Latest / Breaking Points with Krystal and Saagar / 8/20/26: Trump Bond Crisis Worsens, North Korea Humiliates Trump With Missile Launch

Transcript

8/20/26: Trump Bond Crisis Worsens, North Korea Humiliates Trump With Missile Launch · Breaking Points with Krystal and Saagar

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Speaker 1: What do we have Crystal?
0:38
Speaker 2: Did we do a lot of interesting stories we were
0:39
Speaker 2: tracking this morning. Trump panicked yesterday and they intervened in
0:43
Speaker 2: the bond market, a major major development. We will break
0:46
Speaker 2: that down for you. Meanwhile, he believes he can convince
0:49
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Speaker 3: the show and rate us five stars. But as chrystals,
2:00
Speaker 3: let's gohead and get an update on the bond market.
2:02
Speaker 3: Some genuinely crazy stuff. We don't cover it nearly enough,
2:05
Speaker 3: but has massive impacts for everything that we do know,
2:09
Speaker 3: our whole economy, our debt, servicing, interest rates, et cetera.
2:12
Speaker 3: You know, they say the bond market is where the
2:13
Speaker 3: professionals really pay all of their attention.
2:15
Speaker 2: Yes, that is right, and Trump seems to have paid
2:17
Speaker 2: close attention to the bond market, which is why we've
2:19
Speaker 2: paid close attention in the bond market. We had Jeff
2:21
Speaker 2: Stein on yesterday. It was pretty oppression of us actually
2:25
Speaker 2: to do that segment at that time because there was
2:27
Speaker 2: a lot of pressure on the bond market and the
2:29
Speaker 2: yields were going up. That means that the demand is
2:32
Speaker 2: going down. That has huge implications both in terms of
2:36
Speaker 2: how expensive it is to service our debt, also in
2:38
Speaker 2: terms of your day to day life and how expensive
2:41
Speaker 2: interest rates are. Trump has long talked about how he
2:44
Speaker 2: wants to get interest rates down. They were had their
2:47
Speaker 2: hand forced yesterday and actually took some extraordinary action in
2:50
Speaker 2: the market with regard to long term bonds in particular. Yesterday,
2:54
Speaker 2: Trump was speaking to reporters and he talked about interest
2:57
Speaker 2: rates and how he believes they should be much lower
2:59
Speaker 2: less to now.
3:00
Speaker 4: When we announce good number, the better they are, the
3:02
Speaker 4: worse it is for interest rates. So we could be
3:06
Speaker 4: we could have a GDP of ten times. You know,
3:08
Speaker 4: they say, oh, it's going to be three times or
3:10
Speaker 4: four point one. We could have a GDP of ten, twelve,
3:15
Speaker 4: fifteen times. If they just leave us alone, let us
3:19
Speaker 4: let the rates go down. We should pay the lowest
3:21
Speaker 4: interest rates. You know, every point of interest is six
3:25
Speaker 4: hundred billion dollars. Think of that. Every point of interest
3:29
Speaker 4: is six hundred billion two points means we make a fortune,
3:34
Speaker 4: but we keep driving it up. It's a very unfair system.
3:38
Speaker 4: And I've set it now for a long time. When
3:41
Speaker 4: our country does well, interest rates should go down. I
3:45
Speaker 4: mean every time I hear our country is doing well,
3:47
Speaker 4: I say, oh, it's too bad because they lift up
3:49
Speaker 4: interest rates. They should drop interest rates because it means
3:52
Speaker 4: we have a strong country. And it's all based on credit,
3:55
Speaker 4: meaning good credit, and we have the best credit, and
3:58
Speaker 4: we'd pay off the debt very easily, very quickly.
4:01
Speaker 2: So you hear I'm talking there about how important this
4:04
Speaker 2: is in terms of the debt service. Actually, let's throw
4:06
Speaker 2: a nine up on the screen here the last element
4:08
Speaker 2: in this block. The US debt officially hit forty trillion dollars.
4:12
Speaker 2: Obviously America is borrowing continues. This was something Trump talked
4:16
Speaker 2: about at the beginning. I remember when Doge was going
4:18
Speaker 2: to do a lot about that didn't ultimately work out.
4:20
Speaker 2: Now this is something that in ordinary times maybe it's
4:23
Speaker 2: not that big of a deal. But given how much
4:26
Speaker 2: our interest rates are going up, having to pay a
4:28
Speaker 2: lot more to service that debt, and given the fact
4:31
Speaker 2: that the world is moving away somewhat from the US
4:34
Speaker 2: dollar as the world's reserve currency, this is now something
4:36
Speaker 2: we have to pay a lot more attention to. And
4:39
Speaker 2: you know, a lot of that a lot of the
4:41
Speaker 2: cost coming from the endless warst that we choose to fight.
4:44
Speaker 2: Trump was asked about whether or not Americans should be
4:47
Speaker 2: concerned about some of the volatility in the market.
4:49
Speaker 1: Let's take listen to that.
4:50
Speaker 4: Even despite the fact of what's happening with interests until
4:56
Speaker 4: we in the bond market. No, I don't think so because,
4:59
Speaker 4: like I said, our country is doing so well despite
5:01
Speaker 4: interest rates. We have interest rates that are artificially they're
5:05
Speaker 4: actually artificially high. They raise them for no reason. And
5:09
Speaker 4: you can't go out to the market when you have
5:11
Speaker 4: a FED that's raising interest You can't say I want
5:14
Speaker 4: to pay three points less than what the FRED says
5:16
Speaker 4: you're supposed to be paying. So no, I don't think
5:19
Speaker 4: so at all. I think we have a very powerful
5:21
Speaker 4: country and we're powering through these ridiculous interest rates. They're ridiculous.
5:26
Speaker 5: So there's two issues at player.
5:28
Speaker 2: One is what the FED is doing with their rate policy,
5:30
Speaker 2: and then the other is what the market is determining
5:32
Speaker 2: with regard to the Treasury bond yields. As I mentioned,
5:35
Speaker 2: extraordinary action taken yesterday. Sagon put a four up on
5:38
Speaker 2: the screen from the Financial Times US Treasury to boost
5:42
Speaker 2: long term bond purchase purchases in bid to steady market.
5:46
Speaker 2: This is a tell that they are very concerned about
5:50
Speaker 2: what is going on with treasuries. This is an extraordinary intervention.
5:54
Speaker 2: The US Treasury said it would at least double purchases
5:57
Speaker 2: of long term government debt as policymakers seek to contain
5:59
Speaker 2: a sell off that is sent borrowing costs soaring in
6:02
Speaker 2: the world's most important bond market. The more aggressive buyback
6:06
Speaker 2: operation affects treasure securities maturing in ten to twenty years
6:09
Speaker 2: and twenty to thirty years, increasing from two billion to
6:12
Speaker 2: at least four billion, the Treasury said on Wednesday. Surprise
6:16
Speaker 2: move comes at the time of growing strains in the
6:18
Speaker 2: thirty two trillion dollar US treasury market as investors fret
6:21
Speaker 2: over the burst of inflation triggered by what drumps aron
6:25
Speaker 2: war and washings mounting public debt burden. The way that
6:29
Speaker 2: they're going to do this is basically using short term
6:32
Speaker 2: debt to buy the long term debt is the actual
6:36
Speaker 2: mechanism here. So it's a little bit of I guess
6:39
Speaker 2: borrowing from Peter to pay Paul.
