BTC Sessions - Next Phase of the New World Order | Simon Dixon & Dave Collum

Starting point is 00:00:00 If you want to put it in its most simplest form, a negotiation between China, Black Rock and J.P. Morgan. That's what I think this war is. The nuclear bomb was the closure of the Strait of Hummus. That has directly led to the renegotiation of 50 of the most important energy, minerals, food components. We are categorically going through a global reset. In 1881 to the present, the valuation of the market, not the price, the valuation, which should not trend, is up a completely. pounded 4% a year for 45 years. What happens when it compounds negative 4% for 45 years?

Starting point is 00:00:36 The private credit market game is over. In Dubai, they started selling their gold, rotating it into Bitcoin, so that they could then go on the plane and leave. This is the final war, the reset of all. Simon Dixon is back, and this time alongside Professor Dave Cullum, to give us a full update on the Iran War, exactly how it's impacting markets right now and where we are in the transition phase to the new,

Starting point is 00:00:59 multipolar world. All right, gentlemen, thank you so much for joining me today. Very excited to have this conversation to get you guys together to kind of share your knowledge and insight and kind of pull apart what exactly is going on in the Iran conflict. Now, there has been a ton of changes, Simon, since last time we spoke about two weeks ago. You gave a beautiful kind of framework, and I'll cover it here quickly. But since then, like, we've seen serious escalations with oil and gas refineries being hit in Qatar, in Saudi Arabia, in Israel as well, too.

Starting point is 00:01:28 Last night, I was watching in preparation, the precious metals markets were just getting taken out at the knees. We had that 48-hour warning to open up the Strait of Harmoos, which Trump is seemingly completely backed off today. We're recording this Monday morning, as well as I'm seeing zero hedge reporting that they're going to be have like joined control over the area. Things seem to have escalated, but then they've kind of backed off. The markets are going crazy. So Simon, last time you laid out this idea that what we're witnessing is not just, it's not Israel and the U.S. versus Iran. This is the financial industrial complex versus the military industrial complex, that we're seeing basically the transnational

Starting point is 00:02:06 capital using the U.S. military to kind of go in and get rid of the IRGC hireliners, kind of strategically weaken Israel, as well as get the U.S. bases out of the region, to kind of set up the Gulf Coast area to actually be open up to markets, to actually maybe get some stability in that region of the world as well, too. And you'd also pinpointed, it was the April Summit, the April China Summit, that we might even see. the basically proposal of what the things are going to look like going forward at that point in time. So there's a ton of information compressed in there. Can you give us a little bit? If I've missed anything in terms of the framework, please correct me there and give me an update. Where are we?

Starting point is 00:02:44 What do you see going on right now with the Iran conflict? Yeah, absolutely. So I think the first thing to recognize is that this isn't definitely not the scale of the 12-day war. So the 12-day war had a theatrical element to it. There was a tip for tat. There was an escalation cycle and we had certain IACC hardliners decapitated through decapitation campaigns. And then we had Israel that was burdened up with debt, ran out of munitions, and it ended with a Hollywood movie where Trump comes along and says, here's the B2 bombers. We have eliminated and eradicated the Iran nuclear program. Therefore, we don't need to do this anymore. And so there was an off ramps. I believe that the negotiations that we're allegedly on off, on off, and everyone's debating right now that are manipulating

Starting point is 00:03:42 the markets like crazy have already been a five-year negotiation between China, which is effectively the rising power, and America that is being shrunk into a regional power and going through an asset stripping exercise by what I call the financial industrial complex. Now, in order to achieve that, you have the old world order, which is represented by the US being the military industrial complex. Now, they benefited from strategic tension and forever wars in the Middle East because they were able to print money and then send it over to come back and purchase weapons. And then you could use that to create the demand for dollars through the petro dollar, and then you would continually have that money being lent back into the bond market. That order is effectively over. And so there is a

Starting point is 00:04:42 financial operation and a legacy military that still wants to hold on to their version of the world. That's represented by Israel. That's represented by a model of always having and funding militias across the region. And that's represented by strategic tension between Iran and Israel. Once you remove death to America, death to Israel, the need for Israel diminishes, and Israel has an identity crisis because they were always creating the justification for war. And so this is effectively a war to end that narrative is what I think is happening here. but at the same time, we are categorically going through a global reset. I'll just jump into that right now because effectively the nuclear bomb was the closure of the Strait of Hormuz.

Starting point is 00:05:40 That has directly led to the renegotiation of 50 of the most important energy, minerals, food components. And every single one of those is being renegotiated and giving winners, and losers as a result of it. And that is a global reset. Right now, if the straight-off launch open today, it would take probably a month to get through the 3,500 ships that are just sat there trying to figure out what to do. The damaged infrastructure was probably five months of damage,

Starting point is 00:06:20 but if it escalates to the next stage, Qatar has already come out and said five years of damage. to bring that back on tap. And so what we have effectively done is we have reset the world order to make Europe and the Western Hemisphere dependent upon American liquefied natural gas and oil, and at the same time, draw Asia and Russia closer through these energy bailouts right now. There is only two ways in which this goes. And I believe that if we are still in the old world order and the military industrial complex

Starting point is 00:07:00 is still trying to prop up the dollar and the petro dollar, then what would happen next is you'd have 600,000 troops invading Iran. It would take years. They would take over the oil fields and they would rip open, you know, this oil in Iran is all going to be priced in dollar and the strait of Hamous is going to be controlled by Black Rock and other financial powers. That's impossible. It's not going to happen.

