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We got lots of questions on WHAT TO DO about this outlook. Let me know in the comments if you want a Round Two interview on how to size up this new dollar system!
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The post-WWII dollar-based free trade system is structurally unsustainable and will inevitably collapse; Trump's turn toward mercantilism and economic statecraft represents an attempt to manage this systemic transition and rebuild American industrial capacity before military and political decline becomes irreversible.
- The current dollar system requires perpetual US trade deficits to distribute dollars globally, which forces de-industrialization, inequality, and political polarization within America—making it politically unsustainable
- Adam Smith and David Ricardo both provided intellectual caveats showing free trade fails when capital is mobile and comparative advantage collapses—caveats that are systematically omitted from economic teaching
- Trump's policies represent not a cause but a symptom of deeper historical forces; the system was always going to fail politically, socioeconomically, and militarily due to accumulated contradictions
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Adam Smith argued against running trade surpluses but made explicit exceptions for national security, saying countries should tax others and subsidize domestic production of goods critical to defense—a position that contradicts how free trade doctrine is taught in modern economics.
“Adam Smith mentions that as ensuring that no one rich would ever invest abroad because patriotism would ensure their money would always stay close to home where it could circulate. Do you get taught that in economics school? Bet you don't. That's what Adam Smith preached. So he argued mechantalism wasn't needed anymore. This running a trade surplus, trying to control trade, trying to manage your economy shouldn't do it. But he gave you an intellectual caveat where he said actually you can do it for this and you can do it for that and you can do it for this.”
David Ricardo's theory of comparative advantage assumes balanced trade and breaks down if mobile international capital is present—a caveat Ricardo himself stated explicitly but which is omitted from modern economics teaching because it would explain current inequality and manufacturing decline.
“Here's the caveat. First of all, every model he proposed of this had trade clearing. So you would swap x amount of cloth, x amount of port, alcohol, between the two countries and everyone's better off. Isn't that balanced trade? Yes. Do we ever have balanced trade? No...And Ricardo himself wrote with clarity, by the way, my model has a caveat. It doesn't work if you have mobile international capital...if you can take money and knowhow and machinery and take it from country A and put it in country B, then his theory of comparative advantage doesn't work. It breaks down...What does that describe? That describes exactly what we see today.”
The dollar-based global financial system was set up following US victory in World War II and consolidation during the Cold War, predicated on the US running perpetual trade deficits to ensure other nations could obtain dollars needed for international commerce.
“that system was set up a as I always argue as a result of US victory in World War II. people tend to forget a lot of violence created it and then the US victory in the cold war which basically created the platform for for globalization and on top of that it was created by a US strategy of saying okay we'll run trade deficits with the rest of the world in perpetuity to ensure that they can get hold of the dollars they need for a dollar system abroad because you can't have a dollar system without dollars.”
The neoclassicalists experimented with free trade for decades but found that developed industrial countries could conquer others and force them into raw material production, preventing industrialization by either military force or dumping goods below cost—making development impossible without protective barriers.
“So the neochanalists knew their ancient history. They'd read Smith. They'd read Ricardo and they'd tried to experiment with free trade for decades because these arguments took a while to win. But eventually they won and they started to be embraced in most economies...And guess what they found out? All the developed countries, the ones with industry, had the best weaponry. And they went around the world conquering everybody else and insisting you can only sell us raw materials cheap. And anytime you try and build up an industry, we'll blow it up.”
Post-World War II, America broke from its own mercantilist tradition and adopted free trade, but constrained capital mobility while allowing goods trade for 30 years, producing a boom in the West—then after Cold War victory, removed all constraints and repeated every mistake of the past.
“post World War II, for the first time ever, America says, Let's try something different. Because America had been mechanalist from day one...America says let's try free trade. Let's create a world where going back to where I began, not the communists...So a third of the world is out. A third of the world is what we call the non-align movement...But everyone else, let's have free trade. But we won't have free movement of capital. Capital stays locked down but goods can be exchanged. What do we have? We have 30 years of boom in west...Now I won't go through all the economic history of what happened and when and how how eventually it collapsed. But the long and the short of it is that we got to the cold war which America won with Western allies and then said, Right, let's let it rip. Let's have this free trade everywhere.”
The US dollar-based global financial system was set up as a result of US victory in World War II and US victory in the Cold War, which created the platform for globalization, and was deliberately structured by the US strategy of running trade deficits in perpetuity to ensure other countries could obtain the dollars needed for a functioning dollar system.
“that system was set up a as I always argue as a result of US victory in World War II... and then the US victory in the cold war which basically created the platform for for globalization and on top of that it was created by a US strategy of saying okay we'll run trade deficits with the rest of the world in perpetuity to ensure that they can get hold of the dollars they need for a dollar system abroad because you can't have a dollar system without dollars.”
Mercantilism historically emerged from the reality that trade and control of goods (especially grain) was critical to survival and statecraft; leaders had to manage trade carefully and tax it to ensure their people did not starve.
“if you go back to the earliest recorded history all the leaders whether it's in ancient China ancient India ancient Greece were talking about the fact that trade was life effectively the flow of goods particularly agricultural goods like grain was critical uh and you had to manage it very carefully otherwise your people starved um and you had to make absolutely certain that the economy was sound based on controlling trade rather than just saying hey you guys do whatever”
The post-WWII dollar system was created as a result of US victory in WWII and consolidation through Cold War victory, and people tend to underestimate the role of 'a lot of violence' in creating that system, which suggests that changing it will necessarily involve disruption and cannot be achieved through consensus.
“that system was set up a as I always argue as a result of US victory in World War II. people tend to forget a lot of violence created it and then the US victory in the cold war which basically created the platform for for globalization”
In classical mercantilism, silver (not gold, which was too rare) was seen as actual wealth, and countries realized they had to run positive trade balances because in a zero-sum world of warring states, positive trade surpluses provided the metal and money needed to buy weaponry and pay mercenaries for defense.
“And classical mechanalism was based around the fact that people were trying to hoard silver. People talk about gold today because that's kind of where the action is. They weren't hoarding gold in those days. It was too rare. It was silver mainly first of all and the actual metal itself was seen as wealth. Everything else was not seen as wealth even though it was food you were eating and was most important wealth was stored as silver and as I said at the margin gold countries realized that in a very very very zero sum world because Europe was filled with lots of little political pockets and citystates and duchies and many kingdoms all of who were at war with each other all the time. If you didn't run a positive balance of trade and have money flowing into your pockets, you couldn't afford to buy weaponry to defend yourself.”
Classical mercantilism in medieval and early modern Europe was based on hoarding silver (not gold, which was too rare) because metal itself was considered the only store of wealth, creating zero-sum competition where running a trade surplus was existential because trade deficits meant money flowed out and the economy collapsed.
