The Realpolitik of Global Hegemony and USD Swap Lines
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On this week's episode we continue to deal with the "World as it is", rather than "how we would like it to be" as we discuss the Realpolitik of Global Hegemony and USD Swap Lines...and how they are intertwined.
All this and more on this week's edition of Milkshakes Markets and Madness.
Enjoy!
FULL-LENGTH EPISODE 115 (March 30, 2025)
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The speaker argues that pragmatic realpolitik—not idealism or political theater—must guide portfolio allocation and geopolitical analysis, particularly as Trump's policies reshape global dollar flows, debt dynamics, and regional power structures in ways that will subordinate weaker nations to US interests regardless of rhetoric.
- Trump and his administration are clearly signaling their intentions (not bluffing), and the US will use economic tools—tariffs, swap lines, interest rates—as weapons to preserve hegemony and extract cooperation from allies like Canada
- The world is addicted to US dollar debt but cannot print dollars to service it, making dollar supply a lever of control that the US can weaponize by withholding swap lines or restricting exports
- Portfolio allocation must reflect how the world actually is, not how we wish it to be; conflating personal idealism with investment strategy risks capital
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One of the oldest strategies in history when things go bad domestically is to blame and scapegoat foreign entities, which increases international tensions.
“one of the oldest strategies in the world is when things start going bad domestically you start blaming the evil Foreigner right and so that leads to more tensions”
The world has become addicted to US dollar debt; most of this debt exists outside the United States in the eurodollar market, and non-US countries cannot print dollars to service this debt, creating structural dependence on the US.
“the world has become addicted to debt not only addicted to debt but dicted addicted to US dollar debt and while the United States has an incredible amount of obligations that they have to deal with that they have borrowed the United States can print the currency to do it the rest of the world has also gotten addicted to debt they've gotten addicted to euro dollar debt or US dollar debt and there's just as much debt in fact there's a lot more US dollar debt outside the United States than there is inside the United States and those countries cannot print the dollars needed to service that debt”
The Fed extends swap lines not only to provide dollar liquidity but also to lower interest rates in eurodollar markets by offering below-market rates, allowing the Fed to indirectly control overseas interest rates that it does not directly govern through open market operations.
“one of the reasons that the FED would extend a swap line is because that's a way to offer borrowing or you know for Bank to borrow at really really low rates so if the FED loans it to the ECB and then the ECB you know loans it to uh the bank of France um or if uh you know the FED extends the swap line to the bank of England and the bank of England then extends it to the banks the banks now are being offered very low financing so the so the response they give when they're asked how much what's the rate they can borrow at it comes down and so that is a way that the FED could kind of by proxy affect interest rates overseas”
When credit markets are stable, dollar debt service is automatic as credit extends and economies grow, but when credit contracts or eurodollar markets stop expanding, central banks like the Fed must extend swap lines to recapitalize the system and prevent a cascade of defaults.
“as long as things are going good economically and economies are expanding and credit is being extended that everything takes care of itself but what happens when you get a hiccup what happens when you get a credit contraction what happens when that Euro Doll Market is no longer expanding that's when you need somebody like the FED to come in and recapitalize the system by doing QE buying bonds you know putting new reserves into the system”
The world has become addicted to US dollar debt both inside and outside the US, with more dollar debt existing outside the US than inside it, but only the US can print dollars to service this debt, while other countries cannot print dollars and thus depend on dollar inflows from trade to service their obligations.
“the world has become addicted to debt not only addicted to debt but dicted addicted to US dollar debt and while the United States has an incredible amount of obligations that they have to deal with that they have borrowed the United States can print the currency to do it the rest of the world has also gotten addicted to debt they've gotten addicted to euro dollar debt or US dollar debt and there's just as much debt in fact there's a lot more US dollar debt outside the United States than there is inside the United States and those countries cannot print the dollars needed to service that debt”
A global hegemon facing any challenge will strike back and will not voluntarily relinquish power without a fight, making any scenario in which the United States simply permits Canada or other nations to realign with competitors geopolitically impossible regardless of the economic scenario.
