Episode #239 - Brent Johnson and Honestly Assessing the State of the Great Game

Santiago Capital CEO Brent Johnson returns to the podcast to discuss stablecoins, geopolitics, and how the Great Game of global capital is progressing.  I appreciate Brent's realist approach to both markets and politics and how his journey has shaped how he sees things unfolding.  

Show Notes:
Brent on X
Santiago Capital 

Tom on X
GGnG Patreon

Episode Transcript

Speaker 1 (00:22):
Hello, and welcome to the Gold, Goods and Guns podcast
for December second, twenty twenty five.

Speaker 2 (00:27):
My name is Lana Lawonga.

Speaker 1 (00:27):
We have a lot to talk about its episode two
thirty nine, and I have the great pleasure of having
Brent Johnson back on the podcast of Santiago Capital.

Speaker 2 (00:33):
Brent, how are you.

Speaker 3 (00:35):
I'm good. Just got back from Thanksgiving which was fantastic
and so back at work.

Speaker 1 (00:40):
Yeah, that's kind of the way I took like I
don't know about I know, twelve hours off or fourteen
hours off and then when right back to it.

Speaker 2 (00:46):
Like my wife complains of.

Speaker 1 (00:47):
Me all the times, like stop looking at your phone.
I'm like, I can't help it.

Speaker 3 (00:51):
I actually took it. I actually it's the first trip
I have gone in and I don't know how many
years where I did not take my lap on top
with me and did not like log in during the day.
So it was it was I had. It was four days,
but it was fantastic.

Speaker 2 (01:05):
Good good, good.

Speaker 1 (01:05):
Get You have to recharge every once in a while,
and I'm looking forward to actually, to be honest with you,
I hate to admit this in public, but tomorrow Guildor's
reforge drops and I think we're all just going to
take two days off and play that for a couple days,
which could be a lot of fun. So I've got
a small group that did I play with on a
semi regular basis, So let's not talk about that stuff anymore.

Speaker 2 (01:24):
Let's actually get to it.

Speaker 1 (01:25):
So you I've been picking up on a thread that
first started with myself and catlen along. I saw with
me and Vince and Caitlin Long and all this stuff
about stable coins, and you were talking about it NonStop.
I think you actually did you present something over at
New Orleans about this as well?

Speaker 2 (01:43):
Or yeah?

Speaker 3 (01:43):
Pretty My My entire presentation in New Orleans was on
this topic and we that and that was based on
a thirty or forty page research report we had put
out on it shortly before that. So we've done quite
a bit of work on it over the last couple
of months.

Speaker 1 (01:56):
Excellent, So why don't we start there and what you're
seeing and we'll sort of compare noteses to where we are.
I said to you before we hit record, which is
that you know I talk about this, I talk about
all these things that I kind of scattershot or on
the stream of consciousness approach, and you know, it's nice
to have somebody actually like settle it down, make a
proper presentation out of it in order for people to

(02:19):
kind of digest it in all one big felt swoop.

Speaker 2 (02:22):
So if you go ahead, well.

Speaker 3 (02:24):
I think I think the first thing I'll say is,
even though I've just kind of started talking about these things,
this is not new. These have been around for ten, twelve,
thirteen years now, and I have gone down the rabbit
hole on them a couple different times, usually around the
same time I had gone down the bitcoin rabbit hole,
mainly because of Tether. Tether is a central part of

(02:46):
bitcoin in in my opinion, and Tether is by far
the largest US dollar stable coin. And it was because
of the things I ran into and researching Tether that
I kind of pushed these to the side and didn't
give them much credence. And I was of the belief
that if and when they ever came into conflict with
the United States government, there would be a battle. And

(03:08):
while I didn't know who would win that battle, I
was certain that the United States could at least do
some damage along the way, right, And so I never
really embraced the whole stable coin concept. But what really
kind of changed it for me was the Genius Act
or and when it was started to be talked about it,
I started to look into these things again. And then

(03:29):
when the Genius Acts was passed and some of the
comments that were made around it, and when you read
through the bill, what you really start to realize, at
least in my opinion, is that the United States, as
an official entity, has co opted the innovation from the

(03:49):
private market that the private market developed, and it seems
to me, are you using it to build a parallel
euro dollar system or the early stages of a parallel
Euro dollar system.

Speaker 2 (04:02):
Now that's that.

Speaker 3 (04:04):
Now that I've made a lot of big jumps in
that those few sentences, and we can dig into that.
But but that, but that's what really caught my attention.
And then also they started to get more I guess,
public publicity because of the belief that this is a
way to save the dollar, because there was no gonna

(04:24):
be nobody else that would buy the debt, and so
now the US wants these stable coins because that will
be the buyers of last resort that nobody else will
to showed up. And I actually think that's wrong, but
I do I and I think in many ways. I
don't know if anybody is a hunter or not, but
to me, that's a decoy that that's that's something to
get people focused on, to to to to remove eyes

(04:49):
on what the real plan. And the real plan, in
my opinion, is to get more control over the global
monetary system than they already have. And in many ways
they can then use the dollar as a weapon even
more than they do now. And it doesn't mean that
they will have full control and perfect control, but I
think it is a system and a method via which

(05:11):
they can get more control than they currently have. The
US has more control than anybody, but nobody really controls
the euro dollar system. And I don't think the US
likes that they don't control the euro dollar system.

Speaker 2 (05:24):
I know they don't like.

Speaker 1 (05:25):
They don't like that, or we would or we would
still be on the liboard now exactly exactly.

Speaker 3 (05:30):
That's and and that's one of the things we talked
about in our papers. I use the Libor to Sofa
transfer as an example of the US wanting to get
control and the steps that they took to do so,
and it didn't happen right away.

Speaker 2 (05:45):
Uh.

Speaker 3 (05:46):
I think the I think that transfer of the library
to SOFA was a five six seven year process from
beginning to end, and you about five years YEA started
And so I don't I don't think this is all
going to happen tomorrow. And in many ways, I could
see the US just let people, let let the private
market run wild with it for three, four or five

(06:07):
more years in order to get adoption, and then kind
of put their clamps on it. But it's a fascinating
topic for me because it's kind of sits at the
heart of you know, capital flows and monetary system and
the private market versus public market, you know, in country

(06:27):
versus country. Geo geopolitics gets involved here, and it's just
a really, really fascinating, fascinating topic. And I think those
who are dismissing it are are doing so to their
own detriment.

Speaker 1 (06:39):
It's not just that I've actually run into the exact
opposite of that one. I mean, I guess there are
people out here that are that are dismissing it. It's
just another way of extending dollar hegemony, which is a
phrase I can't stand. It's really done. Oh by the way,
if the dollar wasn't the best currency in the world,
people wouldn't use it right, you know, I mean, this
is what this is the this is the oh, by
the way way, and people breathe right. You know, it's

(07:02):
one of those obvious facts that gets ignored while people
try to shape a narrative around a particular thing. So
the the what you bring up is that the dollar
is you know, I was actually had a chat with
somebody yesterday about this. I was on a different channel
and they were going over, well, this is the building
of the Panopticon and this is the new neo colonialism

(07:23):
and blah blah blah Blah'm like, no, no, it's actually
ringing in my mind looking at one Treasury backed you know,
regulated stable coins are actually removing leverage from the system
because we're now actually in control of the of that
Euro dollar system and the gearing inside the euro dollar system.
Because we control the the we say how much leverage

(07:46):
there can be. There's going to be leverage used within
the domestic markets because American banks can issue their own
stable coins against the loans that they make and then
they can have their own individual banks and.