Starting point is 00:07:32 And so therefore, the only other alternative is that you actually end up in a deal that effectively vassalizes Iran deeper into China. And this financial industrial complex, they try to get a foothold across the Middle East, but they commit to a regional stability model rather than the Forever War. So effectively, it ends the Forever War. And we're going through massive market manipulation right now in order to get to a scenario where the only choice is to do a deal. That's a lot covered.

Starting point is 00:08:10 That's a ton covered there. Dave, I'm curious your thoughts on that. If you have any questions or pushback on what Simon just laid out. Actually, it sounded pretty good to me. Financial Industrial Complex and Military Industrial Complex, strike me as a vaguely differentiated group. Can you clarify that? Because I would put the two together. But you might be talking about U.S. versus London or something, you know, so I don't, I'm not sure. Yeah, it's transnational in nature. And the military industrial complex is

Starting point is 00:08:39 somewhat more nationalistic to America. So because America built its empire on the manufacturing base, and then it used that in order to prop up the dollar through endless wars globally. And then you could regime change, you could overthrow dictators, you could replace democracies with dictators, you could destroy currencies, you could do currency wars, all sorts of stuff, in order to enforce the extraction of a country's resources, the money being spent back into a different agreement with US. And the military is effectively a four-rent militia, I think of it as for US corporate interest. So if you need some oil, you go get the military to go get it.

Starting point is 00:09:30 If you need some rare earth minerals, you go get the military to go get it. And through lobbying, corporate power controls like the Western America. Now, this military, is very much nationalistic and aligned with an a America being the global hegemon. Transnational capital is indifferent between London, America, multipolarity, anything. And the fact, because in 1971, when America came off the gold standard and we entered into effectively everything being financialized, securitized, and we entered into globalization

Starting point is 00:10:09 where China built the manufacturing base, transnational capital effectively became the largest asset managers in the world, like BlackRock, Strait Street, and Vanguard, the largest and across multi-organizations, the largest investment banks, J.P. Morgan, Goldman Sachs, the creators of the dollar, of the pound, of the euro, and just this entire central banking, private equity, Silicon Valley, type of complex. It's completely transnational because it partnered with all the global sovereign

Starting point is 00:10:46 wealth funds, the Gulf sovereign wealth funds, Singapore, Norway, and then it also had to partner with the largest pools of surplus capital, which was China and various other things. So transnational capital is indifferent. It's not nationalistic in any way, whereas the military is kind of propped up by ideologies like Israel and Zionism, you know, a funding militia and making sure terrorism is always happening and that type of nationalistic thing. It's also represented by neocon evangelical Christians that prop up the narrative that kind of fuels the war and the fake war on terror and believing that communism is always a threat. and all those different creating a new boogeymon for the next Hitler, but always making sure that the resources come back into the U.S. stock market.

Starting point is 00:11:49 So I would have thought, for example, that when Trump got into office for the second time, there was a win-win relationship that Trump could say to Putin, I want this to end quickly. in Ukraine. And I want bilateral trade agreements between Russia and the United States. And Putin would say, I want this land. And since Russia, since Trump doesn't give a damn about where the borders are over there, he'd say, sure. And they would have cut a deal. What struck me is what stood in the way of that was Europe.

Starting point is 00:12:32 Is that correct? Is that a reasonable model? I see it differently to that. I think that is the mainstream narrative that Trump wants to create peace and Europe is getting in the way of war. When you actually follow how the main military industrial complex, it consists of by far and away, U.S. stocks, Lockheed Martin, General Dynamic, Raytheon, Boeing, Allentia, but there's some legacy Mick in the British companies, BAA system.

Starting point is 00:13:05 There's a big area in Israel and then you've got Germany. and France, those countries host private corporations that always benefit from every single war. And so what I think happened is Trump is way more aligned with the financial industrial complex, BlackRock, those banks, financial, he's very transactional. Biden was a traditional neocon aligned with the military industrial complex. And so because transnational capital, which is the Gulf sovereign wealth funds, China, Black Rock, State Street, Vanguard. They wanted to move this world to multipolarity

Starting point is 00:13:45 because they started to see the returns in America diminish, and they wanted to build little financial centers all around the world to hedge against this concentration within Europe and America. And so when you want to create regional stability in the Middle East and end the Forever War, you need to give the military industry, complex compensation. And the only compensation that you can give it

Starting point is 00:14:11 if America effectively is becoming a regional hegemon rather than global hegemon is you need to give it Central and South America and Europe. And so Trump doesn't want to end the war because the military need to make up for lost profits if this is the final war in the Middle East. And so whenever you end the war, you have to set the parameter for the next war.

Starting point is 00:14:35 And so immediately what he did is he, if we're going to have any breakage in the Petro dollar and the Forever War here, then he created a narrative of, I want to end the war, but I need to blame it on Putin, and I need to blame it on Zelensky. So Zelensky had the humiliation ritual, but Putin is going to get Ukraine, and BlackRock is going to get, you know, the rest of the minerals when the final negotiation happens. but the military needs at least another three years and a trillion dollars out of that war.