“classical mechanalism was based around the fact that people were trying to hoard silver. People talk about gold today because that's kind of where the action is. They weren't hoarding gold in those days. It was too rare. It was silver mainly first of all and the actual metal itself was seen as wealth. Everything else was not seen as wealth even though it was food you were eating and was most important wealth was stored as silver and as I said at the margin gold countries realized that in a very very very zero sum world because Europe was filled with lots of little political pockets and citystates and duchies and many kingdoms all of who were at war with each other all the time. If you didn't run a positive balance of trade and have money flowing into your pockets, you couldn't afford to buy weaponry to defend yourself.”
If America had followed Austrian school libertarian advice at independence, it would still be a farm because it had perfect comparative advantage in farming; Britain wanted America to remain agricultural and never would have allowed American industrialization through free trade.
“if America had followed that advice at independence I can guarantee you'd still be a farm. There's no reason for you to have industrialized because you had perfect comparative advantage to go back to that term in farming. Look at all the land you had. That's what the Brits wanted you to remain doing uh you know even after independence. No, just keep growing stuff. Sell us the food. We make all the stuff already like China does today.”
America would never have industrialized if it had followed pure Austrian economics because it had perfect comparative advantage in farming; instead, it used deliberate policy to build domestic industry, making mercantilism necessary for development.
“the first one is this if America had followed that advice at independence I can guarantee you'd still be a farm. There's no reason for you to have industrialized because you had perfect comparative advantage to go back to that term in farming. Look at all the land you had. That's what the Brits wanted you to remain doing uh you know even after independence. No, just keep growing stuff. Sell us the food. We make all the stuff already like China does today. Don't rock the boat. You don't need to make ships. You don't need to make anything. Just just grow food. So the Austrians never have a good argument there about why you would have seen industry come in into the US and make it the country it is today because I can assure you you wouldn't”
Adam Smith, despite advocating specialization of labor and production over precious metals hoarding, explicitly endorsed exceptions to free trade for national security: he argued countries should not rely on foreigners for national security goods and should use tariffs and subsidies to protect infant industries.
“Except that he made exceptions for national security. He very very clearly said if you have a company that makes things for national security at home, you shouldn't rely on foreigners for that. Absolutely you shouldn't. So you should tax everyone else a bit more to make sure you can subsidize it at home. Well, that doesn't sound like Adam Smith, but it's what he said. Um, and he he also argued you could have uh tariffs to protect infant industry.”
The US has not benefited from the dollar system on net because it requires de-industrialization, loss of productive capacity, rising inequality, and debt accumulation, even though the exorbitant privilege of spending more than it earns appears attractive to financial actors who benefit from money lending.
“I'm surrounded by economists who don't understand that the US as a whole doesn't benefit from that system. They look at it as exorbitant privilege and there is privilege in it. You can spend more than you earn year after year. That happens. Everybody tries to sell you stuff and you just give them piece green pieces of paper. Sure, that's the traditional economic argument. Unfortunately, you have to de-industrialize and lose industry after industry as they're moved offshore in order to sell those goods to you because that's the only way the system can keep working. And that must necessarily come alongside greater inequality in the country.”
De-industrialization resulting from the post-WWII trade deficit system inevitably undermines military capacity because manufacturing capability is required to produce aircraft carriers, planes, missiles, and other military hardware in the volumes necessary to maintain hegemony against industrial rivals.
“if you de-industrialize for long enough and you polarize for long enough, you can't make aircraft carriers or planes or missiles or whatever you're talking about that you need militarily in the volumes necessary to compete with a rival economy that's specialized in production rather than financial markets which is what America has specialized in.”
The American population contains demographic groups who are unwilling to 'fight for' or support the system because of its domestic distributional failures; a military force without public support is fundamentally weakened.
“you have a population where more and more people say why should I fight for this? What's in it for me? you know, I've wrapped myself in the flag and I've come home and I'm a homeless veteran, etc., etc.”
Most people are unaware they are dealing with a dollar-based global financial system because they do not see it directly; they are only ever one or two steps removed from someone who is engaged in the system, meaning the entire world operates within it whether consciously or not.
“Most of us aren't aware that we're dealing with the dollar-based global financial system. Whenever I'm dealing with a client in any country around the world, um you know, if they import or export anything or borrow on international markets, they're in a dollar-based system and you're only ever one or two steps removed from someone who is. So, we're all in that system.”
Every central bank in the world can set interest rates higher or lower, but the Federal Reserve is the one that everyone must base their rates off of because of the dollar system, giving the US asymmetric monetary leverage over the global economy.
“And so the US allows them to earn them by selling to it and those dollars circulate. So that's how the system has been set up until now. And that's why every central bank in the world can set interest rates higher or lower. But the one we listen to is the Fed because that's the one that everyone else has to be based off of because of this dollar system.”
Schumpeter, a rigorous Austrian school economist, recanted his libertarian ideology late in life, arguing that freedom alone is insufficient; freedom combined with morality is necessary because people will otherwise take short-term self-interested actions that benefit themselves while harming the community.
“Shumpeta was a very religious man um you know to his benefit but in the last phase of his life he actually recanted his his ideological approach and he said I've argued my whole life he said that freedom is what allows people to create prosperity and that's still a very kind of American view but he said I've only realized now you need freedom and morality because otherwise you will do something which you have the freedom to do which benefits you and screws everybody else.”
Small countries like Singapore understand that 'when the elephants fight, the grass gets trampled,' meaning when major powers compete or conflict, smaller nations lose regardless of how they position themselves.
“and when you put them in comparison to China on the other side Everyone is small. Uh and as they say in that part of the world, when the elephants fight the grass gets trampled”
No country that benefits from the current system is smiling or doing well; most countries propping up America are aware they depend on its success, and if America collapses politically, economically, financially or militarily, other countries will be 'buried in the rubble' rather than thriving.
“There aren't many places that are really smiling and saying we're having a great time right now...a lot of them are doing better in an environment which is still propped up by America. And were America to fail in any number of different ways...None of these other countries are suddenly going to walk away wearing sunglasses. You're saying I, you know, they will absolutely be buried in the rubble as well. They're aware of it regardless of what they say.”
The system was always going to fail for political, socioeconomic, and military reasons; the confluence of de-industrialization, political polarization, and rising debt simultaneously undermines production capacity, political will, and military spending, creating a finite lifespan that was predictable.
“So, the system was always going to fail politically, socioeconomically, and militarily. It had a finite lifespan. And again, I've been predicting this for years, and now they all seem to have come together uh in a confluence at the same time.”