“the idea even under the best case scenario if any hedgemon in history ever gets challenged they're going to strike back the idea that they would just roll over and hand it off to somebody else without a fight it's just silly it's just it's just not reality”
The Fed transitioned LIBOR to SOFR (Secured Overnight Financing Rate) approximately 10 years ago to gain more direct control over rate-setting, as LIBOR was set offshore by the British Bankers Association and SOFR is a domestic Fed-controlled program, consolidating monetary control back to the US.
“that's why when was it you know I think it was 10 years ago they started the process of transforming liore into suur because sof is something that is a domestic program um and that the FED has more direct control over”
Realpolitik is a philosophy of dealing with the world based on pragmatism and hard truths in reality, as opposed to dealing with it based on political ideology or idealistic beliefs about how the world should be.
“for anybody who's not familiar with the term real politique it's basically a philosophy of dealing with the world oftentimes related to you know kind of big international relations but it's a way of dealing with world based on pragmatism and hard truths in reality as opposed to we're dealing with it based on political ideology or an idealistic belief of how the world should be”
A hegemonic power facing challenge will not voluntarily hand off dominance to rivals; it will strike back aggressively to retain power, making this historical pattern inevitable.
“even under the best case scenario if any hedgemon in history ever gets challenged they're going to strike back the idea that they would just roll over and hand it off to somebody else without a fight it's just silly it's just it's just not reality”
Portfolio allocation should reflect how the world actually is, not how one wishes it to be; conflating personal idealism with investment strategy risks capital that people have worked hard to accumulate.
“I think you have to separate your investment self from maybe your personal self if you want to go change the world either through through some nonprofit you're involved in or maybe you have a business that you think is really going to help change things or you're a teacher and you're trying to you know educate the Next Generation Um so that they can go out and listen that is an ex I I I fully support that I think it's extremely Noble and I would encourage everybody to do that but when it comes to your portfolio I don't think you risk your hard-earned capital on the way you want the world to be I think you I think you invest your portfolio for a way that the world actually is”
Investors should allocate capital based on actual realpolitik outcomes (what will happen) rather than ideological or political preferences (what they want to happen), and separate investment decisions from personal values.
“it doesn't matter to me whether I think Trump's on the right track or not what matters to me is figuring out what he's going to do and reacting to it so it's one thing to say you don't like Trump it's another thing to say you do like Trump but what I do here and what I do in my professional life is I manage people's portfolio I deal with the world as it is and try to figure how to allocate assets based on what's really going to happen the real politic of it not what I want to see happen not what I hope happens but what I actually think is going to happen”
Canada is economically and geopolitically inferior to the United States in terms of military power, economic scale, and global influence, making it a structural reality that any hegemonic power would seek to control or subordinate.
“the idea that Canada is on par with the United States from either an economic perspective a military perspective or a geopolitical perspective it's just silly it's not real politique it's not dealing with the world as it actually is”
Most Canadian exports, particularly energy resources, are sold into the United States; Canada lacks the infrastructure (pipelines to coasts, refineries, shipping capacity) to redirect these exports to other markets like China or Europe in the short or medium term.
“the great resources that Canada does have mostly get sold into the United States that's what this big thing is about is because the United States is talking about putting tariffs on the goods coming into the United States the reason Canada is so upset about that is that's a big part of their economy so if they're not able to sell into the United States without those tariffs anymore then they either have to sell them somewhere else or buy them internally well the reason they can't buy them all internally is they don't have a big enough population to buy it all internally and the idea that they are going to then sell all this production or all these resources to other parts of the world how do they actually do it well a big part of their economy is energy where do all the pipelines in Canada go to they go into the United States so how are they going to get all this energy to either China or to Europe they don't have the infrastructure to do that and as many people know you can't just build that overnight”
The United States has structural advantages—military, economic, resource access—that enable it to maintain hegemonic dominance despite global debt accumulation and emerging challenges.