Starting point is 00:15:09 And so Trump created a narrative and he re-said, right, NATO, we're going to get you to sell a lot more weapons by, let's have this war for another three years or so. And you're going to pay for it. And all the money through the euro dollar is going to go back into the US stock market. And we'll print another trillion and a half in order to get a massive military budget. But the Russian war must continue, and there must be a constant threat in Europe that Putin is the next Hitler and he's going to take it over. So they constructed that narrative, made it look like Trump wants to end it, and Europe is the enemy. And now you've got strategic tension across Europe using Russia in order to make up for lost profits in the Middle East. That's how I see it.

Starting point is 00:16:00 I didn't think that Putin was an expansionist story was very compelling. It always struck me as a very bad narrative. And I kind of figured that few of any importance bought that narrative, that that was just a clickbait narrative that Putin would expand and the Soviet Union would expand. And that always struck me as crap. And at one point, Putin said, you know, why would we invade Europe? You think we're nuts? and I think that's a pretty reasonable few of Russia's stance.

Starting point is 00:16:34 I never quite understood that narrative is one that could lead anywhere because it always struck me as sort of Twitter-level logic, not any higher than that. I did talk to a military intelligence guy from another country who said that this Ukraine War is going to go on for years, and that shocked me a little. Yeah. I thought we'd be finding a way to wrap it,

Starting point is 00:16:57 but that's not consistent with your model of the world. Let me ask you this. It seems as though there was a shift that you could see, and I've never quite understood this, where at one point the dark lord of it all was Goldman and all of a sudden BlackRock takes it over. What was that power shifts? What was that about?

Starting point is 00:17:17 Yeah, so look, Goldman is definitely powerful. JP Morgan is the most important investment bank because they're also a retail bank. They get to create the dollar. They get to financialize securitize, and they have an asset management. But BlackRock and JPMorgan were effectively the net winners of the 2008 global financial crisis. BlackRock got Barclay's iShares,

Starting point is 00:17:43 which was the ETF division in UK and Europe. And ETF has become the new currency war. So if you want to control corporate interest, then because the money, markets are so disjointed from reality now. The one way of doing it is you need to have the money printer. That's what affects a share price right now. So always having the money printer go. The second is ETF inflows. And so now everybody is contributing. They're not picking individual stocks. They're just giving BlackRock State Street and Vanguard their money. And so you go figure out

Starting point is 00:18:22 what the 500 best stocks are. Right. So the passive investing model, yeah. Yes. So the passive investing model, BlackRock was effectively the one that was able to acquire all those assets in the 2008 financial crisis. And effectively, their software, Aladdin, has been used by both the Fed in the 2008 global financial crisis.

Starting point is 00:18:47 Most central banks that are members of the Bank for International Settlements, most, Most pension funds and money managers, and also during COVID, it was used by Treasury in order to allocate people. BlackRock effectively built the best software, the AI, and it got global penetration in order to push out data to all the largest pools of capital in the world. But obviously, J.P. Morgan is still involved in bringing these new companies to market, financialization, securitization. and the banker of all the black op operations and deep state operations as well. So they are both above government, but both BlackRock and JPMorgan have kind of hit the center stage. And now BlackRock's got approximately $12.5 trillion of assets. So it can move capital.

Starting point is 00:19:42 It can control. It's got 20,000 board seats. And it's got the AI and data feed that all the central banks and money managers are reliant upon. So the other reset that maybe I'm being quaint and old fashion, but this, I have this deep-seated belief that markets have a way of wrestling free of control and that, that as you say, the markets are all completely insane. Very few people put numbers on them. The number I put on it, for example, just take the S&P 500, which is the generic 401K white bread investment. I have it at 200 percent. over historical average valuation, which means it can stay up there, but now you have to adjust

Starting point is 00:20:28 your thinking as to how much you will get going forward. You know, if you buy a Toyota Camry, it's a good car, but if you pay $150K for it, it's not a good deal. And so I have this belief that there's got to be a reset. I'm not sure there's one reset, but there's got to be a reset that gets rid of all the fictional profit, gets rid of all the fictional cash. which is really just pixels on a screen and doesn't represent real wealth. And maybe I'm just thinking like an old man. But it seems to me that there's no case in history where our market got way overvalued that didn't eventually find its way back to cheap.

Starting point is 00:21:09 It doesn't mean it'll be fast. In fact, the worst case for me is if it's slow. The worst case for me, to use an historical press, it would be like the Niki. I was listening to George Noble the other day. George and I were out of Twitter spaces, actually. Invited me on a Twitter space. It's like, holy moly, what are you doing, George? And I said, I think our markets will become uninvestable much the way the Niki was uninvestable starting in 89.

Starting point is 00:21:36 And he said, where you could short it. And I didn't know that he actually made money shorting it. I didn't know that at the time. But I said, you know, it took 20 years to find a bottom. That's not, you know, you want something that cliff dives, right? church sellers love it when it cliff dives. Then Niki, there were opportunities, but you could also go broke trying to short the NK too during that 20-year period because it just kept shaking you out of your position.

Starting point is 00:22:01 And that to me is the worst case scenario because I'm going to be in my grave before I'm offered a buying opportunity to get back in that game. And I did notice that although this morning started out bleak, my metals are finally pseudo-behaving, although gold's not, but silver is up. Silver apparently someone pounded the shit out of it a minute ago because it was way up there. These things are like give them some riddling or something, you know, holy moly. But something's got a break. This is teenagers driving on Black Ice.

