Episode #227 -- Brent Johnson and Who's Writing the New Rules Based Order

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:20):
Hello, and welcome to the Gold, Goats and Guns podcast
for August eleventh, twenty twenty five. My name is Tom Luongo.
We've got a lot to talk about. It's episode two
twenty seven, and I have with me the great pleasure
of having back on the cast. As I advertised at
Brent Johnson is here with me today. It's Santiago Capital.
But before I bring Brent in, if you care about
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dot com. Brent, how are you. How you been Now?

Speaker 2 (01:26):
I'm good.

Speaker 3 (01:27):
Had a good summer, you know, has some family stuff
going on with trips and travel and vacation. But you know,
now my son's going back to school tomorrow and kind
of back at it, so it's a here we go.

Speaker 1 (01:40):
I think it's a common theme for everybody to be
honest with you, right. I know, I actually took a
vacation for the first time forever. As a matter of fact,
I was chatting my friend Alex Craner on the last
episode of the podcast, and we spent like thirty five
minutes talking about Alex actually going on vacation for the
first time in like five years or six years. And
I remember, you know, it is hard when you're building

(02:01):
a business out you know how hard it is to
you have, how hard you have to work and the
and I don't think people really realize just how hard
we work, you know sometimes And.

Speaker 2 (02:10):
My why, I mean, I don't I don't know.

Speaker 3 (02:12):
I mean, I suppose everybody does this, but I work
a lot on the weekends, too. It's like it's not
just during the week, and it's not just during market hours.
Like my wife is always like, why what are you
doing in there? I'm like, I'm working. Like there's always
some when you look, when you know, when you when
you're looking at macro stuff and geopolitical stuff, the market's
never closed. Something's always happening somewhere, right, Yeah, And it's
just it's easier to try to keep up with it

(02:33):
than then try to catch up, because if you take
a week off or two weeks off and you try
to catch up, you're just you're.

Speaker 1 (02:38):
Screwed, especially in this environment. I guess I think we're
in the acceleration phase where everything is the pressure cooker
for everybody at the geopolitical level and certainly at the
kind of the big forty thousand foot what's this all
really mean? Level? And you know, obviously I cover that.
I focus on that more than anything else because look,
to me, it's like if you don't understand the parameters

(03:00):
of what the actual fight is, then you can't understand
the moves that are being made on the on the chessboard,
and so yeah, you have to keep up with it
all all the time. It's it's it's impossible not to.

Speaker 2 (03:11):
At least it's interesting.

Speaker 3 (03:12):
That makes it easier, Right, I don't dread going to
work in the morning, and I don't, you know, I don't.
I'm not sitting here in my desk like counting the
minutes until I can leave. I actually really love it.
But it is it does good intense sometimes.

Speaker 1 (03:25):
Well I'll say this, like, you know, people ask, you know,
it's like all I did was turn my hobby into
my job right as my old as my old uh
uh career as a chemist ended because they didn't have
enough education really to you know, be qualified for the
jobs that I would actually you know, be able to run,
be able to do run a laboratory, run a research

(03:47):
group or whatever. You can't do that with the BS
and chemistry. It's not in no NBA. You cannot do it.
It's not possible. Yeah, today's America. So I wound up
just taking my hobby and you know, kind of converting
it into what I do now. And yeah, it's it's
cool from that perspective.

Speaker 3 (04:02):
There's a lot going on, right, There's a lot going
on all over the place, and so you know, it's
really exciting because the thing that makes it interesting for
me is that when I went to business school, I
went to a school called Thunderbird. And most people have
never heard of Thunderbird, but Thunderbird was at the time
the number one ranked school for international business in the world,
and there was no undergraduate associated with it, so it

(04:24):
was a very small school. It was basically a business
technical school for international business. And I think, you know,
since and this was thirty years ago literally, you know, actually,
now that I think about it, it was literally thirty years
ago this week that I that I started there, and
you know, at the time it was kind of unique

(04:45):
to focus on international business. And now every NBA program
in the world has an international focus and international classes
and you know, different languages, but at the time, I
kind of felt like it was doing something a little
bit different. And my very first class, UH was called
International Political Economy, and they basically taught us about the

(05:05):
rules based order, and we learned words like hedge them
on and what the World Bank did, and what the
purpose of the United Nations was, and you know, basically
the whole rules based order, how it was set up,
why it was set up, and what it meant for
doing business on the global stage, and you know, I
would love to be able to go back there now

(05:26):
knowing what I know now, because it would be fascinating
to be kind of either, you know, push back on
the teachers a little bit, or or debate with them
a little bit. Sure, but the fascinating thing for me
is that, you know, I've known how that was set up,
and I've known how that works, and I always thought
it was fascinating, But now to see Trump dismantle it
is quite fascinating as well. And I think if you

(05:48):
don't understand how it was set up and why it
was set up and the way it was meant to function,
then you don't really understand the big things that Trump's doing.
It just looks like chaos. But there I believe that
there actually is a method to the madness. Now I'm
not saying that Trump himself isn't a little bit mad,
and I'm not saying he has everything perfectly worked out,

(06:10):
but when you again, when you understand what the system
was meant to do before and how he is kind
of surgically dismantling it, you can kind of see what
he's up to. And I really think we're in a
place now where that, pardon the pun, Trump's everything else.
And I largely believe this would be happening whether Trump
was president or not, and it wouldn't be happening as fast,

(06:30):
and it might not be happening in the same way.
But I think a lot of the dynamics that we're
going to see play out over the next five or
ten years would play out regardless of who is in
the White House. But I think if you are going
to play this game, and it looks like this game
is going to be played, you do want someone like
Whether you want like Trump or not, you want someone
like him, you know, at the helm because I think

(06:53):
it's going to be very volatile.

Speaker 1 (06:55):
Yeah, So that's really fascinating. And you know, before we
started recording, we weren't quite sure which direction we're going
to go. I now know which direction we're going to go.
We're going to draw on your experience about all that.
So what I you know, because I agree with everything
he just said about and conceptually about the skill set
that Donald Trump brings to the table, the mindset that

(07:15):
he brings to the table in this moment in time,
He's I think the perfect general for the job in
that respect. Now does he have deficits, does he have
does he have personality flaws? Which one that could whatnot
that could get him into trouble. Sure, but we'll leave
that for the later stage of the podcast. I want
to go back to what you said originally about let's
talk about how the rules based order was actually set up.

(07:36):
Everybody talks, Everybody thinks they know something about it, and
they think they understand it. I mean, and includes myself.
So I want to actually hear what you were taught
about this and then just so that we can get
some primitives and some foundations, because I think there's a
lot of conversation that goes on out there, and I
think there's a lot of conflating of terms. There's a
lot of conflating of ideas and people's agendas, and it's

(07:59):
not necessarily everybody says understands that it doesn't actually work
the way we think it all actually does work. So
why don't you start there, that'd be great.

Speaker 3 (08:09):
Yeah, So I'll say I was taught one side of
the story and it wasn't until many years down the
road that I learned the other side of the story.
And as with that, I apologize there's some construction going
on outside my apartment that just started.

Speaker 2 (08:21):
If you hope you can't.

Speaker 1 (08:23):
Hear it, actually zooms, Okay, it's it's filtering it all out.

Speaker 2 (08:28):
It's great, great, and you know, and I was taught
kind of the.

Speaker 3 (08:33):
Fairy tale for last of for lack of a better word,
and that is essentially that the United States and its
allies were the winners of World War two. They stopped
the spread of you know, the Nazis and communism, and
in order to prevent a horrible world war like that
ever happening again, they set up a number of institutions

(08:54):
to prevent a conflict like that from happening again, and
to remote piece promote economic efficiency and to promote stability
and to perpetuate Western quote unquote values.

Speaker 2 (09:11):
That was the essentially the purpose of the rules based order.

Speaker 3 (09:17):
Now, the flip side that I've learned later is that
while that I actually and I actually do think that
was true, but there's also another side to it, and
that it was a system of control that benefited the winner.

Speaker 2 (09:31):
Right, the US sat.

Speaker 3 (09:33):
At the top of that rules based order, and the
rules were largely dictated by the person sitting or the
country United States sitting at the top of that rules
based order, and most of those rules applied to everybody
except for the entity sitting at the top of that
rules based order. And if the entity at the top
ever wanted to do something against the rules based order,

(09:54):
well then the rules just needed to change.

