All-In with Chamath, Jason, Sacks & Friedberg - E72: Impact of sanctions, deglobalization, food shortage risks, macroeconomic outlook and more

Starting point is 00:00:00 I now have a chief of staff. He's pretty great. He's worked for me for a while and he's doing a great job But it's actually really helped. I will say that and then I started a family office. Wow congrats What does that mean you have it placing your home that you call an office? You know like the great-great-grandfather of your refrigerator? Is it office? Is that some family office? Yes The family goes in there to talk about office time Where does Jade put the stickies? I'd say we're out of granola bars in the sand? Hey everybody, welcome to another episode of the All in podcast episode 72 part do with us today again. The Prince of panic attacks the Sultan of science David Friedberg.

Starting point is 00:00:56 The Prince of fact. Oh yes, Ed also Zeppro of Ziloft. And also as you're hearing cackling the duke of degeneracy, uh, the dictator himself. Shema, from Bolly Hoppati. And of course, everybody's, uh, favorite, the rainman himself, the drunk history channel, Uncle David Sacks. I mean, David, I follow you on Twitter. You're tweeting 50 times a day.

Starting point is 00:01:23 Oh, I was thinking the same thing. When do you work? What has happened to you? You won't meet with startups anymore. I bring you startups. You said, you know what, I'm no longer gonna meet with you. I start out like stuck in your room, tweeting. I don't do first meetings.

Starting point is 00:01:36 That is the end of your career. Huge mistake. No, it preserves my energy. There's nothing more draining than endlessly spending your day in first meetings. No, why don't you just have a short first meeting, like a 15-minute first meeting? Well, we have a team for. Well, they have a bad judgment.

Starting point is 00:01:54 They don't, because we know exactly what we're looking for. SAS investing is very metric-striven, and so the first meeting. Oh, that's fair. That's a good one. Yeah, exactly. So it's like, the first meeting we just find out, do they meet our basic threshold for growth? Love it. Yeah, exactly. Yeah,'s like, you know, the first meeting we just find out do they meet our basic threshold for love it for growth and yeah, exactly. Yeah, so you run the numbers and I I will meet with them if they look good. I love this. I would like all VCs to take the same approach.

Starting point is 00:02:17 And I will let everybody know my DMs are open Jason at Cali, Cali, I will take the first meeting. Jason at Calacatastac.com, I will take the first meeting. Sax, I need to call you after this. One of our businesses, which is not in Sass, has started to sell Sass software, and we've already booked $40 million of fucking ACV by complete accident from zero. You stepped in it, and I need some advice.

Starting point is 00:02:38 Okay, yeah, let's talk. All right, everybody. It's been a bit of a crazy couple of weeks here, and we have to start with the war in Ukraine and do a bit of an update. It's been over 20 days. The death toll continues to climb. We don't know exact numbers here.

Starting point is 00:02:55 It's very hard to get information. We're not experts. We don't have boots on the ground. But according to the New York Times, 7,000 Russian troops have been killed. And Zelensky said on March 12, 1300 Ukrainian troops have been killed. I think we've got three or four angles we need to talk about here. One, I want to talk about food supply with freedberg, since you ran climate.com and have a lot of expertise in that. And of course, Ukraine and Russia are the bread basket of the world. Tremoth, I want to talk about markets, of course. But let's go to our history channel,

Starting point is 00:03:30 Uncle First, Sacks. You have been going down the rabbit hole, looking at the history of this. Let me just ask you a just a point in question. Is Russia losing the war? And if they are losing the war, if that is a the war if that is a past is that even a possibility that the losing the war are they losing the war and then what is the exit ramp here what does it mean on a go forward basis right i think great question so here's where i think we stand through the war is that put clearly miscalculated he thought this would be a cake walk it's turned out not to be the Ukrainians have put a very fierce resistance. The Russians have taken very serious casualties and losses. And so the war is very much up in the air.

Starting point is 00:04:14 The outcome is very much in doubt. So I think Putin was overconfident, made a political economic and obviously humanitarian mistake. But I think three weeks in, here is where I would characterize things, is it feels to me like the West might be making a similar mistake of sort of excessive overconfidence and triumphalism, meaning that we think the rest of this war is going to be a cakewalk. And the reason I say that, let me just give you some examples and then tell you why it may not be a cakewalk.

Starting point is 00:04:44 So you've got Francis Fukuyama had a piece this week, basically. He's back with the end of history. He predicts that imminent rush and defeat and that there's going to be a new birth of freedom for the West. It's going to be like the Bush doctrine and 20 years of field policy, and then at least never happened. You got David from all but predicting mission accomplished, just like the Iraq war. He said the spring

Starting point is 00:05:05 time is going to be bad for anyone who bet on Putin, his words, which in his view is anyone who isn't a basically a neoconny favors regime change. You had a piece get a lot of circulation of the last week in the U.S.-China perception monitor by I think a former Chinese observer named Hugh Wei. And he basically predicted that China would be under so much pressure by what the Russians have done. In terms of humanitarian losses, that they would come out basically denouncing Russia

Starting point is 00:05:38 and support the West. And then of course, I think the final example of what you might call Western triumphalism right now is that absolutely no one in Washington seems to be pushing for a ceasefire. They are all paying lip service, at least to this no-fly zone idea. Biden and the squad seem to be the last holdouts for the idea of not imposing no-fly zone. So I would say right now the West seems to be very confident about the way this war is going and not inclined to make any compromise or concessions.

Starting point is 00:06:08 I just want to flag quickly why there might be some clouds on this silver lining. So you had a Washington Post article, first of all, warning. It was very interesting that Ukrainian military progress may not be as great as their, quote, stratcom, the strategic communications, you know, AK propaganda. So in other words, the Ukrainians are very effective at fighting the information war, but the Russians are still making progress on the ground. You also had this, um, Washington Post story about neo-Nazis flocking from all over Europe to Ukraine to fight for the cause. Again, that story got, it's very troubling and it got no likes or retweets because it just doesn't fit the great narrative here. You've got the

Starting point is 00:06:48 slow motion humanitarian. Is that true? Yeah, let's come back to, let me lay out all the issues and we can come back to. You've got the slow motion humanitarian disaster of, you know, a billion people across the world potentially starving if the spring planting doesn't happen, which we should let Freeberg speak to more. You've got the fact that Russia can still escalate this war. I mean, they could still rubble cities. Byelorus could enter the war, and God forbid they could even use WMD. And then you have this idea, this dream of toppling Putin.

Starting point is 00:07:17 Probably, look, it could happen, but probably a fantasy you had. Two and a thousand protesters, pro-war protesters turned out in Moscow today. Nationalism is still strong. In Russia, yes, there's anti-war protesters there, but the Russian people at the moment seem to be still behind Putin. And then I think you had today, the foreign minister of China came out with a statement, really throwing cold water on the idea that they support the West. They basically denounced the West for NATO expansion. So this whole idea of the Chinese bowing to Western media pressure, which they, in other

Starting point is 00:07:50 contexts called the Baisau influence, I think that's a fantasy that is not going to happen. So look, I think that, you know, we all support the Ukrainian cause. We all support their desire for freedom, to their freedom from domination, from this Russian war of aggression. But what I wonder about is whether this would be the opportune time for Washington to try and push for a ceasefire instead of a no-fly zone, and we should talk more about what that might look like.

