Louis-Vincent Gave: Inside China's Plan to Kill the Dollar's Dominance

US tech companies (Microsoft, Amazon, Google, Facebook) had zero cost of capital due to their great run and massive valuations, allowing them to throw capital at AI at scale; this was possible only because of 18 trillion in government debt yielding negative yields, which turned capitalism on its head.

“the Microsofts and the Amazons and the Facebooks and Google's they had such a great run that essentially the cost of capital for them was zero. Uh, so they could afford to be like, you know what, this is probably the next big thing. Let's just th Amazon threw money at cloud and that was that was great. So, let's throw 20 times as much money this time on AI because that's going to be the next big thing.”

Central banks were huge net sellers of gold for 25 years, but after the Russia asset seizures, they became massive net buyers; Chinese individuals and foreign central banks (Indonesia, Thailand, Saudi Arabia) all started buying gold as a result of realizing treasuries and OECD bonds were not safe.

“all of a sudden you start to see central banks that were huge net sellers of gold for 25 years become massive net buyers and individuals as well. Chinese purchases of gold went through the roof. Indonesia, Thailand, Saudi Arabia, everybody started buying gold.”

Asset classes should be evaluated through four prisms: fundamentals, momentum, investor positioning, and valuations; tech is crowded (extreme positioning), stretched (valuations), momentum may be stalling; financials have good fundamentals, no extreme positioning, new momentum, and attractive valuations—easier trade.

“I look at asset classes through four prisms. Fundamentals, momentum, investor positioning, and valuations. Um, and you know, yeah, the tech is a fun story. It's exciting. The valuations seem quite stretched. the the investor positioning is is massively extreme. Um and the momentum might be stalling as we as we speak and I look at the financials which is another really big sector in every market. I think the fundamentals look look pretty exciting. I don't think people are overweight that stuff. Uh the momentum is now there and the valuations are still decently attractive. Uh you're not you're not at stretch levels. So that to me seems like the easier trade here.”

Global fiscal policies are ludicrous: US running 7% budget deficit at full employment with all-time-high asset prices and capital gains should be high; unemployment is in the 4s because you cannot compress it lower; what will the budget deficit be in the next recession?

“fiscal policies around the world are ludicrous. There's, again, the US is running budget deficits of 7% of GDP at a time when asset prices are making all-time high, when capital gains taxes should be great. Employment rates in the fours and unemployment rate is essentially like if you want a job in the US today, you find a job when you're in the fours because you always have a compression that it's hard to go below. So, you know, what's it you can't you can't help but think what's it going to be what's the budget deficit going to be in the next recession?”

Commodity and emerging market currencies traded well even as the dollar rallied initially during the war, contrary to typical 'risk-off' dynamics; this suggests structural demand for commodity currencies independent of short-term risk sentiment.

“the commodity currencies actually traded pretty well. So when the dollar initially rallied, when the war began because people punished those countries that were big importers of energy, the commodity currencies actually traded pretty well. The Aussie dollar traded well. Canadian dollar traded okay.”

Micron had a $100 billion market cap 18 months ago and was more likely to go out of business than reach $1 trillion; this illustrates the extreme DRAM commodity cycle and cyclical risk in semiconductor stocks.

“if you had asked me, let's say, um, I don't know, 18 months ago when Micron had like a hundred billion dollar market cap, whether it was more likely to go out of business than have a trillion dollar market cap, I would have bet my left pinky is going out of business.”

Russia is the main actor pushing for oil price destabilization and higher prices (it needs >$80/barrel to fund its budget), while China stabilizes prices; this is a fundamental difference in their geopolitical objectives.

“I think Putin wants to destabilize it because he needs high oil. China China's not trying to do that at all. Uh so”

Open AI and Anthropic are building medieval fortresses with huge walls (closed-end, proprietary models) saying come into our fortress and you'll be safe, while China is building Dubai—open, anyone can come in, anyone can come out, and you do whatever you want with the model.

