's take a listen
• 0:48
  Speaker 2: to a little bit of how he presented that case.
• 0:50
  Speaker 4: And completely decimated ran They are decimated both militarily and
• 0:56
  Speaker 4: economically and every other way. And the countries of the
• 1:00
  Speaker 4: world that do receive oil through the hormone. Strait must
• 1:03
  Speaker 4: take care of that passage. They must cherish it. They
• 1:07
  Speaker 4: must grab it and cherish it. They can do it easily.
• 1:11
  Speaker 4: We will be helpful, but they should take the lead
• 1:14
  Speaker 4: in protecting the oil that they so desperately depend on.
• 1:18
  Speaker 4: So to those countries that can't get fuel, many of
• 1:21
  Speaker 4: which refuse to get involved in the decapitation of Iran,
• 1:25
  Speaker 4: we had to do it ourselves. I have a suggestion.
• 1:29
  Speaker 4: Number one, buy oil from the United States of America.
• 1:32
  Speaker 4: We have plenty, We have so much. And number two,
• 1:35
  Speaker 4: build up some delayed courage should have done it before,
• 1:38
  Speaker 4: should have done it with us as we asked. Go
• 1:41
  Speaker 4: to the Strait and just take it, protect it, use
• 1:45
  Speaker 4: it for yourselves. Iran has been essentially decimated. The hard
• 1:50
  Speaker 4: part is done, so it should be easy. And in
• 1:53
  Speaker 4: any event, when this conflict is over, the Strait will
• 1:56
  Speaker 4: open up naturally. It'll just open up naturally. They want
• 2:00
  Speaker 4: to be able to sell oil, because that's all they
• 2:03
  Speaker 4: have to try and rebuild. It will resume the flowing
• 2:07
  Speaker 4: and the gas prices will rapidly come back down. Stock
• 2:10
  Speaker 4: prices will rapidly go back up. They haven't come down
• 2:13
  Speaker 4: very much. Frankly, they came down a little bit, but
• 2:16
  Speaker 4: they've had some very good days over the last couple
• 2:19
  Speaker 4: of days.
• 2:20
  Speaker 5: So soccer grab it and take it and cherish it.
• 2:23
  Speaker 2: But also it's just going to open up naturally anyway
• 2:26
  Speaker 2: at some point, So I don't.
• 2:28
  Speaker 1: Know they'll do anything.
• 2:29
  Speaker 5: If it's just going to naturally open up. Yeah, I
• 2:32
  Speaker 5: mean it will.
• 2:32
  Speaker 2: If you go and you pay the toll, and you
• 2:34
  Speaker 2: make a deal with Iran, and you denominate your shipments
• 2:37
  Speaker 2: in Chinese, you on, then the street is actually not
• 2:40
  Speaker 2: closed at all for you if you want to go
• 2:42
  Speaker 2: down that path, and I think that is the path
• 2:44
  Speaker 2: that they will pursue.
• 2:44
  Speaker 3: President Maccron just speaking this morning in Japan, was asked
• 2:48
  Speaker 3: specifically about this. He said that Trump contradicts himself all
• 2:52
  Speaker 3: the time, and that there is no military solution to
• 2:55
  Speaker 3: the Straits of Hormus and that it will be resolved diplomatically.
• 2:58
  Speaker 3: So that is a major a power obviously France, and
• 3:02
  Speaker 3: by the way, in Japan. Again, not that anybody over
• 3:05
  Speaker 3: here cares at all all of these people, but Japan,
• 3:08
  Speaker 3: South Korea, the country's probably most affected US trading partners
• 3:11
  Speaker 3: and US allies by this crisis, who are freaking out
• 3:15
  Speaker 3: having currency problems and whose presidents? I mean just this
• 3:18
  Speaker 3: morning the South Korean president, remember we played last show
• 3:22
  Speaker 3: how he was like, I can't sleep at night. This
• 3:24
  Speaker 3: morning he's like, I am plor I guess at nighttime
• 3:26
  Speaker 3: his time, He's like, everyone, please don't drive if you can,
• 3:29
  Speaker 3: please take public transportation.
• 3:30
  Speaker 1: Do so.
• 3:31
  Speaker 3: He said something like please save every scrap of oil
• 3:34
  Speaker 3: that you can.
• 3:35
  Speaker 1: That's how bad things are getting over there.
• 3:37
  Speaker 3: So what are they gonna do when Iron comes and says, hey,
• 3:40
  Speaker 3: pay up, They're gonna pay it. And this is the
• 3:42
  Speaker 3: big problem for the United States. Are we going to
• 3:45
  Speaker 3: sanction South Korea? Are we going to sanction Japan, France, Germany,
• 3:48
  Speaker 3: the UK all of these other countries which are basically
• 3:51
  Speaker 3: and emphatically saying we are not getting into this mess
• 3:54
  Speaker 3: with you. We may clean it up, but we're not
• 3:56
  Speaker 3: going to clean it up on your terms. That's the problem.
• 3:59
  Speaker 3: Let's put up there on the screen too. Trump is
• 4:02
  Speaker 3: threatening to stop weapons for Ukraine unless Europe joins the
• 4:06
  Speaker 3: Hormuz coalition. And by that, again, let's be very clear,
• 4:10
  Speaker 3: he doesn't mean a diplomatic horrm moves coalition. He means
• 4:13
  Speaker 3: a military campaign. He's desperate to get the Europeans to
• 4:17
  Speaker 3: join the United States and their bombing campaign and at
• 4:19
  Speaker 3: least in some sort of international coalition that would seize
• 4:22
  Speaker 3: the strait or force the straight open again, though they
• 4:26
  Speaker 3: don't want to do that. And in fact you have
• 4:28
  Speaker 3: the major heads of basically all top economies in the
• 4:32
  Speaker 3: G seven or in NATO coming out and saying this
• 4:35
  Speaker 3: is not going to happen. Here's the Prime Minister, Keir
• 4:38
  Speaker 3: Starmer of the UK saying this. Let's take a listen.
• 4:41
  Speaker 6: Conflict in the Middle East has now entered a second month,
• 4:45
  Speaker 6: and while we're working at pace for de escalation and peace,
• 4:51
  Speaker 6: it is now clear that the impact of this war
• 4:54
  Speaker 6: will affect the future of our country. First, let me
• 4:59
  Speaker 6: say once again, this is not our war. We will
• 5:05
  Speaker 6: not be drawn into the conflict that is not in
• 5:09
  Speaker 6: our national interest. And the most effective way we can
• 5:14
  Speaker 6: support the cost of living in Britain is to push
• 5:18
  Speaker 6: for de escalation in the Middle East and a reopening
• 5:22
  Speaker 6: of the straight up hor Moves, which is such a
• 5:25
  Speaker 6: vital route for energy. To that end, we're exploring each
• 5:30
  Speaker 6: and every diplomatic avenue that is available to us. The
• 5:34
  Speaker 6: Foreign Secretary and the Chancellor have met their counterparts in
• 5:39
  Speaker 6: the g seven. The Defense Secretary has been in the
• 5:42
  Speaker 6: Middle East speaking to our partners, and the UK has
• 5:47
  Speaker 6: now brought together thirty five nations around our statement of
• 5:51
  Speaker 6: intent to push as one for maritime security across the Gulf,
• 5:59
  Speaker 6: and today I can announce that later this week the
• 6:03
  Speaker 6: Foreign Secretary will host a meeting that brings those nations
• 6:07
  Speaker 6: together for the first time, where we will assess all
• 6:12
  Speaker 6: viable diplomatic and political measures that we can take. We
• 6:15
  Speaker 6: will also convene our military planners to look at how
• 6:19
  Speaker 6: we can marcial our capabilities and make the straight accessible
• 6:24
  Speaker 6: and safe after the fighting has stopped. Because I do
• 6:30
  Speaker 6: have to level with people on this. This will not
• 6:34
  Speaker 6: be easy.
• 6:36
  Speaker 3: This will not be easy. Is prepping them all for
• 6:39
  Speaker 3: a crisis ahead. But he's still saying we're not joining
• 6:41
  Speaker 3: the war, and he keeps saying, I just it is
• 6:44
  Speaker 3: all I ever wanted was a leader who would say things.
• 6:47
  Speaker 3: And I don't know not how even sure he means
• 6:48
  Speaker 3: it when he's like, I will always act in Britain's
• 6:51
  Speaker 3: national interests. Why is that so hard to find here
• 6:54
  Speaker 3: in the United States? And to see the Euros saying
• 6:57
  Speaker 3: stuff like this again? The most globalist people on the planet.
• 7:01
  Speaker 3: You're like, wow, what exactly have we done?
• 7:03
  Speaker 2: But it's well, they have no choice exactly, really have
• 7:06
  Speaker 2: no choice.
• 7:07
  Speaker 1: Don't have a choice, they can't the war.
• 7:09
  Speaker 2: And there's a couple of things I want to note
• 7:11
  Speaker 2: about his comments in particular. So first of all, he
• 7:14
  Speaker 2: talks about where he's Marshal getting this meeting together. So
• 7:17
  Speaker 2: while he's you know, sort of pushing the US, you know,
• 7:21
  Speaker 2: putting us at arm's length, he's looking for greater collaboration
• 7:25
  Speaker 2: between other European nations. And what he says is we're
• 7:27
  Speaker 2: going to just we're going to explore all diplomatic and
• 7:31
  Speaker 2: political solutions. And then he goes on to say something about,
• 7:35
  Speaker 2: you know, we're going to Marshal also our military resources
• 7:37
  Speaker 2: to uh to keep the street open and safe after
• 7:42
  Speaker 2: the fighting has ended, so you know, he wants to
• 7:45
  Speaker 2: get in. There's something about, yeah, well our military will
• 7:47
  Speaker 2: do something. Put not right now, not right now. Maybe
• 7:50
  Speaker 2: once this is all died down, we'll like play some
• 7:53
  Speaker 2: role and making sure it stays in a new status
• 7:55
  Speaker 2: quo or whatever. But right now, what we're looking at
• 7:58
  Speaker 2: is the political and diplomatic approaches here.
• 8:02
  Speaker 5: And you know, to your point earlier.
• 8:04
  Speaker 2: About always the US going to sanction you know, South Korea,
• 8:06
  Speaker 2: Japan or whoever tries to purchase oil from Iran. No,
• 8:10
  Speaker 2: I mean already we've backed off of sanctions on Iran.