Starting point is 00:08:21 Can I give you a psychological assessment of I think what's happening right now? Yes, great. Just as somebody who, as you know, you guys and I were just joking, but six days just being mostly off the grid with my notifications off, I was really like, honestly,

Starting point is 00:08:37 like you kind of like go through this dopamine fast and what it actually helps you do is pick out better signal. And you know, with all respect sucks, I think like a lot of what you said is not really as meaningful signal as the following, which is the most important thing that happened was both sides basically said the surface area of a deal was very much in sight and that they were down to three or four points. And I think that that didn't get reported nearly as much as it probably should have. And what I thought was psychologically

Starting point is 00:09:08 interesting was that as soon as that was said, the next few days was when the rhetoric got ratcheted up extremely aggressively on both sides. And the way that I interpret that typically is having done deals. That's typically when you're closest to a deal and you're trying to get the last few teas and sees. And in that same construct as applied to Ukraine and Russia, I suspect what's happening is they both put out the trial balloon. It was well received on both sides. The surface theory is now down to a few points. I'm not saying that those are justifiable in the end, but I think that if both of these two parties want to come to a ceasefire, which I think it does, we're probably much, much closer than anybody thinks. And right now, all of this rhetoric is meant to basically try to get the other side to

Starting point is 00:09:49 budge a little bit more. And so I suspect, and I could be completely wrong, is that we're much closer to a ceasefire than anybody thinks. And I suspect that you could see something in the next two to three weeks. And I think that that's really hopeful, because you want this thing to come to an end. The thing I'm trying to parse here, and I don't know if anybody here can even answer this, is how did we either underestimate

Starting point is 00:10:16 or over at masturbate, depending on the time, Russia's ability to invade another country? I think that we can't even estimate correctly. So for example, there was something that said there was 100 out of 100, Russia has 170 Italians, apparently. I don't know if that's true or not. Of which 100% did, we don't know if that's true or not.

Starting point is 00:10:38 Of which Ukraine apparently destroyed 50. Of which we don't know if that's true or not. So we're left to guess, and unfortunately, what that does is it people psychologically then fit as David is using the past year priors. What are your biases? Right, what narrative fallacy do you wanna believe? And then you're gonna fit.

Starting point is 00:10:55 So the pro-Russian factions will say that's entirely not true. The pro-Ukrainian factions will say, actually it's even greater than that, huge sustained military losses. The truth is somewhere in the middle that will only get accounted for after a ceasefire is in place.

Starting point is 00:11:09 So I think we almost need to, again, if we can get caught in this fog of war and talk about the stuff in ways which we don't accurately know, or we can level up and say the thing that we both know is there was on the record statements by the foreign minister of Russia and the president of Ukraine that a ceasefire and the surface area of that ceasefire is within sight.

Starting point is 00:11:30 And unless something has materially changed and that's in the last three days, which it hasn't, it means we are really, really close to this being done. So I agree with a lot of what Tomas said. I don't think it contracts anything I said before. I agree that there was a big piece of news this week that caused markets to rally for three days, which is the announcement of a proposed 15 point piece deal. And we do know sort of the key features of that deal.

Starting point is 00:11:54 It means that the three big features are Ukrainian neutrality. So they don't become members of NATO. You had Zelensky saying that NATO membership was off the table. Ukraine can't host foreign troops bases or weaponry. There be limits on Ukraine's military, but they would get security guarantees from the allies. So it wouldn't be a complete demilitarization.

Starting point is 00:12:14 And then the other pieces of it were Ukraine recognizing Russia's control of Crimea, recognizing that's not coming back. And then some sort of independence recognized for the disputed territories in the Donbass. So I think you're right, Chimath, that everybody now knows the broad contours of what a peace deal would look like. And the markets are starting to price in them getting to that peace deal.

Starting point is 00:12:38 But I'm worried that if you look at it from the point of view of what people in Washington say, that there's no pressure here coming from Washington for Zelensky, who's basically our client, he's an American client, to make a deal. You know, if you compare this to say the 1973 you know, Kippur War, where the US was on the side of Israel, but still acted as a peacemaker and got a ceasefire done.

Starting point is 00:13:05 You know, Kissinger got that deal done, even though we were on the Israeli side. You don't really hear anyone in Washington saying, let's get a deal done. So I hope you're right. But because you're not, we're not talking about the elephant in the room, which is that in the Yom Kippur Boer, the unitary resolve and the military dominance of America was undisputed. And so as a result, its ability to be the dominance of America was undisputed. And so as a result, its ability to be the mediator was also undisputed. We've already talked about this.

Starting point is 00:13:31 When Biden called the UAE in Saudi, they wouldn't even pick up the phone. The people that are negotiating this priest treaty right now are Natali Bennett and Emmanuel Macron. So we're not at the table. So I think a lot of what we're hearing as well is just a lot of the rejection and the psychological, you know, kind of anger that we have to not being even part of the process. If the world doesn't want us to have such an outside Israel, well the point is it's we've moved past that. Whether you wanted us to be involved in it or not, we're not involved.

Starting point is 00:13:59 And we are not the principal mediators in this. And we, I hope to God that Israel and France and whoever else is at the table gets this done. Yeah, I agree with that. But here's my concern is that I think everyone knows the broad contours of the deal, but if you're a Russia or you're Ukraine, you're getting daily reports

Starting point is 00:14:17 of what's happening on the battlefield. And if you think you're winning, you have an incentive to stall the peace process to cement greater gains and get more leverage for those remaining details and negotiating points. And so if Zelensky thinks that the Ukrainians are making progress on the battlefield, he's going to wait. And so neither one of them, I think, left to their own devices, can be fully trusted to

Starting point is 00:14:38 make it deal. I think you need the US applying some pressure or acting in a constructive way towards the process. And I think it's a huge problem that the US is not viewed as a peacemaker. We're basically viewed as so partisan and on the side of Ukraine that no one is involved. David, we've talked on this pod about us not being the global police officer of the world and that other people need to stand up. So maybe the lesson here is, you know, maybe strategically.

Starting point is 00:15:07 It's not like we were called on and we didn't stand up. We weren't called on. Well, okay, that's, we assume that. I mean, we don't have perfect information either, but let's get to Freiburg here. I think the other wrinkle in all of this, and I think it's quite positive is sanctions are seeming to have a profound impact here and people are looking at them as potentially

Starting point is 00:15:28 maybe cyber warfare and just actual tactical warfare on battlefields is less important than economic warfare. Russia has been essentially canceled from the global economy, from visa to McDonald's, canceled from the global economy, from visa to McDonald's, to exports. And these sanctions are not just government sanctions. These are people opting into them, whether it's corporations and other entities saying, we're just not going to do commerce with Russia. Unfortunately, and this is something you have great expertise on. And so we're lucky to have you here to talk about it. People may or may not know this.

Starting point is 00:16:04 I'm happy to be here. This is the bread basket of the world. They export more wheat than anybody, and they also export fertilizer, soybeans, and some other inputs, which we've talked about previously, that provide meat for the world. So what can you tell us about the downstream effects of... They're not being potentially, or half as much crops coming out next year, and what would happen in places that are the beneficiaries or dependent on wheat and fertilizer from Russia? So, there's a number of first order

Starting point is 00:16:42 and then second order effects that are not just about sanctions, but also about export controls by Russia that are creating swings in food markets like we've never seen, and will almost certainly lead to widespread famine by the end of this year at this point. So the first important point to note is about 15% of the world's calories come from wheat. About a third of that wheat comes from Russia, Ukraine. Russia has banned export of wheat. And the wheat spring planting season is like now, this week. And there's not a lot of planting going on. You know, a lot of commodity folks are in the field trying

Starting point is 00:17:22 to figure out who's actually going to go to field and plant, but no one's making the concerted effort that they normally would under normal circumstances. So not only is the current wheat supply in Russia Ukraine blocked up and cannot make its way to countries like Africa or countries in Africa and elsewhere, but the future planting season is now significantly at risk. And again, that's 15% of global calories and I just to take a step back The whole planet earth operates on a 90-day food supply So once we stop making food humans run out of food in 90 days So another way to think about that is our food supply excess our capacity In excess is about 25% of our global production

Starting point is 00:18:05 our capacity in excess is about 25% of our global production. So if our global production goes down by 12%, we've lost half of our global food supply. And that's not just linearly across all nations. What happens is the most vulnerable nations lose their food supply first, and the richer nations buy that food supply to secure their populations' calories. And so you very quickly see a bifurcation happen

Starting point is 00:18:24 when you have a shortage in a food supply like this of just a few points where suddenly famine is a real risk. And we already have about 800 million people on earth that are subsisting on below 1200 calories a day. So this very quickly tips the bucket in a significant way in a number of countries that's going to be really awful. And that's just on the wheat supply and wheat planting problem. The bigger problem is the energy price problem and the phosphorus and potassium problem. All fertilizer is made up of nitrogen, phosphorus or potassium.