“Open AAI and Tropic are essentially looking to build medieval fortresses with huge walls and say come into our fortress and you'll be safe here to the Goldman Sachs of this world and the JP Morgans etc. And China's building Dubai. It's not a fortress. It's everybody can come in. Everybody can come out and you do whatever you want.”

China was forced into open-sourcing AI because the US prohibited chip sales to China, preventing the closed-model strategy that requires ever-larger compute and capital spending. This forced workaround—having global software developers improve the product—contradicts China's historical preference for throwing money at problems.

“China did not have the option of doing the closed one because the closed one needs ever more compute and it needs ever bigger capital spending. Historically, most Chinese companies are happy to throw money and human resources at things. This time, the US told them, 'You can't do it because we're not going to sell you the chips.' So, they had to find workarounds. The only workaround was to open source it and have lots of software developers based everywhere around the world help you improve the product, which is completely anathema to the usual Chinese way of doing.”

When China enters a space, it gets commoditized; both semiconductors and AI models are currently priced for never being commoditized, but the market is rapidly advancing toward commoditization of these two sectors despite markets pricing for the opposite outcome.

“when China enters a space it gets commoditized...when I was last here I said when China enters a room profits work out um so um it seems to me that we are like very rapidly advancing in the process of commod commoditizing those two things the models and the semiconductors uh and yet the markets are priced for completely different”

Hyperscalers are embedding very high levels of maintenance capex that people don't appreciate; leases are essentially debt lasting 30 years with obligations to upgrade technology with expensive new Nvidia chips; there is no rainbow in year four—depreciation and maintenance capex are permanent.

“people assume, okay, this is a three-year cycle. They're going to spend all this money and then in year four for and on, they're just going to reap the benefits. But they're they're they're embedding a very high level of maintenance capex that I don't think people appreciate. The leases that they're signing is essentially debt. Uh the leases are enormous and they go out, you know, some of them are fiveyear extensions, but a lot of them are guaranteeing out 30 years. Uh having to to upgrade the technology and and and the new Nvidia chip that's hugely expensive. Like the maintenance capex and the depreciation expense. This is they're not this there's no rainbow in year four here.”

Russia provides about 11% of the world's diesel supply, and has halted exports through at least July due to domestic supply constraints, which is a major additional tightness for the diesel market.

“Russia provides about 11% of the world's diesel. uh in terms of Russia halting the exports is that Russia provides about 11% of the world's diesel.”

The problem in sovereign debt crises is never debt-to-GDP; it's always the percentage of debt owned by foreigners; when foreigners wake up and decide to exit (as happened in Thailand, Argentina, Greece), there's no buyer and the currency collapses; risk exists for France and Britain (both 30% foreign-held) but not the US because US assets will always have buyers at some price.

“a lot of people look at debt to GDP as a potential uh, you know, sign of impending doom. You look at every debt crisis, Thailand, Argentina, Greece, etc. The problem is never debt to GDP. The problem is always what percentage of your debt is owned by foreigners because one day people wake up there's bad news in France and you come into the office you're like why do I own French oats again? Um and if you're doing it everybody else in the street is doing it and you're like you know what just get me out of these French oats and like I don't want I don't want them and then this that's what happened to Greece and that's what happened to Thailand. That's what happened to Argentina.”

China's strategic interest is maintaining domestic social stability first, which requires a humming US consumer and US economy to sell to, not destabilizing oil prices; China's north star is domestic stability, not geopolitical dominance or weakening Trump.

“I think Chinese political leaders, their north star, their guiding light is always first and foremost domestic social stability. That's that's that's 99% of their job...why did China back away from the oil market? They could have really screwed uh President Trump. they could have really like pumped oil up to 150 bucks and then like his midterms are gone and he's a lame duck and you know why did China do none of that because first and foremost China cares about domestic political stability and $150 oil would would be bad would be bad for China. China would rather, I think, would much rather take $60 oil and a US economy that's humming along with a US consumer that's humming along to whom you can sell a lot of stuff than a President Trump that's weakened, etc.”