Within a globalized free trade world, inequality must rise as a necessary consequence of how international balance sheets work; economists discuss this but have historically swept it under the carpet rather than treating it as a structural feature requiring policy response.
“within this globalized free trade world inequality must rise. It it must they always talk about well yeah you'll have a balancing mechanism here or there. No you don't. No you can't. it must rise as a consequence of how the balance sheets work internationally.”
Trump is not the cause of systemic breakdown but the symptom; he's riding a tsunami rather than creating it, though he is now attempting to guide the flood waters in a direction he believes benefits the US.
“So Trump is not the tsunami. I don't believe he is actually kicking his legs and making the tsunami even bigger. So he is making that wave even higher. But he didn't start the tsunami. He's a symptom, not a cause. But he's now attempting to try and guide the, you know, the flood waters or the tsunami crashing on the beach in a certain direction that's beneficial for the US.”
Schumpeter, despite holding a purist Austrian view for most of his life, recanted late in life and argued that freedom alone is insufficient; you also need morality because otherwise people will do things that benefit them short-term while screwing everyone else, which is economically rational but unsustainable.
“Shumpeta was a very religious man um you know to his benefit but in the last phase of his life he actually recanted his his ideological approach and he said I've argued my whole life he said that freedom is what allows people to create prosperity and that's still a very kind of American view but he said I've only realized now you need freedom and morality because otherwise you will do something which you have the freedom to do which benefits you and screws everybody else. It's short- termist rather than long-term. It benefits you, it doesn't benefit your community. You cut down all the trees so you get rich and you do need denude the environment so there's nothing left there for the next generation. That's economically rational. There's a lot of that going along in the world in many different ways.”
America's advantage over other nations in navigating systemic collapse is its demonstrated flexibility and ability to reinvent itself rapidly—evidenced by its dramatic transformation every 4-8 years—while Europe, UK, and Asia are systemically constrained from rapid adaptation and thus face higher long-term risk despite current American dysfunction.
“When you have a global system that's failing and multiple things that are going wrong at once, it's a test for how flexible and pragmatic a society can be. which societies can reinvent themselves and rapidly to be a phoenix and rise from the ashes. And there I think many people would agree neutrally that the American example is one to look to...Where was America 12 years ago? Where was America 8 years ago? Where was it four years ago? Where is it today? Where do you think 48 12 years from now? Look in look at Europe, it's stuck. I mean the UK, it's stuck. uh Asia stuck.”
Most credentialed experts and policymakers respond to system collapse with inaction ('just carry on and do nothing because something will turn up'), but this approach has manifestly failed, and when offered critiques of this approach, they offer no alternative strategy ('not like this'), revealing they have no constructive vision.
“we are surrounded by a an echelon, a cohort of credentialed experts who think the answer is to just carry on and do nothing because, you know, they've done very well from the system...So, I think we can immediately dismiss that. We can dismiss all the people who decry what's happening today and say, 'Well, not like this.' And you say, 'Okay, so then like how?' And they never have an answer.”
A trade deficit would cause all money to flow out of a country and create real deflation, causing actual economic collapse; therefore, countries became obsessed with running trade surpluses to ensure money stayed within their borders.
“and the opposite would happen if you ran a trade deficit that all the money would flow out of your country and people would literally be going around saying there's no coin. We just don't have any coin. we can't pay creditors, no one can do business in the market. The actual economy started to collapse. Real deflation, which was which was crippling. So it wasn't just an economic crisis. It was existential.”
David Ricardo's theory of comparative advantage is mathematically correct but has a critical caveat: it assumes balanced trade and does not work when international capital is mobile; if capital can move between countries, the country with capital advantage will move all technology and money to cheaper locations, leaving other countries worse off than Ricardo's theory predicts.
“Here's the caveat. First of all, every model he proposed of this had trade clearing. So you would swap x amount of cloth, x amount of port, alcohol, between the two countries and everyone's better off. Isn't that balanced trade? Yes. Do we ever have balanced trade? No. For reasons we can come back to in a moment. So that doesn't happen in reality, only in theory. And Ricardo himself wrote with clarity, by the way, my model has a caveat. It doesn't work if you have mobile international capital. That's the caveat. So in other words, if you can take money and knowhow and machinery and take it from country A and put it in country B, then his theory of comparative advantage doesn't work. It breaks down. because he said, 'Well, everyone will immediately put all their technology and money in another country where it's cheaper and they'll be the only ones making everything and the other country, for example, England in this case, will be worse off and Portugal would be better off.' What does that describe? That describes exactly what we see today.”
After World War II, the US, which had been mercantilist from its founding through Alexander Hamilton, decided to try something different by adopting free trade with non-communist countries while keeping capital controls in place; this created 30 years of boom in the West because goods could flow but capital was constrained.
“Post World War II, for the first time ever, America says, 'Let's try something different.' Because America had been mechanalist from day one. From day one of independence, America was mechanist with Alexander Hamilton in particular as as the first Treasury Secretary and first meant America says let's try free trade. Let's create a world where going back to where I began, not the communists. We won't trade with the communists. They're out. So a third of the world is out. A third of the world is what we call the non-align movement. And they were they were pretty much not involved as well. But everyone else, let's have free trade. But we won't have free movement of capital. Capital stays locked down but goods can be exchanged. What do we have? We have 30 years of boom in west in the west in Australia, New Zealand, Western Europe. An incredible growth period and in America too.”
Any system you set up will eventually end; if it didn't, we would still be speaking Latin wearing a toga, meaning history happens and systems collapse inevitably.
“But the specific answer to that is it's going to end. It was always going to end. Any system you set up will eventually end. And again, if it didn't, you and I would be speaking Latin wearing a toga.”
Neoclassicalists learned from ancient history, read Smith and Ricardo, experimented with free trade for decades, but found that developed countries with industry and weapons went around the world conquering others and insisting they could only sell raw materials; whenever developing countries tried to build industries, developed countries either destroyed them physically or undercut them with below-cost goods until they went bankrupt.
“The neochanalists knew their ancient history. They'd read Smith. They'd read Ricardo and they'd tried to experiment with free trade for decades because these arguments took a while to win. But eventually they won and they started to be embraced in most economies. Not the US by the way. The US was an an exception to this. Then most of the rest of the world gave it a go. And they tried for a few decades. And guess what they found out? All the developed countries, the ones with industry, had the best weaponry. And they went around the world conquering everybody else and insisting you can only sell us raw materials cheap. And anytime you try and build up an industry, we'll blow it up. We'll either do it physically or we'll just sell goods below cost until you go bankrupt”
Mercantilism, historically understood, is an approach to managing trade and the economy based on the recognition that controlling trade and managing goods flow is critical because it affects survival and requires careful political management rather than leaving trade to market forces.