“despite all of the problems despite all of the challenges the United States still has an incredible amount of assets an incredible amount of resources an incredible amount of re of influence around the world that's again the real politic of the situation”
When credit contracts or the eurodollar market contracts, the Federal Reserve has historically extended swap lines to other central banks to recapitalize their systems and prevent financial collapse.
“what happens when you get a hiccup what happens when you get a credit contraction what happens when that Euro Doll Market is no longer expanding that's when you need somebody like the FED to come in and recapitalize the system by doing QE buying bonds you know putting new reserves into the system but the issue is that there is no entity outside the United States that can do that same thing for the euro dollar market so what has historically happened is that the FED would extend swap lines”
Bill Bonner's concept of 'world improvers'—those who think they know better than others and try to impose their will on everyone—explains why most global problems emerge; world improvers cause 90% of problems.
“I referenced a book that I had read and it was a book by Bill boner called Empire of debt and then and in in this book he introduced me to this concept or his his concept of the world improvers and he said it's it's the world improvers it's those who think that they know better than everybody else and not only think that they know better but actually try to impose their will on everybody else who end up causing all the problems that we then need to deal with...he nailed it when he said it's the world improvers who are the ones that that cause 90% of the problem”
The US can weaponize swap lines by choosing not to extend them during crises, which would crush non-US economies while hurting the US less acutely, giving the Fed/US a coercive tool to compel geopolitical cooperation from other nations dependent on dollar access.
“the us doesn't have to do this the us could let them Wither on the vine and this is the way the fed or the US can use the dollar as a weapon they don't have to do this they don't have to extend these swap lines”
Trump and his administration (Vance, HessethBessent) are explicitly stating their agenda and are not bluffing; they genuinely intend to implement the policies they describe, understanding that significant disruption and pain will result from the transition.
“when Trump and Vance and Heth and bessent when they start saying that they're going to do these things I think we need to stop thinking about them bluffing I think they really mean it and I think think that they know that it's going to cause some pain and perhaps it's going to cause a lot of pain but the idea that you can go from doing business one way for 40 50 60 years to a completely new way without having some hiccups and volatility and unexpected consequences along the way that's not reality of course there's going to be”
Trump and his team are explicitly and loudly announcing their intentions (tariffs, Panama Canal control, Greenland acquisition, Mexico/Canada integration) so investors should not underestimate commitment; despite policy volatility and market reaction, they will follow through because they have a mandate to change the system.
“when Trump and Vance and Heth and bessent when they start saying that they're going to do these things I think we need to stop thinking about them bluffing I think they really mean it and I think think that they know that it's going to cause some pain and perhaps it's going to cause a lot of pain but the idea that you can go from doing business one way for 40 50 60 years to a completely new way without having some hiccups and volatility and unexpected consequences along the way that's not reality of course there's going to be and I think that they know that so I don't think that people who who think that just because there's starting to be some volatility in the stock market and things might not be going perfectly economically that Trump and Bess and hex are just going to do a 180 and reverse policy I don't think that's happening”
Trump was elected because underlying global economic and geopolitical challenges were already percolating to the surface, and his election intersects with the convergence of global economics, geopolitical realities, and domestic politics.
“it's funny every week we end up talking about Trump and I it's it's funny every week we end up talking about Trump and I and I often get accused of being a trump lover even though I would never in a million years vote for the guy um and I never have voted for him uh but the reason that we talk about him so much is he is literally affecting all parts of the world in ways that just haven't been dealt with in a long long time and it's happening right at the same time that we're kind of hitting these same challenges from an economic perspective and a geopolitical perspective so you throw somebody like Trump into the mix and I guess you could probably argue the reason Trump got elected was because all of these other things were starting to percolate to the surface”
The world is approaching a state of increasing chaos as hard truths about debt, geopolitical inequality, and economic dysfunction are being exposed, forcing difficult political and international realignment.