Starting point is 00:18:56 Those are the three major types of fertilizer that farmers around the world have to use every year in order to grow that crop. But that fertilizer plants don't grow. Nitrogen is made from natural gas. 98% of the world's ammonia is made from natural gas. Natural gas prices, as you guys know, have doubled and the future's market looks like in some places, natural gas prices going up like 4x.

Starting point is 00:19:17 As a result, the price of ammonia fertilizer, Nitrogen-based fertilizer has gone from $200 a ton to $1,000 a ton. So it's five times as. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference.

Starting point is 00:19:29 That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference.

Starting point is 00:19:37 That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference. That's a big difference, there's a little variation around here, but about 10% of the world's

Starting point is 00:19:45 phosphate comes out of Russia. And about, you know, call it 25% of the world's potassium comes out of Russia, potash. Both of those markets are blocked up. They are sanctioned and they have banned exports. Russia has through the rest of 2022. So around the world, the cost to make nitrogen fertilizer has skyrocketed because of natural gas prices, because of the Russia problem. And Russia is not exporting potassium and phosphorus. And as a result, the price of nitrogen has gone from 200 to 1000. The price of potassium has gone from 200 to 700.

Starting point is 00:20:16 And the price of phosphorus has gone from 250 to 700. So now it's so expensive to grow a crop that a lot of farmers around the world are pulling acres out of production. And they're actually going to grow less this year than they would have otherwise because it is so expensive and they cannot access fertilizer locally to plant crops. So not only do we have the wheat problem, we now also have the fertilizer problem and the acres coming out of production problem. And so food supplies are going to go down even further,

Starting point is 00:20:45 and this is going to become even more catastrophic. And so there's a scrambling going on right now. Food prices around the world as a result. Everyone starts buying up all the commodities. They buy up all the corn. They buy up the soybeans. They buy up the wheat. And the price for corn has nearly doubled

Starting point is 00:20:58 from where it was in July of 2020. The price of soybeans, the price of wheat are all skyrocketing. And in a lot of countries, they cannot afford to acquire and individuals cannot afford to buy food with the skyrocketing commodity prices. Can I ask you a question? I think it's estimated that the US food supply, if you could ex-out the waste, would actually feed most of the developing world, because I think 30 to 40% of all of our food is wasted, can you do something with that? Yeah, that is actually true.

Starting point is 00:21:31 A lot of that happens at the point of consumption, so it's in people's homes, so it's a reverse supply chain problem, where we throw away a lot of like stale bread and cereal that goes bad or whatever. There's some in the fresh vegetables market, but generally the core calorie-producing commodities are rice, wheat, potatoes, and corn. Those commodities don't go bad in the supply chain. They end up getting cost out at the end of the supply chain,

Starting point is 00:21:59 which is at the point of consumption at home. So, I'm not sure there's a real solution there right now. The bigger issue is like, how do you get bulk commodities to the places that are gonna need them over the next 12 months? So look, right now we're reducing food supplies, stocks, around the world. There's strategic reserves that are getting opened up and being released.

Starting point is 00:22:17 As that starts to get the planished diminished, and as the production kind of numbers start to come out, it looks like less acres are in production. You know, and God willing, we have a good weather year everywhere this year because you know a bad weather year in some markets could completely decimate the remaining supply that's coming out this year. Regardless, it is going to be a humanitarian disaster within a year. And we will see hundreds of millions of people go starving. And there will be potentially, I think you said hundreds of millions of people. Hundreds of millions of people be potentially, I think. You said hundreds of millions of people to start a starving. That's never happened in the history of men.

Starting point is 00:22:48 800 million people already live on below 1200 calories a year right now. So this is digesting that over 100 million people will die because of this? I don't know about death, famine. Like famine is this short of calories. You know, within a market, it's not like, hey, there's no food, like,

Starting point is 00:23:04 you know, there will be strategic reserves release, there will be stuff, but it won't be enough. We just don't have enough. In the way supply chains are set up, there just isn't enough. And so once again, we found another supply chain weakness like we did in COVID over and over again. And always says free birth. It's your eyes will be released. But then hoarding is starting. So David, you take it after this. But the one question I had was maybe talk to me about this concept then hoarding is starting. So David, you take it after this, but the one question I had was maybe talk to me about this concept of hoarding because there seems to be a cascading effect. And you kind of, well, yeah, it's not just talking about it a little bit.

Starting point is 00:23:33 It is as with any market guys, as you know, when there's scarcity, people come in and buy at a faster pace, you know, everyone. And so this is a market dynamic. It's not like people are physically hoarding loads of bread, but commodity traders, countries, strategic reserves, they start buying up what they can get to prepare for the famine that's coming. Then prices go even higher and then it kicks other people out of the market that couldn't afford to buy it. And the whole thing gets really ugly, really fast. And there's no offer up here. There's no way to solve this. Well, if Freeberg, yeah, the thing I want to ask you is if we had a peace deal right now, a ceasefire, would we avoid this outcome? I mean, like, how long, how long do we have to avoid this? We need Russia to reopen fertilizer export markets now.

Starting point is 00:24:14 We need natural gas prices to come down now and we need them to plant the spring wheat. Those are three things that need to happen to solve this problem. If those three things don't happen, we're going into spring right now. So around the world in the Northern Hemisphere, farmers are making plans, they're planting, they're deciding how much fertilizer to use. And so as this market starts to kind of work itself out over the next few months, a lot of the commodity traders and the Ag departments, they publish these planting reports and they talk about how many acres of what we're planted and then everyone forecasts how much the supply will be. And we're going to start to see these uglier numbers come out over the next few weeks

Starting point is 00:24:49 and months. Meanwhile, we're seeing supplies dwindle and Russia is holding all this stuff. So they're holding hostage, phosphorus, potassium, and the natural gas pricing is just what it is. Remember, there are ammonia plants everywhere. There are ammonia plants and all ammonia plants use natural gas to create the nitrogen-based ammonia. Let me make a statement and I'd love your reaction. We're finding out all of these externalities that was made with underlying poor scientific reasoning that has caused these issues to be

Starting point is 00:25:23 exacerbated. So we know, for example, that our overreliance on Russian hydrocarbons could have been mitigated with nuclear, but we fell for shoddy science and we fell for a bunch of uninformed people who ran this banner of environmental protection. So they screwed us, okay? And those people now have meaningfully less credibility. Let me give you another cohort, freeberg and you tell me. All the people that pushed back on GMO

Starting point is 00:25:52 and said GMO was unacceptable, it could never happen, it has to be X, Y, and Z way. And there are ways where we could have been working on plants that had different mechanisms of action in order to actually absorb and retain nutrients from the soil in different ways that would have made us less reliant in exactly the way in which fertilizer works. True or false? Yeah, GMO technology as a former Monsanto executive, so you can call me Monsanto Schill here. But, GMO technology has been hindered globally by a challenge to adopt it.

Starting point is 00:26:29 And there are techniques and technologies that have not been aggressively developed because of the concern on approvals. Just to get a single GMO trade approved, I mean, I'd say today, and get it to market, can take 7 to 13 years. And even then, you have to still go get China to approve it because they're the biggest importer. And you have to get all these other market participants to approve it. And there are multiple agencies to get to approve it. Europe is finally, the EU is finally coming back to the GMO problem and saying, you know what, precision gene editing can

Starting point is 00:26:59 actually be beneficial to growing that at more stuff. Now, wouldn't have solved this particular crisis? Sorry, can I just say what's so ridiculous about this? The fact that we have a modern agrarian economy is because we actually did figure out a way to do GMO except we used the punitive square and we used successive iterations. But the minute that you try to scientifically scale it in a lab, all of a sudden, that same process

Starting point is 00:27:22 does not make any sense. To me, that's, it's just intellectually so inconsistent. Yeah, the thing that really scares people about GMO, I mean, I've spent a lot of time on GMOs and the reason people are upset. I have a broader thoughts on the point. But do you believe in that? Do you believe in that inconsistent,

Starting point is 00:27:37 that intellectual inconsistency? How do you think somebody from pre-BC to today? I think that agriculture- You think we're iterated on our route. No, I think agriculture itself is technology. Think about it. Humans used to go out and just eat whatever was lying around what nature gave us.