6:41
Speaker 3: That's the The bottom line is very simple, is that
6:43
Speaker 3: we're taking debt to pay down debt. And what that
6:46
Speaker 3: means in the long term is basically that it will
6:49
Speaker 3: try to affect interest or sorry in the short term
6:52
Speaker 3: is they're trying to bring interest rates down immediately because
6:56
Speaker 3: the higher that they are, it increases the amount of
6:59
Speaker 3: federal spend, which is directly related to debt servicing. So
7:02
Speaker 3: I have some of the numbers here in front of me.
7:05
Speaker 3: Roughly fourteen percent of current federal spending goes to servicing
7:09
Speaker 3: the debt today, which is obviously bad because that's literally
7:13
Speaker 3: just interest that's being paid on the debt three point
7:16
Speaker 3: three percent roughly of total GDP. That is dramatically higher
7:20
Speaker 3: than where things were when we had much lower interest rate.
7:22
Speaker 3: That's why lower interest rates were really good for the government.
7:25
Speaker 3: But a lot of the other problem is that with
7:27
Speaker 3: interest rate, demand side, etc. There's no idea that we
7:31
Speaker 3: could go back to where things were for a variety
7:34
Speaker 3: of reasons.
7:35
Speaker 1: Is number one, we.
7:35
Speaker 3: Got ourselves into this mess of the airon wars, so
7:38
Speaker 3: we have very high inflation, which is part of the
7:40
Speaker 3: FEDS mandate. We have weird things going on with our
7:43
Speaker 3: unemployment sector. We also have this crazy situation now where
7:48
Speaker 3: in terms of our debt and our bonds itself, we
7:51
Speaker 3: have great instability because of what's happened here with Japan
7:55
Speaker 3: and with the general reduction of reserve currency as the
8:00
Speaker 3: US dollars. So with the power of the United States
8:03
Speaker 3: now reduced, we're entering into territory which is very dangerous.
8:07
Speaker 3: You know, japan territory where it's roughly one hundred and
8:11
Speaker 3: ten percent you know, debt to GDP ratio, Like, these
8:13
Speaker 3: are exactly the places that you don't want to be
8:16
Speaker 3: if you're not a global superpower. And we've always been
8:20
Speaker 3: able to avoid the pitfalls of the Eurozone crisis or
8:23
Speaker 3: the Japanese crisis because of our reserve status. Because obviously
8:26
Speaker 3: the great you know, United States military and power projection.
8:30
Speaker 3: As that all begins to fade, that will also have
8:33
Speaker 3: immense impact in our ability to trade to compel nations.
8:37
Speaker 3: We're going to talk a lot about this with Iran,
8:39
Speaker 3: this latest I'll just mention it for now. Trump is like,
8:41
Speaker 3: any economy which does business with Iran is hereby sanctioned.
8:45
Speaker 1: China's like, yeah, that's cute, We don't care. What are
8:48
Speaker 1: you gonna do?
8:48
Speaker 3: It's like, what are you gonna do to us that
8:50
Speaker 3: you haven't already done? You hit us with terrorists, we
8:51
Speaker 3: hit you back. Our banking system is totally you know, proofed,
8:55
Speaker 3: us proofed after what we saw happen with Russia.
8:57
Speaker 1: What's Russia going to do?
8:58
Speaker 3: They don't give a shit, you know, they're already sanctioned
9:00
Speaker 3: in hell, right, Venezuela, Iran are not Venezuela anymore, but
9:04
Speaker 3: the past Venezuela. There's all kinds of ways to circumvent sanctions.
9:08
Speaker 3: Now we've shown our hand. We threw it all away
9:11
Speaker 3: basically on Ukraine. So all of this compounds together, and
9:15
Speaker 3: I guess the bottom line is is that they have
9:17
Speaker 3: to panic in. Scott Bess in his entire career is
9:20
Speaker 3: built on currency manipulation, bond and all this, and he's
9:22
Speaker 3: trying his best, but like, there's only so much that
9:25
Speaker 3: you can do, and we're already in extraordinary territory. The
9:28
Speaker 3: fact that the Japanese bailout basically fell apart after a
9:31
Speaker 3: month should be a real wake up call. We don't
9:32
Speaker 3: have the magic wand that we used to.
9:34
Speaker 2: That's right, And what conditions are going to change over
9:38
Speaker 2: the next month, two months, three months, six months that
9:41
Speaker 2: are going to ameliorate the stress on the bond market.
9:45
Speaker 5: It's hard to see.
9:46
Speaker 2: It's hard to see because what are we talking about
9:48
Speaker 2: so some of the factors that are leading to this
9:51
Speaker 2: situation where you know, just to break it down to
9:53
Speaker 2: its most basic level, when there is less demand for
9:56
Speaker 2: our bonds, when there are less buyers who are interested
9:58
Speaker 2: in taking on us debt, we have to pay higher
10:01
Speaker 2: interest rates to lure them into the market. So that's
10:04
Speaker 2: why the rate goes up when there is less demand
10:07
Speaker 2: for the bonds. That's like the most basic sort of
10:09
Speaker 2: level of thinking about all of this, And so a
10:12
Speaker 2: few factors are tying into this. Number One, you've got
10:15
Speaker 2: this tremendous AI build out, largest debt investment that you
10:19
Speaker 2: could possibly imagine, which is creating all of this demand
10:22
Speaker 2: for capital. So that means if you're somebody who has capital,
10:25
Speaker 2: then you can kind of demand a premium because there's
10:27
Speaker 2: so many companies and entities, there's so much demand for
10:31
Speaker 2: your capital. So that's one issue that's not going anywhere.
10:34
Speaker 2: The other one is inflation, as Sager was saying related
10:37
Speaker 2: to the Iran war. Another one is just the sort
10:40
Speaker 2: of uncertainty about the US and how.
10:43
Speaker 5: Stable it's going to be going forward.
10:44
Speaker 2: And part of that is certainly the large amount of
10:47
Speaker 2: debt and the world moving away from holding treasuries. Note
10:50
Speaker 2: now the world's central banks governments are holding gold more
10:55
Speaker 2: often than they're holding US treasuries. That is a major
10:58
Speaker 2: shift in terms of the way that the world operas.
11:00
Speaker 2: So all of these pieces put together, it's hard to
11:02
Speaker 2: see how things are going to change, So how long
11:04
Speaker 2: can they continue to do these sort of interventions. And
11:07
Speaker 2: the rates are already quite high and at the place
11:10
Speaker 2: where you know, there's a bit of a panic among policymakers.
11:13
Speaker 2: So that is the landscape we're looking at. And you know,
11:16
Speaker 2: if we zoom out here in terms of the debt
11:18
Speaker 2: and where we are as a country and all of
11:20
Speaker 2: these sorts of things we really have, we've got to
11:23
Speaker 2: reckon with some things. And I've never been a debt hawk.
11:26
Speaker 3: You know.