Hong Kong dollar peg will last forever from China's perspective because it's all upside, no downside; China can trade in renminbi with countries that accept it, and trade in Hong Kong dollars with countries that don't want renminbi (since HK dollar is quasi-USD); China is unique as the first financial superpower with two currencies and two central banks (PBOC for renminbi, HKMA for HK dollar).

“if you're China, the Hong Kong peg is all all upside, no downside. Hong Kong essentially, look at it this way. Hong Kong was the first tokenized currency. It's China has its own US dollars. It can when it says to Russia, hey, let's trade in um let's trade in remb if Russia does it because it doesn't have a choice. Um, but other countries who say, 'No, I don't want to do it.' Then China can say, 'Well, let's do it in Hong Kong dollars, then.' And other countries are fine because it's it's a quasi US dollar. So, if you're China, there's really no downside of keeping the Hong Kong dollar. Uh, it's it's it's all upside. It's they have their own US dollar. They have their own currency. And in fact, China is kind of unique uh in the history of countries in that it's the first sort of financial power because it is becoming a financial power to have two currencies and two central banks. They have the remn with the PBOC and they have the Hong Kong dollar with the HKMA.”

China's strategy in AI is to deliver a Toyota (good-enough product at 80% cheaper) rather than a Ferrari; this makes them competitive globally especially with bootstrapping startups; most VC-backed startups use Chinese LLMs because they're essentially free and most startups can't afford expensive proprietary models.

“their strategy of most of these is to say well look if open AI or um or anthropic delivers you a Ferrari something that's like really really top-notch. We're only looking to deliver you a Toyota. Um now if you have, you know, $300,000 and you want to drive a Ferrari to work, use that. If you don't have $300,000 and uh a Toyota is good enough to get you to work because really you don't need to get to work in 200 miles an hour. Uh and the Toyota is going to do the job just fine. Here's our Toyota.”

We are in a structural bond bear market that has been ongoing for 5 years, kicked off by COVID policy failures (lockdowns and free money transfers); the easiest way for governments to pay for these costs is inflation; today all mentioned countries have higher-than-comfortable inflation rates, making them prone to inflationary bust if shocks occur.

“Look, we're we're in a structural bond bear market. uh we have been for five years and I think it was kicked off by all the silliness around COVID which was you know the biggest policy failure both the lockdowns and then sending free money to everyone and it was just policy it was just compounding policy failure after policy failure...the easiest way to pay for these financial costs is always inflation if you're a government that's always the path of least resistance. Um and today in all those countries that you mentioned you do have a very you know you have higher than usual inflation rates higher than than for comfort which does mean that you're very prone to whenever there's a shock whenever oil does go from 65 to 120 um you risk moving into the very bad environment of inflationary bust.”

Amazon guided capex from 100-120 billion at start of year to 180 billion; they increased debt by 100 billion and are selling 25 billion in bonds; Google sold debt and equity; SpaceX did IPO for 75 billion then immediately did another 20 billion deal to pay off a bridge loan.

“Amazon's capex when they came into the year, I think they had guided to 100 to 120 and then last quarter, I think they guided to 180. I mean, just think of that, right? I think they've increased their debt by 100 billion, right? And they they're out there right now selling 25 billion. Um, you know, Google has sold debt and equity, right? SpaceX does their IPO 75 billion and then they immediately do what was 20 20 billion.”

Open AI deferred its IPO to 2027, which is strategically problematic because Open AI is too big to fail from ecosystem perspective; if Open AI fails, it brings down everything in the AI ecosystem.

“the news that they are deferring it to 2027 I think was very interesting and not necessarily a good thing because I would argue that open AI from a strategic standpoint and the extent of its reach throughout this whole AI ecosystem is too big to fail. Not from the perspective that the government's going to come bail it out but if open AI fails it brings down everything.”