Speaker 2 (09:56):
And it took me a long.

Speaker 3 (09:57):
Time probably to figure that out, but I I eventually did, right.
And but but when you think about it, like part
of the part of the reason of having the United
Nations was to have a forum where people could go
and they could air their grievances with certain you know,
uh mechanisms in place that if they were right, there

(10:19):
was some enforcement mechanisms that could make their case be enforced.

Speaker 2 (10:24):
But it was aware it was a place.

Speaker 3 (10:26):
For them to go that they could air their grievances
rather than doing it with rifles and tanks and trenches
and you know, nuclear bombs. And there was the World
Bank was set up in order, you know, to promote
growth around the world, and the International Monetary Fund was
set up as a way to fund developing nations so
they could rise out of poverty and not you know,

(10:49):
be exploited by colonial powers. And there is truth to that,
but there's an ugly truth to it too, is that
the people, again not just the US, but the US
and its allies that sat on the top of this pyramid,
you know, could use those rules and use those forums
to get their way, whether they were right or not.

(11:11):
And in many of these cases, whether that was the WTO,
whether it was again the United Nations, whether it was NATO,
whether it was and all of these are part of
the rules based order.

Speaker 2 (11:25):
Right.

Speaker 3 (11:25):
It's a spider web. It starts at the top and
then it just kind of spiders webs down. A lot
of times it was done. It's not that it was
done to the detriment of the United States, but it
was done for the greater good of the Alliance or
NATO or the Western Powers. And sometimes in doing that,
while it would benefit the US in some ways, it

(11:47):
would greatly hurt the United States in other ways. You
can talk about globalization, and you know, when you let
China into the WTO, and then all the jobs moved
to China, and that's great for the United States stock market,
it's not so great for the Iron Belt and the
rust belt and the manufacturing jobs. And so while it
benefited certain parts of America, didn't it did not benefit

(12:08):
other parts of America. And you know, I would also
argue that in doing that, it may have helped a
couple families and a couple of the elite in those
developing countries, but it often did not help the average
citizen of those other countries as well. Right, And you know,
diplomacy was a big part of the rules based order,

(12:29):
and you know, China has kind of tried to create
that on their own with the Bridge and Road, right,
kind of the Bridge and Road is in many ways
a copycat version of the rules based order. Or you know,
I would not necessarily a copycat, but a similar type
of a program where it looks like you're doing it

(12:49):
for the for altruistic reasons, and perhaps there are some
altruistic intentions, but ultimately it benefits the person doing those actions, right,
extending that olive branch.

Speaker 1 (13:01):
And so.

Speaker 3 (13:03):
I think I don't think someone like Trump wouldever get
elected if there wasn't some downsides to this rules based order,
and if there wasn't some domestic downsides to the rules
based order. And you know, I was in college and
I was literally just kind of starting to study this
stuff when Ross Perot came on the scene, right, And

(13:25):
he was talking about this giant sucking sound going to
Mexico and our jobs fleeing across the seas, and I
kind of understood it, but you know the vision that
he had. And then there was another guy, Sir James
Goldsmith from London or from England, who gave a similar
speech back then that said the same thing was going
to happen. And you go back and you look at
it now and you're almost like, these guys are wizards.

Speaker 2 (13:45):
Man.

Speaker 3 (13:46):
They saw this thirty years ago how it would develop,
and they've been right. They've been totally vindicated. And as
a result, there was a lot of inequality. The inequality
not just in the rest of the world but in
the United States has greatly expanded over that last thirty years.

(14:06):
And it's that inequality that has let someone like Trump,
you know, use his I don't You can call it
nationalist rhetoric, you can call it populist, right, however you
want to define it. He talks about things that are
related to the common guy in main Street as opposed
to you know, the international elite in Wall Street, and
that allowed him to get elected. And while I think

(14:28):
there's a again two sides every story, I think he
knew that by saying that it would help him get elected.
By all, think he believes it. And my reason I
think he believes it is he has literally been saying
it for thirty years. You can go back and find
interviews of Trump in the late eighties and the early
nineties where he said the same thing. So it's not
like he just changed his tune in order to get elected.
He's believed this.

Speaker 2 (14:49):
For a long time.

Speaker 3 (14:51):
And so when you see him go at the WTO,
when you see him go at the United Nations, when
you see him go at you know, the rules based
orders as a thing that's for the greater good rather
than for the greatness of the United States, you then
you can understand why he wants to bring it down.

(15:11):
He will argue it's helped a certain faction of the
United States, but.

Speaker 2 (15:14):
It has an effect.

Speaker 3 (15:15):
It hasn't helped the majority of the United States. And
he has basically said those days are over right. I mean,
there are no certain terms, and you know, not only
has he said it, but he has followed up with it.
You would never have had the trade war or tariff war. However,
you want to describe what's going on last year via

(15:37):
the rules based order because all and if you did,
it would have taken five years to play out, because
that's the way the rules based order handled it. It
went through the WTO, it went through multilateral agreements, and
you know, there was eighteen conferences and one hundred and
fifty phone calls, and you.

Speaker 2 (15:53):
Know, Trump just basically said, no, we're not doing it
that way.

Speaker 1 (15:56):
We're doing and so.

Speaker 3 (15:58):
And the thing is is if you are going And
the other thing I'll say is and I know I'm
bouncing around a little bit, but it's all related.

Speaker 2 (16:05):
Like, the rules based order is.

Speaker 3 (16:07):
Very much enmeshed with the deep state. You know, you
hear the term the deep state. The deep state was
created in many ways by the rules based order, or
they were kind of created together and they have grown together.
So it would be impossible for Trump to take on
the quote unquote deep state without bringing down some of

(16:29):
the rules based order. And this is not an easy
thing to do. I mean, you have to understand, these
institutions are very big, they're very powerful. The people that
work there are not idiots.

Speaker 2 (16:42):
I know. That's another thing.

Speaker 3 (16:44):
I think there's this common view that all the people
in Washington are a bunch of idiots. And I'm not
going to sit here and say that they're all geniuses.

Speaker 2 (16:51):
They're not.

Speaker 3 (16:53):
But and and they certainly have made their fair share
of mistakes. But the people at the top, they are
probably as clever and ruthless as any people that have
ever existed. And to think that they're not, I think
you're doing yourself a very big disservice. You should never
underestimate your enemy.

Speaker 1 (17:11):
So to speak.

Speaker 3 (17:13):
And so I think Trump tried to do this a
little bit in his first term, got shut down pretty quickly.
And then I think he just got so pissed off
when he wasn't in office and on the last campaign
trail that he said, you know what, screw it. This time,
we're really doing it, and he put people. I think
his cabin at this time is much more prepared and

(17:35):
much more willing to do his bidding, for lack of
a better word, than the previous administration. And the last
thing I'll say, and then I'll be quiet and kick
it to you for a minute, is that in a
lot of this stuff, when I talk about this stuff,
this is not necessarily the way I would handle it,
is not the necessarily the way I think is the

(17:56):
right way to do it. But I try not to
waste my time figuring out what I would do or
what the right thing would to be to do, because
that doesn't help me manage money. What I focus on
is what's actually going to happen and what this person's
actually going to do and whether or not they can
do it, because that's what's going to impact markets. And
so I don't want people to think that, you know,

(18:17):
I'm all for tariffs, and I'm all for us bombin
iron and I'm all for you know, us walking around
as the big bully. I don't really like that, but
that's the way it is. So that's the world I
have to operate in.