Starting point is 00:22:32 There's a fish tail and at some point someone's going to drive this sucker off the road. Do you know thoughts? I agree. There's a lot to cover there. So effectively the distortion is money printing, obviously. You know, America has to print. The dichotomy that America is in right now is if you look at the average cost on its, what are we at now, almost $40 trillion a debt. Right.

Starting point is 00:23:00 Right. It's, yeah, 30. Yeah, and that's today. Yeah. And we'll be, yeah, we'll be. I'll tell you, they're going to get me to buy Bitcoin eventually. Yes, they will. This gold, this gold silver movement.

Starting point is 00:23:17 I'm starting to, I'm thinking of buying a beanie bacon. So the average cost of the debt is 3.3%. And the reason Trump always has to tackle on these big moves is he did it firstly during the tariff trade war, where the bond market and the 10-year yield, which really is driving the mortgages, credit card, let, their auto loans. It can't be driving credit card debt that much because the credit card debt has a 22% buffer. So the 10-year can move around the lot and the credit cards don't need. They give a damn. They're just going to gut you like a fish. True. The mortgages then. Yeah. They've got a bit of a margin there to play with. Just a little bit. There might be a reason why it has to be that big, like people don't pay,

Starting point is 00:24:15 you know, things like that. But that's a healthy profit margin on the surface. Yeah. So now, the same is happening right now. So since there was, you know, we had effectively after tariffs, we had the strategic weakening of the dollar and the trade was most foreign currencies represented by DXY, gold, silver. They were outperforming the dollar. We had this big shift, that massive move into gold. And the dollar was effectively being, weakened on the premise that it needs to rebuild the manufacturing base and, you know, that type of thing. When the bond market said no, he had to tackle. We had all this, you know, these different agreements and announcements and market manipulations and all that type of stuff. But we're getting

Starting point is 00:25:10 the same now with the Iran War because the Iran War, as soon as it started, the dollar started strengthening again. The 10-year, 30-year, 20-year yields all started going up. And the issue is that America has to, in order to keep the scheme alive, America's growth rate has to be greater than the average interest on the debt. Otherwise, good luck with that one. Exactly. So you've got to be above 3.3%. So what are the things you can do? Well, you can regime change to federal reserve and force them to put short-term rates down and roll it all over on the shorter. Then they just put in Warsh, which makes no sense based on that model. Yeah, unless you want the world to think that he's hawkish and then he does it.

Starting point is 00:25:54 Right. So he either has to be a pathological liar for 15 years. Yeah. Right. Or I still think it's possible they're teeing up the great financial reset with Warsh. Warsh, they said, you're going to be the next Volker, dude. You are going to ride the sucker to the basement. because you're the only one who's shown any balls.

Starting point is 00:26:15 And so that's my best model. I don't think, I don't think Warsh has been lying for 15 years. I think he believes what he's been saying. Very possible. And I think it's consistent with the financial industrial complex, like hedging to this new model where foreign currencies outperform the dollar and US foreign, sorry, foreign capital markets, outperform the S&P. The only thing is, is that this war changed all those trends.

Starting point is 00:26:41 There was a flight to dollar. The dollar started strengthening again. The S&P became the most stable stock market of all the markets. And so I believe that once this comes to an end, and there has to be a deal, because right now, you know, the longer term rates are going up, that makes it problematic. If we're headed into a risk. Is the Fed afraid to drop rates for fear that they will look completely feckless if they do and the rates keep going up? Are they holding back because they're afraid that they will be shown to be not in charge anymore? Well, before Simon jumps in there, I'd say that that's kind of my position in the sense that

Starting point is 00:27:19 they lost so much credibility over COVID and they're still recovering from that reputational damage that they're giving no forward guidance. They're giving themselves as much slack as possible. They're making very little moves. And I don't think they, I think that that specter kind of rests on their shoulder. But I'm probably wrong. Simon, your thoughts? No, yeah, so we are definitely in fiscal dominance where treasury policy and Fed policy becomes less useful.

Starting point is 00:27:44 And you have to just print as much as you can. There's only a big print at the end of this. We've already had this war. If the straight opens today, it already is the global reset. Coin kite has been in the game for years, creating hands down the best and most secure hardware when it comes to securing your Bitcoin. The cold card Q is an absolute powerhouse and my daily driver, and it's ideal for newcomers and advanced users alike. The tab signer gives you a low-cost, user-friendly option

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Starting point is 00:29:26 So let's clarify print. This gets to me to my, here, let me give you my Twitter-level financial analysis, which you can tell is becoming a pejorative term. To me, you create money by creating debt. And so the idea of printing your way out, short of just real-life printing, real-life, just creating money from zero, from whole cloth, which they're not averse to doing, you end up creating more debt to quench the debt. So that doesn't work for me. So then you say, okay, so there's some QE variant here in which you create money from thin air. But if we start seeing inflation, I think the Fed is going to feel incredibly cornered and say,

Starting point is 00:30:17 we already have inflation, right? You've got to be an idiot to think that their inflation is tame. But although it could become deflation so fast that you know. But I think, I think. I think the Fed, I don't, I think the Fed will be cornered if all of a sudden the headline inflation takes off if the price of lumber shoots up fivefold again, you know, and that sort of thing. I think the Fed will go, we can't, we can't lower rates. We can't create that.