“it's becoming even more and more needed and part of the reason it's becoming more and more needed is we're getting further down into the road where hard truths are being exposed and hard truths are having to be dealt with and it's causing a lot of angst a lot of concern a lot of political Intrigue a lot of global international relationship uh disruption however you want to describe it it's becoming more and more chaotic”
Tariffs reduce the flow of dollars to the rest of the world, which is the real reason countries are upset about Trump's tariff policy—not because of trade economics per se, but because tariffs restrict their ability to earn dollars to service debt.
“tariffs reduce the flow of dollars to the rest of the world that's the real politic of it that is the fact that is the reality”
The speaker uses the metaphor of Canada as 'the United States' attic'—a place the hegemon permits its friends to occupy but will evict and repurpose when needed, illustrating the subordinate position of smaller neighboring powers.
“the Canada was always like the United States attic you know we're happy to let our friends live there while we don't need it but the moment we need it they're getting kicked out and we're taking it”
Canada is economically and geopolitically subordinate to the United States in the modern era—Canada cannot survive as an independent economic entity if it loses access to US markets for its resource exports, as it lacks the population to consume domestically and lacks infrastructure (pipelines, refineries) to redirect energy exports to Europe or Asia.
“the great resources that Canada does have mostly get sold into the United States that's what this big thing is about is because the United States is talking about putting tariffs on the goods coming into the United States the reason Canada is so upset about that is that's a big part of their economy so if they're not able to sell into the United States without those tariffs anymore then they either have to sell them somewhere else or buy them internally well the reason they can't buy them all internally is they don't have a big enough population to buy it all internally and the idea that they are going to then sell all this production or all these resources to other parts of the world how do they actually do it well a big part of their economy is energy where do all the pipelines in Canada go to they go into the United States so how are they going to get all this energy to either China or to Europe they don't have the infrastructure to do that”
Tariffs reduce the flow of dollars to the rest of the world, which is the real political reason countries oppose them, not just because tariffs raise prices.
“this is also a part of the reason why people are so upset about these tariffs tariffs reduce the flow of dollars to the rest of the world that's the real politic of it that is the fact that is the reality”
This forecast about Canada is related to analysis of global hegemony and global hedge fund dynamics challenged by rising powers and sovereign debt crises.
“that goes hand inand with global hemony and it goes hand inand with global hedge of money being challenged and it kind of goes hand in hand and with coming into a sovereign debt crisis and so the the all of this stuff is is is related right”
Trump has indicated that he will use economic means (not military force) to integrate Canada more fully with the United States and achieve deeper cooperation with his agenda, treating the relationship as one of strategic alignment rather than equal partnership.
“he has not said that we're going to send in the tanks and we're going to drop bombs and we're going to Annex Canada by military force but he has indicated that he will use economic means to be more integrated and um get Canada to cooperate more fully with with his agenda”
Future swap line extensions will likely still occur but will be highly conditional, requiring beneficiary countries to align with and support US interests.
“my belief is that the swap lines will probably still be used but they will be used very judiciously and they will have a lot of strings attached to them going forward they won't just be given because they're needed and they will be given to the countries that agree to help the United States and further the United States interest this is no longer we're going to do you a favor because you're our friend this is this is we're going to do you a favor because it actually helps us”
The Fed initiated a transition from LIBOR to SOFR (Secured Overnight Financing Rate) approximately 10 years ago specifically to increase US control over the offshore dollar market.
“so that's why when was it you know I think it was 10 years ago they started the process of transforming liore into suur because sof is something that is a domestic program um and that the FED has more direct control over”
The Milkshake Theory is the culmination of Game of Thrones dynamics—when debt becomes unsustainable and economies weaken, countries stop cooperating and start blaming external actors.