Starting point is 00:27:52 Then we started making rows in the ground and putting seeds in the ground and putting water on the ground. We engineered the earth to make stuff. Then we started to breathe. And then we did plant breeding. And traditional plant breeding, through normal, normal, normal, normal, normal, normal, normal, normal, normal, normal, normal. safe the world that is dramatically, it's modifying things.

Starting point is 00:28:07 It is. And then what we did with GMOs, which is the distinction just to be really clear about the definitional distinction between GMO and traditional plant breeding, GMO is when you take DNA from another organism and you put it in the plants DNA to get that plant to do something very specific. And Jason, you came with me to Monsanto. I mean, you took the turn. You're sure? Remember cautious. We should be cautious about any time we're doing stuff like that. Right. And then there's generally like a very visceral reaction when I make that statement and people like, wait, you're taking the DNA from bacteria and putting it in plants and

Starting point is 00:28:35 how do I know that's going to work? And so there's these layers of concern, which are deeply psychological layers, but we can scientifically resolve this over time. But look, at the end of the day, humans today, you guys remember last year, how much I was talking about that starch synthesis paper and how important it was? We don't need to grow plants to make the stuff we need to consume. If every city around the world had a starch synthesizer, and it took CO2 from the atmosphere and water from the ocean

Starting point is 00:29:02 and had this technique developed out. It could synthesize its own calories in a physical device without needing to rely on the ammonia supply chain and the phosphate supply chain and all of the systems that we rely on that are super outdated that are all a scaled up industrialized version of old school agrarian techniques. Humans today, I think, have the ability to synthesize and print food and over the next couple of decades, particularly catalyzed by what's going on in Russia Ukraine today, we're going to see these technologies accelerate. It's obviously where I spend a lot of my time, but I'm super excited about it.

Starting point is 00:29:34 I think we suffer from a very insidious kind of plague in the world, which is the plague of overeducated dumb people. And it's almost as if, you know, because of their degree in the school, you give them inordinate power to make value judgments that really put the world in a very difficult position. And so when you have something like a war in Ukraine, it just lays everything bare. And you find, you find all these things like, you know, another, another version of this example, how did an entire continent that specifically, I mean, Europe, abdicate their entire energy security to a group of environmentalists and to, you know, to a 16 year old girl without even thinking about

Starting point is 00:30:17 what the right answer was for themselves from first principles. That's really crazy that that happened. And you need a war, you know, where tens of thousands of people have to die to realize that that was a really bad set of decisions that have been compounding for decades. Here's another example where food security is yet another one where, you know, we weren't able to think cleanly from first principles. And so depending on who had more money or who was able to create more psychological guilt or fear was able to get an outcome that fundamentally puts the world

Starting point is 00:30:46 at a hundred million person plus famine. So somehow we need to rethink how our institutions work because we are giving folks who haven't proved that they can handle power, the ability to influence outcomes for the wrong sets of reasons. Well, it's even worse from off these people you're talking about who are smart, dumb people. They're so privileged that they're living in some bubble, making decisions for people who have food insecurity or energy insecurity. And it's only when COVID showed, hey, oh, semi-conductors, I can't get my car that I want because it doesn't have the chip in it, or I can't get drugs, or I can't get P.P.

Starting point is 00:31:24 Then all of a sudden, they see the value and redundancy and supply chain. But when they were living high on the hog and had nothing to worry about in 20 different flavors of Captain Crunch, they can't even think about people in Africa. Jacob, I think it's really important to speak to the capitalist incentive and how you get there. We've globalized supply chains because as a business, it doesn't make sense for me to do every step of the thing that I want to do because you can get better utilization out of CAPEX if a system is running all the time to make stuff. So if one

Starting point is 00:31:55 step of the system doesn't need the other system running 24-7, it's going to outsource that. And that's kind of think about like semiconductor, think about food manufacturing. Right, doesn't make sense for a farmer today to make his own ammonia So there's a pneumonia plant that centrally makes that stuff 24-7 Distributes it out to a bunch of farmers that brings the cost down per unit of production and so these systems Have existed because we've had less capital with a higher ROI on capital invested at every point in the system by you know Distributing and having a distributing and having a centralized supply chain system like this.

Starting point is 00:32:27 Now, what we're looking at today is what happens when one part of that system fails. And now, I think the big trend for the next decade or two, everyone's going to have an institutional memory of this. And you're going to see companies that are going to start to vertically integrate supply chains. They're going to vertically integrate their manufacturing. We're going to see a lot of businesses make what traditionally would have been really quote unquote bad

Starting point is 00:32:51 capex decisions and bad investment decisions. And they're going to say, you know what, we need to have redundancy because we cannot face the cataclysmic kind of circumstance that we face in the past. I also think those should, by the way, the easy decisions. I also think that there are some more complicated ones of morality that we may have also misappropriated. I'll give you one example. So if you think about energy independence of America, I think there's not going to be there's not going to be many who think that it's not critically important. Well, then you go and say we have a short-term bridge with hydrocarbons and the long-term solution is renewables But underneath renewables is the idea that you have to store these things right you have to store the energy you make

Starting point is 00:33:31 Whether it's from wind or solar even if it's from nuclear, okay And all of that results in us needing batteries while batteries need lithium there's enormous lithium deposits in the United States that today The former Slithian deposits in the United States said today can never get access because we've decided that the upper land gross of the state is more important than America's energy independence. So when push comes to shove, a small rat-like creature is prioritized more importantly than America's energy independence. The downstream implications of that are now obvious. Rising costs, inflation, unemployment, potential recession,

Starting point is 00:34:05 war, death, famine, is the upper land gross, that fundamentally more important than all of these systemic risks to humankind. And the thing is, for a long time, we would never even think about the trade-offs to actually think about why that decision should be made that way. And now we actually have the ability to remake these decisions. So it's going to be really interesting to see whether we upend all of these existing frameworks, you know, and there's enormous environmental lobbies that have been created that have praised hundreds of millions, billions of dollars to fight these battles systematically wherever they come up. And in some ways now what people

Starting point is 00:34:44 will say, well, you've really prevented progress, and you've actually done more damage. That's going to be a really interesting point. Now, good intent. Good intent. Save the environment. And then there are downstream impacts. Let's go to SACs about the sanctions. We saw a level of sanctions we didn't expect. They were ferocious. They were, you know, lateral. They're, you know, undeniably having an impact. Do you think Putin would be at the table? Do you think these sanctions are really having a dramatic impact?

Starting point is 00:35:17 And do you think that there'll be a tool that we should use in the future? Or do you think maybe we need to be more thoughtful about them? In other words, cancel culture comes up as an analogy here. People are saying, oh, it's like cancel culture for a country. I think it's pretty great that a country that is murdering their neighbors doesn't get to participate.

Starting point is 00:35:36 But obviously you can have some serious concerns if fertilizer and supply chain issues as we just discussed are going to cause famine. So what's the balance here? Yeah, I think it's another great example of, we're not thinking through the second and third order consequences of what we're doing. We're just reacting. And so to Freeberg's point.