Starting point is 00:30:49 That's money spicket. Tell me about that. Yeah, they've kind of got the, because they got the dual mandate, they got inflation plus unemployment. That we are at what I think is just, you know, the end. No win. No win. You can't do it. There is no win. There's only narrative at this point. So, you know, you can get, okay, put down the short term rates and probably the long term rates are going to spike because no one believes it. So now you've got to roll over everything on the short term. And you've got to find. What Yellen did already. Yeah. Right. The difference here is that, you know, the deficit as a percentage of GDP is at six percent. now. That has never happened since in Volker, I think it was about 2% or something. That sounds like a...

Starting point is 00:31:40 And it was a better read on the GDP too. Yes. Absolutely. And the last time we were here was World War II. That was the last time we got to these levels. The good news is we might be a World War III, so... I personally believe that there's no option of World War III and greater power. are negotiating a deal. I think Trump was in stores to create. Do those greater powers include Iran? Iran right now holds the key to the price of oil. And who is Iran? Iran effectively is an economic dependent upon China right now.

Starting point is 00:32:25 And so Iran is selling 90% of his oil to China. the Strait of Hamoose is open to China. And at the moment, if China is involved in a big negotiation, it is a relationship between Iran and China right now that has maximum leverage. So Trump needs to crash the price of oil. Otherwise, things are going to start breaking. I just don't see how you crash the price of oil today. That just seems to me the price of oil has been hanging on by its nails not to go up, not down. Yeah.

Starting point is 00:33:03 But, well, there is only one way to crash a price of oil. It's to reach a deal with Iran. Right. And to reach the deal with Iran, you are negotiating with the greater power, which is China. And in April, they're due to meet, but that meeting is may or may not be delayed. We don't know what to trust anymore. But to me, this is the final war, the reset of all. 50, you know, oil and LNG and different fertilizers and minerals.

Starting point is 00:33:32 All of those are being renegotiated right now to move to this world of multipolarity. And I don't think Trump's trying to save the dollar. I think he's an agent of chaos that is effectively going to have to reach a deal because right now there are two matrix. You've got the price of oil. At this price of oil, if it stays here for another two weeks, What are the key stress points we can see right now? Well, we've got the, if you look at most of America's growth last year, it was a function

Starting point is 00:34:07 of building out all the data centers, AI, all of the energy that went there, the input functions. See, I don't call that even growth to be old school. Yeah. To me, that's like you build a gas station, right? It's not growth until you start creating revenues, right? you haven't made a penny building that gas station. That's an upfront sunken cost. And to me, the AI, the AI growth is all upfront sunken costs.

Starting point is 00:34:36 And they haven't yet convinced me they know how to actually turn it into wealth creation through presumably efficiency, through presumably firing us all. Exactly. What about the possibility? What are not the possibility that they're creating a technate to use a, to use a, yeah, yeah, technocracy? They're producing a technate that's basically the Middle East. Does that, does that fit into your world? Or is the technate of the Middle East, a sub-technate of something bigger?

Starting point is 00:35:10 Well, the Middle East effectively is this, you know, the Gulf countries that are impacted, mainly UAE. Some of them were hedged. So if you look, firstly, China knew all this was going to happen. They were prepared for it. They built the largest oil reserves. They were preparing this for a long, long time. But the damage has been inflicted. What is actually happening?

Starting point is 00:35:34 So Iran is taking out all of the U.S. bases. So they're targeting all the U.S. bases. I believe I saw 13 so far. I could be wrong in the number. I think I saw 13 bases hit. Yeah. So let's go to that. There's two points.

Starting point is 00:35:48 There's two polar opposite views of that. There's the claim that we're kicking the crap out of Iran. And then there's the polar opposite claim that Iran's been throwing water balloons at Israel and bleeding them of all their fancy tech. And then they're going to throw the good stuff at them and be able to pound them mercilessly. Where do you come down on those two extreme views? I believe that there's a level. So Iran is not, I covered this in the last, one. Iran is not a monolith. There are factions of power within Iran. There's the IRGC. There's the reformist government. The reformist government is who's aligned with China. And there are IRGC, which are more pragmatic. And there is IRGC that has vested interest in continuing this war and fighting till

Starting point is 00:36:37 the end, no matter what. The crazies. Yeah, the crazies. Well, they see themselves as resistance against imperial power. On the other side, in Western, they're Islamist terrorists, and you can take whichever cartoon character. There's no question that you're a freedom fighter if it's your team and you're a terrorist if it's their team. So, you know, that's been true forever.

Starting point is 00:37:01 Exactly, yeah. And neither of them are actually true. There is a series of self-interest. And within Iran, there is an economy within an economy. The IRGCE controls the banking sector because the economy was, because the economy was, sanctioned. IRGC built all these alternative routes for weapons trafficking, various other things. And so the IRGC has effectively a big infrastructure with interest, private interest, within that,

Starting point is 00:37:32 the benefit from this continual strategic tension between Iran and Israel where they never blow each other up, but they always are a couple of weeks away from a nuke and Iran gets to say they're trying to kill us because we're Jewish. That strategic tension has built an industry that has self-interest. Is this K-Faib? Are they knowingly not destroying each other? I personally believe that if you look at Iran-Contra affair, which was declass by the CIA, you could see the exact routes between Iran, Israel, and U.S. all working together,

Starting point is 00:38:11 laundering via Credit Suisse and funding the drug trafficking CIA operations in Nicaragua. And you can see that whole operation in 1980s. And then obviously then Saddam Hussein was a US ally. Then they were put to war. America gave the chemical weapons to Saddam Hussein. And you create those strategic tension. I believe every single war across the Middle East is strategic tension engineered in order to prop up the petro dollar and ensure that the Middle East could never unify

Starting point is 00:38:46 and partner with China and eastwards. Well, that's been my model of U.S. foreign policy in the Middle East, is never let anything get strong, right? Just make sure you knock kneecap every country as soon as they start getting in any way stable. With the exception of oddly Saudi Arabia, who somehow has been on some special list of don't touch, But they may no longer be on that list. Well, if you look at the history of Saudi, so, you know, originally they didn't want to build their oil with the British Empire. They didn't trust the Brits.