Speaker 1 (18:29):
Yeah, no, it's it's what you just described. Is what
I've said, literally from the days when I was like
ranting into my phone on periscope with my hat and
you know and a rye whiskey getting drunk, saying, look,
this is the world I've got, not the world I want.
I'm not analyzing the world I want. I'm trying to
figure out the world I've got and then trying to

(18:51):
push towards how we can get to the world we
want and we all want blah, and we can't get there.
And this is one of the things that we're this
is where we are today. We're in this kind of
transition state from the old rules based order to a
different type of there's gonna be new rules. There's gonna
be a new rules based order when this is all done.
The question is who's setting those rules? And Europe and

(19:13):
the quote unquote West, the old the old winners as
you would you described, you know when and what I
like to call Davos plus the United States, they set
up that system and they used it to arrogate power, wealth,
They locust. They still ran their colonialist playbook. They told
us it was the end of colonialism, while they kept

(19:35):
running the old colonials plays straight out of you know,
City of London, straight out of the Dutch, straight out
of France. You know, it's all and even you know,
and we as the as Americans as we when we
conquered North America, we did the same thing, like we
just looked at you know, it's manifest destiny and all
the rest of this stuff. Right So that but that

(19:56):
mindset is now, you know over and we used the
central banking model, we used that, the plomacy, we used
all these things in order to gain as much as possible.
The level of for me was when I realized that
they're trying to destroy what's left to the US by

(20:17):
getting us involved in wars that will destroy what's left
of the manufacturing base and the primacy of the United States,
while it's simultaneously invading the United States, giving us another
giving us an opium war, giving us you know, unrestrained immigration,
giving us anti democratic systems. The deep State was designed

(20:37):
to build a technocratic state that mirrors what we're seeing
in the European Union now and what we saw in
many ways in the USSR and every other technocratic state
we've ever seen, which is that you can have the
veneer of democracy in order to keep the in order
to keep the people in line, you know, give them
a voice and a means by which to an escape

(20:59):
boll the pressure release valve. But nothing actually ever changes,
Like you get to choose between two globalist ship backs
for president, right right, you know, and then that and
that's not and that's not acceptable. So that system was
beginning to break down. I always go back to the
day that that that Ron Paul took down Rudy Giuliani
and the debate stage during the primaries in two thousand

(21:22):
and eight was the end, was the beginning of the
end of the rules based order, and it was happening
at the exact same time that they were they were
pulling what I thought was a liquidation. In hindsight, now
I think that the global financial crisis of two thousand
and eight was another step along the way of the
liquidating in the United States, like by taking out our
banks and taking and all of that. So there's there's

(21:44):
the way you use interest rates and currency arbitrage. The
old colonial powers of Europe understood this model very very well,
and they've understood it for hundreds of years, either using
trade flows, you know, when we were on hard currencies
and was using trade flows, and then on a fiat
currency standard, using interest rate rigging and UH and currency

(22:07):
rigging in order to enforce arbitrages that benefited them at
the expense of everybody else. And that's what they did.
And then they got cock blocked. They got cock bluck
by Putin in Russia who said that's enough and throw
all the globalists out. They got cock blucked by g
and China early on. He did the same thing, trapped
all their money there, kept the kept the wall up,

(22:29):
and you know that was why g I think that
in Hindsset, it's why I think G was was brought
to power. And then the same thing started happening in
the United States. And you'll notice that the one area,
the one big economic block that refuses to reform this
at all and has actually doubled down on all of
this surveillance and that diplomacy and everything else is the

(22:53):
European Union. And so when you look at the game
board from that perspective, you realize that when Trump comes
to power in twenty twenty four this year, he looks
at everything post COVID, what they did to get rid
of them, post COVID and everything else. It's very very
clear that he's like, yep, no, we're moving forward. Your
point about the cabinet, by the way, is the point
that Dexter White and I made back when we watched

(23:16):
the cabinet being formed. We said, this is a cabinet
for this is a cab this is a work cabin.

Speaker 3 (23:22):
That's that's the perfect way to describe it. And it's
probably not the polite way to do it. It's not
the you know, nice, peaceful way. But like that's literally,
if you were building a work cabinet, you wouldn't build
it any differently.

Speaker 1 (23:35):
Right, you wouldn't. Yeah, I mean, and they were all
it was all about setting up a cabinet. The way
we described it originally was there was a cabinet that
did not need Congress, that his so his the focus
of the first six months of his presidency was to
get past the need for Congress to be able to

(23:57):
step and get in and get in his way. That's
why the One Big Beautiful Bill, for all of its
you know, false, If you have faults with it, you
want to go through it and find chapter and verse
where they were false with it. The whole point of
it was to fund the government through the midterms so
that he didn't have to go back to Congress for
anything and would clear his domestic political decks to do
everything he needs to do in order to take on

(24:20):
this process. And so once that was done, notice how
he's shifted back to international relations. Like literally the day
after the One Big Beautiful Bill passes through his pass
through the Congress and reconciliation, he's off around the world.
He's cutting trade deals, he's you know, and you know
he's inviting people in and ending wars and holding personal

(24:44):
and now soon four days and four days from now,
he and Putin are finally going to sit down for
a chat. And if that chat and this one the
last thing, even if nothing comes from that meeting other
than the fact that they met in Alaska, that's I'll
tell you what.

Speaker 3 (25:03):
Trump meeting Putin in Alaska is another effort to chop
the legs off the rules based order exactly because the
rules one of one of the institutions in the rules
based order is the International Criminal Court, and the International
Criminal Court has an international arrest warrant out for Putin.
If he steps foot in any nation that's part of

(25:24):
this thing, then he should be arrested. Well again, it
just shows you that that that that rules based order
doesn't apply if the United States doesn't back it up, right,
Because if put when Putin lands in Alaska and he's
not arrested, which he won't be arrested. Anybody who's thinking
that they're going to arrest Putin when he lands in
Alaska's you know, they often dreamland that will immediately make

(25:49):
that ICC arrest warrant No. One void because the United
States isn't enforcing it right now. Theoretically, could you know
someplace in Europe enforce it if he landed there, Sure
they could, But that's that's not going to have very
good consequences, right and so but I think I think
Trump meeting with Putin in Alaska is very I don't iconic,

(26:16):
that's not.

Speaker 1 (26:16):
The right word.

Speaker 3 (26:17):
I'm trying to think it's very It has kind of
the shades of Russia, of Gorbachev and Reagan back you know,
in the early nineteen eighties. He says, here's the thing,
you either want peace or you want war, right, And
I know there's a lot of people out here saying, well,
they both really want war. And there's definitely people out
there saying Putin want war, he's a bully. And there's

(26:38):
other people saying Trump wants war, he's a bully. But
you know, I know that there's going to be a
picture with Trump and Putin, and there's going to piece
some people that are saying Trump is appeasing Putin, He's
going to give away some of Ukraine to Putin.

Speaker 2 (26:51):
Shouldn't be doing this. Pruden's a war criminal, and.

Speaker 3 (26:54):
We shouldn't make peace with this enemy. But the reality
is is your enemy is who you make peace with.
You don't have to make peace with your friends. It's
not necessary. So if you want peace, you have to
meet the enemy. And if you want peace, especially a
lasting piece, you have to give up something you unless
you're gonna.

Speaker 2 (27:14):
Go to a full scale war, which is.

Speaker 3 (27:17):
What World War two was, right, and you are ready
to push the ultimate button, which Truman did, You're not
gonna have peace without giving something away. Right now, I
don't think any of us want either Pudin or Trump
to do what Truman did, right, So anything short of that,
you're gonna have to give something up. Each side's going

(27:38):
to have to give something up. But that's how you
come to peace. And so you either want war or
you want peace. Now, I personally would much prefer peace.
I've got a seventeen year old son, and the last
thing I want is some kind of a war breaking
out in the next five to ten years that you know,
all eighteen to thirty five year old males get shipped

(27:58):
off to and put into a meat grind. So I
would love this war to come to an end. And
if Trump can do that, then you know, great. But
but but I think the point of it is. I
do think it's in a very important meeting, and I
do think the only way the war is going to

(28:19):
end is giving something to Russia, like they're going to
have to get something right. They are not going to
go back to Moscow, pull all of their troops back,
give away all the ground that they've taken.

Speaker 2 (28:33):
That that is not going to happen.

Speaker 3 (28:35):
And anybody who thinks it is is just not being
realistic unless we go to a full scale war, right
And like I said that, I don't think we're going
to go to a full scale war with Russia in Ukraine.
I don't think that that's going to happen. I think
it could have happened if Trump wasn't president, but I
don't think it's going I don't think it's going to
happen now that Trump.