“if you go back to the earliest recorded history all the leaders whether it's in ancient China ancient India ancient Greece were talking about the fact that trade was life effectively the flow of goods particularly agricultural goods like grain was critical uh and you had to manage it very carefully otherwise your people starved um and you had to make absolutely certain that the economy was sound based on controlling trade rather than just saying hey you guys do whatever... You had to tax it carefully. You had to monitor it carefully. So it was a very political institution.”
There are multiple players in geopolitical decision-making, and even understanding American intentions does not allow you to predict outcomes because you cannot control or predict all of them, introducing genuine uncertainty to Trump's restructuring project.
“There are multiple players involved in that decision-m process. And even if you think you understand the American side, and we don't, no one knows what's actually going to happen. You don't understand all of them. So that there are risks out there.”
The dollar that emerges in the post-Trump system will likely represent 'dollar supremacy' but in a smaller geography (not the entire world) and/or in a different form that no longer relies on U.S. trade deficits, de-industrialization, and rising inequality—a restructuring that reflects how successfully America rebuilds its own productive economy.
“the dollar that emerges on the other side will be a reflection of how successfully America manages to recreate a new system whereby all the strengths it still possesses, which are enormous, enormous strengths, are used more intelligently for its own benefit rather than trying to hold up a global system in which everyone benefited to an extent. But many demographics in America and in other countries were also left behind. So I think it would try and retain what we call dollar supremacy. But it might be in a smaller geography. So not the whole world. Mhm. Or it might be in a different form. It will no longer be in the form of America running large trade deficits with inequality and de-industrialization and more debt.”
The American security guarantee that underpinned the post-WWII global system was deliberately undertaken by the US to prevent large-scale wars between rival powers, based on the principle that preventing major power rivalries is less costly than managing them.
“And America did that willingly, spending blood and treasure around the world. And you know, in many countries that's seen as imperialism. And sure, there's a line that can be crossed there... On the other hand, it was all done to try and prevent world wars. That was the underlying mission statement. If we have small wars here, there'll never be a power large enough to rival America. We can never have world war.”
The dollar system was predicated on an American security guarantee where the US acted as world police; without America in that role, major powers will attempt to take what they can from those who cannot resist, and America deliberately spent blood and treasure around the world to prevent world wars rather than for imperial conquest.
“the system as is, this dollar system is predicated on an American security guarantee. If you don't have America there as the world police, things go wrong. Every other major power starts to think, 'Now's our chance to try and take what we can from those who can't resist.' And America did that willingly, spending blood and treasure around the world. And you know, in many countries that's seen as imperialism. And sure, there's a line that can be crossed there. Absolutely. I'm I'm not naive about how that line can be crossed. On the other hand, it was all done to try and prevent world wars.”
The US dollar system has been bad for the US as a whole despite appearing to offer 'exorbitant privilege' because it requires de-industrialization, the movement of industries offshore, greater inequality, political polarization between winners and losers, and accumulation of debt that is not equally distributed throughout the US.
“I'm surrounded by economists who don't understand that the US as a whole doesn't benefit from that system. They look at it as exorbitant privilege and there is privilege in it. You can spend more than you earn year after year. That happens. Everybody tries to sell you stuff and you just give them piece green pieces of paper. Sure, that's the traditional economic argument. Unfortunately, you have to de-industrialize and lose industry after industry as they're moved offshore in order to sell those goods to you because that's the only way the system can keep working. And that must necessarily come alongside greater inequality in the country.”
Adam Smith argued that the invisible hand would prevent money from flowing from one country to another because patriotism would ensure capital stayed close to home where it could circulate—a claim that is not taught in economics schools and contradicts the actual practice of international capital mobility.
“He also argued, by the way, that money would never flow from one country to another because the invisible hand, you're familiar with the the mention of the invisible hand as a market force. Well, Adam Smith mentions that as ensuring that no one rich would ever invest abroad because patriotism would ensure their money would always stay close to home where it could circulate. Do you get taught that in economics school? Bet you don't. That's what Adam Smith preached.”
Whenever an ideology solves one problem, people react to that solution and create a new problem—no system works forever, and ideologies should shift according to facts rather than being treated as unchanging revealed truths.
“No system works forever. Whatever ideology and we are talking about ideology here. They are not a religion and shouldn't be seen as a religion. You know, religion should be unchanging. Of course, they adapt, you know, over time, but they're supposed to be revealed truths. Ideologies should be able to shift according to facts. They should. Um, and whenever you use an ideology to solve one problem, which you can because of the human condition and because of the fact that people react to things on the other side of that particular uh action, you create a new problem.”
Farcraft is statecraft using financial flatulence—financial instruments that generate capital without underlying production, creating money from money; Norway does the opposite: takes physical production (oil), invests surplus in financial assets, but Trump must reverse this by taking financial assets and using them to support physical production.
“So that's production into finance. And in that context, I said if you look at what Trump is trying to do, he's taking a US economy which is all about finance with no production. Yeah. Yes, I know you have oil. I know you have LNG. But generally speaking, the US had decided to focus on not producing things, importing them and making money from money or from assets. And I regard making money from money as financial flatulence. It's no way to run everything. It's not bad, you know, like a maybe a breaking wind in the bath, but you don't want it to be the bath. Okay? It's Kane said that much more eloquently, by the way, than me. I'm paraphrasing him. It's not a way to have the entire economy running. But I said what Trump is doing now by setting up his own sovereign wealth fund.”
Trump could establish a sovereign wealth fund by leveraging federal land (e.g., North Dakota land worth $6 billion) by 10x to create $60 billion, give $1 million to everyone in Greenland, and bring Greenland under US control, accessing its substantial natural resources worth far more than the investment.
“You'll take a pod of land into Dakota or somewhere. Let's say it's worth $6 billion. It belongs to the federal government. They'll say it's worth six billion. You know, it's empty piece of land. They'll go to Wall Street and put a gun to their head and say, 'We'd like to leverage this up 10 times, please.' on Wall Street. We'll say, 'Okay, it's government collateral. It's worth six billion.' You say, 'So, fine. Now you got 60 billion.' and they'll take that money and they'll give $1 million to everybody in Greenland. And then Greenland will sign an economic cooperation agreement and become like Guam or something like that and basically an American territory and it's got a lot more than $60 billion worth of physical product in it. You've still got to get it out and mine it and add value, but you've got real stuff.”
Financial markets are obsessed with GDP because it provides something to speculate on (interest rate impacts, FX impacts, asset price impacts), not because GDP itself measures anything meaningful about societal wellbeing.