Starting point is 00:39:22 So they built it. I'm shocked. I'm shocked. So they build it with the Americans. But there was always this imperial project with Israel. And therefore, you had British petroleum. They did all the covert wars with Iran. CIA MI6 overthrew the government, got rid of the democracy, and, you know, continually

Starting point is 00:39:46 installed the Shah and made sure that Iran's oil was used for British petroleum. And then obviously when they tried to nationalize the oil, you had the revolution, then you had Iran-Contra affair. Now on Saudi side, Saudi didn't want to work with the Brits, so they partnered with the Americans. We had what later became known as Saudi Aramco. So when there was a war, the Junckerpah War in 1973, Saudi and King Faisal came back and created the exact same crisis that we're having today. They effectively did an oil blockade, and the price of oil went through the roof.

Starting point is 00:40:23 I remember that vividly. Yeah. Then we had the stagflation that followed. Now, there were a few things that happened after that. There was the assassination of King Faisal. and George Bush created a COVA operation called Safari Club. And that Safari Club was essentially an intelligence network. And after regime-changing Saudi, there was a lot of the more pro-intelligence operations

Starting point is 00:40:52 and that partnership between Saudi. Now, they built a lot of the more radical stuff, like what they call today the Islamist terrorist. you know, they built a lot of these training camps. America was paying for it. Saudi intelligence, CIA and Mossad were connected. I believe that they were the engineers off 9-11. Right. And they took down the towers and then you had the clean break memo, the seven wars.

Starting point is 00:41:22 But Saudi over time. So who do you think new? I'm going to take us right down to Twitter level again. Who do you think new 9-11 was coming? I presume the U.S. and Israel did. U.S.S. Israel and Saudi intelligence, deep state. Those are the big three. Yes, yes.

Starting point is 00:41:41 While the Israelis danced. Yeah. Yeah, you know, and that they're all over the Trump administration now. Like if you look at, so the organization, I'll put a, I'll link, remind me, Nathan, to link to a blog where I can give a documentary on this stuff. but there was that safari club creation the massad part was urban movers which was a massad op in America that actually got arrested

Starting point is 00:42:11 you had the dancing Israelis they were detained for nine months and if you look through the flow of money in the FBI declassified documents one of the loans to urban movers which is the one that placed the bombs and was you know at the bottom and was connected to Mossad and the Mossadop and the Dancing Israelis.

Starting point is 00:42:33 One of the loans, if you look at it, came from Steve Whitcoth. And so Steve Whitcomb is a deep connection. And obviously, you also look at Cantor Fitzgerald was the expected institution that profited from all the options trading and shorting the market. That's not been confirmed, but they've never released. They declassified that. And Howard Lutnik and Larry Silvestine were the two that were the lucky people who didn't go to work, yeah.

Starting point is 00:43:03 He didn't go to work that day. I have this. He had the insurance policy as well. Yeah, both, both towers, right? I have this theory, it's just a, maybe I'm looking for a trace of humanity in Lutnik. I think that might be a fool's errand, but that maybe Lutnik was told don't go to New York that day without telling them why. Or do you think he flat out knew and let his entire company get fried?

Starting point is 00:43:29 I think the jury's out on that one. His brother was killed in that. So that would be a tough argument. It would be tough to argue that he let his brother get killed. I think so. You'd have to believe that there is the highest level of blackmail and degeneracy or something that is incomprehensible to the human minds. If you put it that way, it makes subtle sense.

Starting point is 00:43:49 Yeah, exactly. And he was in the Epstein files all over it. Yeah, yeah. I was on a podcast with Nick Bryant, a Zoom call, and he said, I said, I just did some, like, lightning around questions with him and what I said, I've got a lot, Nick dead to rights, right? And he said, oh, absolutely. He's absolutely. The obscene files are not ambiguous.

Starting point is 00:44:09 I knew it because I've been seeing the emails, but he's still in the White House, right? He's still, you know, he should be bouncing down the road like a golf ball. Yeah. But I find it hard to say that I could definitely, categorically say that he knew. But he knew not to go to work. Yeah, yeah, exactly. So, yeah, and basically the Saudi relationship, obviously, after the blockade,

Starting point is 00:44:37 after the stagflation, after the safari club, then we had the signing of the Petro dollar. And the Petro dollar effectively meant that Saudi would keep buying U.S. treasuries, lend it to the U.S. government. That would create the demand for the dollars. and by this time we'd already gone off the gold standard in the Nixon shock 71. And so now we had effectively, you know, this relationship. Now, what changed during Trump administration in this relationship is America, through fracking,

Starting point is 00:45:11 became an energy exporter. And so now America competes with Saudi, competes with the Gulf countries. And so you now have this very, very changing environment. So what was Saudi doing, what were all of the Gulf countries doing, well, they were selling their oil to the rising manufacturing base, which was China. And so now China was buying oil from Iran, oil from Gulf, oil from LNG from Qatar, and effectively became the primary financier of the Gulf sovereign wealth funds. So what did the Gulf sovereign wealth funds do?