• 8:14
  Speaker 2: You know, we've already given them sanctions relief. Why because
• 8:18
  Speaker 2: we can't take oil going you know, higher per barrel,
• 8:21
  Speaker 2: We can't take the higher prices at the pump. Trump
• 8:24
  Speaker 2: politically certainly cannot sustain that. So no, he's going to,
• 8:29
  Speaker 2: as he already is, allow countries to go in and
• 8:32
  Speaker 2: make deals with Iran, make deals with Russia. And so
• 8:35
  Speaker 2: those two countries in particular will end up being some
• 8:38
  Speaker 2: of the major beneficiaries here. And that's not to say that,
• 8:41
  Speaker 2: of course, Iran is taking a lot of damage. I mean,
• 8:43
  Speaker 2: their you know, steel industry has been hit very hard.
• 8:47
  Speaker 2: That's a major part of their non oil economy. So
• 8:50
  Speaker 2: that is significant. It's going to take a lot of
• 8:52
  Speaker 2: time to rebuild. They're going to lose you know, several
• 8:55
  Speaker 2: points probably on their GDP. All of that is very real.
• 8:59
  Speaker 2: But in terms of long term strategic perspective, you know,
• 9:02
  Speaker 2: Trump keeps saying and his defenders keep saying, short term
• 9:06
  Speaker 2: pain for long term gain. Yeah, short term pain of
• 9:08
  Speaker 2: the entire world for long term gain of Iran and
• 9:12
  Speaker 2: Russia and China is basically what we're looking at at
• 9:15
  Speaker 2: this point. And we can put C four up on
• 9:17
  Speaker 2: the screen. This is just some of the details here
• 9:19
  Speaker 2: from the Guardian about these talks with thirty five countries
• 9:23
  Speaker 2: for straight of horror moves. You know, they're just scrambling
• 9:27
  Speaker 2: trying to figure out what they can do because the
• 9:29
  Speaker 2: economic fallout for all of the European countries is going
• 9:32
  Speaker 2: to be extraordinarily grave.
• 9:35
  Speaker 5: And then we also see, you.
• 9:36
  Speaker 2: Know, and some of this is like you can look
• 9:39
  Speaker 2: at it and it's a little too little, too late.
• 9:40
  Speaker 2: We'd like to hear some more forceful condemnations of what's
• 9:43
  Speaker 2: going on here this illegal war. But you do see
• 9:46
  Speaker 2: some moves starting to be made. We can put CE
• 9:48
  Speaker 2: five up on the screen. France has now joined the
• 9:51
  Speaker 2: list of countries that is refusing airspace specifically to Israel
• 9:56
  Speaker 2: to transfer US weapons for the Iran war. So they
• 10:00
  Speaker 2: haven't directly rebuked the US in quite the same way,
• 10:03
  Speaker 2: but obviously Israel being our key partner in this whole war,
• 10:07
  Speaker 2: that is very significant.
• 10:08
  Speaker 5: We can put C six up on the screen.
• 10:11
  Speaker 2: Italy had already denied US aircraft access to their military base.
• 10:17
  Speaker 2: This is incredibly signing. Italy has a right wing leader.
• 10:20
  Speaker 2: You know, there was a lot of thought that she
• 10:22
  Speaker 2: that Maloney and Trump would be very close in a
• 10:24
  Speaker 2: lot of ways, they're ideologically aligned. But she's also been
• 10:27
  Speaker 2: under tremendous pressure domestically. They've had general strikes against the
• 10:32
  Speaker 2: you know, support for the genocide in Gaza. They have
• 10:36
  Speaker 2: you know, sort of like activated, you know, mobilized actual
• 10:40
  Speaker 2: labor power in the state. That makes it puts more
• 10:44
  Speaker 2: pressure on her perhaps than in other places. And they
• 10:47
  Speaker 2: could put C seven up on the screen just to
• 10:48
  Speaker 2: give you a sense. Germany being one of the largest
• 10:51
  Speaker 2: economies in the world, their growth forecast already cut as
• 10:54
  Speaker 2: according to the Washington Post, scrambles to contain the price
• 10:58
  Speaker 2: shock from the Iran war. And then we put this
• 11:01
  Speaker 2: last one up on the screen, you know, because this
• 11:03
  Speaker 2: has major political and economic implications here in the US.
• 11:08
  Speaker 2: So foreign central banks increasingly are selling US treasuries. There's
• 11:14
  Speaker 2: a lot of you know, somewhat complicated technical reasons for that,
• 11:17
  Speaker 2: but part of it is just decoupling from the US
• 11:20
  Speaker 2: and seeking other potentially safer avenues of investment, and so
• 11:26
  Speaker 2: as the demand for US treasuries goes down, the price
• 11:30
  Speaker 2: we have to pay, so that interest rate, that.
• 11:32
  Speaker 5: Bond yield goes up.
• 11:35
  Speaker 2: That's what makes our debt increasingly expensive. So that means
• 11:38
  Speaker 2: more money out of our pockets to have to pay
• 11:41
  Speaker 2: off that debt, and it creates a lot of problems.
• 11:44
  Speaker 2: That's why Trump seems to really watch the bond market
• 11:48
  Speaker 2: and the bond yields so incredibly closely and has made
• 11:51
  Speaker 2: all kinds of moan. It's not just in this war,
• 11:53
  Speaker 2: but you know, with his tariffs in and other places
• 11:55
  Speaker 2: during his presidency, when the bond yields get too high
• 11:58
  Speaker 2: to try to control them those prices.
• 12:01
  Speaker 3: Yeah, the bond market obviously is dramatically important in all
• 12:04
  Speaker 3: of Trump's decision making, but it also look, I mean,
• 12:07
  Speaker 3: it's trite to talk too much about the petro dollar,
• 12:11
  Speaker 3: but it does matter. One of the reasons why allies
• 12:13
  Speaker 3: are so mad at US right now is the currency problem.
• 12:17
  Speaker 3: So I've talked about this with Japan. Because crude is
• 12:21
  Speaker 3: so high in price, the Indians, the Japanese, the South
• 12:25
  Speaker 3: Koreans are having to sell off their currency into dollars,
• 12:29
  Speaker 3: which is pushing the dollar up, devaluing their currency just
• 12:33
  Speaker 3: to be able to buy the more expensive oil from
• 12:35
  Speaker 3: the crisis that we created. So we're actually creating a
• 12:38
  Speaker 3: major fiscal crisis in a lot of these countries. I
• 12:42
  Speaker 3: believe Japan and South Korea are both trying to pass
• 12:44
  Speaker 3: emergency budgets right now to deal with the crisis. The
• 12:47
  Speaker 3: Indian rupee, I think it's sank to a couple of
• 12:49
  Speaker 3: days ago to a fourteen year low. They're trying their
• 12:52
  Speaker 3: best to buy Russian oil. People are now engaging in
• 12:55
  Speaker 3: all these insane schemes to try and buy Iranian oil
• 12:58
  Speaker 3: with wand But you know, this same ability to convert
• 13:01
  Speaker 3: into that and we're in a crypto is an exactly
• 13:04
  Speaker 3: one to one. But the Chinese banking system, the shadow
• 13:06
  Speaker 3: banking system outside of US control, is trying to be
• 13:09
  Speaker 3: built up for exactly transactions like this between treasuries, currency
• 13:14
  Speaker 3: and everything. Remember, like that really really makes it more
• 13:17
  Speaker 3: difficult for America to maintain it's economic supremacy, and it
• 13:21
  Speaker 3: will create some sort of different system in the future,
• 13:24
  Speaker 3: which is where things continue.
• 13:26
  Speaker 1: To look and look.
• 13:26
  Speaker 3: I think everybody knows I'm no fan of NATO. I mean,
• 13:29
  Speaker 3: if anything a silver lining is like, maybe this would
• 13:31
  Speaker 3: be the end of NATO and we could actually make
• 13:33
  Speaker 3: some real allies and have some security agreements, which makes
• 13:36
  Speaker 3: sense for us and not like north Mont Mathisonia or
• 13:39
  Speaker 3: something like that.
• 13:40
  Speaker 1: But you don't throw the baby.
• 13:42
  Speaker 3: Out with the bathwater, right Like the UK and Australia,
• 13:46
  Speaker 3: I would say, two most critical allies Anglo sphere literally
• 13:50
  Speaker 3: that we're supposed to be with, Well.
• 13:52
  Speaker 1: Look at how they're handled.
• 13:53
  Speaker 3: I mean their prime ministers are or presidents are both
• 13:56
  Speaker 3: going before the public and are being like, this is
• 13:58
  Speaker 3: a disaster, this is a crisis.
• 14:00
  Speaker 1: We are having, you know, serious hits. And then what
• 14:03
  Speaker 1: I'm watching is.
• 14:04
  Speaker 3: I don't know if you saw this one Mark Dubowitz
• 14:07
  Speaker 3: from the from FDD, chair of the Israel lobby basically
• 14:10
  Speaker 3: here in Washington, regime change from the foundation of defensive democracies,
• 14:14
  Speaker 3: and he said, you know, five Eyes is useless. We
• 14:17
  Speaker 3: should go to countries which are really good for us,
• 14:21
  Speaker 3: like Israel and Ukraine. I was like, what, like Israel
• 14:25
  Speaker 3: and Ukraine are good intelligence partners, not the you know,
• 14:29
  Speaker 3: not Australia, like the five Eyes partners. Though we have
• 14:33
  Speaker 3: long blood brothers and have been allies now for decades,
• 14:36
  Speaker 3: like this is the issue that we have. I would
• 14:39
  Speaker 3: say in the G seven, if you look at the
• 14:42
  Speaker 3: rest of the G seven, we have marginally or majorly
• 14:47
  Speaker 3: hurt every single one of those countries. Those are the
• 14:50
  Speaker 3: countries that I would care about the most. And to
• 14:53
  Speaker 3: see that happen it's I mean shocking from an actual
• 14:57
  Speaker 3: ally perspective, and it will really, it will really punish
• 15:02
  Speaker 3: our standing with them in the future. There's talk and
• 15:04
  Speaker 3: stuff about Greenland, et cetera. But this is way beyond that.