Speaker 1 (28:55):
Is, so, you know, and generally speaking, I agree with you.
I also believe that Trump is willing to punch putin
in the mouth in order to to to get that,
you know, and I don't you know, and I've been
we've been, and we've been you know, uh, spitballing about
those about those scenarios and and and and kind of

(29:21):
real politic terms right, like what would have to happen here?
The Europeans clearly a brain for war. Zelensky has not
moved his his his demands one inch, and he keeps
losing territory on a daily basis. Putin has prosecuted this
war in such a way as to not invoke the

(29:41):
ire of the of the Europeans to the point where
they could could generally scream, oh my god, look he's
trying to do. He's trying to do everything, so you're right,
like the way to while asking pieces as as as
always in any negotiation. And Trump understands this because he's
negotiated more big deals than anybody else ever, which is

(30:06):
a really good lasting deal, especially in geopolitical terms, means
that everybody walks away a little unhappy. I mean exactly.
Putin's going to walk away a little unhappy. He's going
to have to give up grand dreams of Odessa, and
you know, and Europe is going to have to give
up their grand dreams of leaving a Ukraine capable of

(30:28):
spinning this war back up twenty years from now. Yep.

Speaker 2 (30:32):
And I think that's I think that's right.

Speaker 1 (30:34):
And you know, I don't know what that had I
still do this. I've been thinking about this forever in
a day, and I don't know what that actually looks like.
But what I can say is this, this is one
of the things that you know that looks obvious to me.
It's not just that Trump is trying to break down
the rules based order. What he's trying to do, well,
he is, but the reason he's doing that is to

(30:56):
try and gain Putin's trust in some ways, and because
trust between the Americans and the Russians are at historic clothes,
designed that way on purpose by people who have crafted
previous policy. Obama, Biden, Blincoln, this one, that one, Hillary Clinton,
all of them, the British blah blah blah blah. And

(31:19):
the way you do that is, and I've been saying
this for a while now, you have to take away
Europe's ability to actually have any control over the US policy,
in the US military policy, in the US foreign policy
in the region. And so how do you do that. Well,

(31:40):
you go to your castle in Scotland and you summon
the head of the European Commission and the UK Prime Minister,
and you bring them there on your helicopter, on their soil,
and you say you are done putin stop.

Speaker 2 (32:00):
That's I talked about on that exact thing on my
show this weekend.

Speaker 1 (32:05):
Like that.

Speaker 3 (32:07):
That is very symbolic, right, I mean, it just is
like and it's it's another example of you know, uh
of doing things a new way. Now, one thing I
will say is, you know, at the beginning, I said,
I typically do not focus on what I want to happen.

Speaker 2 (32:30):
I focus on what I think is going to happen.

Speaker 3 (32:34):
When we were just talking about Trump and Russia and
the wars, I I did kind of veer into what
I want to see happening, because the last thing I
want as a war, right, But I so I but
the reason I'm bringing this back up because I don't
know what's going to happen. You know a lot of
people say, oh, this is definitely going to happen, Like
I don't know. I I think what I think. I
understand what Trump is trying to do, right, and I

(32:57):
think I know the lengths with which he will go
to do it, But I don't know for sure. And
so you know, I do think Europe would prefer to
keep fighting, but they but they do not have the
ability to do that without the United States. So what
I think they would prefer is that the US keep fighting,
or that Europe keep fighting predominantly with Ukrainian citizens and

(33:20):
United States money. Right, I think that's what Europe would prefer,
but I just don't think that's that in my opinion,
that's not going to happen.

Speaker 1 (33:28):
Well, the advance over the weekend made it abundantly clear
that if Europe wants to fight, they can do so,
and we will provide them the weapons, but we will
not provide them the troops. You can pay for these weapons,
and Trump has already made that clear. And this is
the part about what you and I originally were going
to talk about this morning when we before in the
pre role, which was the state of the commentariat, of

(33:51):
state of the zeitgeist within the commentariat, of everybody having
kind of made their bones about what they want to
believe is going on here, right, and in order to
and again the reason why I am I asked you
to go over the primitives of the rules based order

(34:13):
was to remind everybody to look seriously about what's actually
happening and what has happened in the past, and in
this case, the past is not prologued. We are in
a different game board. We're in a different state. This
is a different game state. There are different players at
the table now. You can no longer look at the

(34:33):
United States plus the EU as the collective West. There
is no collective West right now with Donald Trump and Cower,
and that is really challenging a lot of people's worldviews.
And so what has been uncovered is who's really nothing
more than a pro Russia shill, who's a pro China shill,

(34:55):
who's a pro EU shill, who's a pro UK shill? YadA,
YadA YadA, who's a neocon? Who's of this shill? Who's
that show? And I hate to be blunt about this
like that, but it's and it's been very very disconcerting
for me, and it's been very very disappointing for me
to watch this happen with people, I'll be honest with you,
people who I would have considered friends, but I'm watching

(35:18):
it happen in the space and the histrionics and hysterics
over this and the quote unquote black pilling are just
ridiculous because you're missing the forest for the little bitty
trees that will allow you to hold on to your
version of reality that no longer exists. I don't know
if that's what you're seeing, but I know that's what

(35:39):
I'll so sort of.

Speaker 2 (35:41):
Related to that, you said what is passed is no
longer prologue.

Speaker 3 (35:45):
I would put a an asteriskness to that, and I
would say, what is immediately pasted is no longer prologue.
But if you want to go back a couple hundred years,
that is very much prologue. And what I like by that,
I think, I know what you're wrong with this, But yeah,
and so you know, I started off talking about the
rules based order as it Whether you believe it was

(36:08):
altruistic or nefarious, it was a system of control. That's
what the rules are intended to do. Rules are meant
to control things. Now again, you can decide whether they're
good or evil, but that's the purpose of putting rules
in place, is control. And I would argue that in

(36:30):
the eighty to one hundred years, however you want to
define this right of the most recent rules based order,
it was kind of like pre range farming. In other words,
you weren't locked up in pins as strictly as some
other farms, and you know, you had the ability to
go out in graze and run around in the fields.

(36:52):
But at the end of the day, you were still
a piece of livestock, right, And that's what I would say.
The rules based order, especially for the West, was largely democratic.
It was largely for a while there it was las
a fair right. As we've moved forward, those rules have
gotten tighter and tighter and tighter. But I think we're

(37:12):
going back to a system of what it was before
the rules based order was put in place, when it
was a more I don't know, I don't want to
use the word cruel, but it was a more restricted world.
Power was more obvious as opposed to like for most
of human history, society was driven top down, right. It

(37:38):
was every little kingdom or state or country, everybody you
know it was. It was a top down power structure.
And you know, the rules based order kind of was
a very nice little marketing gimmick to say that it
is now bottoms up.

Speaker 2 (37:55):
And in many ways it was because I.

Speaker 3 (38:00):
Don't think people have a proper appreciation for how unique
the United States political experiment is in history.

Speaker 2 (38:10):
The idea that the.

Speaker 3 (38:12):
Governed determined the rules, as opposed to the government determined
the rules, was really the first time in history that
that was done on any scale, and that I would
argue that is what made the United States so unique
and so strong and eventually led them to becoming the
global hedgemon, right or the world's superpower. But that is

(38:35):
a very very unique period of history that very has
that has very rarely happened. In the few occasions it
has happened, it hasn't lasted very long.

Speaker 2 (38:44):
That's why.

Speaker 3 (38:45):
And this is exactly why Benjamin Franklin said, well, gentlemen,
you have your republic if you can keep it right,
because usually usually you can't. Right now, it's taken a
couple hundred years, but the Republic is in danger.

Speaker 1 (38:59):
And oh no doubt right.

Speaker 3 (39:02):
And some people think that that's a good thing, that
the Republic is in danger. Some people think the day
the Republic being in danger is a horrible thing. But
I would argue, we're moving away from a quote unquote,
you know, lase, fair, free range republic into a more controlled,
power down, you know, top down power structure. And I

(39:23):
think this is happening all over the world. By the way,
I don't think this is just the United States, but
I do think it's happening in the United States as well.
And This is why when people tell me, you know,
tariffs will not work, or you know this will not work,
or what he's put in place will not ram. When
I would say to him, I mean Trump, and I say,
it may not work the way you want it to work,

(39:44):
and it may not work the way we would prefer
it to work. But it worked for hundreds, if not
thousands of years, right, It's only in the last hundred
years that it was done differently in many cases, and
so it may not work as efficiently, it may not
work as nicely, it may not work as you know,

(40:05):
politely or efficiently, but it will work. And I think
and so that's kind of where I focus at it.
Like to me that we're just moving into a period
of less choice unfortunately, and more top down power. And
I think there's this belief it kind of it kind

(40:26):
of mirrors the whole woke thesis.

Speaker 2 (40:29):
Right, It's like.