Asia is experiencing currency divergence: yen and Korean won continue to weaken while the yuan strengthens; this creates tension because China's policy has been to stabilize other Asian currencies against the yuan (not the dollar); this rubber band is stretching and will snap with yen and yuan moving sharply.

“you have this this quandry now for China which is you have this this different divergent tension in in Asia where the yen keeps on getting weaker. The yen and the Korean one keep on getting weaker. The remn keeps on getting stronger and it's like this rubber band and if you compare if you look at the US dollar as a whole like oh the dollar is not moving. Um, I think this thing is going to snap and I imagine that it's going to snap with the yen and and the Juan moving starting to move up.”

When Russia and Ukraine invaded each other and seize treasuries (including Russian oligarchs' assets like Chelsea Football Club without court proceedings), the West undermined the rule of law, its biggest comparative advantage; this signals to China and other nations that Western asset protection cannot be relied upon.

“when Russia invaded Ukraine and we seized uh Russia's um treasuries, not only of the country, but also of rich people. Uh all the Russian oligarchs, we said, 'You think you own the Chelsea football club? Uh your wife's Ukrainian, you've got nothing to do with this. We'll take it anyway.' um you uh you think you own this house in London, you don't. Um and we did this absolutely without going through the courts by just by political decision. We undermined our single biggest uh our if you look at the western world, our biggest comparative advantage is the rule of law, right?”

Japanese investors own 3.5 trillion USD of foreign assets (80% of Japan's GDP)—an unprecedented level; as JGB yields rise, the yen falls, reducing returns on foreign assets; there will come a point where Japanese investors say JGB yield is good enough and repatriate capital, pulling support from all global bond markets including US Treasuries.

“Japanese investors own three and a half trillion US dollars worth of foreign assets. That's 80% of their GDP like it unprecedented. So just ludicrously high um and the yen keeps on falling and the JGB yields keep on rising. There will come a point I think uh maybe I'm wrong but where Japanese investors say you know what at and I don't know what that point is but at 4 and a half% JGB yield that's good enough for me thank you very much I'll lock that in um I'll end with the yen at whatever that level it's cheap enough I'm now bringing my money home um and so you have this damically sword over the head of the bond market everywhere because they mostly own bonds elsewhere which they bought uh mostly because you had a huge yield differential between Japan and the rest of the world”

China's military spending and ship building is not for territorial conquest or invading other countries, but for presence and flex; China doesn't have territorial aspirations (except Taiwan, separate discussion); the military is built for deterrence and symbolic parity with the US, not for offensive operations.

“China doesn't have territorial aspirations. you know, when when I when I read and I see all these military uh contrast between, oh, China's building up their military and and and compared to the US and they have x amount of ships versus our amount of ships and and and it's like who's got a, you know, a bigger stick. But China is not going to be and again separate from Taiwan, that's its own political dynamic. Thai China is not in the business of wanting to invade other countries. So this military they're building up is not because we're going to have another world war and they're going to attack somebody or whatever. It's it's it's it's presence they want. They want to play in the global stage. They want to do that economically. They want to at least portray that militarily because they want to be able to flex the same muscle as us.”

The lesson of the Iran/Strait of Hormuz crisis is that nations need to stockpile commodities (fertilizer, oil, rare earths, pharmaceuticals) rather than hold treasuries or gold, because you cannot buy what you need when sea lanes are disrupted; India learned this when unable to obtain fertilizer despite having 700 billion in treasuries.

“The first lesson is I said it before the US no longer controls the sea lines. So imagine I'm India India on the second day of this war Modi picked up the phone called Cining and said mate you have huge strategic uh fertilizer reserve you got enough fertilizer for the next 5 years can you sell me some please because 40% of fertilizer comes out of the Gulf and I'm not getting any and it's about to be planting season. CJ Ping says I'd love to help you but I won't. Um, so now you're India, you think, sweet, got all this gold, I've got all these treasuries, I got 700 billion of treasuries and I need fertilizer and I can't get it. Um, the lesson of this trade hormuz is that rather than treasuries, rather than gold, you actually need to stockpile commodities.”