“we have become so enamored of the cult of GDP again working in financial markets it's all about well this number said this today which means that number might say that which means GDP might be this and it's all just about that because then you speculate on the price of a financial instrument which looks to GDP so are interest rates going to be slightly higher or lower is FX going to be slightly stronger or weaker and you can make money from doing that that's why there's so much time and effort thrown at it”
Economic policy in modern technocratic systems focuses on hitting abstract targets (2% inflation, balanced budgets, 3% fiscal deficits) set by technocrats, deliberately excluding common people from understanding, while economic statecraft uses the same tools to address national security and strategic objectives.
“Economic policy is boring and technical and it's something everyone in my area understands. It's listening to central bankers in America, for example, the Federal Reserve waffle on endlessly about 2% inflation and how it's perfectly okay to be way above 2% inflation for nearly four years now, which you have been whilst they're doing the right thing, of course, because everyone's always doing the right thing. But constant technical talk, which you know really excludes the man on the street deliberately most of the time, to try and meet a target that's been set for them by technocrats.”
In the longer term, selling America requires buying something else, and there are not many attractive alternatives: neither the yen, euro, nor currencies of net exporting countries are appealing; most other countries are also propped up by America and would collapse if America failed.
“In the longer run though, what you have to remember is that this is all a seesaw. You buy something, you sell something. So, if you're going to sell America, you have to buy what? And I can absolutely pull my hair out looking at the state of the US. My father's American and he can too. Absolutely. So, how did we get here? All I can tell you as someone who's lived in nine countries um and uh you know, therefore has a fair slice of life from the bottom to the top in in in different places around the world. There aren't many places that are really smiling and saying we're having a great time right now. Certainly some are doing better than America, but a lot of them are doing better in an environment which is still propped up by America. And were America to fail in any number of different ways. And I said politically, you know, socioeconomically, um, direct economically, financially, militarily, were any of those to go wrong. None of these other countries are suddenly going to walk away wearing sunglasses.”
The real question is not 'sell America and buy what?' but how to redesign the global system from first principles—what will be its core, rules, and mechanisms for addressing aggression—and if you haven't thought through this, you can't assess whether current policies will succeed.
“do you just think we have to just reset everything and start again? At which point okay to what? And then what does your system look like? Who's at the core of it? What are its rules? What are you going to do if someone comes up to you and kicks you and says, I want your lunch money. How's that going to work? You have to start from first principles.”
Even if you understand the American side of geopolitical dynamics, multiple other players are involved in decision-making; you cannot fully understand all their calculations, so risks from unexpected escalation are irreducible—this is not a black swan but a 'gray rhino' everyone can see coming.
“There are multiple players involved in that decision-m process. And even if you think you understand the American side, and we don't, no one knows what's actually going to happen. You don't understand all of them. So that there are risks out there. And as I said, it's no black swan. It's a very large gray rider.”
All ideologies have some truth and should shift according to facts rather than being treated as unchanging religions; however, whenever an ideology solves one problem, it creates a new problem on the other side because people react, meaning no pure ideology works forever.
“No system works forever. Whatever ideology and we are talking about ideology here. They are not a religion and shouldn't be seen as a religion. You know, religion should be unchanging. Of course, they adapt, you know, over time, but they're supposed to be revealed truths. Ideologies should be able to shift according to facts. They should. Um, and whenever you use an ideology to solve one problem, which you can because of the human condition and because of the fact that people react to things on the other side of that particular uh action, you create a new problem.”
The question 'What is GDP for?' is more important than 'How much GDP growth?' because no one asks who actually benefits from GDP growth, and a society could have rising GDP while all that growth accrues to rentiers and asset holders, leaving ordinary people worse off.
“if GDP growth is not benefiting the people for whom the GDP is supposed to help, what is the purpose of GDP growth?”
'What is GDP for?' is the more fundamental question than 'who does GDP benefit?' because it requires asking whether the goal is military dominance, highest aggregate standard of living, vibrant arts and culture, lasting civilization, or just 1.9% or 2.0% growth—a question financial markets reduce to mere speculation target.
“Is it to be the world's greatest military force? Is it to be the, you know, the country where everyone has the highest aggregate standard of living. Is it to be an art a country where in the future everyone looks back and and says, 'Wow, that country had the most vibrant period of arts and culture.' Like I would love to have been there at that time just listening to the songs in the street and tasting the food and just looking at the richness of it around me. Is it to be a country where people a thousand years from now will be walking the streets and looking at them and saying this was this was some civilization like in Rome. You know the architecture that you walk down 2,000 year old streets and they're still fantastic and in some cases still livable. Is that what we're aiming for? Or is it just 1.9 or 2.0 0 or 2.1. And that ridiculous reduction is how things are looked at now by financial markets”
If everyone decided to become hairdressers, the economy would collapse because it would need massive inputs of manufactured goods (hair dryers, sinks, mirrors, shampoo, tongs) that no one would be producing—illustrating that what's good for a country requires strategic balance of economic activity, not just maximizing any single sector.
“what if everyone tomorrow wakes up and says I want my country to be about hairdressing. That's the vision. We're all going to be hairdressers. Everyone quits their job. Everyone stops what they're doing except the hairdressers. Okay. Right. What are we going to need? We're going to need tens of millions of hair dryers. We need some sinks. We're going to need some mirrors, a lot of shampoo, tongs...everyone's going to have a beautiful head of hair. But how does that work? Of course, it won't work.”
Trump floated making auto loan interest tax-deductible, which would save an average borrower $8,000-$10,000, offsetting the cost of a 25% tariff that might raise car prices by $8,000—demonstrating how fiscal and trade policy can be joined so tariffs don't cost poorer people more.
“How about if you can write off the tax on your auto loan against your again sorry the interest on your auto loan against your income tax...you can save between 8 and $10,000. It's a it's a staggering amount that you can save by doing that. Well, when I was being told recently that the US would be insane to put tariffs on cars coming in, I was told at the highest that might mean cars go up $8,000.”
The specific mechanism of how America might use a sovereign wealth fund (leveraging federal land assets 10x to create capital for investment) is an example of 'creative magic' or financial engineering that must work because traditional saving is not possible in an economy running deficits.
“you use Farcraft and you gain production which is going to be used for Warcraft because we are now in a World of Warcraft. But it's very hard to get to be ready for war when you've only been ready for finance. So Norway does it one way. We produce stuff. We invest that in finance. I said America will have to use creative magic. Farcraft to Warcraft coming back the other way.”
Adam Smith also argued that patriotism would ensure capital never leaves a country—that the invisible hand ensures investors keep their money at home to circulate locally rather than investing abroad—but this argument is not taught in modern economics despite being part of Smith's original work.