Speaker 2 (08:00):
Have their own leverage ratios. But the offshore banks are
not going to be able to do that to the
same I don't think so.

Speaker 3 (08:07):
You know, I don't know for sure, but I tend
to agree with you that they that they won't be
able to the question, Well, they can do it, but
what what will the consequences be? You know, and and
and will they will they still have the same access
to to US capital if they do it against the
wishes of the United States, right, and so again it

(08:27):
brings it just brings more control back to the US.

Speaker 1 (08:30):
Well again, and that's what this is. The thing is,
like what Vince Launchi and I have been talking about
is the is how we have We're going to set
up controls around the offshore dollar, the euro dollar, and
the onshore dollar, and the onshore dollar is going to
trade at a premium in terms of purchasing power versus
the offshore dollar, which will trade. If you want access
to dollars, you're going to have to buy them for
a dollar five.

Speaker 2 (08:51):
If you want to.

Speaker 1 (08:51):
Trade them for ninety cents, you go right ahead and
do so. So if you want to lever them up
and trade them at ninety five or ninety eight cents,
that's great, But understand that we control the access to them,
and therefore we can go you know, what no, and
then we can bankrupt you. And as opposed to the
years of the libor and euro dollar dominated markets, we

(09:12):
started in the mid fifties moved all the way until
very recently. The US was never in charge of its
own monetary policy. And that was the point of the
whole libor offshore shadow banking system. So you know, you
can I just wanted to just want to take out
the whole what's the word I'm looking for, the negative

(09:32):
connotation of the United States getting control over its own markets.
This is what they should do, is what sovereign nation
should do. And if you don't like the stable coin,
the US dollar stable coin system that we're putting in place,
and you don't want to use your use our stable coins,
well then maybe you as sovereign governments, should get your
act together and issue currencies that don't suck. And then

(09:54):
you can issue your own stable coins in Turkeys era
or you know, you know, I urinary or whatever, or
you know, and do it that way or you know,
or you can delive with the fact that the United
States is going to eat your launch.

Speaker 3 (10:07):
Well, to me, that that is the key to this all,
is that I think this is a way for the
US to I mean, I could try to be nice
about this, but i'll I'll just say, to invade a
foreign country without using the military to do it, because
if the local population adopts US dollar stable coins as

(10:29):
their preferred medium of exchange, because the local currency, as
you say, sucks, and I agree with you, you know,
it doesn't take long before that local currency starts to fail.
And once a currency starts to fail, a government typically
fails pretty closely thereafter. And the reason, the reason those
two are related is money is a form of control,

(10:52):
and governments use money as a form of control. So
if they lose control of money in their local jurisdiction,
they lose control politically in in that jurisdiction. And it's
it's in my mind, this is a way for the
US to sort of quote unquote steal sovereignty from a
foreign country without you know, parking aircraft carrier off their

(11:14):
off their coast. And the other thing about it is
it's done voluntarily by their citizens, as opposed mandate from
Washington or New York or.

Speaker 2 (11:26):
Wherever it is.

Speaker 3 (11:28):
And that and that then gives the United States plausible
deniability we didn't do it. Your own citizens did it
right now? Is it to our advantage? Sure, it's to
our advantage and you know, but but it's your jurisdiction.
If you want to stop them, try to stop them, right, well,
then that has try trying to stop it has consequences
as well.

Speaker 2 (11:48):
Agreed and the other.

Speaker 1 (11:49):
But see, and this is the interesting part about all
of this is that that's kind of the first order.
That that's one path of this, right, that's one path
is all the evil mustache growing United States and their
banking system. We're going to go out like the evil
capitalist oligarchs that they are and do the robber barons
that they are and do the thing.

Speaker 2 (12:05):
Well, maybe it's always possible.

Speaker 1 (12:08):
It all depends on what kind of relationships to the
United States actually puts together in terms of trade and
foreign policy. With these countries. We have always lived under
you we're all right, of an age we're in in
our fifties. We've lived under the age of American imperialism,
which is really just a cover for freaking British and

(12:30):
old you know, European colonialism through the euro dollar system.
If you look at the way Trump has been dealing
with the trade policy. And this is the part that
I find interesting is he's not cutting trade deals where
we get the factories. You know, we get their raw
materials and the factories and they get dollars in return.

(12:51):
He's actually putting together plans where no, we're going to
build stuff and do jvs locally. If you even you'll
get the twenty eight points peace Plan the verse, the
zero point one beta peace plan for Russia Ukraine.

Speaker 2 (13:05):
What's in there? Everything about money.

Speaker 1 (13:08):
In that peace plan was US and RuSHA will enter
into joint partnerships to develop various assets, meaning both countries
will share in the benefit of it. Right, that's not
a colonial process. A colonial process is always use the
currency as a means by which to extract wealth at
pennies on the dollar and send them home to your

(13:29):
to fill your factories, and then you get to sell
the finished goods around the world.

Speaker 2 (13:34):
And that's what we have to watch for. Right.

Speaker 1 (13:37):
If we start watching we start seeing that old model,
well then yeah, obviously all those criticisms of the Genius
Act and the stable coins will bear fruit. But if
we don't see that, if we see partnerships with these
trade deal that's a different system.

Speaker 3 (13:53):
Well, my guess is you'll see both with some countries
you'll see it go one way, and with other countries
you'll see it go the other way. Rights as has
always been the case. And you know, and this is
this is what I always always try to tell people.
And I'll say it again here in case anybody who's
heard me talk before is going to say, Brent, we've
heard you say this one hundred times. So for the

(14:14):
for the event that you know some of your audience
has never heard me talk about it before, is you
kind of have to set aside what you would like
to see happen. You have to set aside what you
think others would like to see happen, and actually figure
out what it is that others would like to see
happen or what they would do right. And the simple

(14:36):
fact is that people around the world, in many, many
countries around the world, prefer the US dollar to the
local currency. Now, you may believe that they should prefer
to use gold or silver or bitcoin or whatever it is,
and you may believe that the dollar is a horrible currency,
but they do not, and that is born out by
the market. The market tells me that. And if you

(14:57):
look at the stable coins that exist so far, ninety
nine percent of the stable coins are US dollar stable coins. Now,
gold stable coins exist, eurostable coins exist, other stable coins exist,
but ninety nine percent are tied to the US dollar.
And the reason they're tied to the US dollar is
that is the issuers trying to meet market demand. That

(15:19):
is not the issuers going out there and saying, oh,
you want a euro stable coin, Well, too bad, We're
giving you a dollar one. No, no, no, it's it's
the market demanding dollar stable coins and the issuers trying
to meet that demand. So that is the market saying,
on a global basis, we prefer dollars. We don't prefer
euros or yen, or we want or ruble or whatever
it is. And so you know, I think this is

(15:43):
the new digital expression of what the euro dollar market
decided decades ago.