Speaker 3 (40:32):
People believe that just because something is bad, it won't happen,
or it can't happen, or it can't be allowed. But
you know, bad things happen all the time. Like just
because it isn't the nicest system doesn't mean it won't
quote unquote work. Again, I don't. I don't necessarily want
this to happen. This is not the point I'm trying
to make. But my point is is that for hundreds
of years, top down power structures did work. It worked

(40:56):
for the people at the top, it didn't perhaps work
it for the people at the bottom. But the interest
thing I think about this is I actually, well, while
Trump is definitely out for himself, I also think he
is out for the common man. I actually do think
he is trying to help the little guy, and I
don't think he cares as much about the elite quote

(41:17):
unquote as.

Speaker 2 (41:19):
Perhaps some of his predecessors.

Speaker 3 (41:22):
I'm not saying he doesn't care about himself, and I'm
not saying he's not going to enrich himself in this process.
But I do think that he wants to bring back
jobs to the United States. I do think that he
makes wants to make the United States safer. I do
think he wants to make the United States not dependent
on its biggest adversary for national defense. And so I
do think there is a method to the madness of

(41:46):
this new kind of top down power structure that no
longer you know, pays heed to the rules based order.

Speaker 1 (41:54):
Well it's interesting to put it, though I would the
way I would, I would say is that the rules
based order was the top down power structure. And what
we've seen is it looks decentralized, but it really isn't.
And what we've seen is the you know, Vince and
I have VINCENSK and I have gone back and forth
on this and and and he always used the term

(42:15):
we mercantilism is returning. We're going to put up production,
We're putting up protection barriers, putting up tariffs. Everybody's going
and you look at what how putin for example n G.
Both have been able to stop the the globalist free trade,
free flow of money, hot money flow where you can

(42:35):
create money out of thin air and then use it
to infiltrate and take political control. Their response to this
and this and and I hate to hate to echo
anything Alexander Dugan says, but at a certain level I
know I am, which is that what they did was
they used the the they're strong effectively strong unitary executives.

(42:58):
There's a strong unitary state. In order to just say
that's enough, we have to do X, Y and z
in order to get this done. In order to be
able to see that that power back. Later, we have
to defend ourselves, and you have to trust in the
leadership that we have in order to get this done.
Putin's gotten but that trust in, that buy in, and

(43:18):
he put a plan in place, and he executed on
that plan as best as Russia could given the dire
circumstances of when Putin took over at the turn of
the century. And now here we are twenty five years later.
He's rebuilt the country in many ways. And that's not
to say that the country is solved or is, you know,
but it is in a far better state, and it's

(43:38):
far better prepared to be able to walk away from
the rules based order and be its enemy. Okay now,
and it's and it's and it's he's their enemy in
their minds because he refuses to knuckle under to their authority.
Trump is doing effectively the same thing the managerial state

(44:00):
and in booking James Burnham here or whatever you want
to call it, the managerial state, the technocratic state that
they envisioned, and they envisioned this. By the way, they're
now trying to jump to shark and move to AI
for this to impose a new form of feudalism, but
they envisioned that for the US as well, and the
US is saying nuts to that, No, we are going

(44:22):
to enforce. We're going to use all of the leverage
that we actually have. This is one of the things
when I was getting to this is where where you
and I are I think are very much aligned in
the current zeitchgeist, even though we've come to this in
different ways. And you know you we've both talked about
this previously with Nubent on the show, which is that

(44:44):
that ultimately all of these dollar bearers, all of these
you know, brick all of these you know bricks bullies
or whatever you want to call them, and they're all
over the place. And I yell at bitcointers about the
same thing I said you. You all have operated in
a fact in a place where you were watching the

(45:04):
United States willingly torch itself and not use the weapons
it has at its disposal, and you think you're winning,
and you have no idea what it looks like when
the United States actually decides to use everything in its
power to defend.

Speaker 2 (45:21):
It will be different.

Speaker 1 (45:23):
It's you don't want you you don't know what that
looks like. And you're angry, and I'm just serious. There's
a lot of people out there who just flat out
angry at the fact that the United States is defending
itself and winning. And I'm sorry, but the trade deal
that he forced on the European Union classic example of this.
You know, he's still negotiating with China, but I got

(45:45):
news for you. China's you know, has already accepted, you know,
a framework that is far worse than they ever wanted
in the first place. It's happening over and over again,
and now he's moving the ball floward to also end
the central bank era. And I don't want to go
ahead of I want to I'm going to turn it

(46:07):
back to you to talk about this. I don't just
throwing this out there because I know you and I
I'm doing this on purpose. I don't want to belabor
that point. But he's clearly setting up to end central
banks and bring control of the money back under the
Treasury and to deprecate the federal reserves centrality to our
our financial system. And he's also doing that because it's

(46:30):
part of the process to break down the rules that
top that rules based order. And we're going to have
a decentralized system that's going to become digitized, but it's
actually going to be a weird form of return to
a low I hesitate to call it hard money system,
but it's going to be a much lower leverage based

(46:51):
system of finance, and trade is going to be accounted for,
and price discovery is going to start coming back, and
risk assessment is going to come back and be much
more market driven. We're actually going to wind up with
a much more decentralized system. Russia is going to run THEIRS,
China's going to run THEIRS, the European Union can run
whatever horrible system they want, and we're going to run ours.

(47:13):
And I got news for you. The dollar is not dead, folks.
It's internationalizing in a way that we've never seen, we've
never even considered before. And so yeah, I think so
much of the zeitgeist in the political commentary space at
this point. It's like no one wants to admit this,
and I'm watching it every day and I'm like, how
could you miss this? And then, like I said earlier,

(47:36):
it scaus you reveal. Ultimately, what Donald Trump's superpower is
is the ability to reveal as the pressure somebody to
the point where he reveals what their true agenda is
and where their true perspective is. And he's done it brilliantly.
And if you watch, you see it.

Speaker 3 (47:52):
Yeah, so you've kind of ventured we touched on this
at the very beginning. You're kind of bringing it back
to this and that I feel very, very fortunate to have,
you know, had the education that I had, and the
fact that you know, I did not come to finance
because I loved numbers and I loved the idea of investing.
I came to finance because I loved figuring out what

(48:14):
was going on in the world. I loved reading the
newspapers when I.

Speaker 1 (48:16):
Was a kid.

Speaker 3 (48:17):
I just wanted to know what was going on in
the world. And that eventually led me to investing. And
I feel like for a long time that didn't necessary.
It sort of helped, but it, you know, it was
one of the lesser advantages or one of the lesser
things that helped. But I feel like that's becoming more
and more important now because what I said at the

(48:38):
beginning is or I've said it before, is that I
think for the last twenty or thirty years, if you
were a Western based investor, or analyst. For the most part,
you could run the numbers on a spreadsheet, and if
they penciled out on the spreadsheet, you could run that
project or that investment and it would work. I don't
think that that necessarily is the case anymore, because I

(49:00):
think things will still get funded, and things will still happen,
and they may even be profitable if they don't initially
pencil out on the spreadsheet. Because I think things will
happen for strategic reasons, for US national security reasons, for
you know, you know, just.

Speaker 2 (49:21):
This is what the president want reasons.

Speaker 3 (49:24):
I think that I and you know, I think geopolitics,
you know, the Grand Chess Board. I think that is
going to trump many necessary economic things that would not
necessarily pencil out perfectly economically. So I think we're moving
into that.

Speaker 1 (49:45):
That era.

Speaker 3 (49:46):
And money is a very big part of that. And
I think that's what you were starting to touch on
with the Treasury and the Fed and what I don't
think many people understand about money. And in this we
get back to two sides of this story on this
as well as there's a lot of people who believe
and I don't this is something this is I don't

(50:06):
necessarily disagree with this. It's just that I think it's
much more than this. You know, a lot of people
say money is the most marketable commodity that was decided
by the you know, the satisfied the double coincidence of wants,
and it started off, as you know, trading goats for fishes,
and over time, you know, gold became money. And I
think there's some truth to that, right, And they will

(50:28):
say money existed without the state, and I think that
probably did happen in certain cases, and it could happen
if there was truly a free market. But there has
very rarely in history been a truly free market. And
I think money has more often than not been associated
with the state than not. And money and power are

(50:50):
very very intricately interwined with each other. And money is
a system of control, in my opinion, and not only
is it a system of control, it's a very good
system of control. And part of the reason is so
good as most people don't even understand that it is.