“he also argued you could have uh tariffs to protect infant industry. He also argued, by the way, that money would never flow from one country to another because the invisible hand, you're familiar with the the mention of the invisible hand as a market force. Well, Adam Smith mentions that as ensuring that no one rich would ever invest abroad because patriotism would ensure their money would always stay close to home where it could circulate. Do you get taught that in economics school? Bet you don't. That's what Adam Smith preached.”
The greatest risk in the next 3-6-12 months is the 'gray rhino' of the US attempting to rebuild the car while driving it at 90 mph on a potty road—something that's never been done successfully but is the only way to do it; America could either fall apart or successfully manage the transition.
“Well, it's not a black swan. It's a very very large gray rhino which anyone in this field could point to which is as the US tries to rebuild the car it's driving while it's driving it because that's what's happening. You're not in the shop remaking the car. You're doing 90 miles an hour down the highway with potholes and leaning out the window trying to remake the car. No one's ever really done it that way, but it's the only way to do it. a America can just fall apart.”
Trump's proposal to allow deduction of auto loan interest against income tax would save Americans $8,000-$10,000 per loan, offsetting the estimated $8,000 cost increase from 25% car tariffs, so tariffs need not cost consumers more because tax policy can be coordinated to distribute benefits and costs strategically.
“How about if you can write off the tax on your auto loan against your again sorry the interest on your auto loan against your income tax. Mhm. Excuse me. Stating that slightly. If you actually work out how much is saved with an average auto loan interest rate and the average duration of a loan in the US, you can save between8 and $10,000. It's a it's a staggering amount that you can save by doing that. Well, when I was being told recently that the US would be insane to put tariffs on cars coming in, I was told at the highest that might mean cars go up $8,000. Now, I don't know if they will or not. It's not my job to make specific forecasts like that. It's my job to talk about strategic frameworks and how to see the world. And if Yep. Okay. We can put a 25% tariff in place which means over time more cars will be made in America for sure. Absolutely. You know with side effects. There's always a side effect of everything and it will happen. And we can use tax policy to make sure that actually doesn't cost anyone anymore. The only people who will pay more are those who don't need an auto loan. So the rich will pay more and the poor will pay the same. That's called statecraft.”
Critics who say 'not like this' to Trump policies but offer no alternative are intellectually bankrupt; if you don't have an alternative, someone will fill the vacuum, and that's what's happening with Trump.
“We can dismiss all the people who decry what's happening today and say, Well, not like this. And you say, Okay, so then like how? And they never have an answer. I can assure you because I've had this conversation over and over again around the world for years and it's always what I'm exactly. So if you don't have an alternative, someone will fill that gap. Trump is filling that gap.”
People believe that if the midterms or next presidential election go the wrong way, the US can return to the past status quo; this is profoundly wrong because systemic forces driving change are larger than electoral cycles—something will break regardless, and it could be worse than what's already broken.
“Too many people that I talk to still think if the midterms go the go the wrong way um and the next presidential election goes the next goes the wrong way from a Republican perspective, that's it. We we just go back to the past status quo. I cannot tell you how wrong that is because something else will just break. And it could be something worse than what's broken already. But I'm talking about the big forces of of history here. It will happen. It will break.”
The potential range of volatility from current global transitions is 'enormous' but one positive indicator is that when global systems fail, the society that can reinvent itself most flexibly and pragmatically wins; America has historically shown this ability and has changed dramatically in 4-year periods.
“the potential range of volatility is enormous. Absolutely enormous. But the one positive thing I'd like to finish on, you know, from an American perspective is this. When you have a global system that's failing and multiple things that are going wrong at once, it's a test for how flexible and pragmatic a society can be. which societies can reinvent themselves and rapidly to be a phoenix and rise from the ashes. And there I think many people would agree neutrally that the American example is one to look to”
Norway produces oil and converts it to financial assets by investing in US treasuries and stocks, exemplifying how a real-economy country uses production to build financial wealth; Trump is attempting the reverse—using financial leverage to build production capacity.
“Norway is a country in Europe with a lot of oil and gas. They sell that oil and gas which is a physical product coming out of the ground. You know, you can refine the fuel and make it more useful. You sell it to people. You get money for that. And then they have what you call a sovereign wealth fund with which they invest it. And what do they invest it in? US treasuries, US stocks, a financial asset. So that's production into finance.”
Ordinary citizens and businesses lack strategic clarity about how to navigate the current economic transition; they say 'I don't know what to do' but this lack of agency reflects passive acceptance rather than active strategic thinking about how to position themselves given the trends.
“everyone turns around and says to me, 'Well, we don't know what to do.' And I say, 'Well, I hear that maybe from an individual client, sure.' And I hear that from a very medium-sized client. I hear that from a huge client. I hear from a small country. I hear from a big country. It can't be true for everybody, understanding what's happening, and then thinking, okay, if that's the case within that, how do I make sure the waters are guiding me towards what looks like a nice island over there?”
Any global financial system alternative to the dollar (yuan, euro, commodity-based systems) has more fundamental structural problems than the dollar system itself, making 'selling America' a false choice—the real question is which imperfect system investors accept, not whether a better alternative exists.
“So, if you're going to sell America, you have to buy what? And I can absolutely pull my hair out looking at the state of the US... there aren't many places that are really smiling and saying we're having a great time right now. Certainly some are doing better than America, but a lot of them are doing better in an environment which is still propped up by America... You certainly don't buy the yen. You certainly don't buy the euro. You certainly don't buy anything from any of the net exporting countries... No. The question then is you know do you just think we have to just reset everything and start again?”
Trump is not the tsunami but a symptom of it; he did not start the systemic forces pushing for change but is attempting to guide them in a direction beneficial to the US; whether you agree with him or not is a different question than whether the underlying forces are real.
“Trump is not the tsunami. I don't believe he is actually kicking his legs and making the tsunami even bigger. So he is making that wave even higher. But he didn't start the tsunami. He's a symptom, not a cause. But he's now attempting to try and guide the, you know, the flood waters or the tsunami crashing on the beach in a certain direction that's beneficial for the US. Whether you agree with him or not is a different question. Whether you think he'll succeed or not is a different question. He's trying.”
Economic policy is boring and technical (listening to central bankers discuss 2% inflation targets) and excludes the common person deliberately; economic statecraft involves using the same tools in a joined-up fashion to address national security issues, assuming a zero-sum world.