Speaker 1 (15:49):
To reiterate the point you made to sort out with
the United States. Then gets to control what the price
people pay for dollars is, and it should be that
way now. If they just hide the choose, if they
decide to charge too much, well hey, then someone else
will decide to come in with something else. It's what
I find really interesting about all of this is that

(16:10):
your point about is like this, we analyze the world
we've gotten out the world we want. That's another That's
why I've been saying this since I first like sort
of periscoping in twenty sixteen. It's it's a very simple
idea and a very simple heuristic and framed to see
the world through. And so what we're dealing with at
this point in time is we have a lot of

(16:30):
people with an ast to grind.

Speaker 2 (16:33):
That are commenting in the state.

Speaker 1 (16:34):
Yeah, I mean, and I don't care if it's you know,
the former version of myself who hated you and I
talked about this last time we were on the show.
Both we've both gone through a similar like the psychological
process with you know how with our relationship to our
home country, right, And I mean, and so I just
find it so for anybody who's listening that you should
go listen to the last time that Brenton was on

(16:55):
the show, and we chatted about that at length as
a matter of fact. And so for me, it's it's
it's it's very obvious that the market wants this. I
can also I can also say I think and this
is one of the things that Vince and I talked
about in the last episode of the podcast, that there's
also something else going on here where this entire system

(17:16):
has to be recollateralized.

Speaker 2 (17:18):
It can't just.

Speaker 1 (17:19):
Be the US treasuries, US issuing more debt, US, you know,
and all of that stuff. It has to be there's
gonna have to be a hard collateral at at the
bottom of all of this, because if we don't do
it the United States, then someone else could and then
make their stable coins better. So and I'm getting at
and when I'm getting out obviously is at some point

(17:40):
that's why everybody's all the central.

Speaker 2 (17:41):
Banks are rushing for gold, right, the treasuries are all
rushing for gold.

Speaker 3 (17:45):
Yeah, yeah, And I and I think I think many
people when they see the central banks have been buying gold,
and when they see what the price of gold has done,
they automatically assume that means the death of the US
dollar and the US control of the monetary system. And
it doesn't necessarily mean that. Now. Clearly, when the when
gold does what it has done, that is a sign

(18:10):
that the market, the people of the world are saying, hey,
something is not quite right. But people in China are
not buying gold because they fear the dollar losing purchasing power.
They're buying gold because that you want is a horrible currency,
and they know that it's going to lose more value.
And it's the same thing you go through other countries

(18:32):
and and US people are buying gold because we are
losing purchasing power here as well. But the point of
my whole you know, milkshake theory has always been you
can have gold going up dramatically, and as long as
the dollar is not falling versus the foreign peers, it's
not going anywhere, right, right, right.

Speaker 1 (18:51):
And you're and and that's and that's born itself out.
The dollars been trading. And I mean even in a
year where the where the Treasury Department and the President
and have purposefully devalued the dollar in order to force
trade deals onto their opponent, to their trade partners, you know,
even then, the US dollar index has not really moved.

Speaker 3 (19:13):
Yeah, it hasn't really gone anywhere since April, right, I
mean it fell kind of into April. Now it's just
kind of gone sideways.

Speaker 2 (19:18):
You touched on.

Speaker 3 (19:19):
Something earlier that I think is important because one of
the problems for the US with the euro dollar market
is the fact that the rest of the world has
issued dollars in a currency that they cannot control and
that they are not ultimately responsible for, and as a result,

(19:42):
that does hurt the rest of the world when a
credit crunch comes. But it also does eventually come back
to the United States. And I've always made the argument
it starts in the periphery, but it does eventually reach
the core. So I don't think the US gets hurt first,
but it does eventually come back and hit the US.
Part of the reason that that is the case is
because right now a dollar and a Euro dollar, or

(20:07):
a US domestic dollar and an offshore dollar trade at par.
They are convertible, they are fungible. There is no difference
other than geography between a dollar sitting in Dallas and
a dollar sitting in Dubai. They trade one for one.
But and as a result, that's why it can pyramid

(20:28):
back down onto the US because the foreigners can can
can can can claim that they can make a claim
to the base money that only exists in the US
as you go down the daisy chain at par. And
so I think, as you have alluded to, that this
new system is a way to potentially change that right

(20:53):
to make it to where it is no longer at par.
And if and if it doesn't trade at par it
is no longer, it doesn't mean that it still can't
come back and cause problems for the US, but not
to the same extent that it currently does, especially if that,
you know, let's say that let's say we eventually get

(21:14):
to an onshore dollar and an offshore dollar in it,
and under your example, one trades at a dollar, another
one trades at a dollar five or whatever it is. Right,
even at a dollar five, it's not that big a deal.
But in some kind of a crisis where now the
euro dollar is trading at one thirty instead of one
oh five, and it's losing value versus the dollar, that
becomes a much bigger deal, and the consequences of it

(21:37):
start to hurt the rest of the world more than
it hurts the United States. And it gives the US
more control over who they help and who they don't.
And the US already kind of does this through the
swap lines, right yes, And people will tell me, well,
the US the reason that the US gives swap lines
is because if they didn't, then the foreigners would sell

(22:00):
all the US dollar assets and that would be bad
for the US. And yes, that is true, but again,
the problem is starting on the periphery. It's it's it doesn't.
When someone in Brazil sells their US dollar assets, they're
selling them because they are in dire straits and need
the liquidity.

Speaker 2 (22:18):
Yep.

Speaker 3 (22:18):
So you can't say that the US giving a swap
line to Brazil starts in the US and then goes
to Brazil. And I know it's starting in Brazil on
the perimeter and then it's coming into the core. And
this new system is a and I haven't quite figured
out exactly how they'll do it, and I don't know
if I'm smart enough to figure that out exactly. But

(22:39):
I do agree with you that that is one of
the issues that they would like to solve.

Speaker 1 (22:44):
I think it's it's it's very much what's I think
that's I don't have a clear answer to that.

Speaker 2 (22:51):
What they're going to do thing either. I've been talking
about it kind of.

Speaker 1 (22:54):
In the in the you know, the the the bubble framework,
like the you know, you put the flow chart up
on the board with using Microsoft PowerPoint or project.

Speaker 2 (23:05):
Or whatever you've got.

Speaker 1 (23:06):
Well, we need to create a federal reserve that enforces
the international the domestic par versus you know, international park.
How they do that, I don't know, do they? Is
it how they price swop lines? Is that how they
how they set up various facilities? Do do American banks
get preferential treatment to the quote unquote the FED discount
window or even better? Noting also that the stable the

(23:28):
whole stable point infrastructure ecosystem is an end run around
the Federal Reserve because now it's direct Treasury money and
that's now a digital form of greenback more than it
is a Federal Reserve note right, because these stable coins
aren't being issued by the Federal Reserve, so so is
the FED than just the firewall, meaning foreign actors have

(23:51):
to go to the Fed to get dollars because we're
not running the same kind of budget deficits that we
have in the past. If we if we fix the
fiscal side, this is my argue for a long time,
you fixed the fiscal side of the situation. Now you're
not issuing as many Treasury bonds on a regular basis. Yeah,
you're issuing bills to fund the stable coin to growth
of the stable coin market, but that's that's a different

(24:11):
that's a different thing. That's a those are you know,
those are going to be created and destroyed. They don't
affect the long term credit rating of the you know,
the of the US in that respect. But if you
do that and then you have the FED is the
one where everybody has to go to to get dollars
offshore when they need them, then the service or denominated liabilities,

(24:34):
well then we have a we have a we have
a different scenario. And that's how you can kind of
separate the Fed's roll from the Treasury's roll. And that's
how you in the long run get to an onshore
dollar and an offshore dollar. That's what That's the way
Vince and I have been thinking about this for a
while now, and I know that I haven't talked to
Caitlin along in a couple of months actually a few
months now to get her latest thoughts on this as well.