11:26
Speaker 2: I think we've been career airing for thirty years. Oh
11:29
Speaker 2: my god, everything's going to collapse and we can't afford
11:31
Speaker 2: the debt, blah blah blah, and it's never turned out
11:33
Speaker 2: to be the case. However, we are facing a different
11:36
Speaker 2: landscape now where China is rising, where the world is
11:40
Speaker 2: trying to decouple in certain ways from the United States
11:42
Speaker 2: of America, where the previous system that had the dollars
11:45
Speaker 2: of reserve currency. I'm not saying this is going away tomorrow,
11:47
Speaker 2: but there is a shift that is happening. So we
11:50
Speaker 2: are going to have to get our arms around this.
11:52
Speaker 2: At the same time, after the Cold War ends, there
11:55
Speaker 2: would have been a thought of Okay, the military.
11:57
Speaker 5: Spending can kind of wind down.
11:59
Speaker 2: That never really happened, and in fact, now we just
12:01
Speaker 2: keep every single president more and more and more military spending.
12:05
Speaker 2: And for what have you seen these destroyers? Have you
12:08
Speaker 2: seen these carriers? Have you seen the fact? Have you
12:11
Speaker 2: heard about the fact that our munition stockpiles are like
12:13
Speaker 2: down to bottom of the barrel? So for what is
12:17
Speaker 2: basically because the military industrial complex is a cartel that
12:20
Speaker 2: has been robbing us blind to build up a military
12:24
Speaker 2: that is not responsive to the realities of modern warfare.
12:28
Speaker 2: So we have to get our arms around that. And
12:30
Speaker 2: then the third piece here too is that rich people
12:32
Speaker 2: have figured out how to gain the system and not
12:35
Speaker 2: pay taxes. The antiquated progressive taxation system has been broken.
12:40
Speaker 5: They broke it.
12:40
Speaker 2: Okay, they figured out the loopholes, they bought the politicians.
12:44
Speaker 5: They broke it.
12:45
Speaker 2: If we don't figure out some way to tax the
12:49
Speaker 2: extraordinarily wealthy and only getting wealthy by escalating factors every
12:55
Speaker 2: single year, if we don't figure out how to tax them,
12:58
Speaker 2: then yes, we are not going to be able to
13:00
Speaker 2: do anything in this country that will benefit the sort.
13:03
Speaker 5: Of broader public.
13:04
Speaker 2: And we will face at some point there will be
13:07
Speaker 2: a reckoning for the direction that we're going in. So
13:09
Speaker 2: that's kind of the big picture on all of this.
13:11
Speaker 3: I actually think we could have figured it out as
13:13
Speaker 3: bad as things work, if we just hadn't gotten into
13:16
Speaker 3: the Iran war.
13:16
Speaker 1: But if you want to go big picture, I really do.
13:19
Speaker 3: I mean, if we let's say we end the war
13:21
Speaker 3: in Ukraine, thank god, all right, now, Diesel, We've got,
13:24
Speaker 3: you know, things that are flowing, we have a peace settlement,
13:27
Speaker 3: there's a level of stability there. We don't have to
13:29
Speaker 3: worry about that much. Then we don't do the war
13:31
Speaker 3: with Iran. Gas goes to two fifty. We frack the
13:35
Speaker 3: hell out of whatever is left in Alaska. Whether you
13:38
Speaker 3: support that or keeps going down, right, I mean, life
13:41
Speaker 3: is good. You've got two twenty dollars gasoline, you've got
13:44
Speaker 3: cheap energy, and even then, you know, you know, with
13:47
Speaker 3: the data centers like we would worry.
13:48
Speaker 1: I don't think we would worry as much.
13:49
Speaker 3: But in a finite environment where energy is extremely, extremely expensive,
13:56
Speaker 3: and now you have a demand for trillions more military spending,
14:01
Speaker 3: and you have forty billion dollar deficit and or sorry
14:05
Speaker 3: forty show and you have on top of that, this
14:07
Speaker 3: reduction of the overall empire, that's when things get really bad.
14:11
Speaker 1: And so you know, my wife is an economist. As
14:13
Speaker 1: you explained to me this way, it's.
14:14
Speaker 3: Called like a debt spiral where you have big I
14:17
Speaker 3: wrote it down. Big deficits leads to governments borrowing more,
14:21
Speaker 3: leads to investor demands. Higher youth leads to interest expanse
14:24
Speaker 3: rises leads to deficit gets bigger, leads to government needs
14:27
Speaker 3: to borrow more.
14:28
Speaker 1: So if that is the spiral that you exactly.
14:30
Speaker 3: Don't want to enter into, I kind of see that
14:33
Speaker 3: that's what's happening right now, especially with the persistent high inflation.
14:36
Speaker 2: And here's the thing, in another time period, it wouldn't
14:39
Speaker 2: really matter. So like, for example, Japan has much higher
14:43
Speaker 2: deficits STEPT than we too much higher as like percent
14:45
Speaker 2: of GDP hasn't really mattered because they have zero percent
14:49
Speaker 2: interest rates. So that's one scenario. And the other thing is,
14:52
Speaker 2: as I've been saying, like the fact that we have
14:54
Speaker 2: been the global superpower world's reserve currency also means that
14:58
Speaker 2: it hasn't really mattered. We've been able to bar from
15:00
Speaker 2: the world. The world's like, okay, you're going to pay
15:02
Speaker 2: your debt, no big deal. When you start to have
15:05
Speaker 2: to deal with this reality is when those two factors
15:09
Speaker 2: go away. So already we have interest rates, you know,
15:11
Speaker 2: we have very low interest rates for a long time too.
15:13
Speaker 2: That is changing, probably for good. This is probably a
15:16
Speaker 2: new status quo if I had to get some less.
15:18
Speaker 2: A lot of analysts are saying that is changing. And
15:21
Speaker 2: then the sense of oh it's the US, that the
15:24
Speaker 2: global superpower, They're always going to be fine, that is
15:27
Speaker 2: also getting a little bit shaky. So that's when you
15:31
Speaker 2: have to really start worrying about those sorts of things
15:33
Speaker 2: like the debt spiral and and yeah, so that's a
15:38
Speaker 2: situation we find ourselves in. I do want to want
15:40
Speaker 2: a flag. What you were talking about Trump announcing we're
15:43
Speaker 2: going to have these crushing operations against Iran. Put a
15:47
Speaker 2: three up on the screen. Here's a new true social
15:50
Speaker 2: Of course, it's already been broadcast. Got Vesset said something
15:53
Speaker 2: to this effect. No one has given the Islamic Republic
15:56
Speaker 2: of Iran a greater opportunity to make a deal than me.
15:58
Speaker 2: Tragically for them, they've failed to take it. Therefore, today
16:01
Speaker 2: I'm announcing the most crushing economic operation ever taken against
16:06
Speaker 2: any country. This will be economic warfare and isolation on
16:10
Speaker 2: an unprecedented scale. Their navy's gone, their air force is destroyed, interesting,
16:14
Speaker 2: their military factors are now rebel really, their currency is worthless,
16:17
Speaker 2: and their country is hanging by a thread.
16:19
Speaker 5: I feel like I've heard this before.
16:20
Speaker 2: Today I am also announcing that any country that allows
16:23
Speaker 2: its financial institutions, businesses, airports, or government entities to provide
16:27
Speaker 2: any type of lifeline to Iran will itself face tremendous
16:30
Speaker 2: economic consequences. Oil smuggling, swap lines, cash transfers, exchange houses,
16:34
Speaker 2: ship registries, front companies.