• 15:09
  Speaker 3: Like when you put foreign economies who are allies for
• 15:13
  Speaker 3: decades into recessions, or you create these types of crises,
• 15:17
  Speaker 3: they will have the same reaction that America did after
• 15:20
  Speaker 3: the oil shock of the nineteen seventies. We cannot rely
• 15:24
  Speaker 3: on these people, period. We are going to have to
• 15:27
  Speaker 3: do something else. And look said, as I said, I'm
• 15:29
  Speaker 3: no great fan of NATO. However, the dissolution of NATO
• 15:33
  Speaker 3: today I stole this from my friend Bruno Masi's It
• 15:36
  Speaker 3: would have nothing to do with Russia. It would basically
• 15:39
  Speaker 3: enable a Israeli war on Turkey. That would be the
• 15:42
  Speaker 3: net effect, right, because the Turks in the Israelis hate Turkey,
• 15:46
  Speaker 3: that's basically what it would open his door to another
• 15:49
  Speaker 3: Middle Eastern war. I mean, already half of NATO is
• 15:51
  Speaker 3: seting that we have to even defend Turkey, even though,
• 15:54
  Speaker 3: of course, you know, they have their own domestic political
• 15:57
  Speaker 3: interests and they're furious with what's happening with Israel. So
• 16:00
  Speaker 3: that's the most likely war that would erupt if there's
• 16:04
  Speaker 3: any you know, withdrawal or end of NATO, is an
• 16:07
  Speaker 3: Israeli war on Turkey, which at this point I'm certain
• 16:10
  Speaker 3: the United States would somehow get dragged in, even though
• 16:12
  Speaker 3: the Turks are fifty thousand times better allies than the Israelis.
• 16:16
  Speaker 5: Now we wouldn't get dragged in.
• 16:17
  Speaker 1: We are really choiced to get in.
• 16:19
  Speaker 2: Because I think Trump, like is so Israel is basically
• 16:22
  Speaker 2: just a permanent war economy now right, Like that's that
• 16:25
  Speaker 2: is the way that state is structured. That's what keeps
• 16:28
  Speaker 2: Benjamin etnia who in power. That is the whole like
• 16:32
  Speaker 2: logic of their genocidal state, and increasingly that is I mean,
• 16:37
  Speaker 2: that's when Trump says, we can't do healthcare, we can't
• 16:40
  Speaker 2: do Medicare, we can't do childcare, because we've got to
• 16:42
  Speaker 2: just be at permanent war that's the vision for this
• 16:45
  Speaker 2: country that he is articulating as well. Now, Trump is
• 16:49
  Speaker 2: an old man, who knows how long he's going to
• 16:51
  Speaker 2: be around. I think after this regardless at this point
• 16:54
  Speaker 2: of how this war is brought to a conclusion, it's
• 16:57
  Speaker 2: going to be humiliating one way or another. So I
• 17:00
  Speaker 2: think this is pretty much the end of his presidency.
• 17:02
  Speaker 2: But that is the way that he is viewing the
• 17:04
  Speaker 2: direction of the United States as well. So yeah, he
• 17:08
  Speaker 2: would be eager to find a new country to go
• 17:11
  Speaker 2: to war with because that is the logic of this
• 17:13
  Speaker 2: state that he has created as well. So you're absolutely right,
• 17:16
  Speaker 2: as with many Trumpian things, like he can take something
• 17:20
  Speaker 2: that is already bad and that there's a genuine critique
• 17:23
  Speaker 2: of and then find a way to make it infinitely worse.
• 17:26
  Speaker 2: And that's what would happen with this direction of how
• 17:29
  Speaker 2: NATO would end. I thought Professor Pape made a great
• 17:32
  Speaker 2: point yesterday with Ryan and Emily and everybody should go
• 17:35
  Speaker 2: watch that interview as quite exordinary actually how he laid
• 17:37
  Speaker 2: things down. He's like NATO's already over, because do you
• 17:41
  Speaker 2: really think that you know, if you have this US
• 17:43
  Speaker 2: led US led coalition and there's an order that comes
• 17:48
  Speaker 2: down from this president or another that all the NATO
• 17:50
  Speaker 2: countries are just going to fall in line and take
• 17:52
  Speaker 2: it and do what. No, he's like, no, it's already dead.
• 17:55
  Speaker 2: Like it's already all but dead. So we're just living
• 17:58
  Speaker 2: with this sort of zombie organization for the time being.
• 18:00
  Speaker 1: That's all been true.
• 18:01
  Speaker 3: And yet you know, look, I don't even care, you know, necessarily,
• 18:05
  Speaker 3: I think there should just be a force piece dealer
• 18:07
  Speaker 3: on Russia and Ukraine. But for those of the people
• 18:09
  Speaker 3: who allegedly do care, congratulations, you know you went after Iran. Okay,
• 18:13
  Speaker 3: nice work. Now Russia is very rich. It is almost certain.
• 18:17
  Speaker 3: You know, we were talking about jet fuel. Well, jet fuel.
• 18:20
  Speaker 1: Let's say, if the things continue to be closed.
• 18:22
  Speaker 3: Where did the Europe buy all of its jet fuel
• 18:25
  Speaker 3: from before Russia and Ukraine from Russia.
• 18:28
  Speaker 1: Well, now, if.
• 18:29
  Speaker 3: You're going to remove all of this refined product from
• 18:31
  Speaker 3: the market and then they have to come to the
• 18:33
  Speaker 3: United States to try and buy it, what's more likely
• 18:35
  Speaker 3: they're going to keep doing that to support Ukraine or
• 18:38
  Speaker 3: are they just going to open things up?
• 18:39
  Speaker 1: They're going to buy from Russia on a long enough timeline.
• 18:41
  Speaker 3: That's the almost certain way that things are going to normalize,
• 18:45
  Speaker 3: So congratulations, you actually bailed Russia out, not that it
• 18:49
  Speaker 3: necessarily needed it, but will it will almost certain if
• 18:53
  Speaker 3: this crisis continues, there will be more normalization with Russia
• 18:57
  Speaker 3: than would have happened if this war had not contain
• 19:00
  Speaker 3: which actually really bolsters them because they didn't give a
• 19:03
  Speaker 3: single inch on sanctions or on the war in Ukraine.
• 19:07
  Speaker 3: And then the Ukrainians themselves are basically in the last
• 19:10
  Speaker 3: gasp trying to hit all of these Russian oil facilities,
• 19:13
  Speaker 3: which is only driving the price higher, which only makes
• 19:16
  Speaker 3: the logic of normalizing relations with Russia even better as
• 19:20
  Speaker 3: the price of.
• 19:20
  Speaker 1: Oil continues to go up.
• 19:22
  Speaker 3: So nobody's gonna win in this one if you're allegedly
• 19:25
  Speaker 3: on the Ukrainian side, But that's almost certainly what's going
• 19:28
  Speaker 3: to happen.
• 19:29
  Speaker 2: So all right, Yeah, and I'm just just checking the
• 19:31
  Speaker 2: markets now. Oil right at this moment at eight fifty
• 19:34
  Speaker 2: five up at one eleven, and actually the West Texas
• 19:38
  Speaker 2: Intermediate is a little bit higher than Brent crude at
• 19:41
  Speaker 2: this point.
• 19:41
  Speaker 5: One eleven is where we are.
• 19:43
  Speaker 3: That is so pot that's what is that an eleven
• 19:45
  Speaker 3: percent jump in a single day before.
• 19:47
  Speaker 5: Yeah, that's exactly what happens.
• 19:49
  Speaker 3: Yeah, so off the top of my head, that's like
• 19:51
  Speaker 3: four to twenty a gallon nationwide.
• 19:54
  Speaker 1: Yikes, that's not good. That's really bad.
• 19:57
  Speaker 5: Great, great speech you gave last night.
• 19:59
  Speaker 1: Let's move on to the warcle.
• 20:03
  Speaker 3: So we have very ominous warnings about potential ground operations.
• 20:06
  Speaker 3: We do want to reiterate what that would actually look like.
• 20:09
  Speaker 3: The president remember he pointed to Mark Levin saying, we
• 20:12
  Speaker 3: need to go and get the uranium.
• 20:14
  Speaker 1: Well, let's go and put this up.
• 20:15
  Speaker 3: Here on the screen now from the Washington Post confirmed
• 20:18
  Speaker 3: some of the Wall Street Journal reporting that we have
• 20:20
  Speaker 3: brought you all before about what exactly it would take
• 20:23
  Speaker 3: to go and to get all of this uranium. So
• 20:26
  Speaker 3: let's just go through the plan, shall we. The plan
• 20:30
  Speaker 3: would represent enormous difficulty, would require the airlift of hundreds
• 20:35
  Speaker 3: or thousands of troops heavy equipment to support the EVA
• 20:39
  Speaker 3: excavation and recovery of radioactive material. It could take weeks
• 20:43
  Speaker 3: and would take place under fire deep inside of Iran.
• 20:48
  Speaker 3: So literally would entail not only dropping in troops but
• 20:52
  Speaker 3: also excavators. They would have to build a runway, a
• 20:57
  Speaker 3: temporary runway to have to come in and come out.
• 21:00
  Speaker 3: You would have to drop the Special Operations Force, and
• 21:01
  Speaker 3: they would have to drop a force to protect the
• 21:03
  Speaker 3: Special Operations Force, and it would take close air support
• 21:07
  Speaker 3: and ground operations to make sure that nobody could even
• 21:09
  Speaker 3: come close to them as they take the weeks and
• 21:12
  Speaker 3: or months to actually carry out this mission. And a
• 21:16
  Speaker 3: lot of people obviously think that that's totally crazy. But
• 21:19
  Speaker 3: what's even crazier is that it could even be in
• 21:22
  Speaker 3: the works. Remember the eighty second Airborne is there. You've
• 21:24
  Speaker 3: got special operations units. But we wanted to flag this.
• 21:27
  Speaker 3: This is a viral video that came out from San Diego.
• 21:30
  Speaker 3: Can we go and put this video up here on
• 21:33
  Speaker 3: the screen where a user actually took this video of
• 21:37
  Speaker 3: excavators that were moving via train to the Naval boatyards
• 21:41
  Speaker 3: in San Diego. They said, look, we don't know obviously
• 21:45
  Speaker 3: why all this equipment is moving in, but you could
• 21:47
  Speaker 3: see that it was very clearly moving on the train
• 21:49
  Speaker 3: to potentially good reason. You know, there's a lot of
• 21:52
  Speaker 3: use for military assets and for things like that. But
• 21:55
  Speaker 3: don't remember, or don't forget San Diego all of a
• 21:57
  Speaker 3: Special Operations forces and conventional horses that are all stationed
• 22:01
  Speaker 3: there not to mention the naval base, so we did
• 22:03
  Speaker 3: want to flag it as at the very least you
• 22:05
  Speaker 3: can see some of this type of equipment which is
• 22:08
  Speaker 3: making its way to the base, and who knows from
• 22:10
  Speaker 3: where it could go.
• 22:11
  Speaker 1: I don't even really know if it would have.
• 22:13
  Speaker 3: To be shipped over there if they have of course,
• 22:15
  Speaker 3: if they have to also drop it in via air.
• 22:17
  Speaker 3: But you can see very clearly what this would entail.