Speaker 2 (24:58):
So just throwing it out.

Speaker 3 (24:59):
There, Well, well what you're touching on though, listen, I
don't have the answer either, but what and I have
not written about this, yes, but we're planning to write
about this, so stay tuned. There is in addition to
the US, let's say, going to war with the rest
of the world over the monetary system, they may be

(25:19):
going to war internally. And what I mean by that
is the rise of stable coins. It makes it easier.
It doesn't necessarily rule out the necessity for the FED,
but it makes it easier for the Treasury to take
over monetary policy. And I've said for a long time
that we are headed for a battle between the Treasury

(25:41):
and the FED, and that I think the Treasury will
ultimately win. Now, whether that whether the FED ends up
getting absorbed by the Treasury, or whether they just take
orders from the Treasury, or whether they put get somebody
into the FED that works hand in glove, you know,
because it's their lackey or whatever it is. But but
once you have a US dollars stable coin that is

(26:05):
done by the Treasury and can be done digitally, and
each individual can open the wallet and receive and make
payments back and receive payments from the government, make payments
back to the government. Because you got to remember, the
FED is the Treasury's bank, right, If you no longer

(26:26):
need the bank to transact between the individuals and the Treasury,
you no longer need their distribution arm right, right, And
so that's but this is going to be a huge battle.
Like the banking system is one of the biggest lobbies
that there is, right, it's one of the biggest allocators
of capital there is. They are not going to go
quietly into that good night, right, They're going to fight

(26:48):
to keep control of monetary policy. The FED is not
going to want to give that up. But you know,
that doesn't mean that they're going to win just because
they don't want to lose, right, and so, but but
all these different little battle battle grounds are opening up now,
and this is you know, this is the you know,
it's just another hallmark of the fourth turning, right, you know,

(27:08):
where these institutions that once seemed mighty and impossible to
fall end up going by the wayside because things change, change,
and and and I think I think we've talked about this,
and I'm pretty sure you agree, but feel free to
push back if you don't sure. Is that, you know,
I think for a couple of years now we have
been and we're moving into more of an environment that

(27:31):
requires people to think not just from an economics perspective
when evaluating economic projects, but thinking from a politics and
a power perspective, because you know, for you know, I've
been doing this for twenty five years now, and for
for basically all of that time. If I was evaluating
an investment opportunity, I could, you know, look at the
economic aspects of it and pencil it out on a spreadsheet,

(27:55):
and if it made sense, you do it. But you know,
you can no longer just say something is going to
work or fail based on the spreadsheet because power and
politics will trump that. And I think I think the
pendulum is now swinging back that direction, and I think
it's going to be very hard to stop that pendulum
from going further in that direction. So and I think

(28:17):
this could last ten, fifteen to twenty years where this
is the case.

Speaker 1 (28:20):
I think I know where you're going with this, which
is that you know, our government has made some very
controversial choices from a free market perspective to take strategic
positions in companies like Intel and others, and it's the
and officer's strategic capital. I think it's the name of
the thing that no one's that's the thing that no
one's talking about that you brought up before we sort

(28:41):
of recording today, and we want to move back, and
you want to move the conversation into that and to
that realm. And I think that this is a very
very important thing to consider. Like we've outlined here, with
the euro dollar system, the euro dollar system, inder libor,
we were not in control of our own monetary policy.

(29:02):
You cannot be a country worth a salt if you
don't control your own monetary policy, or at least you
can't be the core. You can't be like the United States, right,
the core economy of the world, not being control of
your own monetary policy. Same thing with your military, same
thing with your domestic policy, same thing with your industrial policy.

(29:23):
So I find I, I, you know, normally I would
like look at this and be anathema of that. We
would take, you know, a a government position in a
company like Intel or any of these other these other firms.
And but I remember what Putin had to do back
in Russia in two thousand in order to stop the
globalist from destroying and taking over all of these state

(29:44):
assets that were really publicly there were. These were public
goods companies like Yukos and gas Prom and not Rosenef
the one. These are public goods, These are the birthright
of the of the Russian people, and they were being
stolen by the City of London and Wall Street assets
left in right, guy like Bill Browner and Evan Safferin
and all, I mean all that stuff.

Speaker 3 (30:04):
And you know that that that's a big story that
you and I need to talk about sometimes much. I know, Yeah,
I know you did that story.

Speaker 2 (30:13):
And I've gotten out of that story. I've had that
story in my back pocket for ten years now. Yeah.

Speaker 3 (30:17):
It's fascinating. It's really fascinating.

Speaker 2 (30:19):
So that's that's the way I see this. I don't
know that you know.

Speaker 1 (30:23):
So this is something I think we need to discuss
it that in a sense that this what we're talking about.
All the things that Brent and I are talking about
now are really the hahollmark of a transition period. We
almost have to do this from a national security perspective
first before we can, you know, go back to any
kind of well.

Speaker 3 (30:42):
And here's here's the here's the part that I and
we we've talked about this before. And here's the part
that I struggle with because I am a free market guy.
I'm a capitalist. I don't like the marriage of government
and state, right, I don't like the government lean into
the free market dynamics. But the truth is we've never

(31:03):
truly had a free market. We have perhaps had a
more of a free market than other places, but we've
never had a truly free market. And even if I
don't like the government taking a more active role as
someone who manages other people's capital, doesn't matter what I like.
I just have to analyze the world as it is

(31:23):
and figure out what the hell they're going to do.
And just because I don't like it doesn't mean they're
going to stop, right, And so I have to take
that into account when I am making a decision and
when I'm analyzing things. And so I think the people
that do a free market analysis on a project and
come to a conclusion, and then when the government interferes
them they said, well, they say that, well that's manipulation. Well,

(31:45):
to me, they've only done half the analysis. Yeah, I agree,
it's only happening because of the government. But listen, the
government's a real thing. You know, as much as you
and I might not like it, they're a real player,
and they're in the market, and you have to take
their their actions account. And so I don't well, I
don't necessarily like from a free market perspective, what is

(32:07):
happening If I look at this as the big game,
which I have often described what's going on in the world,
the big geopolitical tensions as the big game. Right, it's
it's it's it's the global hedgemon trying to stay on top,
and it's the up and comers trying to usurp their position,
and the US is going to do everything it can
to stay on top of the mountain, and then the
usapers are going to do everything they can to knock

(32:29):
us off. And so from that perspective, you know, there
are some things we have to do in order to
stay there. And if I'm trying to win that game,
then it completely makes sense what the government is now doing,
especially when you realize, which COVID put on perfect display,

(32:49):
the dependence on some critical inputs that the United States
needs coming from advers aerial countries. Right, And so at
a minimum, we need to be either self sufficient or
move more towards self sufficiency. And if and when it
ever becomes kinetic between US and our adversaries, then it

(33:12):
becomes an even bigger, bigger deal. And I think it
was himing Away. There's a great quote, and I'm pretty
sure it's by him Away. It says something about once
war is declared, the only thing that matters is winning,
because nothing is worse than losing a war or something
to that effect. And you know, I've got a son
that's seventeen years old, and the last thing I want

(33:35):
is the war, and so I will do everything I
can to keep that from happening. But I also, you know,
don't want to be living under communism. Quite honestly, I'm
a capitalist, right.