16:35
Speaker 5: It all needs to stop. Now you know who you are.
16:39
Speaker 2: This will be an economic d Day, and we need
16:42
Speaker 2: all of our allies to stand with the US to
16:44
Speaker 2: isolate and defeat the Iran threat. These maniacs are on
16:47
Speaker 2: the ropes and these historic measures will cripple them and
16:50
Speaker 2: their ability to protect terror worldwide. Iran will never have
16:53
Speaker 2: a nuclear weapon. Thank you for your attention to this matter.
16:56
Speaker 2: As we've said before, hard to imagine how much more
17:00
Speaker 2: we could do to Iran, and certainly the maximum pressure
17:04
Speaker 2: we've ever been able to apply is to Cuba, which
17:07
Speaker 2: is in dire straits because of the blockade we have
17:11
Speaker 2: put on that country. That is a country that is
17:13
Speaker 2: very close. It is an island nation, it is much smaller,
17:15
Speaker 2: has much fewer internal resources than Iran. What we can
17:20
Speaker 2: do with regard to Iran is much more limited. But Sagara,
17:22
Speaker 2: I was reading this morning that the Iranians see yesterday
17:26
Speaker 2: we covered Emily and I covered that the UAE cut
17:29
Speaker 2: off all trade because they claimed that Iran had fired
17:32
Speaker 2: missiles at them. Iran sees that as part of this
17:37
Speaker 2: program of economic strangulation, because they do have a lot
17:40
Speaker 2: of financial ties with Dubai in particular, and so they're
17:44
Speaker 2: seeing that as part of the economic warfare project.
17:47
Speaker 5: Here.
17:47
Speaker 3: Look, I mean you said Cuba, it's actually I mean,
17:51
Speaker 3: Russia is empirically the most sanctioned economy the history of
17:55
Speaker 3: the world.
17:56
Speaker 1: How's it doing. They're doing okay.
17:58
Speaker 3: And by the way, in terms of what hit them economically,
18:01
Speaker 3: it's got nothing to do with sanctions. It's got to
18:03
Speaker 3: do with these drones that are blowing the shit out
18:05
Speaker 3: of their diesel facilities. So what does that tell you
18:07
Speaker 3: is that their ability to export diesel is actually the
18:10
Speaker 3: only real thing which was keeping their economy afloat, they
18:13
Speaker 3: were doing fine. Their GDP actually increased, their defense spending
18:16
Speaker 3: was twenty percent, and all that they transformed into a
18:19
Speaker 3: wartime garrison and they're still living to fight another day.
18:22
Speaker 3: Their population doesn't care, and they continue to just roll along.
18:25
Speaker 1: With the war. It had nothing to do with the
18:27
Speaker 1: banks to the finance.
18:28
Speaker 3: If anything, it actually helped putin because any of the
18:30
Speaker 3: Western oligarchs either throw them in jail or they had
18:33
Speaker 3: to leave voluntarily. Everybody is completely around him. So with Iran,
18:37
Speaker 3: what is left to that country economically that we haven't
18:40
Speaker 3: done nothing. They want you to believe that there's some
18:42
Speaker 3: super secret secondary sanctions.
18:44
Speaker 1: It's just not true.
18:45
Speaker 3: I mean again, and maybe it is true, But if
18:48
Speaker 3: it is true, get ready for some crazy realignments, because
18:52
Speaker 3: then China, Iran, all the China, India, South Korea, all
18:57
Speaker 3: of these different countries which previously have purchased Iranian and oil.
19:00
Speaker 1: Then they're going to have to actually make a real choice.
19:02
Speaker 1: They're like, Okay, which one do we choose?
19:04
Speaker 3: So we're going to choose less oil, higher inflation, higher
19:07
Speaker 3: costs to ourselves over the United States, what are they
19:10
Speaker 3: really doing for us? Like, oh, I don't know abandoning
19:12
Speaker 3: our military exercises and saying screw you while we pursue
19:15
Speaker 3: a deal with the North. These things are all going
19:19
Speaker 3: to be taken into consideration by world leaders in world economies,
19:23
Speaker 3: and the balance sheet looks very different than it used to.
19:26
Speaker 3: Last thing I want to highlight here is a six
19:28
Speaker 3: about the Federal Reserve and high inflation, because this was
19:31
Speaker 3: to your point about why interest rates just probably aren't
19:34
Speaker 3: going down within the next five years, but potentially even
19:37
Speaker 3: the next decade. And many members of the Federal Reserve
19:41
Speaker 3: are concerned that persistently high inflation will lead to these
19:44
Speaker 3: rapid price rises becoming embedded into the world's economy, according
19:48
Speaker 3: to their latest policy vote, and they said that it
19:51
Speaker 3: highlighted the possibility after several years of inflation above two percent,
19:54
Speaker 3: continued elevated inflation rates could begin to affect inflation expectations
19:58
Speaker 3: and wage price setting decisions. Basically saying it's baked in,
20:01
Speaker 3: and they're choosing to hold borrowing costs at their current
20:04
Speaker 3: interest rate for their July meeting and potentially set for
20:07
Speaker 3: the future. May be because of Iran having to even
20:10
Speaker 3: hike the interest rate. So that's important because their expectation
20:15
Speaker 3: along with what's happening in the bond market, et cetera,
20:18
Speaker 3: is making it so that it becomes the de facto
20:20
Speaker 3: policy of these high interest rates and of all of
20:23
Speaker 3: this crazy bond trading. You know, even the Journal of
20:26
Speaker 3: their top headline this morning is bestent leans into his
20:28
Speaker 3: role as America's bond trader in chief. A willingness to
20:32
Speaker 3: intervene after yields had hit a nearly two decade high
20:36
Speaker 3: and I know, as you guys covered to see it
20:38
Speaker 3: back at seven levels, that should give you jitters. I mean,
20:41
Speaker 3: we should not forget what it means to go through
20:43
Speaker 3: even a modest recession. It is a disaster, a genuinely
20:47
Speaker 3: devastating if we had to go into that.
20:49
Speaker 2: Yeah, and the high interest rates, what does that mean?
20:51
Speaker 2: Housing affordability out the window? And that's part of why
20:55
Speaker 2: Trump is so concerned about, you know, all of our
20:57
Speaker 2: any sort of debt interest. You He is related to
21:02
Speaker 2: what we're talking about here, both with the bonds and
21:04
Speaker 2: with the businessls.
21:06
Speaker 3: Well, that's the other thing you know we talked about, right,
21:07
Speaker 3: high interest rate? You know who can the data center
21:10
Speaker 3: dize they don't give a shit if it's four percent
21:12
Speaker 3: or five percent but you know, in another world, you
21:15
Speaker 3: and I are running a different type of small business.
21:17
Speaker 1: The difference between two and six is a lot, right,
21:19
Speaker 1: Why don't we look at a loon.
21:20
Speaker 3: I mean, I may buy the machine, maybe not, you know,
21:23
Speaker 3: new cameras something like that, if you have to, if
21:25
Speaker 3: you have to buy it on the finger, like I
21:26
Speaker 3: don't know, you know, And so if that's the type
21:28
Speaker 3: of stuff which actually has a much more shrinking effect
21:31
Speaker 3: to the US economy, restaurants.