• 22:21
  Speaker 3: It's not just some grab and go style mission. The
• 22:23
  Speaker 3: Iranians and know you're coming. And remember in our last
• 22:26
  Speaker 3: show Crystal, we told everybody they hit that ammunition dump
• 22:30
  Speaker 3: in Isfahan, not a missile city, an ammunition dump specifically
• 22:33
  Speaker 3: of artillery and of weapons which would be used as
• 22:37
  Speaker 3: defense in some sort of ground combat operation.
• 22:40
  Speaker 1: I don't think that.
• 22:41
  Speaker 3: Was a mistake that they hit that, and that you're
• 22:43
  Speaker 3: seeing all of this, not saying it's going to happen,
• 22:45
  Speaker 3: but saying if they did, they're setting the ground if
• 22:47
  Speaker 3: they want to.
• 22:48
  Speaker 2: I mean, those are some of the signs we talked
• 22:50
  Speaker 2: earlier about the eight tens. That would be another sign
• 22:53
  Speaker 2: you know that those are going to the region. You've
• 22:55
  Speaker 2: got also reports that some additional infrastructure around Isfa has
• 23:00
  Speaker 2: been struck things like, you know, bridges and other logistical
• 23:04
  Speaker 2: infrastructure that would make it more difficult for Iranians to
• 23:08
  Speaker 2: respond to any sort of an attack. There also worth
• 23:12
  Speaker 2: noting that this completely insane plan to seize this nuclear material.
• 23:18
  Speaker 2: This was drawn up apparently at Trump's request, per this
• 23:22
  Speaker 2: report from the Washington Post. So this wasn't something the
• 23:25
  Speaker 2: military was like, Okay, here's one of your options. Here's
• 23:28
  Speaker 2: another option, here's the carg Island idea, here's this ido.
• 23:31
  Speaker 5: He was like, what would this actually look like?
• 23:35
  Speaker 2: Which I think is just a demonstration that this is
• 23:38
  Speaker 2: a direction that he is very interested in. You know,
• 23:41
  Speaker 2: it has a lot of Trumpian hallmarks. He would be
• 23:43
  Speaker 2: able to have some sort of the victory narrative. He
• 23:45
  Speaker 2: would be able to claim, as he did after the
• 23:47
  Speaker 2: Twelve Day War, that their nuclear program was completely obliterated
• 23:51
  Speaker 2: and there was no chance for them to develop a
• 23:54
  Speaker 2: nuclear weapon, and so, you know, he would be able
• 23:56
  Speaker 2: to assert some sort of a victory of this whole mess.
• 24:02
  Speaker 2: But very likely, given the highly risky nature of what
• 24:07
  Speaker 2: is being contemplated here, it could be a complete and
• 24:10
  Speaker 2: utter disaster where it just completely fails. At the very
• 24:13
  Speaker 2: least it's highly likely you will have significant casualties to
• 24:17
  Speaker 2: come out of such a risky operation. And then once
• 24:21
  Speaker 2: you've had you know, a large number of American service
• 24:23
  Speaker 2: members killed, are you really able to just walk away
• 24:27
  Speaker 2: at this point?
• 24:28
  Speaker 5: At that point?
• 24:29
  Speaker 2: And how does Iron respond, how does Israel respond, etc.
• 24:32
  Speaker 2: So you know, if I had to say this is
• 24:34
  Speaker 2: the direction that his psychology would most lead him towards.
• 24:39
  Speaker 2: I'm not even sure whether he's particularly made up his
• 24:42
  Speaker 2: mind about exactly what he wants to do. It seems
• 24:45
  Speaker 2: like he's getting a bunch of assets in the region
• 24:48
  Speaker 2: to have a whole lot of different options. But to me,
• 24:52
  Speaker 2: the idea that they're just going to continue this air
• 24:54
  Speaker 2: only campaign for another two to three weeks, it's not
• 24:58
  Speaker 2: going to fundamentally change anything in terms of the strategic objectives,
• 25:03
  Speaker 2: and then he's just going to walk away with his
• 25:05
  Speaker 2: presidency in shambles and having effectively, you know, de facto
• 25:09
  Speaker 2: declared a complete surrender to the Iranians.
• 25:12
  Speaker 5: That's very difficult for me.
• 25:13
  Speaker 3: And the other problem with this whole two to three
• 25:15
  Speaker 3: week timeline is, you know, the war is going to continue,
• 25:18
  Speaker 3: and it's not just us bombing them, it's them bombing
• 25:20
  Speaker 3: US and Israel. So let's put some of this video
• 25:23
  Speaker 3: up here on the screen that we have. Israel continues
• 25:26
  Speaker 3: to get pounded every night, and remember they're rationing missile interceptors.
• 25:31
  Speaker 3: They are having a lot more sites that are struck.
• 25:34
  Speaker 3: Anybody can go and can watch video of all of
• 25:37
  Speaker 3: the damage that has happened in Tel Aviv. Just yesterday
• 25:41
  Speaker 3: they were multiple foreign journalists and others reporting the number
• 25:46
  Speaker 3: of intense missiles barrages that were coming in as a
• 25:50
  Speaker 3: result of Iranian ballistic missiles which were not being intercepted.
• 25:54
  Speaker 3: And we're actually striking, as you guys can see just
• 25:57
  Speaker 3: from the ground of like what it looks like. You
• 25:59
  Speaker 3: did not see much of this in the very opening
• 26:01
  Speaker 3: days of the war, when their interceptor stockpile was much more.
• 26:05
  Speaker 3: That was I believe it was an oil refinery that
• 26:07
  Speaker 3: you all are watching right now on your screen and
• 26:10
  Speaker 3: you can actually see. Let's put the Times of Israel
• 26:12
  Speaker 3: report up there. They are even admitting right now Iran
• 26:16
  Speaker 3: and Hezbola launch attacks as Israelis are hosting the Passover Satyrs,
• 26:20
  Speaker 3: sending the millions into the shelters. But they also note
• 26:24
  Speaker 3: that the number of strikes was more than at any
• 26:27
  Speaker 3: time since the first week of the war. So it's
• 26:30
  Speaker 3: actually an increase in the number of missiles that you
• 26:33
  Speaker 3: saw that were coming directly into Israel. Not to mention
• 26:37
  Speaker 3: again all of the targets across the Gulf. Let's go
• 26:41
  Speaker 3: ahead and put D five and some of the other
• 26:43
  Speaker 3: video that we have from the Golf strikes.
• 26:45
  Speaker 1: This was a very striking video that came out.
• 26:48
  Speaker 3: This was an Iranian missile coming in and hitting a
• 26:52
  Speaker 3: facility near US troops.
• 26:54
  Speaker 1: You can actually see one of the troops there who's
• 26:56
  Speaker 1: in the video.
• 26:56
  Speaker 3: There's multiple other videos that even came out overnight before
• 27:00
  Speaker 3: or we started the show of facilities, US facilities in
• 27:03
  Speaker 3: Jordan that were being struck, I mean just all across
• 27:06
  Speaker 3: the Middle East. And you remember that there's an intense
• 27:08
  Speaker 3: amount of censorship that is coming out. We do know
• 27:11
  Speaker 3: that some three hundred or so US troops have been
• 27:14
  Speaker 3: wounded now so far, I believe six remain seriously wounded.
• 27:19
  Speaker 3: The vast majority have returned to service. But this continues
• 27:23
  Speaker 3: for two to three weeks. You just don't know. You
• 27:25
  Speaker 3: had the refueling tanker that went down over Iraq that
• 27:28
  Speaker 3: claimed the lives of some for service members. You got
• 27:31
  Speaker 3: thirteen now who've been confirmed dead, several hundred who have
• 27:34
  Speaker 3: been wounded. I believe a dozen or so who are
• 27:36
  Speaker 3: seriously wounded, and six or so who remain in critical care.
• 27:40
  Speaker 3: So it's not like that we haven't had a toll ourselves.
• 27:43
  Speaker 3: Not to mention all of the energy infrastructure and other
• 27:47
  Speaker 3: things that continue to be targeted every day. You can
• 27:50
  Speaker 3: watch and see the UAE straits of horn Moves, you know,
• 27:55
  Speaker 3: attacks and the straits of Hormos. You've seen attacks in
• 27:57
  Speaker 3: the Dubai, like in the port in the against Saudi Arabia.
• 28:01
  Speaker 3: There are multiple missile strikes that happen there, and they
• 28:04
  Speaker 3: still have the capability and the capacity to launch strikes
• 28:07
  Speaker 3: at the critical energy infrastructure. They're holding off on it
• 28:10
  Speaker 3: for right now, but they're ready to go if they
• 28:13
  Speaker 3: need to, if there's some sort of escalation. So just
• 28:15
  Speaker 3: keep that in mind, and we do have D six.
• 28:19
  Speaker 3: This is part of the problem about this strategic logic
• 28:22
  Speaker 3: which is happening, is that the axios is reporting the
• 28:26
  Speaker 3: Saudis sound like Mark Levin. They want the US to
• 28:30
  Speaker 3: finish the job by wiping Iran off the globe. Now
• 28:33
  Speaker 3: we don't want to, is what you have now is
• 28:36
  Speaker 3: a situation where the UAE and Saudi who have gone
• 28:40
  Speaker 3: all in with America right, well, now they're held hostage
• 28:43
  Speaker 3: their entire economies by Iran in the streets of Hormuz.
• 28:47
  Speaker 3: They don't want to pay the hostage toll, even though
• 28:49
  Speaker 3: that would be the rational thing to do at this point,
• 28:51
  Speaker 3: it would probably be easier for everybody involved. So they're
• 28:54
  Speaker 3: pushing the US. They're like, no, you have to finish
• 28:56
  Speaker 3: the job. You have to finish the job. And then
• 28:58
  Speaker 3: America's in a very tough position, right Crystal, because well,
• 29:02
  Speaker 3: we can follow their lead. We could do what they
• 29:04
  Speaker 3: want to the detriment of our people and of course
• 29:06
  Speaker 3: of our forces, our nation what we want. But if
• 29:09
  Speaker 3: we don't do what they want, then maybe they're going
• 29:11
  Speaker 3: to say, well, okay, then all your troops have to go.
• 29:14
  Speaker 3: So we're in a very tough position where the people
• 29:16
  Speaker 3: who are in the region who are US allies are
• 29:18
  Speaker 3: the people who are actually going to push us the
• 29:20
  Speaker 3: hardest to continue on with the war. It's only Qatar
• 29:24
  Speaker 3: and Oman really, which are the ones who are like, look,
• 29:27
  Speaker 3: we can find some sort of diplomatic solution. And remember
• 29:30
  Speaker 3: that's only because they're much closer to Iran. The rest
• 29:32
  Speaker 3: of them, who are really all in and who have
• 29:34
  Speaker 3: their own problems, they are really pushing America to escalate
• 29:38
  Speaker 3: this war. So it's an alignment of Golf interest and
• 29:41
  Speaker 3: of Israeli interest to continue the war.