Hyperscaler earnings in Q2 were reported up 28%, but this masks significant weakness: excluding 'other income' (unrealized capital gains), earnings were up only 17%, and excluding semiconductors entirely, earnings growth was only mid-single digits.

“If you look at Q2 earnings that were up like 28%. If you take out the other income, it was like 17%. If you take out semiconductors, it was like mid-s single digits.”

According to McKinsey, between now and 2030, there will be 6.5 trillion in capex spending on data centers and AI; Oracle is spending 100% (or nearly 100% accounting for prepayments) of its revenue on capex.

“according to McKenzie you're looking at 6.5 trillion between now and 2030 uh mean these are gargantuan gargantuan amounts...Oracle, in fact, is spending 100% of their revenue on capex, a little less than that if you take in some of the prepayments.”

Oil prices have been set in a 65-100 range by China's buffer stock strategy: China buys at 65 and below, stops buying at 100, creating a band that is great news for energy companies making healthy cash flows without needing capex; refiners at all-time highs with enormous free cash yield and no plans to build new capacity.

“if oil gets to 65 and below China just like buys every boat and ships in as much as it can and stores it. And because it has the capacity to store it, it's kind of unique. Storing oil is costly. And but China's built up huge infrastructure to to do just that...at 65, they buy as much as they can. 65 and below and at 100 they stop buying. So you end up if if that's the case if you think okay well China sets the old price. We live in a world where we're in a $65 to $100 range...if you think refining is what it is, like uh and these guys are going to be making margin for quite a while. Um I mean, Marathon is going to be buying five or 10% of their stock uh like for the next few years u every year...They're not going to go out and build new refineries. They're just going to buy back their shares.”

We live in an inflationary boom where governments run 4-7% budget deficits of GDP (US at 7% with full employment), making investors search for scarcity; Q1 scarcity was energy (oil stocks up), Q2 was semiconductors (7 of 10 trillion global market cap increase), Q3 likely refining capacity.

“I think we live in an inflationary boom where inflation is is decently high and economic activity is fine because every government out there is running budget deficits of between four and 7% of GDP. I mean look at the US right budget deficit 7% of GDP with full employment. So we're in an inflationary boom environment. In inflationary boom environments, investors look for scarcity. Now, in the first quarter, scarcity was energy. There wasn't going to be enough oil for everyone. So, all the oil stocks went through the roof. Second quarter, it was semiconductors. Um, in the second quarter, the global market cap increased by 10 trillion, seven of which was semiconductors.”

Open AI and Anthropic are burning 10-15 billion per quarter and will need IPO funding to continue operations; the market's willingness to fund their losses is questionable when they're selling Ferraris at 10,000 dollars before eventually raising prices to 300,000 dollars.

“these companies, the open eyes, the anthropic that are burning 10, 15 billion a quarter. you get to a point where, you know, it's now, you know, they're going to do their IPOs, so you could say, well, they're going to get another round of funding so they can keep selling you the Ferrari at $10,000. Um, but no, it'll be interesting how long the market gets excited about funding people's Ferraris at $10,000.”

China's FX policy has shifted over past 18 months: the REMBI has been going up 50 basis points per month like clockwork, indicating deliberate policy to strengthen the yuan independent of broader USD strength.

“if you look at the past 18 months, the REMBI is going up 50 basis point a month like clockwork. Like it's literally going up 50 basis points a month almost regardless. So very clearly China has shifted its FX policy to we now want a um a stronger rem.”

S&P 500 earnings are at record divergence from national income earnings (tax-based earnings), matching 2000 and 2007 peaks; this divergence is driven by financial engineering including other income (unrealized gains on investments like Anthropic positions at inflated valuations) rather than core operating earnings.