21:32
Speaker 1: You know, whether you're gonna do a small.
21:35
Speaker 3: Business loan, even a normal loan that people take out
21:38
Speaker 3: for ordinary capital expenditure purposes, that's what gets screwed. So
21:43
Speaker 3: the tech people can afford the high interest rate, it's
21:46
Speaker 3: average small business owner who absolutely cannot.
21:48
Speaker 1: And that kills your expansion period. So that's that is.
21:51
Speaker 3: That I think is the biggest cooling effect on hiring,
21:55
Speaker 3: as well as, like you said, at the personal level,
21:58
Speaker 3: whenever it comes to personal debt, life car loans and
22:01
Speaker 3: or house.
22:01
Speaker 1: Loans, none of it could. None of it could. Okay,
22:04
Speaker 1: let's get to North Korea.
22:08
Speaker 3: Turning now to North Korea, some actually crazy situation happening
22:12
Speaker 3: there after Trump saying he was going to abandon military
22:15
Speaker 3: exercises with the South and try to pursue a meeting
22:18
Speaker 3: with Kim Jong un. Kim Jong Un actually basically spit
22:21
Speaker 3: in Trump's face and was like, Yeah, I don't care
22:23
Speaker 3: about your stupid meeting or your cancelation of military exercises.
22:26
Speaker 3: You're either going to bow down, kiss my hand and
22:28
Speaker 3: acknowledge my nuclear weapons or nothing else is happening. And
22:31
Speaker 3: to show that he's serious, let's put this up here
22:33
Speaker 3: on the screen. The Prime Minister's Office of Japan releasing
22:36
Speaker 3: a statement this morning showing that there has now been
22:39
Speaker 3: suspected missile launches by North Korea. They say that quote
22:43
Speaker 3: provisional translation with is what they put out ensuring the
22:46
Speaker 3: safety of aircraft, vessels, and other assets. They also put
22:49
Speaker 3: out another statement that it looks like roughly ten different
22:52
Speaker 3: short range ballistic missiles were fired by North Korea in
22:56
Speaker 3: the vicinity of Japan. Not exactly like new new, but
23:00
Speaker 3: you should pay attention because this is what they use
23:03
Speaker 3: to compel diplomacy and to shape these talks with the
23:06
Speaker 3: United States. It comes on the heels of Trump trying
23:10
Speaker 3: to create space for a grand diplomatic summit with North Korea,
23:14
Speaker 3: just like he did with Kim Jong un in Singapore
23:17
Speaker 3: in twenty eighteen, but this time around the North in
23:20
Speaker 3: terms of their demands are much higher for what any
23:23
Speaker 3: sort of bilateral meeting actually would look like. Here's Trump
23:27
Speaker 3: try to lay the ground and then I'm going to
23:28
Speaker 3: give you the truth be too. Let's take a listen.
23:30
Speaker 6: There's you said North Koreas some like fifty seven nuclear
23:33
Speaker 6: weapons and expanding any clear is your goal in trying
23:37
Speaker 6: to re engage with German Jim's still denuclearization and what
23:41
Speaker 6: makes you think you could be successful now when you
23:43
Speaker 6: work Well, I don't.
23:44
Speaker 4: We're talking about that. But I do have a good
23:45
Speaker 4: relationship with Kim Jung Lund. As you know, you've seen.
23:51
Speaker 4: He didn't like Biden, he didn't like Obama, he didn't
23:54
Speaker 4: like anybody. But he likes me, and I like, you know,
23:57
Speaker 4: I just got along with him very good. We had
23:59
Speaker 4: We had great meet We speak, and I think our
24:02
Speaker 4: nation and I think other nations frankly, whether it's Japan
24:05
Speaker 4: or South Korea, they're a lot safer if I'm president
24:09
Speaker 4: of somebody else's presidents.
24:10
Speaker 3: Always very funny that he thinks that Kim Jong un
24:13
Speaker 3: likes him and didn't like Biden or Obama, Kim Jong
24:16
Speaker 3: un doesn't care or think about any of those people.
24:18
Speaker 1: The only thing he cares about.
24:19
Speaker 3: Is dying, filthy rich in his mansion and keeping the
24:24
Speaker 3: fifty seven nuclear weapons that he has. And to show
24:28
Speaker 3: you how delusional Trump is, because he wants this imagery
24:31
Speaker 3: of meeting with Kim, which at this point I think
24:33
Speaker 3: the North Koreans understand, and that's why their demands are
24:36
Speaker 3: so much higher. Let's put B three up here on
24:38
Speaker 3: the screen. Trump still has the same policy as Biden
24:42
Speaker 3: and Obama, which is total denuclearization. So let's let's read
24:47
Speaker 3: President Trump is pushing aids for a meeting as soon
24:50
Speaker 3: as this fall with the North Korean leader Kim Jong un,
24:52
Speaker 3: seeking to revive dramatic diplomatic quest from his first term
24:55
Speaker 3: to convince Kim to abandon his country's nuclear way weapons program.
25:01
Speaker 3: Trump is privately discussed setting up this in person discussion
25:04
Speaker 3: on his next trip to Asia. And while Trump sees
25:07
Speaker 3: another one on one as a chance to reopen dialogue, quote,
25:10
Speaker 3: analysts and officials said they don't expect my progress because
25:13
Speaker 3: Kim wields a nuclear arsenal that has not only grown
25:15
Speaker 3: stronger and more capable of striking the US since Trump
25:19
Speaker 3: and Kim's previous three summits. That's actually why I think
25:23
Speaker 3: this is all so ridiculous. Is Donald Trump, in the
25:28
Speaker 3: midst of a war where he tried to prevent Iran
25:32
Speaker 3: from getting a nuclear weapon, struck them under the guys
25:36
Speaker 3: of diplomacy, failed to do so, failed to do regime change,
25:41
Speaker 3: and affirmed the strategic logic of Kim Jong ill and
25:46
Speaker 3: his father for pursuing a nuclear weapons program in the
25:49
Speaker 3: first place, which is, you will make us untouchable, and you,
25:53
Speaker 3: the American president, you will meet me as a peer
25:57
Speaker 3: nuclear weapons power, and I will demand and what I want.
26:01
Speaker 3: You can keep your pitoy denuclearization talks out because we
26:05
Speaker 3: don't care, and we have more nukes than we could
26:08
Speaker 3: ever need to eviscerate your entire homeland. And yet because
26:11
Speaker 3: in America we've been bombarded as well as propaganda, and
26:14
Speaker 3: I was like, oh, famine, Yeah, and all of that
26:16
Speaker 3: is true, but it does.
26:18
Speaker 1: Not belie the strategic logic.
26:19
Speaker 3: They have nukes, they can wipe our cities off the map.
26:24
Speaker 3: Thus we have to deal with that reality. They get
26:27
Speaker 3: to make demands, and you know, it's like we're still
26:31
Speaker 3: living in this total fantasy from that Donald Trump. Yeah,
26:34
Speaker 3: and that's why I just find this so preposterous. And
26:37
Speaker 3: if anything, you know, Kim is humiliating him by now
26:41
Speaker 3: shooting these missiles at Japan by being like, yeah, man,
26:44
Speaker 3: we don't care about your dumbass summits or your joint
26:47
Speaker 3: military exercises, Like we have nukes, dude, Like you're gonna
26:50
Speaker 3: meet me and at the end of the day, remove
26:52
Speaker 3: the sanctions or not. But my nuke's not going anywhere.