• 29:43
  Speaker 2: Yeah, and we can put D eight up on the
• 29:45
  Speaker 2: screen here, which speaks to that. With regard to UAE,
• 29:48
  Speaker 2: I mean basically, they're sort of feeling like, all right,
• 29:51
  Speaker 2: we're in, and for them, it is it truly is
• 29:53
  Speaker 2: existential because you know Dubai Abu Dhabi, you know, these
• 29:57
  Speaker 2: family US backed anarchies that are installed there. They do
• 30:03
  Speaker 2: not feel that at this point, given the way that
• 30:05
  Speaker 2: they've been hit by Iran and the risk that would
• 30:07
  Speaker 2: persist if the US just walks away, they don't think
• 30:10
  Speaker 2: that that's something they can bear.
• 30:11
  Speaker 5: So they asked the UN.
• 30:13
  Speaker 2: To approve this measure to force the straight of hormves open,
• 30:17
  Speaker 2: you know, not that the UN really has any teeth
• 30:20
  Speaker 2: in this regard, but trying to get some sort of
• 30:21
  Speaker 2: international consensus around the idea that what Iran is doing
• 30:25
  Speaker 2: with the straight of Horm moves is in violation of
• 30:28
  Speaker 2: international law. And then this report D nine we can
• 30:31
  Speaker 2: put up on the scream from the Wall Street Journal
• 30:33
  Speaker 2: also was quite extraordinary. They say, UA wants to force
• 30:37
  Speaker 2: hormuves open and is willing to join the fight, so
• 30:40
  Speaker 2: meaning they would not just allow the US to you know,
• 30:43
  Speaker 2: use bases in their country, but they would also actively
• 30:48
  Speaker 2: join as combatants, which would be extremely significant. And so, yeah,
• 30:53
  Speaker 2: if you join as a combatant and then the war
• 30:56
  Speaker 2: ends without Iran, you know, without the straight being open,
• 31:01
  Speaker 2: with Iran maintaining significant military capabilities, that is going to
• 31:05
  Speaker 2: be a dire situation for UAE.
• 31:09
  Speaker 5: So that's the logic.
• 31:11
  Speaker 2: That they've you know, that they've adopted at this point.
• 31:14
  Speaker 2: And so if Trump tries to sort of unilaterally walk away,
• 31:20
  Speaker 2: which to me is looking less and less likely all
• 31:22
  Speaker 2: the time. But let's say he tries to do that, well,
• 31:25
  Speaker 2: Saudi is going to be calling him, UAE is going
• 31:28
  Speaker 2: to be calling them and basically being like, what the
• 31:30
  Speaker 2: hell you can't do this.
• 31:32
  Speaker 5: So one of Iran's.
• 31:34
  Speaker 2: Major goals that they've talked about from the beginning of
• 31:37
  Speaker 2: this war is we don't want US bases in the region.
• 31:40
  Speaker 2: And a lot of these countries are going to look
• 31:43
  Speaker 2: in the aftermath of this and say, was this really
• 31:45
  Speaker 2: worth it to have these US forces on our soil
• 31:47
  Speaker 2: and make us in our countries and our people and
• 31:50
  Speaker 2: our key assets to make them a target as well.
• 31:53
  Speaker 1: That's the problem.
• 31:53
  Speaker 3: I mean, I really do get it from their perspective.
• 31:56
  Speaker 3: You're Saudi, You're the UAE. You have bought ten ends
• 32:00
  Speaker 3: of billions of dollars from the United States. You have
• 32:03
  Speaker 3: invested hundreds of billions, if not trillions into the US economy.
• 32:08
  Speaker 1: It was built on a.
• 32:09
  Speaker 3: Singular, singular promise, we do this, you protect us. Now
• 32:15
  Speaker 3: we created a situation where literally almost one hundred percent
• 32:19
  Speaker 3: of their economy is reliant on the straight to Hornmouz,
• 32:23
  Speaker 3: which we have now created a situation where it's closed
• 32:26
  Speaker 3: and we're telling other countries, hey, you got to go
• 32:28
  Speaker 3: and you got to open it, which is not like
• 32:29
  Speaker 3: Saudi in the UA you can. So they're like, hey,
• 32:31
  Speaker 3: what was all this money for? We literally this is
• 32:33
  Speaker 3: the reason that we did it. So you got to
• 32:34
  Speaker 3: go and you've got to finish the job. But we
• 32:36
  Speaker 3: don't want to. So then for them, I mean, what
• 32:39
  Speaker 3: are they going to do. They're going to rewrite the
• 32:40
  Speaker 3: way that they have their entire economy or security relationship
• 32:44
  Speaker 3: with the US. That seems untenable. It seems equally untenable
• 32:47
  Speaker 3: for them. I mean, they just took all these missiles
• 32:49
  Speaker 3: and all these hits from Iran. Can they really just
• 32:52
  Speaker 3: sit there and be sitting ducks? Theoretically yes, but it
• 32:55
  Speaker 3: would create you would need a bunch of security guarantees
• 32:58
  Speaker 3: and other operations from the US which are not going
• 33:01
  Speaker 3: to happen. Or you could abandon America, which also seems
• 33:04
  Speaker 3: equally disastrous for them because they now they do have
• 33:07
  Speaker 3: this real existential threat, so they're they're really in a
• 33:11
  Speaker 3: real tough spot. I don't see any situation in the
• 33:15
  Speaker 3: near future where they're paying the Iranian toll. I just
• 33:18
  Speaker 3: I can't see it right now because the amount of
• 33:21
  Speaker 3: pain they've experienced, it's not enough to get to that
• 33:24
  Speaker 3: threshold where you want to make a deal with your enemies,
• 33:27
  Speaker 3: even though unfortunately they'll probably get there at some point
• 33:30
  Speaker 3: if we stay the course of where we are, or
• 33:32
  Speaker 3: we're just going to escalate to an insane and dramatic occupation,
• 33:36
  Speaker 3: which also seems you know, very very likely if we
• 33:40
  Speaker 3: continue on this course, and you know, you can just
• 33:43
  Speaker 3: see though that the damage that they're taking in Israel
• 33:46
  Speaker 3: and in the Gulf, that only points in one direction,
• 33:50
  Speaker 3: you know, to irrational people, maybe people like we're watching
• 33:52
  Speaker 3: listening to this, or like, wow, we should get out
• 33:54
  Speaker 3: of this. Yes, we agree, but for them it only
• 33:56
  Speaker 3: pushes them up the escalation ladder and increases the logic
• 33:59
  Speaker 3: of total war, which would of course draw us in
• 34:02
  Speaker 3: and create this conflict in an even more prolonged situation.
• 34:05
  Speaker 1: It's really bad. All right. We've got Nicholas Molder.
• 34:08
  Speaker 3: He is a historian of economic warfare and a professor
• 34:12
  Speaker 3: at Cornell University. He's going to join us now to
• 34:14
  Speaker 3: talk about the end of the ability of US to
• 34:17
  Speaker 3: wage unilateral economic warfare. Joining us now is Nicholas Moulder.
• 34:24
  Speaker 3: He is a professor at Cornell University. He's an expert
• 34:27
  Speaker 3: on economic warfare sanctions, and he wrote a very interesting
• 34:30
  Speaker 3: piece in the Financial Times that we wanted to talk
• 34:32
  Speaker 3: to him about. Let's ahead and put this up here
• 34:34
  Speaker 3: on the screen. This really grabbed my attention. What you
• 34:38
  Speaker 3: wrote is that the era of US dominance in economic
• 34:42
  Speaker 3: warfare is over. America has long used sanctions to coerce adversaries,
• 34:46
  Speaker 3: but Iran and China can wield powerful economic weapons. To Nicholas,
• 34:50
  Speaker 3: tell us a little bit about the study that you've
• 34:52
  Speaker 3: made here now so far of US sanctions, their effectiveness now,
• 34:57
  Speaker 3: and how they're working out in this war with Iran.
• 35:00
  Speaker 7: Yes, So, the United States came into this century in
• 35:03
  Speaker 7: the twenty first century with a really unique position of
• 35:06
  Speaker 7: economic power, and it's been using that for years against
• 35:08
  Speaker 7: many countries to impose economic and financial sanctions. So Iran
• 35:12
  Speaker 7: has been inter sanction since two thousand and nine. They
• 35:15
  Speaker 7: were briefly lifted and then there was a nuclear deal,
• 35:17
  Speaker 7: and then Trump got out of that nuclear deal in
• 35:19
  Speaker 7: twenty eighteen and reimposed maximum pressure sanctions. But if you
• 35:23
  Speaker 7: look at any number of other conflicts there were in Ukraine,
• 35:27
  Speaker 7: of course, there were big sanctions imposed against Russia export
• 35:30
  Speaker 7: controls on chips going to China. So it's been a
• 35:33
  Speaker 7: big part of US a Chinese competition, North Korea, Cuba, Venezuela.
• 35:39
  Speaker 7: All the conflicts I think that we are seeing at
• 35:41
  Speaker 7: the moment really involved the use of sanctions, and the
• 35:44
  Speaker 7: United States has been using them a lot, really because
• 35:48
  Speaker 7: it gives an easy alternative to boots on the ground
• 35:52
  Speaker 7: and to directing more military effort towards these conflicts. But
• 35:57
  Speaker 7: increasingly you see that the sanctions not only don't really work,
• 36:00
  Speaker 7: or they take a very long time to work. They
• 36:03
  Speaker 7: also have really counterproductive effects. One of them is that
• 36:06
  Speaker 7: the targets of these sanctions begin to cooperate more so
• 36:08
  Speaker 7: a lot of these countries are driven together more by
• 36:11
  Speaker 7: the fact that they are all exposed to this US pressure.
• 36:15
  Speaker 7: We can see that at the moment, particularly in the
• 36:17
  Speaker 7: rise of this big shadow fleet, so a very large
• 36:19
  Speaker 7: part of the global transport infrastructure that is now being
• 36:23
  Speaker 7: devoted to basically trading oil outside of the reach of
• 36:26
  Speaker 7: US sanctions, and increasingly also regimes that are exposed to it.
• 36:31
  Speaker 7: Countries that are exposed to sanctions becoming more and more hardline.