Starting point is 00:36:00 So first of all, we have to realize this was more than just sanctions. This was a complete severing of economic ties. I mean, basically every western country pulled up stakes out of Russia. They did it on their own too. I mean, they did it because for the reasons you said, because they wanted to make a statement that what Putin did was wrong. So every Russian who is working for one of these companies basically got fired and all the stores closed and so on so I think I think it is The repercussions of it are gonna be severe however these things the economics of it take time to play out and

Starting point is 00:36:33 So do I think it creates pressure on Putin to make a deal? Yes, but you know if the if this is gonna be determined on the battlefield One way or another in the next month. Do I think it has time to operate in that time frame? Probably not. And I think what's likely to happen here is that in the same way that the real repercussions of this war are going to be felt in grain production in six months, there is an economic tsunami headed for our own economy as a result of the

Starting point is 00:37:06 blowback from basically severing 144 million Russians from the global economy. There's also going to be geopolitical blowback. I think it's very likely that the way this is going to play out geopolitically is that Russia will become a Chinese client. All of those natural resources that China produces, the gas, all the mineral wealth, those resources are going to flow on a conveyor belt, on a belt and a road conveyor belt, from Moscow to Beijing, and they're going to fuel the Chinese economy. Yes, I know, because the thing we have to remember is China is still a fund and from Moscow to Beijing, and they're gonna fuel the Chinese economy.

Starting point is 00:37:45 Yeah, yes and no, because the reality is, the thing we have to remember is China's still up fundamentally, export-driven economy, of which 35%, just alone goes to the United States. When you add in Europe and other OECD countries, it's almost 60%. So I think the idea that all of a sudden Russia will be able to backdoor all of these things through China into the rest of the world I think is not really realistic and this is actually why I think the rhetoric is so high Because those two countries specifically are put in a very difficult situation like what do you think the China calculus on Taiwan is looking What's happening to Russia hasn't completely answered because it's completely off the table completely off the table. They would never consider invading to Taiwan knowing that it would put Apple in a position

Starting point is 00:38:30 or other companies that are entwined in the Chinese economy. I think what they have to pull out. Again, I've said this before. Everybody has was always sort of like land-based economic sanctions. Even on this pod, people, it's never going to work, it doesn't do anything, and it turns out it's just not true. To be clear, I think sanctions are an appropriate way to create economic pressure so that we can get a ceasefire and a peace deal made, okay? So I do believe, in the same way that I believe we should arm the Ukrainians so they can defend themselves,

Starting point is 00:39:00 well, I'm against a no-fly zone. The issue is just, are we actually using the leverage that we're creating to drive this process to a successful resolution? Because if we just make this the new normal, which is basically an insurrection in Ukraine that drags on forever and Russia cut off from the global economy and becomes a client of China. I think there's a parade of horribles that flow from that and Freeberg just outlined one of them, which is hundreds of millions of people across the world potentially starving. So my point about sanctions is not that we shouldn't have done them, but

Starting point is 00:39:42 there are going to be big repercussions for our economy if we don't resolve the situation in Ukraine. Let's do best case worst case with this new economic order here, an economic sanction ability that the West has now demonstrated quite effectively. For me, the best case scenario here is if you want to participate in the global economy and globalization 2.0 means you're going to have to hit some base behavior level of being a good actor in the world if you want to participate in the wider economy. Therefore, as Trimoff just pointed out, Ivan quite correctly, Taiwan's off the table.

Starting point is 00:40:22 I mean, China already is having massive economic downturn and headwinds. The idea that they would face what Russia is facing right now in terms of sanctions globally would be cataclysmic for them. So, do we think what's the best case in your mind, Friedberg, the worst case of this new economic sanctions that we've just outlined? Best case, worst case of this new economic sanctions that we've just outlined. Best case worst case. Much of this is driven by Russian decision making,

Starting point is 00:40:50 not just our decision making. And so there's a lot of question marks around what they're going to, they've said definitively, we are banning all fertilizer exports through 2022. Okay, so like does changing a sanctioned model at this point get enough resolve for them to kind of come back to the table, do we need to kind of weave that in to some discussion, piece discussion

Starting point is 00:41:15 that they're having with Ukraine? I think there's gonna need to be this multilateral like global either support or partnership model that's gonna have to kind of emerge for this to all get resolved positively. I don't think that it's just about Russia and Ukraine agreeing to a bunch of terms, we're all gonna be affected by what's going on

Starting point is 00:41:33 and what Russia has chosen to do back to us. And we all think we're in the power and we've blocked them and destroyed the rubble and knocked them back to the Stone Age, Yadiyata, but we're hurting ourselves far more than we realize, and we have to go get something back from Russia in order to resolve this. So nuance.

Starting point is 00:41:50 I'm not sure I totally agree with that. I actually think that necessity, what does it mean? Necessities, the mother of invention. I think that this has the ability to circling back to what we said before, for us to rewrite all of these other decisions that were frankly not necessarily rooted in either first principles

Starting point is 00:42:09 or long-stro pedgy thought in a way that can actually improve the state of play for everybody, not just including us for the next 50 or 100 years. So I'm not completely convinced that it's as catastrophically bad as you think. Well, what about this, Friedberg, if we were thinking about food stability, you mentioned your slurry and, you know, being able to make these calories without actually planting any food. If we- It's not going anywhere if you call it a slurry, but yeah.

Starting point is 00:42:36 Okay. Let's call it a protein bar. You know, like ultimately, Jason, we can actually create pasta, bread, rice. I mean, that's where this all goes. Perfect. By the way, just so you guys know, I want to frame this up. It's super important. 60% of the world's calories come from carbohydrates, which are basically two molecules,

Starting point is 00:42:55 amylose and amylopectin. Okay. That's what makes up stars. So if we can synthesize amylose and amylopectin, we can make it into any plant. How long would it take? How long would it take? What would it cost to build your pasta making machine and rice making machine to have more.

Starting point is 00:43:11 These are decades long-stay-la problems, right? This is not like, hey, we got a solar solution. So it's similar to nuclear or solar, exactly. Yeah, yeah, got it. But there are solutions to this. Look, I mean, this is why I keep coming back to saying, like we're evolving the global economy and plan it earth away from this model

Starting point is 00:43:30 of centralized industrial manufacturing into a production system that looks more distributed, more decentralized with better technology. And that's really a big trend for the century for our global economy. And that's why right now, I think the near term trend is in de-globalization. People making less capital efficient decisions

Starting point is 00:43:48 that create redundancy and supply chains. And there's a lot of ways as investors to play that, by the way. Saks, where are your thoughts on maybe the high order bit for the West being a race to resiliency or a race to redundancy in energy, in semi-conductors, this race to resiliency in food supply. Yeah, I mean, look, trade creates economic wealth that also creates dependency.

Starting point is 00:44:10 And we're realizing the downsides of having that dependency. If we're dependent, or Europe is dependent on Russian cast, or you saw during COVID, we've become dependent on Chinese pharmaceuticals, all the pharma companies that move their manufacturing over there. And then that got, when China was rattling the saber because we were blaming them for COVID. This is back in 2020. The Alva started to imply we might not get access to pharmaceuticals. So, look, we are going to have to rethink all those trade relationships. You can't have trade

Starting point is 00:44:39 without trust because, again, if you are empowering the producer to cut you off when you make yourself dependent on that. So, look, I think we're going to have to rethink all of that. But can I go back to your best case worst case question? Yes, I was trying to get somebody in there on the... I think it's a good question. And, you know, I hear, lay out the best case, so the best case, look, the best case is the sort of the Fukuyama argument, the sort of the from argument is

Starting point is 00:45:05 the swedish and triumphalism, which is like sanctions are going to drive the Russians into submission. They're going to topple Putin. The people are going to rise up. They're going to lose this war. We are going to strike a great blow against autocracy and liberal democracy is going to win. Okay, I understand that argument. Okay, now what's the worst worst case scenario worst case scenario is

Starting point is 00:45:29 freeberg's right we ended with hundreds of millions of people starving the war drags on because Russians are going to give up so the sanctions you know while be while hurting the Russians don't end the war and in fact drive them into the arms of the Chinese. Don't end the war and in fact drive them into the arms of the Chinese You know the rush has been called a big gas station with the nukes that gas station will now fill up the Chinese economy hence fourth Worsing the balance of power in cold war two and then there's a big, you know tsunami or boomerang headed for the US economy and we we have a recession later this year as gas prices go to $7 and $10 a gallon and So it ends up hurting us. And so I know, I certainly see the case for sanctions, but I wonder if people are really thinking through

Starting point is 00:46:15 the downside scenarios. And what I do think is that if that the removal of sanctions should be certainly something we're affirmatively putting on the table in these ceasefire negotiations and that sounds obvious but I saw a tweet from Ian Bremer who's sort of part of the foreign policy establishment. I think I think I who has been pretty good on like he's smart and he's been good on no fly zone. He's been saying the same things I've been saying like guys this is tandem out to a declaration of war we're not going there. Also basically saying that listen to matter what the Russians do, we are not gonna get into war three here. He's been cool headed about that, but he also tweeted that listen as long as Putin's in control of

Starting point is 00:46:56 Russia, we can never do business with them again, sanctions are sticking around basically forever. And I just wonder if that is basically forever. And I just wonder if that is an overreaction. If we're going to make that policy, I'd rather see us as America be willing to put economic relations back on the table as, you know, in this peace process, as opposed to saying that Russians are cut off forever. Because otherwise, they're just going to become a Chinese client state. I don't see how that benefits us long term. Well, again, I see. But again, David, what do you think they do with China? China, what are they going to do?