“and today you are back at one of these stretches just like you had in 2000, just like you had in 2007 of record divergence between S&P 500 earnings and national income earnings and a lot of it is linked to these capital gains taxes.”

The MAG 7 / Magnificent 7 tech stocks (and AI/hyperscaler trade) became reserve assets globally—owned by every fund, every sovereign wealth fund (Abu Dhabi, Norway, Swiss National Bank); Swiss National Bank explicitly said they just buy top 20 market cap stocks globally; this created a correlation between MAG 7 performance and the dollar index.

“Over the last couple years, it seems that these these mag seven stocks became a reserve asset. Yes. Owned by everyone around the world. Every fund. You were an asset manager. I'm not ex US. You had to own these stocks. Or if you were like imagine if you're managing the Abu Dhabi Investment Authority or the Norris Pension Fund, you're literally managing two three trillion dollars. Swiss National Bank. Swiss National Bank is like Swiss National Bank. They came out and said we just buy the top 20 market caps in the world and that's it.”

The dollar has been on a downward trend; MAG 7 / AI trade caused DXY to stick between 97-100 during a period when fundamentals (rate hikes, relative growth) should have driven it higher; if AI trade rolls over, dollar should resume downward trend—this is a death knell for the trade.

“Let me add some water to your mill. Um I think it's fascinating. Look, what is it four months ago? People are expecting two rate cuts. Wor comes in. Sounds a little hawkish. Everybody's like, 'Oh,' and of course oil prices go up and inflation numbers go up. It's like, 'Oh, we're not going to get two rate cuts. We're going to get two rate hikes instead.' So the market moves from two rate cuts to two rate hikes. Gold gets smoked. silver gets smoked, a lot of assets get smoked, miners, energy, uh, Hong Kong, and we can come back to that. Um, all these things get smoked, but the dollar itself really didn't go up all that much. It went, it went up a little bit, but like if you were, you know, to your point, you were at 98, you went to 100 on a DXY.”

In next 6 months, the market won't get the two rate hikes that it moved from two rate cuts to; instead, the Fed will keep short rates low because governments fund themselves at the short end, and one-third of US government debt rolls over in next 18 months—the Fed is locked into keeping rates unchanged.

“I don't think we get them for a number of reasons. Um therefore, I think the long end sells off a little bit because that long end is sort of thinking, oh, you got a you got you've got a um a hawkish Fed, etc., which you're not going to get. Uh and here I I'll disclose a full-on uh you know one of my bias is I firmly believe that in my career 52 years old in my career Japan has been the trailblazer on monetary policy for everybody else...We're going to have central banks that keep short rates very low because governments now all fund themselves at the short end. A third of US government debt rolls over the next 18 months. Worsh can't raise interest rates when you got a third of the the debt that that that rolls over. investment has locked them in to keeping rates unchanged”

Financials are outperforming globally—European banks, Chinese banks (despite bad debt and bust real estate), Japanese banks (historically problem banks) are all breaking out together, indicating structural driver of financial sector strength.

“one of the interesting trends lately has been the outperformance of financials uh and not just in the US but everywhere around the world and that to me makes a lot of sense. We're going to live move to a world where the demand for capital is super high. Even European banks are broking out. European banks are breaking out. Chinese banks, everybody's like, you know, everybody's favorite dog with fleas, right? I mean, these guys are loaded up with bad debt on bust real estate, etc. They're breaking out. Japanese banks, other dogs, historical dogs with fleas, they've been breaking out like banks everywhere.”

Japan has been the monetary policy trailblazer for everyone else: first with zero interest rates (everyone thought nuts, then everyone did it), then QE (everyone thought nuts, then did it), then negative rates (most followed); today Japan has 3% inflation, short rates at 1%, and is dragging its feet on tightening while long end sells off and yield curve steepens, and banks rally daily—this is the pattern everyone will follow.