• 36:35
  Speaker 7: They don't see any real reason to negotiate with the
• 36:39
  Speaker 7: United States, and they don't really trust the United States
• 36:42
  Speaker 7: as a negotiating position. And for that reason, I think
• 36:45
  Speaker 7: that sanctions, often first build as an alternative to war,
• 36:49
  Speaker 7: have now really become kind of an on ramp to war.
• 36:53
  Speaker 7: And this is a conflic where we.
• 36:54
  Speaker 2: See that to really, yeah, that's a fascinating insight, and
• 36:58
  Speaker 2: I think an important one. The one, well, you have
• 37:01
  Speaker 2: a number of insights here, but another significant insight in
• 37:03
  Speaker 2: this piece is just how consequential it will be if
• 37:07
  Speaker 2: Iran maintains control and there's a new status quo with
• 37:10
  Speaker 2: regard to the Strait of Hormuz, because that effectively gives
• 37:13
  Speaker 2: them sanction powerful sanctionability as well.
• 37:16
  Speaker 7: Yes, absolutely, and it'll be very interesting to see in
• 37:19
  Speaker 7: the next few weeks if a regime for the control
• 37:23
  Speaker 7: of the Straight of Hormoves emerges. There are some indications
• 37:25
  Speaker 7: now in the last few days that Iran has begun
• 37:28
  Speaker 7: to levy tolls on ships that can pause, and moreover
• 37:31
  Speaker 7: that it is implementing a kind of tiered system of egress,
• 37:35
  Speaker 7: so being able to leave the Strait of Hormus friendly
• 37:38
  Speaker 7: countries that are friendly to Iran. So we've had confirmations
• 37:41
  Speaker 7: that Pakistan, but also the Philippines and China have been
• 37:44
  Speaker 7: able to send tankers and ships through the Straight of
• 37:47
  Speaker 7: Hormoves can go through it without any problem. Then there
• 37:50
  Speaker 7: seems to be a group of neutrals that are forced
• 37:53
  Speaker 7: to pay tolls. And here the question is really whether
• 37:56
  Speaker 7: Iran it poses a very heavy toll or if it's
• 37:58
  Speaker 7: going to be a light one. One of the things
• 38:00
  Speaker 7: about this current energy crisis caused by the war is
• 38:02
  Speaker 7: that actually the cost of one or two dollars per
• 38:05
  Speaker 7: barrel tall is not that much, so it actually, I
• 38:08
  Speaker 7: think might be surprising how quickly countries see this as
• 38:12
  Speaker 7: a price worth paying to regain access to some of
• 38:15
  Speaker 7: their energy flows. After all, right, the United States have
• 38:18
  Speaker 7: imposed fifteen percent teriffs on most other countries last year,
• 38:21
  Speaker 7: and most countries accept that too, So it's actually, I
• 38:24
  Speaker 7: think possible that countries accept this more quickly than we
• 38:28
  Speaker 7: might expect. And then the final group of countries that
• 38:31
  Speaker 7: those are hostile countries in Iran's words, they are continued
• 38:35
  Speaker 7: to be They're continuing to be denied access to the
• 38:37
  Speaker 7: Gulf and also the ability to leave from there. And
• 38:42
  Speaker 7: I think one of the things we might see is
• 38:44
  Speaker 7: that Iran is going to really use that three tiered
• 38:46
  Speaker 7: system to try and break up some of the coalition
• 38:50
  Speaker 7: behind the war and to try and move countries that
• 38:52
  Speaker 7: the US is now hoping might help open to straight
• 38:55
  Speaker 7: up from moves and tear those countries away from the
• 38:58
  Speaker 7: United States and explore some rifts in that coalition. And
• 39:03
  Speaker 7: particularly Asian countries are in a very dire situation, so
• 39:06
  Speaker 7: they really need access. So we'll have to see how
• 39:08
  Speaker 7: it's used, but potentially a very powerful source of diplomatic
• 39:11
  Speaker 7: leverage for Iran.
• 39:12
  Speaker 1: Here, got it?
• 39:13
  Speaker 3: So, Nicholas, you just references to put E one up
• 39:16
  Speaker 3: here on the screen. This is about secret codes and
• 39:20
  Speaker 3: demands for Wan fees to get ships through Iran's Hormus tollbooth.
• 39:24
  Speaker 3: What you're saying is that sanctions, and specifically I really
• 39:27
  Speaker 3: think the Ukraine sanctions created the runway for this new
• 39:32
  Speaker 3: ecosystem of oil and these shadow fleets that move across
• 39:36
  Speaker 3: the seas, and that Iran in this situation is really
• 39:38
  Speaker 3: the beneficiary of that and could accelerate that trend of
• 39:42
  Speaker 3: booking oil on Chinese Wan or on crypto entirely outside
• 39:46
  Speaker 3: of the US banking system, which makes sanctions effectively irrelevant
• 39:49
  Speaker 3: in any sort of future conflict.
• 39:50
  Speaker 1: Is that right?
• 39:52
  Speaker 7: Yeah, that certainly seems to be one hope. Whether they
• 39:54
  Speaker 7: can do it as an open question, but they definitely
• 39:57
  Speaker 7: have means available to them in the infrat structure that's
• 40:00
  Speaker 7: grown up around that shadow fleet to make those payments
• 40:03
  Speaker 7: and receive them. And the question is how many neutral
• 40:06
  Speaker 7: countries and other traders in the rest of the world
• 40:09
  Speaker 7: are going to enter that system and use it basically
• 40:13
  Speaker 7: to settle these trades. Even if they in doing so
• 40:15
  Speaker 7: run the risk of being exposed to US financial sanctions,
• 40:19
  Speaker 7: and that's going to be a difficult calculus to make.
• 40:22
  Speaker 7: But I think as this energy crisis gets worse, we
• 40:24
  Speaker 7: will see more and more countries trying to run the
• 40:27
  Speaker 7: risk of being entangled in US financial sanctions because ultimately,
• 40:31
  Speaker 7: what you would like more and what countries need more
• 40:34
  Speaker 7: for their economy is energy, fertilizer, all the things that
• 40:37
  Speaker 7: possibly the straight before moves right. So there's a real
• 40:39
  Speaker 7: premium on being able to access the physical goods, and
• 40:43
  Speaker 7: some measure of financial sanctions risk may need to be tolerated.
• 40:47
  Speaker 7: And moreover, we've seen also the Trump administration already lift
• 40:50
  Speaker 7: some sanctions on Iranian oil already at sea. They've lifted
• 40:53
  Speaker 7: them on Russian oil at sea. That wasn't intended at all.
• 40:56
  Speaker 7: It was really an improvisation to deal with the second
• 40:59
  Speaker 7: order effect of their own economic war and their direct
• 41:03
  Speaker 7: military attack on Iran. But it's already shown right the
• 41:07
  Speaker 7: in principle the US is willing to lift some of
• 41:11
  Speaker 7: those sanctions, and that too, I think will strengthen the
• 41:13
  Speaker 7: Iranian negotiating position. So one question is, depending on how
• 41:17
  Speaker 7: long this war goes on, whether Iran will ultimately agree
• 41:20
  Speaker 7: maybe to open hormones to all countries in return for
• 41:23
  Speaker 7: a much broader sanctions lifting. So that's also financial sanctions
• 41:27
  Speaker 7: on Iran. That means the ability of other countries to
• 41:30
  Speaker 7: invest in Iran and potentially help reconstruct some of its economy,
• 41:34
  Speaker 7: things the Iranians have been wanting for many, many years,
• 41:37
  Speaker 7: and they've always lacked the means to do so, and
• 41:39
  Speaker 7: potentially now they have an instrument in their hands with
• 41:41
  Speaker 7: which they can try and negotiate for that broader access
• 41:44
  Speaker 7: to the world economy.
• 41:46
  Speaker 2: Let's talk about Russia a little bit more here, because
• 41:48
  Speaker 2: Osaga and I've been tracking, you know, the I guess
• 41:51
  Speaker 2: degradation of the US sanctions regime, especially as it applies
• 41:55
  Speaker 2: to Russia's war on Ukraine. And you know, we made
• 41:59
  Speaker 2: Russia the most sanction and country on the planet, and
• 42:02
  Speaker 2: certainly it had a negative impact on them, but they
• 42:04
  Speaker 2: also had planned for that, and they've been able to
• 42:06
  Speaker 2: withstand that, you know, aggressive sanctions regime, and now de
• 42:11
  Speaker 2: facto they are getting some significant sanctions relief because of
• 42:15
  Speaker 2: our desperation, the desperate situation that we find ourselves in
• 42:18
  Speaker 2: because of a war of choice in a run. So
• 42:21
  Speaker 2: how impactful do you see those developments as being in
• 42:25
  Speaker 2: terms of sort of, you know, creating an alternative financial
• 42:28
  Speaker 2: infrastructure that allows people to evade sanctions and also in
• 42:32
  Speaker 2: demonstrating that there are severe limits to the ability of
• 42:35
  Speaker 2: the US to really extract you know, effective pain or
• 42:39
  Speaker 2: force some sort of regime overthrow with our sanctions.
• 42:42
  Speaker 1: Yeah.
• 42:43
  Speaker 7: I think that the shadow fleet as it's emerged in
• 42:46
  Speaker 7: the last decade and a half has really been an
• 42:49
  Speaker 7: important factor in continuing to facilitate this trade, and it
• 42:53
  Speaker 7: has now also created a whole network of shell companies.
• 42:56
  Speaker 7: Oftentimes these are in jurisdictions where you know, individuals in
• 42:59
  Speaker 7: come also go to evate taxation. So this is an
• 43:03
  Speaker 7: offshore economy that also exists for the benefit of corporations
• 43:07
  Speaker 7: and of people with a lot of money who put
• 43:09
  Speaker 7: their assets there. And the shadow fleet is using those
• 43:13
  Speaker 7: same jurisdictions. So we're talking about Caribbean islands. The Emirates
• 43:18
  Speaker 7: actually are an important hub of this as well, Hong
• 43:21
  Speaker 7: Kong and places like this. And the shadow fleet depends
• 43:26
  Speaker 7: really on a network of brokers and intermediaries that can
• 43:29
  Speaker 7: incorporate companies in those jurisdictions. And the question then is
• 43:34
  Speaker 7: can the sanctions policy makers in the United States and
• 43:37
  Speaker 7: in Europe track down those companies quickly enough to put
• 43:40
  Speaker 7: them on the sanctions blacklist before these people create new companies.