Starting point is 00:47:31 Take 60% of their goods and still export them to us, even though it just contains Russian materials that are now considered contraband. So they can't absorb it economically as my point. There's not enough demand outside these OECD countries to absorb all of that. Well, here's what I think is. It's just mathematically not possible. I think, so look, I think you make a point, but I think if you're going to look at this from like a 50,000 foot level, I think there's like two grand narratives about what is happening in the world. One narrative, sort of the Neocon, sort of liberal, hegemgemony narrative is that we're in a great battle between democracy and autocracy.

Starting point is 00:48:08 The other narrative is that we're in Cold War II, it's that it's more of a great power rivalry between the US and China. I tend to think that the latter is where we're really at in the world, and the reason why I say that is you look at, there's a lot of autocracies who frankly we support because we want them on our side. For example, Turkey is run by an autocrat.

Starting point is 00:48:30 Erdogan is becoming more autocratic. In Egypt, we had sort of democracy there for a brief moment when Merubarca overthrown. Guess what? They elected the Muslim Brotherhood. And we didn't like that too much. Now we got General L. C. C. in charge. We like that a lot better. We are still allies with the Saudis and they're more on a credit government. So I tend to think that the better way to describe what's happening in the world is a balance of power rivalry between the US and China,

Starting point is 00:49:03 which is only going to pick up momentum in the coming decades. And we have to think about who's on the other side of the ledger and who's on their side of the ledger. And I think at this point, we've pretty much driven Russia completely onto the Chinese side of the ledger. And I think it's going to have very bad consequences for us. All right, let's segue from here

Starting point is 00:49:27 into the economy inflation and markets. In a previous episode, Jamat, you talked about the psychological cycle of ignoring good news than accepting it being outraged by it and then maybe not taking the good news. good news than accepting it being outraged by it and then maybe not taking the good news. In the bad news column, obviously inflation continues. Less six months of CPI numbers year over year, obviously September 5.4. I'll fast forward to November 6.8, January 7.5, February 7.9.

Starting point is 00:50:00 Excluding food and energy, core inflation still rose 6.4%. That being said, we have 11.X million jobs available for Americans, five or six million people unemployed who are looking for work. Obviously, there will be some mismatch in terms of geography and skills there. And then corporate earnings, great, but a recession, possibly looming. Where are you on this? And obviously, the market's bottomed out. So where are you at with the economy? Hope, fear, and otherwise. Well, I think that we're in the midst of what I would call a melt-up. So, you know, probably the next month, month and a half. There really isn't much, quote unquote, bad news that hasn't been priced in.

Starting point is 00:50:48 The thing that I've learned over the last few years is that markets don't actually care what the news is. They can process good news and bad news equally well. What they despise is the uncertainty of what the news could be. And so this week was really important because we had two huge buckets of uncertainty taken out of the market. So the one we've already talked about, which is when the market saw that there was a surface area of a deal between Ukraine and Russia, that was really constructive, because neither side would have signaled something if both parties were very far apart.

Starting point is 00:51:29 So that meant to the markets were a few weeks out from something getting done. And then the second thing was Jerome Powell and the Federal Reserve. They finally had their meeting. They raised rates 25 basis points, but even more importantly, they gave you a very prescriptive forecast of what the next year will look like at a minimum, and possibly even two years. And once you could have that, you were able to then go and redo all of your expectations, and what people realized was, okay, inflation may actually start to get teamed in the back half of the year the economy is still quite strong

Starting point is 00:52:08 And we could actually support two to and a half percent interest rates and still actually grow really well And so what you've seen in the last three or four days is a reaction to the loss of uncertainty and so there really isn't now The only thing the fine the ointment could be if the war all of a sudden escalates, not that it gets dragged on because at that point that's also, I think, been priced in. But if something very meaningfully different and some and Russia, in this case, ratchets up the intensity by going, you know, nuclear or something else, although I think that's a very long tail.

Starting point is 00:52:45 Chemical weapons seems a possibility, or carpet bombing. I think these are all very, very low probability events. But in the absence of these things, you basically have really constructive dynamics right now for at least the next month and a half, maybe even two months. How much of this has to do with retail investors who were Y-lo,

Starting point is 00:53:05 hotelers, speculators, Stimmi Chess. I'm going to get in. I'm going to get in. I'm going to get in. Super active for two years and then maybe getting super spooked right now and maybe needing the money to deploy in their lives. Look, the thing to remember, and I hate to be this blunt, but it's true.

Starting point is 00:53:21 Retail is not a very good signal of anything. In fact, if you actually look at retail flows, typically you will make money by doing the exact opposite of what retail does. And I post this in the group chat to you guys. Every single day since the beginning of this year, retail was a net buyer. In all of those days, the market got punched in the face. Finally, at the beginning of March, retail capitulated. Right? And I posted that same day, and I said, guys, this is the moment to buy. And it low and behold, what

Starting point is 00:53:56 happened, the markets rallied meaningfully from that point. And the reason is because they were going into the end of Q1, you have a huge tax bill, due in April 15th, people were starting to just finally give up. They were buying every single day and they finally gave up. But that capitulation was the moment that you buy. So, if anything retail is the, you know, I've said before, you fade your faith list, you know, retail flows or something, you typically will make money by fading by doing the exact opposite of whatever retail is doing.

Starting point is 00:54:27 And you just need to have access to that information. If you have access to it, you can kind of, you know, profit from it. So where are we going from here? Probably out. David, you've been pessimistic. We're seeing a lot of changes in the private market, funding rounds taking longer, a lot of funds getting closed, venture funds that is,

Starting point is 00:54:47 but seems like a lot more diligence is being done. The time, meantime to closing a deal has definitely extended massively. What's your betting strategy now is a venture capitalist? I think that there's gonna be a trickle down effect of what's happened in the market to privates and the valuations are gonna go back to their pre-COVID levels. I mean, ARR multiples pre-COVID were like 20, not 100.

Starting point is 00:55:10 So we're seeing a massive repricing of deals, and that's gonna continue. And I don't think it's just gonna be this like transient effect. Everything's gonna bounce back in a few weeks. On the public markets, the defining characteristic of these markets is volatility. I mean, the VIX, which is the measure of volatility, is at one of its all-time highs. And so, it's true that over the past week we saw a nice sort of melt-up or rally because there was speculation about this piece deal. The Financial Times had that article on the 15-point plan.