“in in you've probably heard me say many times that that the milkshake area is in many ways the culmination of the Game of Thrones that because the world is in trouble from a debt perspective that because things are no longer going as great economically as they used to as a result the world is no longer cooperating as well as they used to”
Once Carney becomes prime minister, Canadian policy toward Trump will shift dramatically not because Canada wants it to but because it has no other viable option given structural dependence on the US.
“but the reality of what they are saying how they're going to deal with Trump now and how they will deal with him when and if Carney wins the election I I think will be dramatically different not because Canada necessarily wants it to be different because they don't really have another option that's the reality of it”
Canadian leadership's strategy of 'out-Trumping Trump' by raising nationalism and threatening to cut ties with the US is politically beneficial domestically (raising poll numbers) but strategically counterproductive, as it hardens Trump's resolve rather than negotiating pragmatically.
“the leadership in Canada I believe is trying to out trp Trump because it has skyrocketed them in the polls and the the the the liberal party in Canada was kind of on their way out and Trump was just a godsend to them because they keep saying that you know they're going to you know they're going to fight Trump tooth and nail and he's the worst thing ever and you know you know we don't need the United States and we're gonna end our relationship with the United States and we're gonna just you know become closer with Europe and D listen and it's it's it's selling like hotcakes and and so they're they're skyrocketed in the polls”
The optimal Canadian strategy would be to laugh off Trump's 51st state rhetoric, acknowledge the 80+ year alliance, and work pragmatically to find mutual solutions, which would likely have reduced tensions rather than escalating them through nationalist rhetoric.
“what they should have done is they should have just laughed when Trump started talking about the 51st date they should have just laughed said Trump is ridiculous of course we're not becoming the 51st state but you know what we've been the longest Ally of the United States we've got the longest international border in the world we're best friends we've been best friends forever and we're going to figure out a way to make this all work for everybody that probably would have calmed most of it down”
Carney will probably become the next Canadian prime minister as a result of his anti-Trump positioning, but his actual approach to dealing with Trump will be dramatically different from his campaign promises because Canada doesn't really have another option.
“and they'll you know Carney will probably become the next prime minister as a result but the reality of what they are saying how they're going to deal with Trump now and how they will deal with him when and if Carney wins the election I I think will be dramatically different not because Canada necessarily wants it to be different because they don't really have another option”
Trump believes that for the United States to continue being the global hegemon, things need to change from how they have been done for the last 50-60-70 years.
“he believes deep in his soul that for the world for the United States to continue being the global hedum on that things need to change and for the world to continue being the global hedgemon that things need to change”
Canada issued a sovereign treasury bond denominated in US dollars despite claims of reducing dependence on the US, revealing the contradictions of the Canadian position—if they need dollars to service external debt, they cannot fully decouple from the US.
“Canada just launched uh uh they issued a sovereign treasury bond a Canadian Sovereign treasury bond issued in US dollars right so how can they ever pay that back if they if they are no longer trading with the United States right and no longer getting dollars as a result now I'm just using this as an example um because the reality is is Canada's direct US dollar debt issued by the government is not that big and they actually own more treasuries I believe than they owe in this Sovereign Bond but the point is is if they didn't need dollars why are they issuing a US dollar bond to begin with and how could they ever stop completely doing business with the United States”
The Milkshake Theory is the speaker's framework for understanding how the convergence of global debt, geopolitical power struggles, and currency dominance will play out in the real world.
“this is the whole debt situation and how a sovereign debt crisis plays out is the basis of the entire milkshake Theory that's where I come that that's how I came to this in the first place and many ways the whole milkshake theory is trying to help people understand how things will play out in the real world as opposed to how we would like to see them play out”
Trump has signaled that all US policy will be conducted in the interest of the United States specifically, ending the era of policy justified as serving 'the greater good' or broader alliance objectives.