• 43:44
  Speaker 7: And it's a real cat and mouse game. And we've
• 43:46
  Speaker 7: seen right in the global fight against tax evasion that
• 43:50
  Speaker 7: no matter how well intentioned you are, it is very
• 43:52
  Speaker 7: difficult to keep tracking these offshore entities quickly enough. It's possible,
• 43:56
  Speaker 7: but we are going to need a big investment in
• 43:58
  Speaker 7: state capacity to do that. And more broadly to your
• 44:02
  Speaker 7: question Crystal about the limits of US leverage, I think
• 44:06
  Speaker 7: one of the things that the Russia sanctions have really
• 44:08
  Speaker 7: shown is that Asia is the absolutely pivotal economic player
• 44:12
  Speaker 7: in the world economy when it comes to making sanctions
• 44:15
  Speaker 7: effective and particularly making them hermetic. And one of the
• 44:19
  Speaker 7: things that was sorely underestimated in the run up to
• 44:23
  Speaker 7: the war in Ukraine is that Western policymakers believe that
• 44:27
  Speaker 7: if they launched very big sanctions those would be sufficient
• 44:30
  Speaker 7: and they didn't really need to incorporate large Asian economies.
• 44:33
  Speaker 7: And what the last three four years have shown is
• 44:35
  Speaker 7: that if only China and India continue to buy Russian oil,
• 44:39
  Speaker 7: that is actually enough to keep the Russian economy afloat
• 44:42
  Speaker 7: and even doing reasonably well. The sanctions are definitely imposing
• 44:45
  Speaker 7: costs on Russia, but they can survive for the time being,
• 44:49
  Speaker 7: and they're not under any immediate very strong pressure, and
• 44:53
  Speaker 7: that's really key. So I think that the Russia Ukraine
• 44:55
  Speaker 7: War is the first geopolitical crisis where we see that
• 44:58
  Speaker 7: Western economic power alone is not enough to make sanctions decisive.
• 45:04
  Speaker 7: You really need to have Asian countries on board, and
• 45:07
  Speaker 7: even all the major Asian economies, and that's exactly what
• 45:10
  Speaker 7: you see in this crisis too. It really, I think
• 45:13
  Speaker 7: is going to be a question of how Iran and
• 45:16
  Speaker 7: the Asian economies negotiate, because those links are the most important,
• 45:20
  Speaker 7: and that's I think where we're going to see the
• 45:23
  Speaker 7: most important developments about what might stabilize out of this
• 45:26
  Speaker 7: Hormo's control weapon.
• 45:28
  Speaker 1: Yeah, got it.
• 45:29
  Speaker 3: Well, thank you so much for joining us, professor. We
• 45:31
  Speaker 3: appreciate you, and we'll continue to read your work. So
• 45:34
  Speaker 3: thank you, appreciate your time, Thanks.
• 45:35
  Speaker 7: You very much for the invitation.
• 45:36
  Speaker 2: Pleasure so very much related to the world, though a
• 45:42
  Speaker 2: bit of a separate issue. We've been tracking some signs
• 45:45
  Speaker 2: of concern we'll say, in the massive AI sector, in
• 45:50
  Speaker 2: the AI data center sector in particular, which has been
• 45:53
  Speaker 2: the backbone of what's kind of kept the US economy
• 45:56
  Speaker 2: afloat in spite of declines in almost every other sector
• 45:59
  Speaker 2: of the economy. So let's put this up on the screen.
• 46:02
  Speaker 2: I saw this with quite a lot of interest yesterday
• 46:05
  Speaker 2: from Bloomberg. They're saying that half of US data centers
• 46:10
  Speaker 2: planned for twenty twenty six are expected to be delayed
• 46:13
  Speaker 2: or canceled. One big reason is shortage of electrical equipment
• 46:17
  Speaker 2: such as transformers, switch gear, and batteries. US does not
• 46:21
  Speaker 2: have the manufacturing capacity, forcing it to rely on imports
• 46:27
  Speaker 2: and very much saga related to the last segment we
• 46:30
  Speaker 2: did on economic sanctions and economic power. Most of those
• 46:36
  Speaker 2: imports come from China, so we are really betting the
• 46:41
  Speaker 2: whole farm on this AI revolution. The particular approach that
• 46:46
  Speaker 2: we have taken that ORAI companies have taken is building
• 46:50
  Speaker 2: out as many of these data centers as they possibly can.
• 46:54
  Speaker 2: There is an insane amount of money being spent here.
• 46:58
  Speaker 2: You also have a political backline in all of these localities,
• 47:01
  Speaker 2: you know that's really cross partisan against these data centers
• 47:04
  Speaker 2: being located in the town. And then while this big
• 47:07
  Speaker 2: bet is being placed, at the same time, they're projecting
• 47:11
  Speaker 2: out all these data centers that they don't even have
• 47:14
  Speaker 2: the parts to build, and you know, are trying to
• 47:17
  Speaker 2: import from China, et cetera. But even trying to import them,
• 47:21
  Speaker 2: they simply don't have the materials to build out what
• 47:25
  Speaker 2: they have promised investors they are going to build out.
• 47:28
  Speaker 2: So seems like a pretty alarming situation.
• 47:31
  Speaker 3: Well, let's also remember what did Ryan Emily cover in
• 47:33
  Speaker 3: their first show yesterday. Amazon facility got hit in the Gulf,
• 47:37
  Speaker 3: And I actually don't think we can take this away
• 47:39
  Speaker 3: from the war because let's think about it, the AI
• 47:42
  Speaker 3: data center is fundamentally needs cheap power. Like the reason
• 47:47
  Speaker 3: why you're in a crisis with data centers in the
• 47:49
  Speaker 3: first place. Why it actually is like a binary choice
• 47:52
  Speaker 3: between data center or our own electricities because we don't
• 47:55
  Speaker 3: have the electrical grid capacity right now. LNG and gas
• 47:59
  Speaker 3: prices are actually pretty good here in America, and it's
• 48:02
  Speaker 3: largely because we don't have the capacity to liquefy it
• 48:05
  Speaker 3: and to send it abroad, which doesn't make it as
• 48:07
  Speaker 3: much of a global commodity. However, it's very possible in
• 48:11
  Speaker 3: the future that we may have to ramp up liquification
• 48:14
  Speaker 3: and export in order to backfill a complete closure of
• 48:18
  Speaker 3: the Straits of Hormuz. And remember that's what Donald Trump wants.
• 48:21
  Speaker 3: He wants Europeans and others to come and buy LNG
• 48:24
  Speaker 3: and other product from America. That would actually increase the
• 48:27
  Speaker 3: overall price of our own electricity prices here in the US,
• 48:31
  Speaker 3: which would make it much more difficult for these AI
• 48:33
  Speaker 3: models and others because and data center projects which need
• 48:37
  Speaker 3: cheaper power. And then on top of all of that,
• 48:40
  Speaker 3: you have venture capital investment. A massive portion of venture
• 48:44
  Speaker 3: capital investment comes from the Gulf. Also it comes from
• 48:48
  Speaker 3: all over the rest of the world, sovereign wealth funds, etc.
• 48:51
  Speaker 3: Guess what's happening with all that money. It's drying up,
• 48:53
  Speaker 3: or at the very least, they're having to massively pause
• 48:56
  Speaker 3: a lot of their buildouts. So there's like multiple factors
• 49:00
  Speaker 3: as to why this is all going to continue to spiral.
• 49:03
  Speaker 3: And the AI bubble, you know, itself, was propped up
• 49:06
  Speaker 3: on big tech valuations which were obviously disconnected from reality.
• 49:11
  Speaker 3: But fundamentally, like what is the US economy? We don't
• 49:14
  Speaker 3: really make a lot of shit we just buy it.
• 49:16
  Speaker 3: We're a massive consumer economy. Well, we're all about to
• 49:20
  Speaker 3: tick take a huge haircut on consumer spending because of
• 49:24
  Speaker 3: gas prices and because of inflation, which just means by definition,
• 49:28
  Speaker 3: consumer spending is going to go down. That's going to
• 49:30
  Speaker 3: drag down everything, not just AI bubble plus consumer sentiment.
• 49:35
  Speaker 3: So you put all this stuff together and you can
• 49:37
  Speaker 3: see how the real economy.
• 49:38
  Speaker 1: Would go down. Why an AI bubble pop is very very.
• 49:42
  Speaker 3: Much I think in the in an open conversation, and
• 49:45
  Speaker 3: that was the only thing propping up our GDP at
• 49:48
  Speaker 3: all was building out these data centers. This it's another
• 49:51
  Speaker 3: reason why the war.
• 49:52
  Speaker 1: What a folly? What a folly.
• 49:53
  Speaker 3: You're going to go to war and hit the energy
• 49:55
  Speaker 3: supply of the whole world at a time when that's
• 49:58
  Speaker 3: the only thing that's booing the United States economy and
• 50:02
  Speaker 3: then drop the bottom out of consumer spending too.
• 50:04
  Speaker 1: So it's a mess.
• 50:06
  Speaker 5: And antagonized China too.
• 50:08
  Speaker 2: And at a time would you have not built out
• 50:10
  Speaker 2: the industrial capacity to be self sufficient? Far to the contrary,
• 50:14
  Speaker 2: I mean a lot of during the Trump administration. In fact,
• 50:17
  Speaker 2: we've gone backwards in a lot of regards with respect
• 50:20
  Speaker 2: to trying to build out our own industrial capacity, so
• 50:24
  Speaker 2: you're you know, antagonizing the entire world supposedly, you know,
• 50:28
  Speaker 2: the way that the Trump administration and these heads of
• 50:31
  Speaker 2: American AI tech companies, the way they see things as
• 50:34
  Speaker 2: this like existential race versus China to be the first
• 50:38
  Speaker 2: to dominate the AI sphere. And yet we're still, in
• 50:42
  Speaker 2: the most basic level, fundamentally dependent on China to be
• 50:46
  Speaker 2: able to import these parts for a bunch of these
• 50:48
  Speaker 2: rare earths, you know, all sorts of portions of this.
• 50:51
  Speaker 2: We've also talked about helium being disrupted in the straight
• 50:53
  Speaker 2: up hormos and how that ties in as well. So
• 50:56
  Speaker 2: just on multiple levels, we've created a massive crisis for
• 51:01
  Speaker 2: the AI industry that we've decided to apparently batter whole
• 51:05
  Speaker 2: economy on. And those cracks are just starting to show.