Starting point is 00:55:44 the financial times had that article on the 15 point plan. Jamat is right that if that piece deal gets signed, I think the market rally strongly, because it went up considerably just on hopes that it might be signed. But on the other hand, if this piece process falls apart, I think the market will give back all those gains and then some. I think we are nowhere near out of the woods on all the risky scenarios that could develop from this war. I think that if there is no peace deal, I think you can almost expect Russia to escalate in the war. They have said this is an existential issue for them. I think that would mean at a minimum, you know, heavy bombing of Ukrainian cities, and then they'll

Starting point is 00:56:25 step up the pressure even more on Biden and Washington to get militarily involved. This situation could still spend out of control. So, you know, I think in the absence of peace deal, and then finally, we have all the risk of recession. We definitely are seeing a slowdown in the economy right now. And I think if this war continues, and we don't get the spring planning and Things keep you know deteriorating. I think we're headed for a very serious recession in this country I think we'll go from slowdown to recession So if I were advising Biden of course no one's listening to me

Starting point is 00:56:55 But if I were advising Biden I would be telling Biden listen mr. President We are gonna have a horrible midterms in November and you know We are gonna have a really hard time in 2024. If this war continues and, you know, we head down into a session or any of the other catastrophes that could happen, we need to push for a peace deal right now. And the US should be playing a constructive role and we should be applying pressure wherever we can to make a deal because the broad contours of this deal to Tomas Point have been set. I don't think any of the details now that we know look it's about korean about donbas about neutrality.

Starting point is 00:57:33 None of the details that we're still fighting over are more important than getting a piece right now and if I were in the white house I'd be seeing the pushing for that. Yeah, it's uh, it's complicated. The counter to that, obviously, is this could be the beginning of the end for Putin. And even if that's a 10% chance or 20% chance, the possibility that in our lifetime, Russia could have a leadership change, could be tremendous. Obviously, it's a coin toss, which way it goes, but change could be. I think that's certainly in the cards. And look, if somehow magically Putin got toppled and replaced with a Democrat, that would

Starting point is 00:58:13 be a wonderful thing. However, we shouldn't before it's rare, but it happens. Yeah. Well, tell me when was it happened? East Germany, right? We tore it down the wall. Yeah, I mean, that was a reunification. Here's the basic problem is, we understand the Russians and the Russian system.

Starting point is 00:58:31 We've got all these oligarchs are basically like bosses or mob bosses. And then Putin's like the boss of bosses, right? So what are the odds if you take out the boss of bosses that he's replaced with someone who's a Democrat versus the next biggest baddest boss. I think, you know, look, that that's certainly a possibility, but my concern is that when you play for Maximus Upside like that, you're also taking Maximus down side. And a lot of people I've made this point that look, if Putin's life is on the line, he's going to be more willing to do anything. And I think the better approach, and you've forpules mentioned this idea of the golden bridge from Sun Sioux,

Starting point is 00:59:08 which is give your enemy a golden bridge to retreat, mentioned it so that he's not fighting for his life. That was a really clever framework, J. go. I think. I mean, by the way, if you guys went and created a tally, and I'm not trying to be Debbie down here, but, you know, since the advent of the CIA, the number of times that we have tried to incite regime

Starting point is 00:59:29 change and then the number of times it's been successful, what is that percentage? I mean, we don't know because we don't know how many times we've tried. Well, we know we know many attempts. Yeah, I mean, we've changed a lot of two outers, which take out every time we try it, we either get the same or worse. So for example, Syria, we tried to get rid of Assad. He's still there and now it's worse. Afghanistan, we tried it.

Starting point is 00:59:50 The Taliban are back in power. No, but it's not enough to take it to the calculation is what if it does change? Hold on, Iraq, we got rid of Saddam and now we've handed that country to Iran and the Silver Platter, the IOTO was control it. Kadofi in Libya, we got rid of him because he was so horrible and now that country is in chaos You've got open air safe markets. We tried in In Ukraine we tried in Ukraine in 2014 So our track record is not super good

Starting point is 01:00:20 Yeah, no, I mean, I think regime change is like chasing someone out or something. You know, if we were a company at some point, we would have been pipped for our ability to do regime change. I don't think it's a great strategy. I'm not necessarily advocating for it, but I'm not saying that. I'm saying whether or not it's a good strategy. I think that we are particularly not good at it. Yeah, we need a performance improvement plan on that front.

Starting point is 01:00:43 Well, we should just, I think we should have stopped trying that. We shouldn't be going for regime change. We should be... This is good. You and I had this thing where I said you and I are in sync that we both want to contain dictators and maybe isolation and you were like, I'm not in isolation. So I think a definition of like what is the strategy for containment going forward post a piece deal with Russia and isolationism, you know, I guess is a bit of a trigger word and it's loaded but well, yeah I'm not an Isolationist next person. I would describe my strategy as selective engagement Meaning that we still engage internationally on behalf of vital American interests and our core interests But we don't stick our fingers in the pie of the internal affairs of all these countries all over the world to try and

Starting point is 01:01:24 From meant regime change. So for example, like what's the example of a vital affairs of all these countries all over the world to try and ferment regime change. So for example, like what's the example of a vital American interest? I would say standing up to China in the sense that we do not want them dominating Asia and becoming a peer competitor to the United States, that can then challenge us all over the world. So some more pragmatists on it. I would be more pragmatists. We can be isolationists with North Korea because there's literally nothing they can do for us. And look, I would not be throwing countries

Starting point is 01:01:49 like Turkey and Egypt and Saudi Arabia out of our coalition in Cold War II because we don't like the nature of their governments. And I'm not saying I support autocracy. I don't. But the reality is. Dialogue is reasonable because if you don't, then the other side will. The foreign policy playbook is going to get fundamentally rewritten after this Russia-Ukraine War in large part because of the effectiveness of government sanctions, plus corporate social responsibility, whatever you want to call that, see that's our function. Public sentiment, woke is an awkward word, whatever you want to call that, see that's our function. Public sentiment, wokeism, whatever you want to call it. Yes.

Starting point is 01:02:28 I agree. But the combination of these two things has proved to be incredibly effective at setting the stage for some sort of compromise or regime change, the spectrum of outcomes is there. But the point is that's an incredibly unique set of circumstances where before we never would have thought an economy that large or a country that important on the world stage, whatever have compromised in the absence of military intervention, and I think that that's important to think about as we think about what our forward-going China policy looks like, I think really like the importance of like the OECD, right? The importance of all these organized nations

Starting point is 01:03:06 that consume from China, becoming more organized now, probably makes more sense. I said this before to tweet, but the importance of the US dollar has become completely primary, which has been an incredible benefit of what has happened because of this war. You know, very small silver linings

Starting point is 01:03:24 in the grand scheme of all of this humanitarian crisis, but those are going to be really important things that the United States can seize on. We may in some ways have had some diminished power in order to facilitate peace in this conflict, but the downstream capital that we could accumulate by organizing these countries more effectively, I think, could be really important. Then separately, we have to have a moral conversation in the United States about all these things like environmental laws, like our approach to agriculture that may have been underwebbed. Absolutely. Yes. With faulty logic. A little more pragmatism would go a long way. Yes, it would. I'm a little more pessimistic about our foreign policy establishment. And part of the

Starting point is 01:04:04 reason I say this is because I'm very disappointed in the Republicans. The Republicans used to be the party of vital national interest, meaning America did not get involved all over the world unless we had a vital national interest. You just never hear them making that case anymore. It's all the way back to sort of bush doctrine. As an example, they're all pushing for the no-fly zone. They're all pushing for the delivery of the Migs, despite they want war. Just say the words. They're weird. I mean, those were I mean,

Starting point is 01:04:32 they're crazy. Why are they so? I've been very critical. I mean, I've been to the war on this. I don't understand their. Well, I think there's too possible. I think there's anxiety. I think I think there's too possibilities. I think. What is it? What is it? Anxiety. I think there's two possibilities. What is it? Anxiety. Yeah. And this is why I predicted war the last year, but you know. I think that's not a great prediction.

Starting point is 01:04:54 I've been very disappointed in the Republicans and I think here's what I think is going on. I think if any of those Republicans like say Mitt Romney or something, I think Lindsey Graham is just a crazy sort of warmonger. But you take someone like Mitt Romney, who's basically saying all of these sort of more bellicose and escalatory things. If he was actually in Biden's shoes,

Starting point is 01:05:16 I bet he'd be making the same decisions as Biden, because he would not want to risk war three. But it's such a cheap, easy partisan political attack to say that Biden is being weak and he's not doing everything he can. I don't think he's being weak at all. I think history will look back and think two things about this whole thing with the American lens. The first thing was, for whatever set of reasons, we lost it and we diminished some

Starting point is 01:05:42 stature in the world as a perceived arbitrator and mediator in these kinds of conflicts. But separately, I do think Biden has done a very good job in seeing the forest from the trees. He held the line on military intervention and he has really ratcheted up the ability for others to impose economic sanctions beside and behind the United States. And I think that will turn out to be a masterstroke. I give him credit. And I think that will turn out to be a masterstroke. I give him credit.