“he has made it very clear that everything that the United States does has to be done in the interest of the United States it's no longer we're doing this for the greater good every policy has to be done uh W with with with the idea that the interests of the United States are being furthered”
Canada should respond to Trump's 51st state rhetoric with humor and reassurance of friendship rather than confrontational rhetoric that escalates tensions.
“what they should have done is they should have just laughed when Trump started talking about the 51st date they should have just laughed said Trump is ridiculous of course we're not becoming the 51st state but you know what we've been the longest Ally of the United States we've got the longest international border in the world we're best friends we've been best friends forever and we're going to figure out a way to make this all work for everybody that probably would have calmed most of it down”
Trump has not stated he will annex Canada by military force, but has indicated he will use economic means to increase integration and enforce cooperation with his agenda.
“now he has not said that we're going to send in the tanks and we're going to drop bombs and we're going to Annex Canada by military force but he has indicated that he will use economic means to be more integrated and um get Canada to cooperate more fully with with his agenda”
Canadian leadership has adopted confrontational rhetoric against Trump ('outtrumping Trump') specifically because it has become politically popular and polls well, despite being ineffective as a strategy.
“but the leadership in Canada I believe is trying to out trp Trump because it has skyrocketed them in the polls and the the the the liberal party in Canada was kind of on their way out and Trump was just a godsend to them because they keep saying that you know they're going to you know they're going to fight Trump tooth and nail and he's the worst thing ever and you know you know we don't need the United States and we're gonna end our relationship with the United States and we're gonna just you know become closer with Europe and D listen and it's it's it's selling like hotcakes”
The speaker references 'Empire of Debt' by Bill Bonner to support the concept that 'world improvers'—those who try to impose their ideological will on others—are responsible for 90% of global problems.
“I think last week I talked about how I kind of came up with the whole dollar milkshake theory in the first place and I referenced a book that I had read and it was a book by Bill boner called Empire of debt and then and in in this book he introduced me to this concept or his his concept of the world improvers and he said it's it's the world improvers it's those who think that they know better than everybody else and not only think that they know better but actually try to impose their will on everybody else who end up causing all the problems that we then need to deal with”
Bolivia is currently in chaos because it cannot get dollars and can no longer obtain energy to run its economy, illustrating the concrete consequences of dollar scarcity for smaller emerging markets.
“you know if you follow any of the the smaller Emerging Market Bolivia right now is in chaos because they can't get dollars they're out of dollars and they can no longer get energy uh to run their economy”
European leaders now worry that under Trump, the next time there is a eurodollar market hiccup, swap lines may not be extended as readily because Trump prioritizes US interests over historical precedent of providing crisis support to allies.
“last week as again a lot of it has to do with Trump coming into power and no he he's kind of changing the way business has been done and so there was an article last week about the European leaders are worried that the next time there is a hiccup in the euro dollar Market that swap lines from the FED may not get extended listen and they they should be worried”
Realpolitik is a philosophy of dealing with the world based on pragmatism and hard truths in reality as opposed to dealing with it based on political ideology or idealistic beliefs about how the world should be.
“it's basically a philosophy of dealing with the world oftentimes related to you know kind of big international relations but it's a way of dealing with world based on pragmatism and hard truths in reality as opposed to we're dealing with it based on political ideology or an idealistic belief of how the world should be”
One of the oldest strategies in history is that when domestic conditions deteriorate, political leaders blame foreign enemies, which generates international tension and shifts blame away from domestic failure.
“one of the oldest strategies in the world is when things start going bad domestically you start blaming the evil Foreigner right and so that leads to more tensions”
European leaders are now worried that the Trump administration may not extend swap lines in future crises, marking a shift from the automatic extension that characterized previous administrations.
“there was an article last week about the European leaders are worried that the next time there is a hiccup in the euro dollar Market that swap lines from the FED may not get extended listen and they they should be worried”
Canada issued a sovereign US dollar-denominated treasury bond despite not needing dollars for trade, revealing Canada's ongoing structural dependence on the US financial system.