• 51:08
  Speaker 2: There were some and let's put F three up on
• 51:10
  Speaker 2: the screen. You know, it's hard to say what's going
• 51:13
  Speaker 2: on here behind the scenes, why these decisions are being made,
• 51:17
  Speaker 2: but we've got claud code users who are hitting usage
• 51:20
  Speaker 2: limits faster than expected, and they're putting in some limits
• 51:24
  Speaker 2: for you know, people who were extensively using Claude sort
• 51:27
  Speaker 2: of trying to pull back, especially during the highest use hours,
• 51:32
  Speaker 2: pull back some of the usage of Claude. You also
• 51:35
  Speaker 2: had this story F four where Sora, the video generation
• 51:41
  Speaker 2: site from open ai, has been completely It's being completely
• 51:46
  Speaker 2: shut down ending in April. This was announced with a
• 51:50
  Speaker 2: lot of fanfare. This was a central sort of core
• 51:54
  Speaker 2: promise and achievement of open Ai. The idea was that
• 51:58
  Speaker 2: Soro was going to be a major part of their
• 52:01
  Speaker 2: plans for the future, and now that is being shut
• 52:04
  Speaker 2: down as well. Some of this, too, Sager speaks to
• 52:07
  Speaker 2: the fact that the business models just haven't as of
• 52:10
  Speaker 2: yet really panned down. You know, it has a lot
• 52:12
  Speaker 2: of similarities to the early Internet phase where you had
• 52:16
  Speaker 2: all these websites and all this promise and yet a
• 52:20
  Speaker 2: lot of and obviously the Internet worked down and a
• 52:22
  Speaker 2: lot of companies did make a lot of money, but
• 52:24
  Speaker 2: in the early days some of the business models didn't
• 52:26
  Speaker 2: make any sense. And so what these ai companies needed
• 52:30
  Speaker 2: was a lot of time in bandwidth and patients from
• 52:33
  Speaker 2: investors willingness to continue to funnel them tons and tons
• 52:36
  Speaker 2: and tons of money cheap energy to continue this data
• 52:40
  Speaker 2: center build out while they figure out some sort of
• 52:43
  Speaker 2: revenue model that is actually going to generate profits that
• 52:47
  Speaker 2: justify these massive investments, and what the impact of the
• 52:50
  Speaker 2: war I think is effectively to dramatically shrink those timelines
• 52:55
  Speaker 2: and put a lot more pressure on all of these companies.
• 52:57
  Speaker 3: Yeah, I just think, you know, looking at first of all,
• 53:00
  Speaker 3: no tears for Sora or for their Disney porn, which
• 53:03
  Speaker 3: is let's call it what it is, that's what it
• 53:05
  Speaker 3: was about, and all of their erotica.
• 53:07
  Speaker 1: That they just abandoned with chat GPT.
• 53:10
  Speaker 3: But really I think look, limits, limits and server time
• 53:16
  Speaker 3: is really about power. Like this is an entire conversation
• 53:18
  Speaker 3: about power. And by the way, I mean, it's pretty
• 53:21
  Speaker 3: shocking that we're in this crisis and not a single
• 53:25
  Speaker 3: national leader is saying, hey, don't doesn't this mean that
• 53:28
  Speaker 3: we should just like become more energy independent?
• 53:31
  Speaker 1: And the answer is obviously yes.
• 53:33
  Speaker 3: I actually anticipate all of the Asian countries and maybe
• 53:37
  Speaker 3: a lot of the European countries this could finally push
• 53:40
  Speaker 3: them over the edge to nuclear power to overcome their
• 53:43
  Speaker 3: fifty year hangover over the issue. They're burning more coal
• 53:47
  Speaker 3: right now in Asia than probably ever before, and they
• 53:49
  Speaker 3: will continue to do so as long as this crisis continues.
• 53:52
  Speaker 3: Because people need electricity, but here at home, like this
• 53:55
  Speaker 3: should be the impetus to be like, hey, we need
• 53:58
  Speaker 3: to be one hundred percent energy independent, because even if
• 54:02
  Speaker 3: we are a net exporter of oil, with oil at
• 54:04
  Speaker 3: a global commodity, we're still very vulnerable to a shock.
• 54:08
  Speaker 3: This is the I mean, why are we still paying
• 54:10
  Speaker 3: four dollars a gallon in gas if we are a
• 54:12
  Speaker 3: net exporter And the answer is because of this global commodity,
• 54:15
  Speaker 3: which we still remain entirely reliant on on but where
• 54:18
  Speaker 3: there's no like real vision or even plan really you know,
• 54:22
  Speaker 3: to do anything about that. And if you want a
• 54:24
  Speaker 3: data center, you can have that too. If there's cheap
• 54:26
  Speaker 3: and abundant power, then none of us really have to
• 54:29
  Speaker 3: pick and choose. But that's what I think that this
• 54:30
  Speaker 3: whole conversation is going to be about in the future,
• 54:33
  Speaker 3: and that's really bad for AI. And the worst part
• 54:35
  Speaker 3: is that probably just means a recession. I mean, already,
• 54:38
  Speaker 3: you know, things were on the edge in terms of
• 54:41
  Speaker 3: inflation and consumer sentiment, but with gas at four dollars
• 54:45
  Speaker 3: a gallon for at least a few months likely you know,
• 54:48
  Speaker 3: at this time, I don't know, how can you possibly
• 54:51
  Speaker 3: you know, pull out of a spiral like that because
• 54:53
  Speaker 3: of all of the follow on effects. I have high inflation,
• 54:55
  Speaker 3: that means high rates and no rate cuts. There's going
• 54:58
  Speaker 3: to be you know, drop drop in the stock market. Already,
• 55:00
  Speaker 3: I think the stock market is down a couple percent
• 55:03
  Speaker 3: at the very least year to date. It could have
• 55:05
  Speaker 3: an entirely down year. Overall. All of these things are
• 55:09
  Speaker 3: just bad. Also, you know, one story, you and I
• 55:11
  Speaker 3: haven't talked about private credit. I'm not sure if you've
• 55:14
  Speaker 3: been reading or to keeping your eye on that.
• 55:16
  Speaker 1: Yeah, the private credit markets are really drying up.
• 55:18
  Speaker 3: That has a lot of impact actually on tech, on
• 55:20
  Speaker 3: venture capital, and more so, that could be another place
• 55:22
  Speaker 3: where everything would could blow up, especially on top of
• 55:26
  Speaker 3: what's happening with Iran. It's a majorly important financial story.
• 55:29
  Speaker 2: Yeah, I was just looking. There was actually a headline
• 55:31
  Speaker 2: that came across this morning that I was just looking
• 55:34
  Speaker 2: for Blue Owl capped redemptions after investors asked to withdraw
• 55:38
  Speaker 2: twenty two percent of the private credit giants thirty six
• 55:41
  Speaker 2: billion dollar fund. So another private credit giant that's saying
• 55:45
  Speaker 2: that's effectively experiencing bank run And this is you know,
• 55:49
  Speaker 2: not the first instance of this that we've seen over
• 55:52
  Speaker 2: the past several weeks. But you know, zooming out to
• 55:55
  Speaker 2: your point, I think nuclear yes is a potential option
• 55:58
  Speaker 2: and renewables, and the US under Trump has effectively bet
• 56:01
  Speaker 2: like we're going to steal Venezuela's oil. We obviously have
• 56:06
  Speaker 2: a lot of fossil fuel production ourselves. Trump has said
• 56:10
  Speaker 2: multiple times, now you know what he wants to do
• 56:12
  Speaker 2: in Iran is take their oil as well. I think
• 56:14
  Speaker 2: the bet from the US in terms of energy was
• 56:18
  Speaker 2: we are going to be this fossil fuel behemoth, and
• 56:22
  Speaker 2: obviously it's not working out too well for US in
• 56:24
  Speaker 2: terms of the Iran war, but that was the idea. China, meanwhile,
• 56:28
  Speaker 2: has aggressively invested in renewable technology. You know, they are
• 56:33
  Speaker 2: at the bleeding edge in terms of solar panel development.
• 56:36
  Speaker 2: Those renewable technologies have gotten much much better, and obviously
• 56:39
  Speaker 2: we've talked a lot about how their ev tech is
• 56:42
  Speaker 2: just like blows Tesla anybody in the US out of
• 56:46
  Speaker 2: the water. So you know, they're well positioned on that
• 56:49
  Speaker 2: front as well, not to mention having been much more
• 56:52
  Speaker 2: strategic about securing the supply lines to enable that technology
• 56:56
  Speaker 2: as well. So that's the direction that they decided to
• 56:59
  Speaker 2: you know, that's where they decided to place their bets.
• 57:01
  Speaker 2: And you know, I think there's going to be a
• 57:03
  Speaker 2: lot that's going to be pushing the world in that
• 57:05
  Speaker 2: direction because it feels a lot more secure than you know,
• 57:08
  Speaker 2: hoping that the oil supply through the strait of Horboos
• 57:12
  Speaker 2: remains open and free and safe from any sort of interference.
• 57:17
  Speaker 2: There was one last story that I just wanted to
• 57:19
  Speaker 2: get in here because it did significant f two on AI,
• 57:23
  Speaker 2: which is that Anthropic, which is supposed to be the
• 57:27
  Speaker 2: paragon of safe AI development. These are supposed to be
• 57:32
  Speaker 2: the responsible players in the field. They accidentally leaked five
• 57:36
  Speaker 2: hundred thousand lines of their own source code, and contained
• 57:42
  Speaker 2: in here was obviously all sorts of information about how
• 57:45
  Speaker 2: you know, the product works and their approach, et cetera.
• 57:47
  Speaker 2: There were also there were also product updates that haven't
• 57:50
  Speaker 2: been released yet that gave you know, everybody in the world,
• 57:53
  Speaker 2: including their competitors, inside into Okay, here's what clawed code
• 57:57
  Speaker 2: is going to be the direction that they're moving in now.
• 58:00
  Speaker 2: And I'm sure there's I mean, of course, Anthropic is
• 58:04
  Speaker 2: embarrassed and it's in patro blow to them it's a
• 58:06
  Speaker 2: big problem for them. But to me, the significant piece
• 58:09
  Speaker 2: is just even the ones who are supposed to be
• 58:12
  Speaker 2: the responsible, good guys, being safe and cautious, etc. Are
• 58:16
  Speaker 2: prone to really self destructive, incredible, sloppy, humiliating errors. And
• 58:25
  Speaker 2: I don't think that that should comfort anyone about the
• 58:27
  Speaker 2: direction that AI is going in.
• 58:30
  Speaker 1: Very true. All right, thank you guys so much for watching.
• 58:32
  Speaker 1: We appreciate it.
• 58:32
  Speaker 3: There'll be a Friday show for everybody tomorrow, and we're
• 58:34
  Speaker 3: of course we're all on ground invasion watch, so we'll
• 58:37
  Speaker 3: see you all later.