26:55
Speaker 3: If anything, we're building more tomorrow.
26:57
Speaker 2: It is hilarious imagines at this moment in time when
27:03
Speaker 2: they have never.
27:03
Speaker 5: Been more vindicated.
27:05
Speaker 2: Again, this is not a moral judgment, This is just
27:07
Speaker 2: a reality check. They have never been more vindicated. And
27:10
Speaker 2: there has never been more clear cut logic in favor
27:14
Speaker 2: of not just North Korea, but Ran and South Korea
27:18
Speaker 2: and all kinds of other countries around the world.
27:19
Speaker 5: Also Saudi Arabia.
27:21
Speaker 2: Also acquiring nuclear weapons because of the logic we ourselves
27:24
Speaker 2: have created in the world. And you think that is
27:27
Speaker 2: the moment when North Korea is going to say, you
27:29
Speaker 2: know what, you're right, I'm going to give up my
27:30
Speaker 2: nuclear weapons. Zero chance, zero percent chance. Not only that
27:35
Speaker 2: we covered how North Korea economically, they're doing pretty well.
27:39
Speaker 2: They're having some significant growth they have. I mean, they've
27:43
Speaker 2: effectively waited us out.
27:45
Speaker 3: Right, we did that article how they have more housing
27:47
Speaker 3: than the city of Chicago.
27:48
Speaker 1: Yeah, in Pyongyang, you're like, I.
27:51
Speaker 5: Don't know what to say about this. Yeah, that's right.
27:54
Speaker 2: And again not to like we're not trying to sugarcoat
27:56
Speaker 2: things here or whatever. But they've found two partners in
27:59
Speaker 2: China and Russia that have turned out to be very beneficial,
28:03
Speaker 2: and they've found ways to also contribute to those relationships.
28:07
Speaker 5: With Russia.
28:08
Speaker 2: Again, again these are not moral judgments, this is just reality.
28:10
Speaker 2: With Russia, they have sent their own troops as effectively
28:14
Speaker 2: mercenaries into Ukraine, very valuable there. They've also helped with
28:18
Speaker 2: industrial production.
28:19
Speaker 1: They have Russia allians weapons, the fifth largest military in.
28:22
Speaker 2: The world exactly, So they have and they've so they've
28:25
Speaker 2: earned all kinds of money from that that they're now
28:27
Speaker 2: investing in housing and all kinds of things internally, so
28:32
Speaker 2: that they're trying to make it so that there isn't
28:33
Speaker 2: so much wealth just concentrated in Pyongyang, that that wealth
28:36
Speaker 2: has spread more throughout the country. So economically the picture
28:40
Speaker 2: is pretty good for them. They've got two pretty powerful
28:42
Speaker 2: allies in China and Russia, and so why at this
28:47
Speaker 2: moment would they come and do anything that we want
28:50
Speaker 2: them to do. So so their response to Trump's reduction
28:55
Speaker 2: of these military exercises was number one, we have a
28:59
Speaker 2: great person relationship and friendship with Trump, you know, playing
29:02
Speaker 2: to his ego. But number two, we don't really care
29:04
Speaker 2: that you reduce the military actually means nothing to us whatsoever.
29:08
Speaker 2: And as a show of strength, we're going to go
29:10
Speaker 2: ahead and do one of our missile launches. So it's just,
29:14
Speaker 2: you know, it's it's really silly, and I think it
29:17
Speaker 2: to me reads as desperate. Trump sees what an l
29:21
Speaker 2: he has taken on Iran. He's desperately trying to figure
29:25
Speaker 2: out some kind of a win that he can get
29:28
Speaker 2: on the global stage.
29:30
Speaker 5: This kind of worked for him in the past.
29:32
Speaker 2: I think he genuinely does like Kim Jong un and
29:35
Speaker 2: thinks that maybe, and he is so delusional about his
29:38
Speaker 2: own powers of negotiation and persuasion that he thinks perhaps
29:42
Speaker 2: this is some sort of a win that he could
29:44
Speaker 2: get on the global stage. And let me be clear,
29:46
Speaker 2: like I support the idea of being less militaristic. I
29:50
Speaker 2: think that's going to be a necessity in terms of
29:53
Speaker 2: how we move forward in the world after this demonstration
29:56
Speaker 2: of incredible weakness in the Iran War. So I supported
30:00
Speaker 2: the original meetings with North Korea. I support figuring out
30:03
Speaker 2: how to coexist with the other nations of the world,
30:06
Speaker 2: whether they're doing things we like or don't like or
30:08
Speaker 2: whatever in terms of their internal domestic politics. But he
30:11
Speaker 2: is living in such a delusion to imagine that he
30:14
Speaker 2: has any position to demand anything from North Korea.
30:17
Speaker 1: That's my thing too. I'm with you.
30:18
Speaker 3: I vehemently defended the original summit, which, in man if
30:23
Speaker 3: the young kids today who weren't paying attention to politics,
30:26
Speaker 3: they were like, oh, he's meeting with the brutal dictator.
30:28
Speaker 3: I'm like, yeah, the guy's got a nuclear weapon. That's
30:30
Speaker 3: how it works.
30:30
Speaker 1: Sorry, you know, like, what do you want? What do
30:32
Speaker 1: you want us to do?
30:33
Speaker 3: Lose Hawaii? I'll keep Hawaii, thank you very much. And
30:36
Speaker 3: or Los Angeles. I'd rather make sure that they don't
30:38
Speaker 3: get wiped off the face of the earth. Oh, and
30:41
Speaker 3: make sure that we you know, look, I mean soul
30:43
Speaker 3: and everybody living in South Korea has been living in terror,
30:46
Speaker 3: in fear for since nineteen fifty. Like, it's actually insane
30:50
Speaker 3: that North Koreans have the ability while they're sarin gas
30:53
Speaker 3: and Chema VX and the conventional artillery nukes aside, they
30:57
Speaker 3: can destroy the city of Soul in forty five minutes.
31:00
Speaker 3: I was reading some of the work. It's terrifying what
31:02
Speaker 3: they were living underneath. Let's keep them safe. We can
31:04
Speaker 3: keep our economies well integrated. They're a great ally. Let's
31:07
Speaker 3: have good relations with the North. We don't have to
31:09
Speaker 3: keep them. We don't have to have fat missiles and
31:11
Speaker 3: carriers and all this other crap which is over there
31:13
Speaker 3: just to stop North Korea, let alone what's happening with China.
31:16
Speaker 3: But in this case, what Trump has done is he's
31:19
Speaker 3: actually being forced to go to them on their terms
31:23
Speaker 3: because not just of their nukes, because of the bad
31:25
Speaker 3: situation with Iran, but also everybody knows, from Pyongyang to
31:30
Speaker 3: Beijing that there is nothing they can do if there
31:34
Speaker 3: actually is a war between North Korea and South Korea.
31:36
Speaker 3: They know that even with all the American troops which
31:39
Speaker 3: are stationed there, push comes to shove with the interceptors
31:41
Speaker 3: and all that we are going to take tens of
31:44
Speaker 3: thousands of casualties, millions if the icbm's and all that.