“Canada just launched uh uh they issued a sovereign treasury bond a Canadian Sovereign treasury bond issued in US dollars right so how can they ever pay that back if they if they are no longer trading with the United States right and no longer getting dollars as a result now I'm just using this as an example um because the reality is is Canada's direct US dollar debt issued by the government is not that big and they actually own more treasuries I believe than they owe in this Sovereign Bond but the point is is if they didn't need dollars why are they issuing a US dollar bond to begin with”
Bolivia is currently in economic chaos specifically because it cannot access dollars and cannot service its obligations, demonstrating the lethal consequences of dollar deprivation for small economies.
“if you follow any of the the smaller Emerging Market Bolivia right now Bolivia is in chaos because they can't get dollars they're out of dollars and they can no longer get energy uh to run their economy”
The speaker has predicted Canada's eventual subordination to the US for years based on economic and geopolitical realities (not preference), framing it as an inevitable outcome of hegemonic logic rather than as a desired policy outcome.
“I've I've kind of been talking about this for a number of years and and you guys may have remembered there's been times at different conferences and maybe I'm on this podcast you know I I made comments about how Canada would eventually become part of the United States and not because I want this to happen not because I think Canada's unimportant and it's not their own sovereign country”
The speaker's role is not to advocate for Trump's policies or to judge whether they are correct, but to predict what will actually happen and help clients allocate portfolios based on realistic expectations.
“it doesn't really matter whether I agree with him or not what matters is what he's going to do and how it's going to affect things both politically and economically and what it means for our portfolios the other reason um that this is important and the reason you try to war game all these things out”
LIBOR (London Interbank Offered Rate) was set by surveying banks about their borrowing costs in the interbank market; during credit crises, LIBOR rises because banks are perceived as riskier, but swap lines lower LIBOR by offering cheap alternative financing.
“the British Bankers Association would set liore um and the way they did it is they would go around to the banks and they would do a poll and they say what rate are you quoting other Banks or what banks are what what rate are you able to lend at or borrow at between you and the other London Banks and then based on that survey they took they would set the liable or interest rate well one of the reasons but in the credit crisis that Li that interest rate Rises right the credit is not as free so one of the reasons that the FED would extend a swap line is because that's a way to offer borrowing or you know for Bank to borrow at really really low rates”
Hard truths about global economics and geopolitics are being exposed and forcing confrontation, causing increasing angst, political intrigue, and international relationship disruption, bringing the world closer to a chaotic state.
“hard truths are being exposed and hard truths are having to be dealt with and it's causing a lot of angst a lot of concern a lot of political Intrigue a lot of global international relationship uh disruption however you want to describe it it's becoming more and more chaotic now it isn't chaotic yet but I think a lot of people can sense that we're at least on the edge of it or getting close to where it could become like that”
LIBOR (London Interbank Offered Rate) is set by the British Bankers Association through a survey of bank borrowing rates; the Fed has no direct control over LIBOR because it is set offshore.
“the British Bankers Association would set liore um and the way they did it is they would go around to the banks and they would do a poll and they say what rate are you quoting other Banks or what banks are what what rate are you able to lend at or borrow at between you and the other London Banks and then based on that survey they took they would set the liable or interest rate”
Trump believes that for the US to continue being the global hegemon, fundamental changes in how the US conducts global business are necessary, and Trump intends to implement these changes.
“he believes deep in his soul that for the world for the United States to continue being the global hedum on that things need to change and so it doesn't really matter whether I agree with him or not what matters is what he's going to do and how it's going to affect things both politically and economically”
The United States retains an incredible amount of assets, resources, and influence around the world despite its problems, giving it the capacity to strike back against any hegemonic challenge.
“the reality is is that despite all of the problems despite all of the challenges the United States still has an incredible amount of assets an incredible amount of resources an incredible amount of re of influence around the world”
The speaker's goal is not to claim complete certainty about future events but to share analytical frameworks and insights learned over 25 years to help people understand the 'big Mosaic of a problem.'