“in my career Japan has been the trailblazer on monetary policy for everybody else. They were the first to do uh they were the first to do zero interest rate. Everybody thought it was nuts and everybody did it. They were the first to do QE. Everybody thought they were nuts and then everybody did it. They were the first to do negative interest rates and then most people did it. And now today what are they doing? They've got 3% inflation and they got short rates at one and they're sitting on their hands and they're dragging their feet, dragging their feet. Long end shows sells off every day. Yield curves gets steeper and steeper and banks go up every day. Like literally go up every day. Uh and I think that's what we'll do. We're going to have central banks that keep short rates very low because governments now all fund themselves at the short end.”

In a weaker dollar environment, cyclicals do well and consumer staples don't; if central banks drag their feet on rate hikes and dollar falls, cyclicals and financials should be favored over tech and consumer staples; consumer cyclicals have lagged, momentum isn't there, nothing suggests that will change.

“if we're right that look they're going to drag their feet uh US dollar goes down your cyclicals do well and your consumer stuff in a weaker dollar doesn't do quite as well. Uh now the consumer stuff has all been sort of lagging like your consumer cyclicals uh they've they've dragged um the momentum isn't there and I don't really see what changes that momentum. So, so in terms of the markets, I'd be overweight cyclicals and financials.”

The DXY (Dollar Index) is 2/3 euro, 1/4 yen, and lacks China entirely; it's the index of the world 25 years ago, not the world of the next 10-20 years; it doesn't have meaningful commodity currencies and is not the right benchmark for assessing dollar strength versus emerging markets.

“The DXY is 2/3 euro a quarter yen, right? You know, it's like it's not it's the index of the world of yesterday. It's the index of a world of 25 years ago when Japan was really important and Europe was really important. It's not the index of the next 10 20 years. Uh doesn't have China in there. Frankly, it has a little bit of Mexican peso but but peanuts. Uh to your point, it doesn't have commodity currencies or it has a little bit of of looney but peanuts. Like that's not the that's not the benchmark for tomorrow.”

Empire strategy (as in Darius the Great and Alexander the Great): build roads, bring in commodities cheaply from everywhere, transform them at home into higher-value goods, ship them back; every empire is a road-building exercise; China under Xi Jinping is doing this through Belt and Road, Silk Road Fund, Asia Infrastructure Investment Bank.

“we were talking about Iran uh which did have one of the first sort of big empires and it was said that Darius was a traitor uh the first big Persian emperor. Darius was a traitor because uh Darius would conquer different regions. He typically he did the same as Alexander the Great leave the same uh government in place. He'd build roads. Um and because the history of every empire is fundamentally a road building exercise. every empire tries to bring in commodities cheaper from everywhere around the world. Transform these commodities at home into higher value added goods and then ship them back. Um that was the whole thing with Gandhi and India. It's like oh we're sell sending all our cotton to the UK. They change it in the linker mills and then they sell them back to us at and they keep all the profits. Um and so when you listen to Cin Ping, Cin Ping is fundamentally an imperialist president and that when he talks about he talks about the one belt, one road, the Silk Road Fund, the Asia Infrastructure Investment Bank, all these things are fundamentally imperial projects. It's we're going to build a road, we're going to bring in all the commodities from Africa, from Central Asia, from Russia. We're going to transform them in China, and then we're going to sell you a car, a tractor, a telecom switch.”

The market moved from expecting two rate cuts to expecting two rate hikes (a 4-rate-decision swing) when Worsh sounded hawkish, but this repriced oil, energy, miners, Hong Kong, and many other assets negatively, while the dollar itself didn't move much, suggesting something else is supporting the dollar.

“Look, what is it four months ago? People are expecting two rate cuts. Wor comes in. Sounds a little hawkish. Everybody's like, 'Oh,' and of course oil prices go up and inflation numbers go up. It's like, 'Oh, we're not going to get two rate cuts. We're going to get two rate hikes instead.' So the market moves from two rate cuts to two rate hikes. Gold gets smoked. silver gets smoked, a lot of assets get smoked, miners, energy, uh, Hong Kong, and we can come back to that.”