Speaker 1 (51:08):
Yeah, well, this is what I think. This is what
I think. This is where you can make the argument.
I I this is in order to just to like
interject for a second, I like to talk about this
era of starting with the formation of the Bank of
England in sixteen ninety four, because this is the era
of money that we're living in, the central bank control
of money and the the and the issuance thereof, and

(51:29):
the centralization process of money, and that era is coming
to an end and we're getting we're moving into a
different era where money, where the state and money are
going to be intertwined, but they're going to be intertwined
in different ways. And then the transition period to a
new monetary system, Yeah, it's going to be not just

(51:53):
a it's going to be it's going to be a
more it's going to look authoritarian in the short term
in order to get to at the central money in
the long run because technology is clearly trying to decentralize money.
This is what's happening. And so that's where I think
we are. And so, you know, when we started the podcast,

(52:15):
one of the things we wanted to talk about was
which was this this misperception that everybody has. You know,
you're the dollar milkshake guy, I'm the Davos guy. You know,
we have this. You know, we have our own theories
about how America and you know, America's rebellion against the
rules based order is going to lay itself out. I
think that's like basically what we're talking about here, what

(52:39):
you what we really need to focus on is again
not what we want and that we are going to
have to go through a period of authoritarianism in order
to get to what we need to to where we
want to go. Meaning at the end of the day,
sometimes you have to go left to go right. Sometimes
you got to go south to go around the mountain.

(53:01):
And if the mountains too big, sometimes you got to
go over the mountain. And you know, the mountain is
a re a is a metaphor for the obstacles the
intern in the institutional inertia that exists both in the
investor space and the political space at the state level,
at the you know, at the at the agency level,

(53:22):
you know, in everywhere, and then this is one of
the things that you have to overcome. What Donald Trump
is doing is literally walking around with a big cleaver
that says Gordian on it and is like whacking all
these Gordian knots all around the world. And everybody's like,
oh my god, you can't do that. I'm like, yeah,
I actually can.

Speaker 2 (53:39):
Well you know the reason he can, And this is
the part where people end up hating me, and listen,
the real I will say. The reason I know that
this is the reason.

Speaker 3 (53:54):
People hate me is when I first figured this out,
I hate it it myself and I still don't like it.

Speaker 2 (53:59):
But it's just reality. And that is once you understand.

Speaker 3 (54:05):
How embedded the Euro dollar or the US doll however
you want to describe that is not just in the
United States, but in the entire world.

Speaker 2 (54:16):
The idea that they.

Speaker 3 (54:17):
Can just change that overnight and move away from it
and start something different, I mean it is it is
just not possible to do that without great, great chaos
and because and I think the fact that the euro
dollar market developed outside the purview of United States regulators

(54:43):
is what allowed it to permeate the entire world.

Speaker 2 (54:47):
And where the world thought they were being very clever
and very you know, by by skirting their.

Speaker 3 (54:53):
Local regulations and US regulations, and they were they were
meeting a need that was demanded by the market. All
of that is true, but they also ended up building
their own prison. And while the US does not have
perfect control over the US or the euro dollar market,
they have better control over it, or I would say

(55:15):
influence over it than anybody else. And in the same
way that you were talking earlier that the Bank of
England and the colonial powers knew how to use money
against their colonies as a weapon. Believe me, the US
Treasury and the Federal Reserve knows how to use the
US dollar as a weapon against all of those outside
the United States who have taken on enormous amounts of

(55:37):
US dollar debt in a currency that they can't print.

Speaker 2 (55:41):
And so I think what the US is now trying
to And by.

Speaker 3 (55:49):
The way, because the US can influence the euro dollar
market but cannot completely control it, it gives them more
control and more ability to protect themselves than everybody else.
But that whole Euro dollar market can still boomerang back
and hurt the United States as well. So I'm not
saying that because of this design the US is immune.

(56:12):
That is not the case at all. And in fact,
it's because they are not immune that I think they
are very much trying to get more control over it
than they have now. And I think, you know, the merger,
either the removal of the FED or the merger of
the FED to the Treasure with the Treasury, which I

(56:32):
you know, I think you and I have talked about
this before. I've been talking about this for a couple
of years that I thought this would ultimately happen. And
the reason, I know, I'm jumping around, but this is important.
The reason central banks exist is not just a system
of control and exploitation. That's certainly a part of it,
but the primary reason they exist is to perpetuate the
state itself. They are there to keep the state in business.

(56:55):
That is their primary function. Everything else flows down from that.
The issue with the Federal Reserve not being a full
government entity is they are. They're not independent, but they
have a lot of autonomy and that autonomy keeps the
government from quote unquote controlling it perfectly, and that's why

(57:17):
and every government ultimately wants control. And so while the
autonomy has benefited the United States for a while, I
think we're moving into a period of time where the
government feels like that autonomy is going to hurt it.
So they're going to do everything they can to merge
it back in with the Treasury. And you already see
this plane out with you know, the comments about Powell
with Vessent. In many ways, the Treasury has been running

(57:38):
monetary policy over the last couple of years, somewhat subverting
the will of the Fed. And so I think one
of the things that Best since has.

Speaker 2 (57:49):
Talked a lot about.

Speaker 3 (57:51):
Well, this gets very interesting because you know, on the
one hand, Trump said We're never going to have a
central bank digital currency. I think the way he's going
to justify that is he's just going to get rid
of the central bank, will have a treasury digital security
as opposed to itself.

Speaker 1 (58:02):
Yeah. Yeah, that's that's that's what that's what's coming. But
right and so.

Speaker 3 (58:07):
Yeah, and so you know, the the idea of a
having a US dollar stable coin, in my opinion, the
great value in doing that. I remember this is value
as seen from the government's perspective, not seen from the
individual's perspective. The great value in having a digital US

(58:28):
dollar stable coin. And to me, it's not that it
will create all this new demand for the debt. I
think that's part of it, and I think that will exist.
But to me, the big, big part of it is
it is a new channel, a new distribution channel, a
new rail system plumbing however you want to describe this,

(58:52):
that could eventually migrate the traditional euro dollar channels into
this US dollar stable coin channel, and the US would
have much more control over the US dollar stable coin
channel than they do over the traditional euro dollar channel.
And the way I think of it is, you know,
several years ago. Really it started after the financial crisis,

(59:15):
but it picked up speed probably I don't know, twy seventeen,
twenty eighteen, the whole libor thing in the United in London,
you know, the FED and the US government didn't have
control of libor.

Speaker 2 (59:25):
That was set by you know, the British banking system.

Speaker 3 (59:29):
But in many ways, that was the interest rate for
the euro dollar market, right, And I don't think the
US liked not having control over that, and so it
took them six seven eight years, but they eventually got
that migrated over to sofa, right, And so I think
the same thing could happen with the US dollar stable coin.
It's not going to happen right away. I don't think
it could happen right away. As I said earlier, to

(59:51):
try to move away from that system immediately would be
extremely chaotic. I don't think the US wants it to
be chaotic. But they could provide this new system and
over time, you know, cannibalize those traditional year dollar channels
and increase them into the stable, and pretty soon in
the US has maybe not full control, but much more
control than that they have now. So I think that's

(01:00:11):
where it's headed from a from an overall systems basis,
I think it gives more control to the US. And
so to your point earlier, I think I do think
that in many ways the world is becoming decentralized. In others,
We're not going to have one global market, We're not
gonna have one global supply chain, you know.

Speaker 2 (01:00:29):
And I think we're going to have.

Speaker 3 (01:00:30):
Regional factions and country factions. But within those countries we
could potentially have more decentralization. But I think on a
global stage we're going to have d decentralization.

Speaker 1 (01:00:44):
Yeah, yeah, no, exactly. You're going to have currency, You're
going to have economic blocks that are that are going
to determine how much how closed they want to be.
What I've been saying for a while now is that
the goal is I think clearly the goal is to
create a domestic digital dollar that trades at one cost

(01:01:06):
basis versus a euro dollar offshore dollar that trades at
another cost basis, and that the toll, and that the
fed's job will in this new environment, if it's to be,
if it's to survive at all, will be to enforce
that arbitrage in the same way that the PBOC does
so with the offshore you want, in the entree you want.