Speaker 1 (33:50):
If you're fram yeah, if you frame him from the Chinese,
I think you're framing us from the Chinese perspective. I'm
actually yeah, on my side of it, I would I
say that's a great game.

Speaker 2 (33:58):
But the great game is different.

Speaker 1 (34:00):
I just I have the different frame, which is that
the real empire never ended, and they're the ones don't
want to watch anybody actually get their independence. And that
means and those independent actors are America, Russian, and China.
That the British and the old Anglo Dutch, British, Venetian
whatever you want to call it, the Davos, the High Table.

Speaker 2 (34:19):
I don't get it. Damn could pick a pick a pick.

Speaker 1 (34:21):
A metaphor that works for you, and you know, sprinkle
with with oh my god, all the evil.

Speaker 2 (34:27):
Jews that you want, I don't care.

Speaker 1 (34:30):
That is the actual game, and everybody else is trying
to get out from underneath that system. And what you're
actually watching today is not China in the United States
at Loggerheads, but China and the United States trying to
define and the Russians as well, trying to define where
they agree, where they disagree, and how they can work

(34:50):
together to get rid of the ship bags in Europe.
Who are you know, who are literally trying to start
World War three amongst every everybody and then come to
a Dayton later on. I've been I think there's a
Yaulta too in the future that has America, Russian in China,

(35:12):
and we're seeing the beginning of that with how everyone
has now said, yep, Europe, you get to stay out
of the negotiations over Ukraine. We don't want you here.
The Russians have said it, the Americans are saying it,
the Chinese are saying it. And that's a very very
very big tell.

Speaker 3 (35:28):
I mean, I don't think Europe could have played this
any worse if they had tried. I mean they I mean,
it's just it's just incredible. It's just incredible. But you
know something you said. It made me think of something
that I think is equally important. And I think I
think a lot of people are of the belief that
the United States wants to divorce itself from China, and

(35:48):
that listen, that is true. But China wants to divorce
itself from the United States as well. And if you
look at some of the moves they've been doing over
the last ten years, that's pretty clear. It's not like
the United States arted this right. This is kind of
a mutual divorce. Both sides agree that we are going
our separate ways. The question is is it going to
be amicable or is it going to be confrontational. And

(36:12):
each side is trying to get all their ducks in
a row to where if it does get confrontational, they
come out on top. But I don't think anybody wants
a war, most of all Trump. And here's the thing,
and I may have said this on the last episode,
but I'm going to say it because I think this
is important to understand. If you put yourself in Trumps,

(36:32):
what does Trump want more than anything in the world.
Is he wants his face on the front of the
New York Times saying what a great job he is doing.
Lording over a global economy that's booming. That's number one.
And the second thing he wants is his face on
Mount Rushmore. Those are his two biggest goals, right, And
you can't get your head on Mount Rushmore if China

(36:56):
usurps you while you are the president, and you can
to get your face on the front page of the
Wall Street Journal in New York Times saying what a
great business guy you are and what a great deal
maker you are if we're in the middle of a
global financial crisis, because those two things don't square. So
his challenge is, how do you create a booming economy

(37:16):
while you keep China in a box? That is really
really hard to do. It's really hard to do. If
he just wanted to crush China, probably could have already
done it, but that would have had huge blowback on
the United States and we would have been in a
recession that probably would have led to some kind of
military conflict in its own right. So it's not as

(37:36):
simple as just wanting to beat China. It's wanting China
not because if China collapses, that's going to be a
nightmare for the whole world.

Speaker 2 (37:45):
That will be a.

Speaker 3 (37:47):
Nightmare for the whole world, just like if the United
States collapses, it will be a nightmare for the whole world.
The idea that the US is going to go into
this big recession and the rest of the world is
going to be just fine and trade amongst themselves is
amongst the dumbest ideas I've ever heard.

Speaker 2 (38:01):
In my life.

Speaker 3 (38:02):
It's it's just that's not how it works. But similarly,
China is not gonna you know, we're not gonna have
a crap. We're not gonna have a collapse in China
and the rest of the world goes along. It's merriway. Either,
that's going to be a disaster as well. So so
so when you when you think about it from that perspective,
you've got these big guys in the sandbox trying to
knock the other guy out of the sandbox, or at

(38:22):
least control most of the sandbox. And you know, I
think it's in this I'm bringing this back to my
belief that the dollar is going to remain dominant. That
doesn't mean that the rest of the world will always
continue to use dollars at the same level they currently are.

(38:43):
It would not surprise me at all, if we go
from a globalized world to a very regionalized world, and
within those regions, maybe there's a currency that's the dominant
currency in that region other than the dollar. But I
do not believe there will be any currency on a
global basis that comes anywhere close to the United States dollar.
But it doesn't mean that we will become a completely

(39:06):
dollarized world either. I do think that the rise of
these stable coins will make it more difficult for the
rest of the world to dedollarize, and in fact, I
think much of it will become dollarized, especially the small
and developing countries. But the bigger countries, the stronger countries,

(39:26):
the countries that have more of their own resources, whether
it's Russia or China or you know, Japan or some
of them that are more developed and perhaps are more
authoritarian and can better control their own citizens, will be
able to fight against the US dollar stable coins than
other countries will be able to. But I think we're

(39:48):
going to a more fractured world, not a more centralized world.

Speaker 2 (39:52):
So I think so.

Speaker 3 (39:53):
In other words, I think the world on a whole
becomes decentralized, but within those pockets, I think it becomes
more centralized because I think think authoritarianism will rise in
each of those pockets.

Speaker 2 (40:04):
Now that's a that's a fair assessment.

Speaker 1 (40:05):
It almost has to uh, we we're gonna the world
is going tribal, like in a big in a big sense,
the world is going tribal. And the I the way
I prefer to look at it, there's somebody still trying
to like control the sandbox. And I'm telling you it's
still your It's Europe in the in City London, the Russians,

(40:27):
the Chinese, the Russians to a westper ecent. But the
Chinese and the Americans are literally saying, look, okay, this
is our part of the sandbox, this is your part
of the sandbox, and you know, let's let's leave it.
Let's leave it at that. And this is when you
start really thinking about there's a there's a multi variant
problem here is that this isn't a two player game.
This isn't you know, one team versus the other. This

(40:48):
is a five to sixty seven player game, or at
least a a two player game or three player game
being played in seven or eight different dimensions.

Speaker 2 (40:55):
This is the biggest problem.

Speaker 1 (40:56):
And of course, now people will say there's a long
ago playing twenty four chess again like he always does. Well.

Speaker 2 (41:01):
Unfortunately, folks, it's a twenty four d fucking world. And
that's just the way it works. Whether you like it.

Speaker 1 (41:06):
That doesn't matter whether you like it or not, whether
you think it's it should be simple or not, it
doesn't work.

Speaker 2 (41:10):
It doesn't work that way.

Speaker 1 (41:12):
So you have Trump fighting multiple wars here when you're
your point about no one wants a war, Well, you're
in a war. That war's financial, that wars cultural, that
wars political, That war is geopolitical. It's in the intelligence
agencies versus civilian government.

Speaker 2 (41:27):
We have.