“Economic policy is boring and technical and it's something everyone in my area understands. It's listening to central bankers in America, for example, the Federal Reserve waffle on endlessly about 2% inflation and how it's perfectly okay to be way above 2% inflation for nearly four years now, which you have been whilst they're doing the right thing, of course, because everyone's always doing the right thing. But constant technical talk, which you know really excludes the man on the street deliberately most of the time... Economic statecraft is where you look at all the same tools. for example, taxation and spending, for example, the Federal Reserve interest rate and Federal Reserve liquidity. And instead of saying we're trying to hit 2% or minus 3% as if these numbers are actually real and physical and out there, tangible that you can put your hand on. we are using them in a joined up fashion to try and address national security issues which is mainly offshore uh and assumes you have a zero sum world.”
When making financial and investment decisions across geopolitical turbulence, the approach is to accept the underlying forces driving change, understand the direction of those forces, and position oneself to ride the wave toward favorable outcomes ('islands') while avoiding unfavorable outcomes ('sharks'), rather than resisting the current or hoping for status quo restoration.
“Accept it. Understand the process that's playing out...Trump is not the tsunami...he's trying to say...the tsunami is sweeping me forward with everyone else...he's now attempting to try and guide the, you know, the flood waters or the tsunami crashing on the beach in a certain direction...What are you doing?...if that's the case within that, how do I make sure the waters are guiding me towards what looks like a nice island over there? and how do I make sure the waters don't push me towards what looks like a lot of sharks over there.”
Experts and policymakers who criticize Trump's policies without offering substantive alternatives are intellectually incoherent; if they don't provide a different path, someone will fill the gap, and Trump is filling it—the question is not whether disruption happens but how it is managed.
“We can dismiss all the people who decry what's happening today and say, 'Well, not like this.' And you say, 'Okay, so then like how?' And they never have an answer. I can assure you because I've had this conversation over and over again around the world for years and it's always what I'm exactly. So if you don't have an alternative, someone will fill that gap. Trump is filling that gap.”
There is no way to turn the omelette back into eggs; even if Trump loses future elections, something else will break, and the systemic forces toward restructuring are too large to reverse through electoral politics alone.
“Too many people that I talk to still think if the midterms go the go the wrong way um and the next presidential election goes the next goes the wrong way from a Republican perspective, that's it. We we just go back to the past status quo. I cannot tell you how wrong that is because something else will just break. And it could be something worse than what's broken already.”
If the US successfully rebuilds in real time and manages to create a new global order focused on China and Russia, the risk is geopolitical escalation where other powers left behind in the dust deliberately provoke conflict to prevent US dominance, either accidentally or deliberately.
“And the other one is if it doesn't and if it many really manages to pimp its own right in real time, what does that create as a reaction from some of the other people who are going to be left behind in the dust? So, let's say America really manages to rally the troops around a new global order under the Trump presidency. And I think it's got a better chance than people would realize. And it's largely focused on China on Russia. What's going to happen if they take things into the geopolitical sphere? Again, the same way we've already had war in one region and then in another region and just in the last week or two there was another small war in another region. We have lots and lots of things simmering away in the background waiting to boil over. And it would be very full hardy to think that couldn't happen either accidentally with the best of intentions or deliberately in order to make clear to the states that we're not going to let you win this.”
The dollar will still be in a winning position relative to reserve currency status by 2030, but it will likely operate in a very different way than the post-WWII system, creating a dollar-based system that is fundamentally restructured.
“myself and Brent were on the team saying that the dollar would win. And I I know for a fact because we you we've spoken regularly then and we still converse regularly now that both of us are of the view that yes, the dollar will still be in the winning position relative to the question that was put to us in 2030. Will it still be the global reserve currency? But we agreed then and we also think now um that it's going to be likely in a very different way to how it's been done up until now. So we'll be talking about a dollar-based system, but it won't be the same dollarbased system that it was two years ago”
If everyone in a country simultaneously decided to become hairdressers, the economy would need to produce tens of millions of hair dryers, sinks, mirrors, and shampoo, but would have beautiful hair while everything else fell apart—illustrating that complete hands-off approach to economy ignores what is needed structurally.
“What is GDP4? Why are we doing this? And one of the examples that I use is what happens if everyone tomorrow wakes up and says I want my country to be about hairdressing. That's the vision. We're all going to be hairdressers. Everyone quits their job. Everyone stops what they're doing except the hairdressers. Okay. Right. What are we going to need? We're going to need tens of millions of hair dryers. We need some sinks. We're going to need some mirrors, a lot of shampoo, tongs. You know, what do you think your economy looks like? Well, everyone's going to have a beautiful head of hair. But how does that work? Of course, it won't work.”
Both Michael Every and Brent Johnson predicted that the dollar would remain the global reserve currency by 2030, but in a fundamentally different form than the current dollar-based system, not the same arrangement that existed two years ago.
“the last point I'll make is of course myself and Brent were on the team saying that the dollar would win. And I know for a fact because we you we've spoken regularly then and we still converse regularly now that both of us are of the view that yes, the dollar will still be in the winning position relative to the question that was put to us in 2030. Will it still be the global reserve currency? But we agreed then and we also think now um that it's going to be likely in a very different way to how it's been done up until now. So we'll be talking about a dollar-based system, but it won't be the same dollarbased system that it was two years ago”
Singapore's political leadership has given clear public speeches explaining to the population that the global order is changing and that countries like Singapore (small relative to the US, tiny relative to China) must prepare accordingly.
“Singapore in particular has a has a very very clear vision of this. They have wonderful uh political leadership which is visionary. not many countries you can say that about and the prime minister has given several very clear public speeches to the entire population you know laying this out now they don't go into the technicalities of how the dollar system works but they explain it you know for a for a general audience very very clearly that things are now changing”
The mainstream debate about whether the dollar will remain reserve currency in 2030 has become widespread, but participants in that debate do not understand the underlying methodology or thought processes required to engage with it, and are mostly recent trend-followers rather than serious analysts.
“what seemed to be a rather obscure debate when we had that one around 12 to 18 months ago...is now discussing it. So it's become mainstream. That's the first thing to consider. Um the second thing is the people who are discussing it in the mainstream still don't understand it because they don't understand any of the methodology or the thought processes that we were using to have that debate in the first place. So it's a very uninformed debate”
The language and arguments being used in Trump's second administration echo 18th and 19th century mercantilist debates between underdeveloped countries and industrial powers, because economists today have never read the history they're repeating.
“And here we are today in Trump 2 administration and the language that's being used and the arguments that are being used absolutely echo what you were seeing in the 18th and the 19th century between undeveloped countries and the industrial powers that were basically setting the rules for everyone.”
Multiple localized conflicts are already 'simmering' globally and waiting to 'boil over'; these represent potential escalation points that could become major geopolitical conflicts if mismanaged during the US realignment process.
“we have lots and lots of things simmering away in the background waiting to boil over. And it would be very full hardy to think that couldn't happen either accidentally with the best of intentions or deliberately in order to make clear to the states that we're not going to let you win this.”