Starting point is 00:45:48 Well, they effectively said, we're not going to buy your trade. treasuries anymore. If you remember during the Biden tried to get like Saudi to flood the market with oil and famously Saudi partnered with Putin because he was upset that Biden didn't help him with the Houthis and various things. But, you know, they started buying US equity instead. Now, this comes to the current markets. So Saudi is not really buying. There is not much of a petro dollar anymore. There is a petro yuan on the Chinese side, but the petro dollar, everything's being priced in dollars and the vast majority of the world are settling in dollars, but they're not buying treasuries with those dollars because now they're buying gold and they're buying US

Starting point is 00:46:36 equities. And so if you look, what was the growth? What was the AI trade? It relied upon two sources of funding. One was the private credit market, you know, by the financial industrial complex, basically lending by putting together these packaged products. Those are the ones that are blowing up right now and getting mass withdrawals. But it was also transnational capital. It was Gulf, sovereign, foreign direct investment. And so they were buying up the AI infrastructure, doing deals with Nvidia and saying, you build the data centers here, we'll plug our energy in.

Starting point is 00:47:14 And so effectively, America has been asset stripped of all of its innovation. they weren't buying the treasuries, they were buying gold instead. And as the dollar started weakening, they needed to protect the peg. How are they going to protect the peg? Well, they had to just sell their treasuries, and they're not going to sell their gold. But the more, the less, if they run out of treasuries, they're now protecting the peg to the dollar by selling gold, which is obviously not a trade that's going to last forever. So you need to reset that relationship.

Starting point is 00:47:45 one way of doing it is get Iran to blow up all the U.S. foreign bases. You get America and Israel to take out some of the hardliners, turn it into a government that would work with China's vision of the world. China has leverage over Iran, all the Gulf countries, and America, because America's running out of weapons. If it wants to build those weapons, China could just say, no, we're not exporting. So the American military industrial complex

Starting point is 00:48:20 is dependent upon China in this relationship, which is why I can only conclude that people are negotiating, talking, and this is leading up to a big deal between the powers within America, which are military, financial, and technical, and China. And Saudi is going to probably renegotiate defense contracts And immediately what happened, as soon as Iran started hitting those strategic targets, we had, then they started targeting the energy infrastructure, pushed up the price of oil, the closure of the strait of Hamous, every single, you know, relationship renegotiated.

Starting point is 00:49:02 Even countries like Qatar, very interestingly, they did force major, turned off their LNG plants. but they're a 70% owner in Golden Path in Texas, which is 70% owned by Qatar and 30% owned by Exxon. And so they're somewhat hedged, but UAE wasn't hedged. But all of this distress selling that's happening in UAE institutions are buying up right now. So effectively, what the financial industrial complex is doing is getting a foothold in this new multipolar world order. Trump is delivering the set of circumstances to renegotiate these contracts. And then eventually, I believe there will be a regionally stable Middle East because it will no longer be the Middle East. The reason it was called the Middle East is because London was looking eastwards and saying this is the middle of the world.

Starting point is 00:49:57 It's now going to come West Asia again because it's all renegotiated with China. And Trump, via Israel, is just trying to give as much leverage to the banks and financial. institutions to get as big a foothold in this new world as effectively the Middle East control the future of the dollar. Before you jump in there, Dave, I just sign a quick question. The LNG plants, the oil and gas infrastructure that was hit by Iran, was that intentional or was that the military industrial complex taking shots at the financial industrial complex?

Starting point is 00:50:29 Was that part of the plan? Or how do you read that particular event? I believe there is a power struggle. and there was a plan, and there are factions of the military that are fighting against that plan, represented by, you know, neocons within America, Zionists within Israel, and hardliners within the IRGC. And so I think they are genuinely resisting this. And there is a theatrical agreed-upon outcome that has spiraled out of control. But in the end, I think the financial industrial complex,

Starting point is 00:51:07 will get what they want. And the military, just like it was in Venezuela, is being sent on these missions for transnational capital to go and get it done what it needs to be done to transition to this new world. See, you know, I thought the 12-day war, which I don't even quite understand this name, because I don't remember it lasting 12 days,

Starting point is 00:51:30 was all theatrics. In fact, the way I looked at it was Team Trump reached out to team Iran and said, we're going to pretend to destroy your nuclear facility, which if the Iranians are as smart as I believe they are, there's so a way you can bomb them into oblivion because they're going to be way underground. If they're really important, they're not going to be sitting in a quonset hut. And then Iran said, well, we're going to bomb an irrelevant air base, and they agreed that no one would die of any consequence. And then we'd be able to say to Israel now, shut the fuck up. And then we'd be able to say to Israel now, shut the fuck up.

Starting point is 00:52:06 And that to me was the theatrics. I thought it was brilliant theatrics using a simple model. Yeah, and I completely agree. I agree with that. People don't like referring to theatrics because people die and things go wrong and stuff like that. But it is theatrics. But it is theatrics. And it ended with the Qatar operation.