Speaker 1 (41:28):
I mean, we're doing this on December second, and I'm
literally sitting here watching our CIA going to open revolt
against the civilian government to try and undermine the military
because because the civilian government and the military are trying
to take out their base in Venezuela, of their base

(41:48):
of operations with the drug trade in Venezuela, which everybody
with five brain cells are up together to make a
spark knows that.

Speaker 2 (41:55):
That's what's been going on since the nineteen eighties.

Speaker 1 (41:57):
Yeah, and now we're watching CIA assets literally call for
insurrection against the against the government.

Speaker 3 (42:05):
And it's pretty crazy, right, It's it's pretty fast, it's
it's it's fascinating on so many levels. I mean, it's
just great. But you know, you just touched on something.
And again, it doesn't matter really who's well for the
point I'm going to make, it doesn't matter who is
running the drugs. One thing I would say is for

(42:27):
people who think that the United States can no longer
do anything and no longer accomplish anything, and they're run
by a bunch of idiots who couldn't manage their way
out of a paper bag. The US knows where every
narco lives. They know where their moms and dads live,
they know where their girlfriends live. They know the airports

(42:49):
in the jungle, the runways that the planes take off from,
they know the marinas that the boats leave from. They
have it all mapped out. And anybody who thinks that
they don't is be night. Now, that doesn't mean that
the US knows everything, and it doesn't mean that the
narcos and the you know, the groups running those can't

(43:10):
have some success. But the idea that this is just
a random thing and the the US is just blowing
up random boats and they really have no idea who's
in them? I mean, you're you're, you're, you're being crazy,
I used to say.

Speaker 1 (43:26):
I used to say, during the during the during the
Rise of Isis back in twenty fifteen. Ran Paul, by
the Way used to used to like, like, go into this,
these flights of fantasy.

Speaker 2 (43:35):
We can't stop Isis. I'm like, are you kidding me?
We can read the icense plates from space.

Speaker 1 (43:39):
And we can't find a bunch of a bunch of
guys running around the desert and Toyota highlexes with thirty
millimeters cannons on the back of the Yeah, thirty milimeters
like bull bullshit, Like you're like, that's nonsense.

Speaker 2 (43:49):
Of course we can see them.

Speaker 1 (43:51):
Of course, now you have to ask yourself why they're
being allowed to run around out there.

Speaker 2 (43:55):
And then, and that's a question no one wants answered.

Speaker 3 (44:00):
And that's a totally different question. But the idea that
that that the US.

Speaker 2 (44:03):
Is just.

Speaker 3 (44:05):
Blind here and doesn't really know what they're doing. I mean,
good real ship.

Speaker 1 (44:10):
In one hand, wishing the other which one fills up first? Right,
you know, I gotta get it to them.

Speaker 3 (44:15):
Well, this is what's funny to me about it is
on the one hand. People on the one hand, people
will tell me that the people in charge of a
bunch of idiots that have no idea what they're doing.
And on the other hand, they'll say they created a
system that enslaved the entire world and nobody even realizes
they're doing it. Well, now, which is it?

Speaker 2 (44:30):
Right? Right?

Speaker 3 (44:32):
Take you take your pick, because it doesn't go both ways.

Speaker 1 (44:34):
Right well, And yeah, you will see that. You will
see that on on Twitter, like literally in the same tweet. Yeah,
I mean you'll see the cognitive this in the same tweet.
This is what's interesting is one of the things that
I want to bring up here is that, you know,
one of the things that we have to realize is that.

Speaker 2 (44:52):
We live in and this.

Speaker 1 (44:53):
Is not just an It's obviously it's an informational war.
And now we're fighting at the generational war. That's purely
this film is purely informational. And the question you have
to ask yourself now is are you falling for the
myth of the omnipotent law or omnipotent ass I've been
like making this point for a while now, and that's
the myth that you know, these people are all powerful.
It doesn't matter, if it doesn't matter who it is.

(45:14):
Right in my case it's the all powerful city of London,
and somebody else's case it's the all powerful Jews, or
the or the tech bros or this or then none.

Speaker 2 (45:22):
Of that is true.

Speaker 1 (45:24):
It's all the omnipotent in anything other than possibly God,
depending on your your cosmology, is pretty much energetically unsustainable.

Speaker 3 (45:35):
Well not only that, but within those groups, whichever group
it is that you think is running things within that group,
there are battles, right, Yes, there's two sides to the
deep State. There's two sides to the High Table. There's
two sides to the US government. There's two sides to
the Chinese government, Like there are factions within factions within factions. Yes,

(45:57):
And so when people say this is what the Chinese
are thinking, I was just kind of laughed to myself.
I was like, well, okay, right now, now, now, now,
yesterday you were an expert on weather, and now you're
an expert on what the Chinese are thinking.

Speaker 2 (46:08):
Good, good for you.

Speaker 1 (46:09):
Right, Well they sided that everybody stayed at a holiday
and expressed last night, right, So yeah, right, is that
a classic?

Speaker 2 (46:14):
And this is the classic thing? And what you what
you what you find.

Speaker 1 (46:17):
Is, of course they seed into the zeitgeist the information
that they want you to to parrot and to come
back to so that they can newly mint virologists and
and geopolitical analysts and all the rest of it. And
it's like, oh, really, how about No, the world is
a lot more complicated than anybody wants to admit. I
was doing this for example in you know, it's like

(46:38):
Israel's on a monolith, the Ron's on a model. So
during the during the Twelve Day War, I kept like
the guys, you have to realize that there's multiple factions
within the Israeli government, or they wouldn't be changing governments
every eighteen months. And then there's there are factions, you know,
within the power structure in Iran that mapped a different
two different influences, some of some of which are French,

(46:58):
some of which are British, some of which are native Iranian,
some of which are you know, you know, some that
we've some of which I can't even I can't even map.
And so once you realize that none of these things
are monoliths, then you realize that the world is. It
becomes a question not of is Iran going to do
ex It's more a question of which faction within Iran

(47:19):
is dominant or which faction within Iran just got their
assets handed to them. And that's the questions you should
be asking yourself.

Speaker 3 (47:27):
Well, and I want to make this point too, because
I think this is also important to understand that for
anybody who is listening to this and thinking what does
this have to do with finance, you know, ten or
fifteen years ago, I may have agreed with you this
is all like secondary stuff that isn't as important. Let's
get back to the hardcore numbers. But because of that

(47:48):
pendulum that I talked about earlier, this stuff is important,
and this stuff is going to increasingly not only impact markets,
it is going to make hardcore decisions within those markets
of what happens. And as much as I would like
to ignore this nonsense, I don't have that luxury, and
I think if you are an investor allocating your capital,

(48:10):
I would suggest that you don't have that luxury either,
and so you do have to think about these kind
of things.

Speaker 2 (48:15):
I agree.

Speaker 1 (48:15):
It's like I got into this, you know, as as
an amateur, right as an amateur gold bug, and so
I would get up every morning and I watch the
price of gold, and I get and I get up
in the morning and they drop bomb at twenty bucks,
and I get angry, and then my whole day was
ruined and blah blah, blah blah. And I realized after
a while that I was watching the most politicized market

(48:36):
in the world. And so certainly twenty certainly twenty years ago.
Whether it is still is or not is a different story, right,
But certainly twenty years ago, the gold market was the
lynchpin to the all of the things that we were
dealing with. And once you have that realization, you're like, well,
now you have to take pay attention to politics, what's
driving people to do X, Y and z.