(01:01:27):
And you know that system was forced onto the Russians,
and now you know the rule doesn't really exist as
you know, an international currency, and are they trying to
internationalize the rule? Probably a little bit, but they have
to build a financial system capable of handling that, and
that's part of where they are. Now that's a that's
a The Russian story is a different story. It's like,

(01:01:51):
you know, how do we get rid of the Bank
of Russia? Well, you do exactly what Mabuliana is doing,
which is by holding interest rates way above market rate,
so that private lending can and private banks can then
begin to issue effectively digital rules and create a kind
of your Ruble scenario that's outside again, a transmission system
outside of that which is created, which is under the

(01:02:15):
control of the Bank of Russia. It's a very similar situation.
It's a very similar criticism in some ways. I think
that's part of the reason why mapulating is still there.
It's the job is to depreciate the Bank of Russia
by allowing her to continue to run her IMF trained. Oh,
we need to have austerity in order to stop inflation.
Blah blah blah blah. It's the same situation we have
here in the United States with Powell. I think Powell

(01:02:37):
was put in place to do what he's done. I
do not think Powell is the guy to manage and
I clearly he doesn't want that job anyway, to manage
this transition from where we are to where we're going.
And what Trump is using he's doing is he's using
Powell as a scapegoat to popularize the idea that the
FED needs to be reformed. And you know, Jerome Powell

(01:02:59):
doesn't give a shit whether or not you know. His
legacy as he walks out the door, is that these
Trump's you know, pin his Trump's pinata either a shit.
He's JOm Powell like, he's a very powerful man who
doesn't need to didn't need to do the second term
any more than anybody else, you know, any more than
Scott Bessett needed to take assent, needed to take over Treasury,
or Donald Trump needed to be president again. All these

(01:03:20):
men are very very rich, very independently wealthy, and could
have just finished their lives, you know, on their in
their own quote unquote, on their own private in their
own private idahos or whatever you want to call it,
and just move on and let the world burn. They
could have done that. They all chose not to do
that for a variety of reasons. They chose to take
on these fights for particular reasons. And so the in

(01:03:45):
order for Trump to turn reforming of the FED, which
is a very unpopular idea, not in our circle, but
we're weird, we're in the offshoot of the world, to
reform the FED to the Normi's out there that barely
even though the FED exists. He's got to turn that
into an eighty twenty popular issue. Like Trump is a
very eighty twenty guy. He likes to take on issues

(01:04:07):
that are eighty percent of the country are behind and
twenty percent aren't. He ignores to twenty percent that aren't,
focuses on the eighty percent that aren't, gets most of
that done, moves on to the next thing. And what
he also does is create eighty twenty arguments. But he
has to set the stage for that. He's done this
brilliantly throughout his career. You watch him and you see

(01:04:28):
him do this, And I think FED reform is one
of those things. So what I know that the whole
you know, you see what I'm going with this.

Speaker 3 (01:04:39):
Right, No, no, no, I think the whole FED you know,
spending two point three billion dollars on a remodel that
very much helps Trump, right, it helps him with the populace, right,
it might it might not help him with the people
on Wall Street, It might not help him with the
people in DC. But you walk into a bar and
you know, Tosa, Oklahoma, and sit down next to the
construction guy, and you say, do you think that the

(01:05:00):
fetch it's been too and a half billion dollars on
a remodel. I don't know that guy's going to agree
with Trump, right exactly. And so you know, all of
this stuff is kind of coming to a head. And
I and I think, I think and and this is
part of the reason why I think we're going to
have a lot of volatility over the next couple of years.
And you know, it doesn't mean the US is immune
to this volatility. In fact, I think the US is

(01:05:22):
going to experience a lot of volatility. But I also
think that on a global basis, the US will be
the beneficiary course of all this volatility. And so you know,
I and I know that there it's really kind of
fascinating to watch, you know, all of the different you know,

(01:05:42):
analysts or commentators who literally everything that Trump does is
bad or evil or going to fail. And the reason
I bring and part of the reason I've talked so
much about Trump today is because I don't think you
can be an investment on a global stage and not
talk about Trump and not think about Tump. You know,

(01:06:03):
it would be nice if that was the case, but
that's just not reality. And so what I would say
to anybody who who who you know, is trying to
manage their own portfolios or is allocating assets and they
don't necessarily like the things that Trump was doing, or
they don't like him personally, that's fine.

Speaker 2 (01:06:23):
I you know, that makes sense to me.

Speaker 1 (01:06:25):
I get it.

Speaker 3 (01:06:27):
But just because Trump is mean, or just because he
says things in an un you know, polite way, just
because he's a bully, it doesn't mean that absolutely everything
is going to fail. I mean, the reality is bullying
works if bullying didn't work, Bullies wouldn't exist in the
first place, you know. And when people say the world

(01:06:49):
is sick of the United States being the bully, I'm
sure the world is sick of the United States being
the bully. And then people will say, well, all you
have to do is walk up and punch the bully
in the nose. Well, the reality is, and I've actually
seen this happen before, so this isn't just pure speculation.
Most of the time when people try to walk up
and punch the bully in the nose, they're the ones

(01:07:10):
that get their teeth knocked out. So it's not as
easy as just walking up punching the bully in the nose.
And now everything is kumbay a again. I mean again,
I think we're moving into this period of time where power,
you know, is going to make the decisions as opposed
to what is right or wrong. You know, might makes right,

(01:07:31):
and that's that's not the ideal situation to have, but
I think that's what we're in. And so I think
as you analyze your different investments, or you analyze different situations,
or you analyze different outcomes, you know, just figure out
who actually has the power in those situations as opposed
to what you would like to see happen.

Speaker 2 (01:07:48):
And I think it will help you make better decisions.

Speaker 1 (01:07:50):
I no, I agree, and that's it's really important, you know.
I think we said, remember having doing a podcast I
think I was on with pkanoneus and he said, look,
this is the return of power politics, the return the
age of consensus politics is over. We're not dealing with
contens We're not dealing with consensus politics anymore. We're dealing

(01:08:12):
with power politics. And we have to and sadly we
have to deal with power politics. Consensus politics brought us
to this state, and you have to ask yourself, you know,
who was presenting us with the consensus politics model and
who benefited from the consensus politics model. And it's very
clear who benefited from this and those people and I

(01:08:36):
happen to call them these fucking people, which is another
way of saying Davos or the elite or whatever you
want to call them, the people who enforced and created
the rules based order. These people are absolutely you know,
livid at the idea that they're not going to be
the ones just determining, you know, what power gets expressed
in the world. They always like to, you know, express
their power through consensus and manipulating the game board to

(01:09:00):
make us all feel like we had a seat at
the table, but we actually never really did. They did
exactly what they wanted, when they wanted, and how they wanted.
These are the same people that Donald Trump is attacking
like directly today are the ones and this dude, we're
doing this on August eleventh, and Trump just federalized the

(01:09:22):
law enforcement in d C. Four days before he's gonna
meet He's gonna leave DC to go meet Putin in
Alaska while he's in these putting together indictments against the
entire freaking Obama administration in the southern District of Florida
for obamacaight and everything else. Like shit's happening at a
level that like if I were Donald Trump, yeah, I
locked down d C too, because you know, like you

(01:09:47):
don't think these people are going to try These people
aren't going to try in color revolutions my don In
in Washington, d C while he's not there. I mean,
it sounds crazy, but this is the level. This is
the level of insanity we're dealing with. We're dealing with
people who are willing to start and threaten US with
a nuclear a broad based nuclear war over swamp land

(01:10:08):
in eastern Ukraine yep, or you know, over Israel Oran
whatever they have to do in order to try and
maintain control over the rules based order. And Putin has
talked about this a tremendous amount. G has talked about
it to a lesser extent, and I think Trump understands
it as well. So the idea that Trump and Putin

(01:10:29):
don't have common ground to work out in Alaska is insane.
Of course they do. The question is what are they
going to be able to get done and in what
time frame are they going to be able to get
this done? What I would suggest everybody expect very little
out of Alaska per se at the headline level, but

(01:10:50):
understand that there's architecture being laid and foundations being laid
for other things to occur for the for this to
continue moving forward. Long time ago, I haven't said this
to you, but I've mentioned it another podcast about three
or four months ago. It was just before I think
it was right around May maybe I don't know. Dexter
Why and I were having one of our typical you know,