“listen I certainly don't have everything figured out and I certainly can't sit here and tell you exactly what's going to happen but what I can do is I can tell you what I'm thinking and I can share you all the share with you all the things that I've learned and I can help you try to understand this big Mosaic of a problem”
The speaker sometimes uses harsh language and aggressive debate style, which is not personal but an attempt to 'get down to the meat of the matter' and break through 'Kumbaya' thinking to address hard realities.
“I know I get into some arguments online and you know at conferences I'll get into debates and stuff but it's never personal it's really just trying to get down to the meat of the matter...the whole point is to kind of get through the the Kumbaya of it all and get down to the hard reality”
The speaker does not consider himself a world improver and has no interest in forcing others to believe his views; his interest is in helping people understand the world as it really is.
“I don't consider myself a world improver I I I have certain ideas of the ways I think seems be but you know know I I I have no interest in forcing other people to believe that I have no interest in forcing other people to follow that but what I do have an interest in is helping people understand the world as it really is”
The speaker's harsh language and aggressive argumentation style are not personal attacks but attempts to penetrate through politeness to reach clarity about material reality.
“I know I get into some arguments online and you know at conferences I'll get into debates and stuff but it's never personal it's really just trying to get down to the meat of the matter”
The speaker does not consider himself a 'world improver' and has no interest in imposing his beliefs on others, though he does want to help people understand the world as it actually is.
“I I I don't consider myself a world improver I I I have certain ideas of the ways I think seems be but you know know I I I have no interest in forcing other people to believe that I have no interest in forcing other people to follow that but what I do have an interest in is helping people understand the world as it really is”
The speaker recommends reading 'Empire of Debt' by Bill Bonner (approximately 15-20 years old) as still relevant for understanding the world's challenges, particularly the concept of 'world improvers.'
“I I brought this up two weeks in a row now this book Empire of debt uh in some ways I think it's uh it's still appropriate it's probably 15 years old now 20 years old now but I think it's still appropriate if for no other reason that to get to get an understanding of the challenges that the world has so I would encourage you to read that”
The 'milkshake theory' is a framework for understanding how a global sovereign debt crisis plays out, based on understanding the structural dependence of non-US countries on dollar debt and dollar supply.
“the whole debt situation and how a sovereign debt crisis plays out is the basis of the entire milkshake Theory that's where I come that that's how I came to this in the first place and many ways the whole milkshake theory is trying to help people understand how things will play out in the real world as opposed to how we would like to see them play out”
Trump is automatically deemed wrong, incorrect, and impossible by critics because of who he is, rather than because of substantive refutation of his statements.
“because Trump is who he is and because Trump is how he is anything he says is automatically deemed as many times wrong incorrect could never happen should never happen and we have to do everything we can to fight against this”
Stock markets are currently experiencing volatility with earlier month selloffs followed by two-week rallies and ending-week declines, making March a particularly unsettled month.
“markets are kind of crazy right now uh you know we we we had the big selloff earlier in the month we had a two-week rally and then we had a three or four day sell off to end the week so March is kind of going out on a on on a sour note”
The speaker has been developing these ideas for 25 years and freely admits not having everything figured out, but offers his thinking and learning to help audiences understand complex systemic problems.
“I've been doing this for 25 years now and listen I certainly don't have everything figured out and I certainly can't sit here and tell you exactly what's going to happen but what I can do is I can tell you what I'm thinking and I can share you all the share with you all the things that I've learned and I can help you try to understand this big Mosaic of a problem”
Markets are currently volatile with a major selloff earlier in the month, a two-week rally, and another three-to-four day selloff ending the week, with March ending on a sour note.
“you know we we had the big selloff earlier in the month we had a two-week rally and then we had a three or four day sell off to end the week so March is kind of going out on a on on a sour note”