Speaker 2 (48:57):
And so slowly I didn't.

Speaker 1 (48:59):
Become this version of me today that exists because I
always wanted to be this guy. I became like you,
it's a journey. You started here and I wanted to
worry the journey X and then you go and you
keep going until you get to the and you know,
as a you know, I'm a former scientist, and at
the end of the day, I'm a former I'm a
former research and process chemist. And like you do root

(49:23):
cause analysis, and you know, once you're doing art, once
you're doing root cause analysis, and you have to actually,
you know, write cars, you have to write corrective.

Speaker 2 (49:31):
Action reports, you have to do all this stuff.

Speaker 1 (49:33):
You have to find the variable that is going to,
you know, be the most the biggest driver of change.
And once you understand that model, you can apply it anywhere.
And this is where, this is why I am where
I am today. I hear from now I maybe in
a different place.

Speaker 3 (49:50):
Overall, my overall framework for looking at the world hasn't
really changed in six or seven years. The framework that
I've used has really kind of hel to me to
understand what's going on. It doesn't mean I've gotten everything right.
I'm not sitting here saying that. But for the most part,
it's it's it's been accurate, and it's helped me navigate
all the ins and outs. But it doesn't mean that

(50:12):
new things don't develop. Like you know, like I said,
three or four years ago, or really two or three
times of the last ten years, I took a look
at these stable coins and kind of dismissed them. But
this last time I looked at them, my mind kind
of changed, right, Because as things change, you kind of
have to take these changes. And I think the world
is going to change a lot over the next five

(50:32):
or ten years, right, I mean I think that that.
I don't think that's a crazy statement to make, and
I think most people would agree. But and it doesn't
mean that just because every time you see a new headline,
you need to change your whole framework. You know, it's
good to have a framework. It's good to have a
roadmap because then it helps you keep on track and

(50:52):
not get distracted by every headline. But sometimes when a
material change takes place, you have to at least in
or brate that into your your framework. Right. You can't
ignore it just just for the sake of staying on
your lane or following your map, or.

Speaker 1 (51:10):
Just being on autopilot. And this is and and I
will be I will be honest with you. I remember,
you know, I've told the story before when I first
went to work for Newsmax writing a goldstock advisor and
and then we rebranded or whatever. But I was sitting
there with a version of the world in my head,
and I was analyzing the world that way, and it

(51:30):
wasn't working. It was in the middle of the gold
bear market. It was twenty thirteen, twenty fourteen, twenty fifteen,
and it wasn't what.

Speaker 3 (51:35):
I was kind of going through the same thing.

Speaker 2 (51:36):
So, right, we were all kind of going to the right.

Speaker 1 (51:38):
And then one day but I was, but I was
moving into the geopolitics.

Speaker 2 (51:42):
Right. I had already done that.

Speaker 1 (51:44):
I mean, I already covered the Russian the Russian ruble
crisis and all that stuff that was happening. But so
I was moving in that right in the in the
right direction. But at some point I went, this is
not working. My dollar bear theory, my this theory, all
of that that stuff working, and you're eventually just going
to have to look in the mirror and go, well,
do you want to be right or do you want.

Speaker 2 (52:05):
To have a job? Oh?

Speaker 3 (52:06):
Exactly?

Speaker 2 (52:08):
And I went, I kind of want to have a job.

Speaker 1 (52:11):
Already did the two years of grinding unemployment, trying to
change careers.

Speaker 2 (52:15):
Don't want to do that again.

Speaker 1 (52:16):
So yeah, So I mean this is one of those
things where you have to be willing to you know,
the goal with all of our frameworks is to get
to a point where that frame, where the core of
it is so strong that you can that you're you're
only shifting for you know, you're only moving the focus
four or five degrees, it's both a thirty or forty

(52:37):
or fifty degrees, you know, looking at different directions, and
you're you're you're trying to just nail it down, and
then the world becomes a lot more predictable. That's not
to say that it's not also going to change in
ways that are to surprise you, because it will, right
and when it does, that's when you look up and
you go, WHOA, that one's new, and you can but
you can see them a lot easier if you have

(52:59):
a really strong I think if you have a really
strong framework, and this one that's a little flexible, but
still you know, if you know who the bad guys are,
you know who the good guys are, and you understand
you've mapped everybody's incentive as well, and you've done it
honestly from their perspective, and you've been honest about their incentives,
then it's pretty easy to figure out what their next
moves are going to be and then we see if

(53:21):
they if they act in accordance to that or not.

Speaker 3 (53:24):
Well, so one of the things you know somewhat related
to what we're talking about, and I actually think this
is a material development, I guess is the right way
to say. It doesn't change my overall thesis and it
does not change my framework, but it is something that
I think is important to understand, and that is, you know,

(53:45):
related towards you know, no longer just penciling things out
on a spreadsheet. Understanding that politics and geopolitics and national
interests are going to trump part in the pun, you know,
the economics of a project. The United States. I think
there is a lot of people. First of all, I

(54:05):
know there are because I hear from them all the
time on social media, and when I go to conferences,
everybody's always telling me that I need to kind of
wake up and realize that the United States best days
are behind it. And it's just, you know, it's a
slow spiral now, but it's going to pick up into
a fast spiral into you know, a heap of ashes.
And what I've always tried to say is listen, that

(54:29):
may eventually happen. I cannot rule that out, and I
have to be open to that possibility. But despite all
its flaws and despite all the mistakes it's made, it
still owns the best piece of real estate in the world.
It still has incredible resources and assets that the rest
of the world just doesn't have. It has. The system

(54:52):
that currently exists was set up to favor the United States.
You could even go so far as to say it
is rigged in favor of the United States. Now, that
doesn't guarantee that the US will always quote unquote when,
and it doesn't mean that things will always go well.
But the point is that if you're going to bet
against them, just really understand what it is you're betting against,

(55:14):
and who it is you're betting against, and the challenge
that you are up against. In other words, if you're
going to storm the castle walls and have a revolution,
at least know how high they are and how thick
they are. Right, don't delude yourself that it's made of
paper and you can just run through them. And along
these lines, I think if we go back to the

(55:37):
you know, the point we were making about when COVID
hit and it showed in starking, stark clarity the dependence
that the United States had on China for certain needs, inputs, commodities,
whatever you want to call them, and then that prompted
the US to do a bigger analysis from a national

(55:57):
security perspective, and you realize how much of our needed
inputs come from China or you know, countries that are
quote unquote adversarial to the United States. It showed again
in glaring detail what a problem we have. And one
of the most bipartisan things in Washington. Listen, Washington has

(56:21):
probably never been more divided than it is now. But
one of the very few things that they agree on
is that the US needs to be self sufficient, or
at least much more self sufficient than they are now.
And Trump's Big Beautiful Bill is part of that. That is,
for lack of a better way of saying, that the
American manufacturing and industrial renaissance, where he wants to bring

(56:46):
industry back to United States, higher paying jobs, become more
self sufficient, produce things here, buy things here, and export things.

Speaker 2 (56:54):
You know.

Speaker 3 (56:54):
That's all part of the Big Beautiful Bill.

Speaker 2 (56:57):
But part of the.