31:47
Speaker 6: Kid.
31:48
Speaker 2: Yeah, well, well, and we should also talk about South
31:50
Speaker 2: Korea's response to this, because North Korea's response very interesting
31:54
Speaker 2: of like, we don't care about your military exercise. We're
31:56
Speaker 2: going to do what we want to do. Sure, you
31:57
Speaker 2: could come, you know, maybe we'll have a meeting, but
31:59
Speaker 2: you're not getting what you want. South Korea also was like,
32:03
Speaker 2: that's fine. We actually support you having some sort of
32:05
Speaker 2: dialogue with North Korea, and we are going to move
32:08
Speaker 2: in the direction of decoupling from relying on you anyway.
32:11
Speaker 5: That was their response.
32:12
Speaker 2: So both of these countries are sort of like, okay, bro, whatever, dude,
32:16
Speaker 2: do whatever you're going to do, We're going to look
32:19
Speaker 2: out for ourselves because we know how much you've been
32:22
Speaker 2: humiliated on the world stage. We know the limits of
32:25
Speaker 2: your power now, so we have to look out for
32:27
Speaker 2: our own interests at this.
32:28
Speaker 3: Point and let me go into them, because it really
32:30
Speaker 3: does matter because one of the things I've seen now
32:32
Speaker 3: and actually, let me play Trump bashing South Korea. A
32:35
Speaker 3: bunch of maga people were backing him up, but the
32:38
Speaker 3: internal dynamics and the story.
32:39
Speaker 1: Here matter a lot. Let's listen to b four. For example, South.
32:46
Speaker 4: Korea has been protected by US for many, many years,
32:49
Speaker 4: and during my first term, they agreed to pay close
32:52
Speaker 4: to three bidion dollars a year for protection because we
32:55
Speaker 4: don't you know, they essentially weren't they and I asked
32:58
Speaker 4: him to do that at my request. I said, they
33:01
Speaker 4: weren't happy about it, but they agreed. I asked for
33:04
Speaker 4: ten billion dollars and they were very unhappy, but we
33:10
Speaker 4: agreed for a short term there would be three billion
33:12
Speaker 4: dollars and next year would go up, and the next
33:14
Speaker 4: year would go up, so they start paying for their protection.
33:17
Speaker 4: When the election was rigged and I ended up watching
33:20
Speaker 4: for four years and then coming back, I watched Biden,
33:24
Speaker 4: we send that three billion dollars here for whatever? Is
33:28
Speaker 4: what I called recently President of South Kote, who I like.
33:32
Speaker 4: I think he's very nice actually, but I called him,
33:35
Speaker 4: I said, would you like to give us a little hand?
33:36
Speaker 4: We don't need help with Ran, but if you'd like
33:39
Speaker 4: give us a hand with Arran? He said no, thanks,
33:43
Speaker 4: and I said, we have thirty nine thousand soldiers over
33:46
Speaker 4: there guarding you from Kim Jong un. You're next door neighbor,
33:52
Speaker 4: and you're not going to help us on a very
33:54
Speaker 4: easy military operation in Iran.
33:58
Speaker 3: That's strange, right, So this is South Korea is a
34:01
Speaker 3: freeloader Israel though that's a good ally, it's preposterous. But
34:06
Speaker 3: let's tell the story of South Korea because their most
34:10
Speaker 3: recent foreign policy decision. I've talked about this on the show,
34:14
Speaker 3: about that when the United States deployed.
34:16
Speaker 1: Those bad batteries.
34:17
Speaker 3: Those both the missiles to help intercept North Korean missiles,
34:21
Speaker 3: but the radar. Especially the Chinese government because that that
34:24
Speaker 3: radar the range extends well over Beijing. They were like,
34:27
Speaker 3: this has nothing to do with North Korea. It has
34:28
Speaker 3: to do with us, which is probably right. But anyway,
34:31
Speaker 3: the Chinese economically sanctioned softwise the hell out of South Korea.
34:37
Speaker 3: They took a massive hit. Chinese tourists stopped coming. They
34:41
Speaker 3: start banning all these exports. I mean, it was a
34:43
Speaker 3: real problem for their economy. The South Korean government said,
34:46
Speaker 3: at the end of the day, we must gamble. The
34:48
Speaker 3: Americans are our blood brothers. We fought in the Korean War.
34:51
Speaker 3: We sent our troops to fight in Vietnam. You know,
34:53
Speaker 3: fifty two hundred South Koreans died in Vietnam. Now I'm
34:56
Speaker 3: not saying they should have been there in the first place,
34:57
Speaker 3: but they felt a moral obligation.
34:59
Speaker 1: We are together, right.
35:01
Speaker 3: They spent three point five percent of their GDP on defense,
35:04
Speaker 3: which is more than most people in NATO. They allow
35:06
Speaker 3: these tens of thousands of Americans. This was the decision
35:10
Speaker 3: point for them. They said, we will gamble. We must
35:12
Speaker 3: go with America at the end of the day, because
35:14
Speaker 3: they will protect us against China and against North Korea.
35:17
Speaker 1: Thus we will take the hit.
35:18
Speaker 3: And then how did Trump repay them? He hit them
35:20
Speaker 3: with tariffs in the first term. Second time, then Biden
35:24
Speaker 3: becomes president. He extends this stupidity policy of denuclearization first
35:28
Speaker 3: with North Korea.
35:29
Speaker 1: North Korea's nukes.
35:30
Speaker 3: Continue to dramatically expand they have dozens now nuclear weapons.
35:35
Speaker 1: Similar decision point.
35:36
Speaker 3: Remember the previous South Korean president twenty twenty two, I
35:39
Speaker 3: forget is it's like un something, the guy who tried
35:42
Speaker 3: to do martial law.
35:44
Speaker 1: Well, he had this entire policy of.
35:48
Speaker 3: We will only extend our hand to North Korea in
35:51
Speaker 3: exchange for total denuclearization. The Biden administration and the first
35:55
Speaker 3: Trump administration largely were supportive of that idea, so they
35:59
Speaker 3: took the hard line, which was very antithetical to how
36:02
Speaker 3: China wanted. And Pyongyang, then what happens. He's an idiot,
36:05
Speaker 3: he tries to do his martial law takeover of the nation,
36:09
Speaker 3: he gets removed. So the current South Korean Prime minister,
36:12
Speaker 3: he's a liberal Democrat, and I mean that in their sense,
36:14
Speaker 3: like a liberal democratic party. He has the opposite approach.
36:18
Speaker 3: And so if you are the leader of South Korea
36:21
Speaker 3: now under the second Trump administration, let me tell you
36:24
Speaker 3: their story. You've seen what it seems to go all
36:26
Speaker 3: in on the American Empire. You've also watched the bad
36:30
Speaker 3: missiles get removed. So even though you said that they
36:32
Speaker 3: would be there to defend you, they took it away
36:34
Speaker 3: from Iran. We hurt their economy when it came to Iran.
36:38
Speaker 3: And then this I cannot emphasize how important this story
36:41
Speaker 3: was too. Remember when that Hyundai plant got raided by ice,
36:45
Speaker 3: this was a national scandal over there. I am talking
36:49
Speaker 3: like front page news that their people were treated like
36:53
Speaker 3: this because remember we told them just go ahead and
36:56
Speaker 3: come in here under visa waiver whatever, get this plant revving.