Starting point is 01:06:05 And I think that he deserves to be acknowledged. I'm going to agree with you on that. Because I think the Biden has done an amazing job of just saying, outright, we're not going to war. We are not starting war with a free-for-all. Stop. That takes a lot of courage. He has not even, I mean, in sex, you've lauded him.

Starting point is 01:06:21 I think that shows some intellectual honesty on your part. And to your point, you're not, There's a reason why we lost our credibility. These misadventures of sacs-chalzum in the Middle East have been disastrous. We made huge mistakes, and we need to take a different approach. I'll give a Trump compliment. He didn't start any worse. And if you look at every president who came before him

Starting point is 01:06:41 in our lifetime, every time they start two or three conflicts, and he was like, we're going to have a no more policy. And now you got Biden say, we're not going to go to war either. This could be a tipping point. And our focus, I think the ultimate checkmate should be Biden coming out and the EU coming on saying, we are going to start a race to resiliency. And here's how it's going to look. Jason, it's an incredible point that you just made.

Starting point is 01:07:03 I just want to reiterate it. Since Reagan, I can explicitly point out incremental conflicts that the president of the United States has approved and greenlit to get us into since Reagan. So we've been in seven wars. We've been in seven wars since the end of the Cold War. It's amazing. The American people Trump was the only one that did not start any new war. Right.

Starting point is 01:07:26 For Biden. You want to know why? Because he was a populist and the people of the United States America don't want these crazy wars. They are sick of all these wars. It is the foreign policy establishment that is pushing for all of these wars. And listen, why an Obama the same way, oh, let's just go back. Obama beat Hillary Clinton for the Democratic nomination because he was against the Iraq war and she was for it. Yeah, Obama had the right instincts on Ukraine. He did not want to escalate the situation. Remember in 2014, when they took Crimea, he said,

Starting point is 01:07:57 America does not have a vital national interest that justifies us going to war. He was right. The president that tried to incite regime change, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's advisor for Dick Janie and these people bull weevil their way into the foreign policy establishment. They're in the think tanks. They're in the state department. What would you use? Bull weevil. They like, they are the permanent. The hold on a second. They are the permanent establishment of Washington. The presidents come and go. They stay forever. She was there. She was caught on a phone call basically picking the new leader of Ukraine after a coup in 2014

Starting point is 01:08:49 She she the one that had that famous quote that said Putin fuck Putin was that he said he said yeah, she said yes is our guy basically picking yatson yuk to be the new leader And she said fuck the EU when the EU wanted to take a more temperate approach, okay? Okay, okay, William Fuckley here you go and sax I think the mistake Biden made listen the EU, when the EU wanted to take a more temperate approach. Okay. Okay. Look at William F. Buckley. Here you go, and sax. I think the mistake Biden made, listen, I think Biden has good instincts on this.

Starting point is 01:09:11 I think he had good instincts last year in June when he called for basically an emergency summit with Putin to dial down the tensions. And I think that summit was successful. So what happened? Okay. The intercept just had a great article talking about how tensions ratcheted down after that June summit, but they picked back up in October, November. What happened between June and October? I'll tell you what. On September 1, Zalinsky

Starting point is 01:09:35 met with Biden in the White House and the State Department issued a joint statement. Basically, reaffirming that Ukraine will be part of NATO, it would reaffirm military ties, economic ties, and then on November 10th, they published a giant charter agreement between the United States and Ukraine that was signed by Blinken. Now look, did Biden know about this? Yes, but this is the State Department agenda. And it was on the heels of this charter agreement that the Russians basically said they had reached the boiling point.

Starting point is 01:10:05 They basically delivered the ultimatum to the US in December and precipitated the crisis that proceeded to this war. So my point is just listen, we have a state department with its own agenda. It loves regime change. It loves having clients all over the world and inserting its fingers in the pie and unless Biden, hold on, if unless Biden stands up to his own state department, we will not get a cease fire and we will not get a peace deal.

Starting point is 01:10:31 And that will be disastrous for his presidency. What I will say is I think Biden has done a very good job and I know Tony really well and I think Tony is trying to do the best job he can. I think he's done a pretty good job. All things considered as well. That's all I'm saying. Final thoughts here on, you know, a very difficult time period we're living there.

Starting point is 01:10:52 The global order is being restructured. It's predictable. I think again, if you read Ray Dalio's book, which I recommended heavily last year, it's surprising how much of that simple rubric is playing out today exactly as that rubric kind of estimated it would. And look, I mean, by the way, one way to think about the China Russia-US dynamic, you got a one, two, and three player game theories. Number one wants two and three to be at it, because then they'll, you

Starting point is 01:11:25 know, end up diminishing value. Number two wants one and three to be at it. Number three wants one and two to be at it. And so we're seeing that, um, that multi-party game theory playout right now. Um, and, you know, again, based on that rubric, you can probably predict where this is all going to end up. Brilliant point. Listen, if you're to look at this from the Chinese standpoint, they must be loving what's going on loving it Old saying I think Napoleon said it never interrupt your enemy when he's making a mistake. Why is China so quiet right now? Well, yeah, because they love their dream. They're dream is the US and Russia attacking each other. Yeah, we have to implement

Starting point is 01:12:04 energy independence, writ large, and we have to make sure that it is very clear we have influence amongst all these OECD countries, because if China takes one foot over the line, we have to have the ability to do to them what we've done to Russia economically. It's the only way in which we can ratchet down all this tension and find peace. Yes, the new war is the war on our dependency on dictators. We must must must have a race to resiliency. We're going to talk about this and more at the all in Sunday. 1560. No more. May 1516 and 17 all in some at Miami. 500 of the 700 tickets are gone. If you want to apply for a scholarship,

Starting point is 01:12:47 you can apply. Tell us how much you love the show with the website. Just do a Google search for all in summit. Really excited to announce Keith Roboi will be joining us. One of SACs is Besties, a very iconic classic person. We're going for iconoclast. Next up, Brian Peterson, friend of the pod from Flexport, talking about all these supply chain issues.

Starting point is 01:13:04 The number of speakers we're gonna have is gonna be extraordinary. Brad Gerson, our friend of the pod from Flexport, talking about all these supply chain issues. The number of speakers we're gonna have is gonna be extraordinary. Brad Gerson, her friend of the pod, is gonna come talking about markets, education. Joe Lonsdale is halfway in. Again, another iconoclastic controversial person. And that's what we're going for the day and out. Yeah, and we'll keep announcing more.

Starting point is 01:13:22 We'll keep announcing more every week. Apply for a scholarship if you like. And we'll see you all there for. Love you guys. Salt enough science. The Rain Man and the dictator I'm Jake Al. Love you, Bats and BYE BYE. BABY BABY BABY BABY BABY SACS.

Starting point is 01:13:36 Love you, SACS. Love you, Fiebert. Back at ya. Those are good feelings for you to have. We're like your winners, right? Rain Man, David Sack I'm going on the way. And it said we open source it to the fans and they've just gone crazy with it.

Starting point is 01:13:52 I'm going on the way. I'm going on the way. What, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, Besties are gone. Go through that. That's my dog. Take it away. It's your driveway. Sit next. Get it off. Oh, man. My ham is the actual meaty.

Starting point is 01:14:11 I put it in. We should all just get a room and just have one big hug. Because they're all just like this like sexual tension that we just need to release that house. What? You're the beef. What? You're the beer of beef.

Starting point is 01:14:23 Beef. What? We need to get my best? You're a B I'm confused Where did you get my cheese? I'm doing all the... I'm doing all the...

All-In with Chamath, Jason, Sacks & Friedberg - E72: Impact of sanctions, deglobalization, food shortage risks, macroeconomic outlook and more

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