Speaker 3 (57:00):
Funding of that, and that Big Beautiful Bill is like
four billion dollars four trillion dollars over a ten year
period or something. Part of the funding of that Big
Beautiful Bill went to a somewhat unknown department in the Pentagon,
which is now known as the Department of War, and
by the way, the fact that they changed it to
the Department of War should give you a little bit

(57:22):
of hint as to how seriously they are taking this.
And I say that jokingly, but like, seriously, why do
you think they changed it just for the hell of it.
Probably not, So that's how serious they're taking this. And
so there's an out there there. There's a department in
the Pentagon called the Office of Strategic Capital. Now this
was actually created under Biden. I can't remember if it

(57:44):
was late twenty one or early twenty two that this
was created. And it's an office that is supposed to
kind of spearhead the US solution to being too dependent
on other countries from a national security perspective. There's more
to it in that, but in essence, that's what it
is about. Now Trump has not only embraced that, he

(58:06):
has accelerated it and gave it additional funding through the
Big Beautiful Bill. The person he put in charge of
it is named Jeff Feinberg is I always forget his
first I don't know if it's Jeff or it's Keith,
but his last name is Feinberg. And the reason that's
important is this is not a typical government bureaucrat. It's
not a you know, career military leader who has never

(58:27):
set foot in a you know, Wall Street boardroom or
has never done a business deal. Feinberg is the founder
and chairman of Cerberus Group, which is one of the
biggest and most successful private equity firms in history. And
he has made billions and billions of dollars for not
only himself but all of his clients. And he has
he has himself sat on many different presidential advisory boards

(58:48):
and think tanks, and he's been involved in numerous you know,
infrastructure products or projects and you know defense contractors. So
this is a guy who knows his way around not
only washing Hington, but American industry and global industry. I
should say this guy hates losing money. The last thing
he wants to do is just you know, hand a

(59:10):
billion dollars to somebody and let it go to their
you know, uncle or aunt or something. And I think
that's important because most government run projects are run by
career bureaucrats, not business people. The Office of Strategic Capital
is a hybrid model public and private. So he put
a very Trump put a very successful private industry guy

(59:32):
into headit. So when you've seen these things about the
United States buying a stake in Intel, or when they
made a one hundred and fifty one hundred and fifty
million dollar investment in MP Materials, which is a rare
earth company in California. That is the Office of Strategic
Capital coordinating that. Now they're probably not listed in the papers,
and Feineberg's probably not going to have his picture there

(59:54):
because he's kind of notoriously private. But that's who's behind
this so again, and in his job, they have the
Office of Strategic Capital has identified a number of industries
and specific sectors and critical minerals that they have specifically
targeted for the government to help develop and innovate in

(01:00:18):
those industries, because developing those industries will make the United
States at least more independent than they currently are. And
I can't tell you that this is going to be
perfectly successful. I am sure something will go wrong along
the way, but they are going to throw several hundred

(01:00:40):
billion dollars at this. The Office of Strategic Capital has
Feinberg running, and he is able to coordinate resources from
the Department of Energy, the US Treasury, the Small Business Administration,
the Commerce Department, and the list goes on and on
and on. So again, if you think the US is
going to just automatically fail, realize who you are up against.

(01:01:03):
You are up against the Pentagon, You're up against the
US Treasury Department, You're against the Commerce Department, the Department
of Energy. These are the biggest players in the world,
and they are going to do whatever. They are viewing
this as the twenty first century Manhattan Project. This is
solving this problem. Is a race. It's a race against China,

(01:01:26):
and China is trying to solve this as well. They're
trying to be independent of everybody else as well. And
it is a race, and whoever wins the race will
probably dominate the world for the next thirty, forty, fifty
sixty years. So I don't know for sure who's gonna
win this race. But what I do know is the
United States isn't gonna decide not to run. They are

(01:01:47):
gonna run, and they are going to run to win.
And the other thing is the money is then gonna
go to the small and medium sized businesses that are
trying to develop. So if you're betting against the United
States and this endeavor, you're not a betting against you
know a career senator, You know in d C, you're
betting against the people working in those factories and in

(01:02:10):
those jobs and in those startups. Those are your average
Americans that are doing that. So those are the people
you're betting against. And again, I don't know for sure
who's going to win, but to say that they're automatically
going to lose, I think is crazy. And I think
anybody that sits in my position and is looking at
a play how to allocate capital, allocating capital in the

(01:02:35):
United States to these industries that are going to have
this huge tailwind behind them. Whether it's critical minerals, whether
it's natural resources, whether it's important technology, whether it's defense contractors.
There is a wave coming of liquidity to those sectors.
And I think it's an a to me. It's one
of the biggest opportunities investment opportunities I've seen in twenty

(01:02:57):
five years of doing this. Now again, I don't necessarily
like that the government is getting involved here, but I
do like that it's not just coming from government bureaucrats.
I like it that that they're part Oh I didn't
say Feinberg is running it, but he is going to
partner with private investment managers who are going to put
up their own capital, and their own capital is going

(01:03:19):
to get invested in these arenas, and then the government
is going to match it. So again it's kind of
a hybrid between government funding and private market funding. But
you know, when I when I look at this, I
just think about, you know, what's the likelihood that none
of it succeeds. I think that's pretty low, right, And

(01:03:39):
so when you're when when when the US sees something
as an existential issue and they are going to throw
all of their resources behind it, even if they are
slightly successful, it has the potential to provide enormous opportunity.
And so from that perspective, that kind of stays with

(01:04:02):
my overall thesis. If I want to be invested in
the US versus the rest of the world, and and
that's going to kind of roll out. We have a
way to access that. It's only available to accredited investors.
But it's kind of exciting, and you know, it's it's
going to be interesting to see how this goes. But
the point the point of this is this goes back
to the not everything is going to pencil out perfectly

(01:04:23):
on a spreadsheet anymore. Uh, and there's going to be
bigger forces at play that are going to determine whether
or not something succeeds or fails, and I think this
is a perfect example of that. I kind of went
off on a long tangent there, but that's that's just
something I'm seeing right now.

Speaker 1 (01:04:40):
No, you didn't. That's a perfect way to end the podcast.
As a matter of fact, mister Johnson, I really do
appreciate that one because that was important, and I don't
really think I have anything to add to other than
I can see some historical residents do it, but I've
already kind of mentioned them. So with that said, Brent,
I mean you've got a hard stop.

Speaker 2 (01:04:57):
Let's do it. Tell people thanks for having all about
I'm all happy. Yeah.

Speaker 3 (01:05:01):
So you can go to our web if you want
to contact us. We have a website to Santiagocapital dot com.
It's got a lot of information on there. If you
go to research dot santiagocapital dot com, that is our
our research offering. We've got a couple different levels there
that you can sign up. We typically write about the
intersection of capital markets, geopolitics, and the madness of crowds,

(01:05:22):
and then I'm pretty active on x as you know,
ex or Twitter just Santiago Capital. It's the White Seashell
and I love mixing it up on there. So anyway,
I appreciate you, hav It, I appreciate you having me on.
It's always fun talking to you.

Speaker 1 (01:05:36):
Absolutely, Thank you, Brent as always on TfL seventeen twenty eight.
Uh patron sbash gold ghats guns, which is how we
pay the bills. So you guys be well, you take care,
we'll talk soon.

Speaker 2 (01:05:45):
You stick on the ice.

Speaker 1 (01:06:01):
Rapia Mai