(01:11:12):
afternoon chats three hours long. And we're sitting there, you know,
blathering into into our iPhones at each other, and he said,
you know, we were talking about Russia and Putin and
all this, he said, you know, I he said, I think, honestly, look,
Putin and Trump don't trust each other, and neither should they. Right,
they both have their agenda. Their agendas, you know, is
what it is. But if you want to rebuild trust,

(01:11:33):
then whatever phone calls they've had or whatever whatever correspondence
they've had through human interlocertors, which you'll notice that they
use human beings to move their messages back and forth,
not anything else. I think they both have parallel to
do lists, like like Trump's gonna knock one off the board,

(01:11:53):
and then Putin knocks one off the board, and hey,
you know we did that. Great. Now we'll move on
to item two, item three, item four, and we'll just
cantinue to do that to the point, get things to
the point where now they can actually do, you know,
make a big move. And I think if you if
you go back and you look at the last three
or four months, certainly last you see a lot of

(01:12:16):
these little line items being knocked off the to do lists,
and maybe more on Trump's side than a Putin side.
But then again, we the United States has a lot
more to prove because the Russians have for the most
part acted quite i wouldn't say honorably, but quite forthrightly
about what it is that they want. They've stated their

(01:12:37):
goals very explicitly, and you know, and in many ways
they are the aggrieved party, not necessarily in Ukraine where
they invaded Ukraine. We know why they invaded Ukraine. We
can sympathize with why they invaded Ukraine, but still they
invaded Ukraine. From a legal perspective, they invaded a sovereign nation.

(01:12:57):
That cannot be lost in anybody in this conversation. But
for the most part, Trump's got a lot of things
He's got to knock off this to do list, and
Putin's got to knock some things off of this to
do list as well, in order for them to get
to this point. I think that the do lists have
gotten to the point where they can have a meeting.
And I also think that Trump is going to make,
you know, Putin realize that, look, this is as far

(01:13:19):
as we're going to go, and you know, you couldn't
stand up to you know, NATO dropping a quarter million
troops into Ukraine supported by American air power, and we
can we can blow your line open if we need to.
This is a part of the This is a dimension
of this war that has not been fought yet. I
know it's not popular in our circles. I know people

(01:13:40):
think that, you know, the Russians with us knock all
our planes out of the sky. Or I'm like again,
you're you're sounding off like bitcoin maxis to me in
Circle twenty nineteen, where bitcoin is going to take over
the world because the Fed is hopeless. I got news
for you. The Fed's been defending the dollar.

Speaker 2 (01:13:57):
Yep, they're still here.

Speaker 1 (01:14:00):
Coins not a million of coin.

Speaker 3 (01:14:01):
Yeah, yeah, yeah, Well it's fascinating. Like I said, I
I don't know what's going to happen. What I do
know is that to your point, you know, power politics
is replacing consistency politics. And perhaps that's a good thing,
perhaps that's a bad thing. But regardless of which side
you come down on, that's the reality. And I think
if you, if you, if you, if you look at

(01:14:21):
the world through that lens, you're going to.

Speaker 2 (01:14:23):
Be much better off.

Speaker 1 (01:14:24):
Yeah, And it's not. It's and it may even be.
And this is the hard part for people to wrap
their brains around, but this is I believe I've come
to the conclusion, Brent, that this is what needs to
happen in order for us to get to thegether side
of this, where there's a uh, you know, where there's
a free future. I just this is what I think

(01:14:45):
at this point. It's the world that we've been handed,
you know, and sometimes you gotta I mean, if you
want freedom, sometimes you gotta fight for it. And sometimes
it may, it may you may have to just put
your trust in the state for a little bit. As
much as we all don't want to have that happen,
but like at this point, if they're if the institutions

(01:15:06):
are fighting amongst themselves and the people aren't being sent
on the ground to die, fight and die in a
meat grinder, And as Trump keeps saying over and over again,
I want the killing to stop.

Speaker 2 (01:15:20):
And I think he I think he actually means that.

Speaker 3 (01:15:22):
I know, I think he actually does, and you know,
you don't hear other politicians saying that. And I think
he deserves if nothing else, I think he deserves credit
for that.

Speaker 1 (01:15:34):
He absolutely does, And I think that putin is tired
of watching Russians on you know, both ethnic Russians in
Ukraine and Ukrainians who he considers, you know, brothers to
Russians die for cynical geopolitical reasons because you know, a
bunch of Liamis are still butt hurt about the civil

(01:15:55):
about the US Civil War. I piss off.

Speaker 2 (01:15:57):
You know, this is this is you know, we don't
have time to get into it now. We've actually got
to cut this down.

Speaker 3 (01:16:05):
But I will say one thing we didn't really talk
about this, but we probably should have, is that part
of the reason that Ukraine is such a big deal
and why there is so big of lines drawn on
each side is.

Speaker 2 (01:16:19):
Ukraine is like ground zero for.

Speaker 3 (01:16:21):
The rules based order, Like it is there everything of
the World Bank, of the rules based order is has
has has operated on some level in Ukraine. And there
has been so much corruption, I mean the levels. I mean,
it's probably there's probably more. What the potential you know, uh,

(01:16:43):
you know, exception of North Korea is probably the most
correct place in the world. And that's why it's gone
along so long. That's why it's gone on for so long,
and that's why neither side wants to back down. As
they're defending their turf. And that's you know, the how
many families of senators and comersmen have gone to work
on companies and and you know the Ukraine and come

(01:17:04):
back millions of dollars richer. You know, it wasn't just
it wasn't just Biden's son who did that. It's you know,
on both sides of the aisle. And so anyway, hopefully
we can never bring this battlefield to a close.

Speaker 1 (01:17:16):
I agree, And I'll just to finish that point and
then we'll close the podcast out. The entirety of the
rules based order put in place post World War Two
was designed for this to bring this conflict to a hen,
because the goal was always freeze the conflict and attack

(01:17:36):
Russia again. And you attack Russia through Ukraine. It was
always the point of the old order to do this.
And what you're watching is what's hard for people to
understand is that the United States is backing out of
that system because it doesn't serve not to one, it
doesn't even serve our purpose. And two we're no longer

(01:17:57):
where this. I think Trump understands the framework of the
of the problem, and and and and trying to free
the Commonwealth along with the United States, from the clutches
of City of London, Luxembourg, Zurich, that whole old European
banking architecture and here in European system, and which to

(01:18:19):
them Ukraine was where they put all their marbles. They
can't leave and they can't back down.

Speaker 2 (01:18:26):
So fascinating.

Speaker 1 (01:18:29):
What's that.

Speaker 2 (01:18:30):
It's a fascinating world, isn't it fascinating? Fascinating?

Speaker 1 (01:18:33):
Okay, So Brent as always great to chat with you.
Maybe we'll do this again more quicker than the last
time we were then, you know, because I think we
never really have enough time to like do everything we'd
like to talk about. So tell everybody where they can,
you know, find you and do the thing and do
the self plug and you know we'll get out there.

Speaker 2 (01:18:49):
Yeah, yeah, no, I appreciate it.

Speaker 3 (01:18:50):
So, you know, there's a bunch of different I'm obviously
very If you don't know, I'm very active on Twitter.
You can find me under Santiago Capital, Santiago au Fund,
the actual handle we do.

Speaker 1 (01:19:03):
We write.

Speaker 3 (01:19:04):
We do a lot of stuff on substack. If you
go to research dot Santiago Capital dot com. Uh, there's
a couple of different ways to follow us there if
you like the topics that we're not. We do a
lot of writing and putting out reports related to the
intersection of geopolitics and capital markets. And then every weekend
I do a show on YouTube called Silkshakes, Markets and

(01:19:25):
Mates where we just kind of go over a number
of things that we see going on in the world.
So I appreciate you having me on, you know, happy
to talk to you again at some point down the
road and see how this world is developing.

Speaker 1 (01:19:37):
I appreciate it that and and yeah, so follow Brent
do the thing, and you know, you guys can find
me as always TfL seventeen twenty eight on Twitter. I'm
if I if I'm not more active than the Brent,
that would be that would be funny. And you know,
Patroon's last Gold, Ghost and Guns, if you want to know,
support what we do here. So that's that's that he's Brent.
I'm Tom. We're out. Keep your stick on the ice.

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Episode #227 -- Brent Johnson and Who's Writing the New Rules Based Order

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