36:59
Speaker 1: They've built all these factories here.
37:02
Speaker 3: They have tens of billions of dollars invested in our
37:05
Speaker 3: country to be treated and shackled like that and deported
37:08
Speaker 3: on national television. On top of everything I just laid out,
37:12
Speaker 3: Now you arrive at this current situation where now we're
37:15
Speaker 3: saying no more military exercises and the current president says,
37:19
Speaker 3: you know what enough, Yeah, I can't deal with the
37:21
Speaker 3: shit anymore. I have to maybe choose a different way.
37:25
Speaker 3: This is a disaster. They are our tenth largest trading partner,
37:28
Speaker 3: Samsung Phones. Tell the television I'm looking at right now
37:31
Speaker 3: is made in South Korea or designed in South Korea.
37:33
Speaker 3: The amount of bilateral economic trade and their importance store
37:36
Speaker 3: economy is immense. So when I tell that story, if
37:39
Speaker 3: you're South Korean, what would you do? What would any
37:42
Speaker 3: rational country would say? I'm done with these people. You
37:44
Speaker 3: can't deal with the shit anymore. Yeah, that's the problem that.
37:47
Speaker 1: We're living in.
37:47
Speaker 2: South Korea is a microcosm if there are many countries
37:50
Speaker 2: around the world that, maybe in less extreme ways, are
37:53
Speaker 2: learning the very same lessons and saying we can't rely
37:56
Speaker 2: on these people. I mean, think about the Goldfairbawis for example.
38:00
Speaker 2: You know, even the ones that are still raw raw,
38:02
Speaker 2: let's do the war with Iran like UAE. Are they
38:05
Speaker 2: going to invite us back to our bases in the region?
38:07
Speaker 2: Did that work out well for them? No, they're thinking
38:09
Speaker 2: about this all very, very differently, And so there's a
38:12
Speaker 2: tremendous shift happening in the world. The very fact that
38:15
Speaker 2: South Korea was apparently asked to be involved in the
38:17
Speaker 2: Iran war like this a year got on your own
38:20
Speaker 2: on this one. That is a significant sign as well.
38:23
Speaker 2: And Trump took it that way and was pissed about it.
38:26
Speaker 2: But you can understand one hundred percent where they're coming from.
38:28
Speaker 2: And not to mention he says this thing of oh,
38:30
Speaker 2: it would be an easy, just an easy little war
38:32
Speaker 2: with Iran that we asked them to be involved in.
38:34
Speaker 1: How dare they.
38:35
Speaker 2: Deny us their assistance in our easy, little quick war
38:40
Speaker 2: with Iran? Here, of course, we've seen how that's turned out.
38:42
Speaker 2: So no, it's a new day in the world. And
38:45
Speaker 2: this is one example of the way that countries are
38:47
Speaker 2: completely reassessing how they think about it.
38:49
Speaker 1: And I forgot to mention this.
38:49
Speaker 3: This whole navy thing, guess which ally is the single
38:53
Speaker 3: most important node for American ship building because we don't
38:55
Speaker 3: have to do anything more.
38:56
Speaker 1: Oh it's called South Korea.
38:57
Speaker 3: Oh which country has one of the best domestic munitions
39:00
Speaker 3: industry with its own interceptors and all that.
39:02
Speaker 1: It's called South Korea.
39:03
Speaker 2: You know.
39:03
Speaker 1: It's like, I could go on forever.
39:05
Speaker 3: How important these people are compared to some Latvia or Estonia,
39:09
Speaker 3: some other nonsense country which everybody in Washington gets all
39:12
Speaker 3: upset about when Trump is like, oh, maybe we shouldn't
39:14
Speaker 3: defend them. Every It's like America, the media, everybody, we
39:18
Speaker 3: blink an eye and we just forget the entire area
39:22
Speaker 3: of Asia and how vitally important these people are. But
39:25
Speaker 3: this story I just told that is now happening in Japan.
39:29
Speaker 3: They have a conservative PM, they have their own national politics.
39:32
Speaker 3: They just got screwed by Trump. And now same thing
39:36
Speaker 3: with Shinzo. The current conservative Japanese establishment went all in
39:40
Speaker 3: on Trump.
39:41
Speaker 1: Same thing.
39:42
Speaker 3: They got slapped around in these tariff negotiations. They're extremely pissed.
39:47
Speaker 3: The prevailing sentiment, as I understand it inside the Japanese
39:50
Speaker 3: government is if we could go back in time, we
39:53
Speaker 3: would never build anything in America.
39:54
Speaker 1: We would rather just pay the tariff. We hate your country.
39:57
Speaker 3: We hate dealing with all of you people, and just
40:00
Speaker 3: sell to China or whatever.
40:02
Speaker 1: So and now we're militarily screwing them.
40:04
Speaker 3: And these are the number three economy in the world,
40:07
Speaker 3: the top top trading partner outside of Canada, Mexico and China.
40:12
Speaker 3: I mean, think about how important these countries are just
40:14
Speaker 3: to our own everyday existence, and so how much we've
40:18
Speaker 3: screwed them, Like the bill will come do as we say,
40:20
Speaker 3: Like nothing happens overnight, but empires die very slowly.
40:24
Speaker 1: And then all at once. Yeah, we will have one
40:26
Speaker 1: major event and then that's it. It's gone.
40:28
Speaker 2: And ultimately, you know, this may force actually a better
40:31
Speaker 2: It's possible, it forces a better status quo, more realistic
40:35
Speaker 2: one one that does allow us to trim our sales
40:36
Speaker 2: and cut the spending in terms of the military and
40:39
Speaker 2: be able to focus on our own people and not
40:41
Speaker 2: have these insane fantasies of world domination. But it's hard
40:45
Speaker 2: to imagine us getting there without the way that Trump
40:48
Speaker 2: has done. It is hard to imagine us getting there
40:50
Speaker 2: without a lot of.
40:50
Speaker 3: Well, the flip side, and this is the danger. Guess
40:52
Speaker 3: what South Korea, They're gonna have a nuclear weapon in
40:54
Speaker 3: a decade. Maybe idiots not to Japan. They're already I
40:57
Speaker 3: read Japan Times yesterday. Maybe we should rethink our constitution
41:01
Speaker 3: and nuclear weapons, right, and so look that's how it starts.
41:05
Speaker 1: Some ten fifteen years from now. You got to no more.
41:07
Speaker 1: What do you do?
41:08
Speaker 3: You get a nuke or you ally yourself with the
41:11
Speaker 3: Japanese and the Australians are doing joint exercises right now.
41:14
Speaker 3: That doesn't really happen, you know, normally without at least
41:17
Speaker 3: the United States. What I mean is it doesn't normally
41:20
Speaker 3: happen separately outside of America. But this is what rebalance
41:25
Speaker 3: all starts to look like, and it's it's not to
41:27
Speaker 3: our benefit whatsoever. Now we're going to welcome on a
41:30
Speaker 3: guest of the show, sal from the What's going on
41:32
Speaker 3: with Shipping Channel. I'm sure he'll have plenty more to
41:35
Speaker 3: say about this, so let's bring him in here