Michael has been using the term 'mercantilism' as an analytical framework for 10-13 years in his work, but most analysts now using the term cannot define it, indicating they are 'trend followers' rather than careful thinkers.
“I have been using the word for 10 or 13 years now within my work. Um, and when I was first using it more particularly around 10 years ago, no one knew what it meant... Now, as you said, everyone's using it, but I would challenge anyone who's in a conversation with someone who uses it, ask them to define it. And if they can't define it, you know that once again, you're talking in a very kind of abstract. what I say jazz hands gone away.”
The Trump administration was blindsided by how strong the negative reaction to its policies has been, suggesting they underestimated the short-term impact of capital rotation out of the US, even though long-term dynamics may favor them.
“I do think the Trump administration has been completely blindsided by how strong and negative the reaction has been to their genuinely credible critique saying that this system can't continue and has to change. So, everyone is saying fine, I don't want to hold anything US as a result. I think they underestimated how large that short-term negative impact would be.”
Within a globalized free trade world, inequality must necessarily rise because of how balance sheets work internationally; economists discuss balancing mechanisms but they do not exist.
“within this globalized free trade world inequality must rise. It it must they always talk about well yeah you'll have a balancing mechanism here or there. No you don't. No you can't. it must rise as a consequence of how the balance sheets work internationally.”
We deliberately omit from economics teaching the caveats that Adam Smith and David Ricardo provided, which would explain the current economic problems, because acknowledging them would require questioning free trade ideology and confusing people about policy choices.
“So, Adam Smith gave you the first caveat, David Ricardo gave you the second. We don't teach that. We literally edit that out of how we teach economics because otherwise it explain the mess we're in now and everyone just wants to be confused and angry about it.”
Small countries like Singapore understand that 'when elephants fight the grass gets trampled,' creating incentive for them to think clearly about global power shifts and trade dynamics, in contrast to large developed economies that assume they will remain insulated from major disruption.
“Singapore is a very small country uh and relative to the US most countries are fairly small and when you put them in comparison to China on the other side Everyone is small. Uh and as they say in that part of the world, when the elephants fight the grass gets trampled and so there are a lot of other countries talking about this with a lot of clarity because they really have to.”
The Trump administration has been blindsided by how strong and negative the reaction to its policies has been, and it underestimated the short-term negative impact of its genuine critique of the unsustainable system.
“I do think the Trump administration has been completely blindsided by how strong and negative the reaction has been to their genuinely credible critique saying that this system can't continue and has to change. So, everyone is saying fine, I don't want to hold anything US as a result. I think they underestimated how large that short-term negative impact would be.”
The greatest risk in the next 3-12 months is that America tries to rebuild the car while driving it at 90 mph on a highway with potholes—this has never been done successfully, and while America might succeed, it could also fall apart; success could trigger geopolitical escalation from countries left behind.
“as the US tries to rebuild the car it's driving while it's driving it because that's what's happening. You're not in the shop remaking the car. You're doing 90 miles an hour down the highway with potholes and leaning out the window trying to remake the car. No one's ever really done it that way, but it's the only way to do it. a America can just fall apart. Again, I just alluded to the fact that I don't think it's as likely as people fear, but it sure it can.”
The language and arguments being used in the Trump 2 administration absolutely echo the 18th and 19th century arguments between underdeveloped countries trying to industrialize and developed industrial powers that set rules for everyone, suggesting Trump's policies are historically repetitive not novel.
“And here we are today in Trump 2 administration and the language that's being used and the arguments that are being used absolutely echo what you were seeing in the 18th and the 19th century between undeveloped countries and the industrial powers that were basically setting the rules for everyone.”
Michael Every has been predicting for many years that the US would eventually elect a president proposing a 40% tariff and rejecting free trade, based on his analysis of the unsustainability of the dollar-based trade deficit system; his prediction was mocked by free trade advocates at the time.
“many many years ago, just as a segue, many many years ago, um I was predicting that America would eventually elect a president who would put a 40% tariff on the world and say enough. Uh I could probably dig out the the personal emails I was I was sending saying that. And I was laughed at. No way that'll ever happen. We love free trade.”
The debate about whether the US dollar will remain the world reserve currency by 2030, which seemed obscure 12-18 months ago, has now become mainstream, but the mainstream participants discussing it do not understand the underlying methodology and thought processes that informed the original debate.
“what seemed to be a rather obscure debate when we had that one around 12 to 18 months ago... are now discussing it. So it's become mainstream. That's the first thing to consider. Um the second thing is the people who are discussing it in the mainstream still don't understand it because they don't understand any of the methodology or the thought processes that we were using to have that debate”
Every predicted years ago that America would eventually elect a president who would put a 40% tariff on the world and say 'enough,' but was laughed at and dismissed at the time because the consensus favored free trade ideology.
“many many years ago, just as a segue, many many years ago, um I was predicting that America would eventually elect a president who would put a 40% tariff on the world and say enough. Uh I could probably dig out the the personal emails I was I was sending saying that. And I was laughed at. No way that'll ever happen. We love free trade.”
The current system has been breaking down for some time, and what we're seeing under the Trump administration is an attempt to not only change but correct a system that once worked but no longer works for America; this is necessary for US economic and national security.
“What we're seeing now under under the Trump administration is an attempt to not only change but correct what maybe what once worked, a system that worked for America for some time, but it's not the 1950s anymore. It's not the 1990s anymore. Your argument, it seems to be this system that we're currently under is really starting to break down for America or has been breaking down for some time. And without editorializing, you're saying that this is good actually. Like we this has that everything we're seeing under the Trump administration, as disruptive as it has been, is necessary for US economic and national security.”
Making money from money (financial asset appreciation without underlying production) is 'financial flatulence'—perhaps acceptable in small amounts, but catastrophic if it becomes the entire economic model, as has occurred in the post-Cold War US economy.
“I regard making money from money as financial flatulence. It's no way to run everything. It's not bad, you know, like a maybe a breaking wind in the bath, but you don't want it to be the bath. Okay? It's Kane said that much more eloquently, by the way, than me. I'm paraphrasing him. It's not a way to have the entire economy running.”
Singapore's political leadership has given clear public speeches explaining to the population that the global system is changing, framing it for general audiences without technical detail, recognizing Singapore's vulnerability to the shifting balance between US and China.
“Singapore in particular has a has a very very clear vision of this. They have wonderful uh political leadership which is visionary. not many countries you can say that about and the prime minister has given several very clear public speeches to the entire population you know laying this out now they don't go into the technicalities of how the dollar system works but they explain it you know for a for a general audience very very clearly that things are now changing”