Starting point is 00:52:29 And then, you know, Iran went after Qatar. And then Qatar didn't retaliate. and then Netanyahu had to apologize to Qatar and Trump brokered that, and they had a three-way victory narrative. But in the end of this, the question you originally asked is, is U.S. kicking ass or is Iran kicking ass? I believe this ends with, and this could go wrong, but I believe there is a deliberate attempt, and it seems on track.

Starting point is 00:52:59 At the end of this, the U.S. will have a completely weakened presence, that will be renegotiated along with China and Russia and the Gulf countries. Iran will have a country that is going to be subjected to sanction relief and opened up in mainly China's conditions. And there probably will be a joint security force with the strait of Hamous. There will be a Palestinian state and there will be normalization between Iran and the GCC, and I think they have, to some degree, which people find hard to believe, agreed what targets are being taken out.

Starting point is 00:53:43 But there's hardliners that are going a bit further. Like, I don't think anyone agreed to kill the children at the Iranian school. What do you think happened there? Was that an AI fuck up, some say? Or what do you think happened there? I believe there are factions of power that are engaging in false flags to derail this. One of those is, you know, hardliner radicals in Israel. The other is Russia really benefits from this.

Starting point is 00:54:12 But Israel didn't benefit from that at all because it looks like a consequence of Israel's bad behavior, right? I think. Well, it was America. No, I know. But the extent that, I mean, at least the average Joker like me thinks that Israel dragged us into it. and therefore when something bad happens, you can point back to Israel. I have this faith that wars have this ability to change course on you abruptly, and that once it goes kinetic that the best laid plans, you know, I have a friend who is a lieutenant colonel, and he said, you get these directions, you know, take Hill 521.

Starting point is 00:54:56 And it says right at the top, take Hill 521. And he said, the reason it's there is so that when you're in the middle, and you're shooting in every imaginable direction. You go back to the top and you say, what did we plan on doing? Don't lose sight of the fact that Hill 521 was our goal, you know, that sort of thing. But I have trouble picturing what we'll call, I guess, the hardliners of Iran, not wanting to destroy Israel.

Starting point is 00:55:22 And therefore, you know, if I could easily imagine those guys saying, look, we're going to take out the seven desalination plants. Yeah. I don't think Iran would ever do anything as extreme as such an extreme attack on civilians. I know we're led to believe that they would. Oh, I recognize that we have propaganda too. Yeah. Yeah. So I think we did have the Iranian desalitation plants hit, but it was in a managed way because it didn't create full water insecurity. but if you hear Israel's water desalination or the Gulf, it's catastrophic. It's a full-blown civilian target, disasters, humanitarian crisis.

Starting point is 00:56:09 I'm hoping that that doesn't happen, and I don't believe it is meant to happen. But I do believe there are several factions that can derail this. There's always private interest from those that benefit from the current setup that don't want to transition. Russia is significantly benefiting from this situation. So although they are aligned with China and they're aligned with Iran, they are getting, you know, a significant windfall out of this. And that might have been agreed. And so that it might be, you might want to use false flags to push it a bit further. And I do believe that America is meant to end this saying it was Israel's fault. This wasn't our war. Trump got blackmailed. He was Epstein. I think that's a construct of, how the average American is meant to feel.

Starting point is 00:57:01 Trump wouldn't, Trump's enough of an, I always, to underestimate Trump is a big mistake. He should not be taken literally, but you got to take him seriously. And I have trouble picturing him falling on his sword

Starting point is 00:57:16 by playing along with some plot that requires that he gets overtly, publicly blackmailed as part of the plot. They could do, do it to him, but I have trouble him participating in such a plan. I also have trouble imagining that there aren't just guys of Iran and say, fuck it. And just get pissed off and say, you know, my family got killed yesterday.

Starting point is 00:57:45 Hit the desalination plants, right? And, and, and, and Israel will die of thirst, right? Israel, 70%, 80% of their water comes from desalination. Israel will become an absolute killing field of a magnitude, you know, dwarf anything we've probably seen in our lifetime. Yeah, I completely agree if that happens, and I personally believe it won't happen. But if it does, that's a complete disaster,

Starting point is 00:58:16 a crime against humanity. Yeah. It is awful. but Israel is definitely meant to end up, burdened with a lot of debt, an economy that no longer works and strategically weakened at the end of this. I don't think they're going to have a humanitarian crisis, but they are meant to be vassalized, I believe, into the GCC, while Iran is effectively vassalized into China. And then Trump is negotiating for the financial industrial complex.

Starting point is 00:58:46 But Israel's not going to sign off on this plan. Whoever's, right? This is going to be over Israel's dead body, right? Because Israel's taking a beat. I mean, anti-Semitism is really hitting new high watermarks, right? And I think Israel's paying a very, very high price for this war. Israel has always benefited from anti-Semitism. Mild anti-Semitism.

Starting point is 00:59:14 True hatred doesn't go. It doesn't work as well, right? On the military side, Israel to me was a jurisdiction where American military companies and the deep state can engage in their crimes against humanity. They turn Palestine into a laboratory where they could test the most illegal types of surveillance technologies and crime criminal technologies. And Israel was always the jurisdiction for doing that. The money would always float back to the U.S. military companies, everything that was laundered three. it. But it was always a tool for military powers. And if you want to recruit an army, they were involved in radicalizing the evangelical Christians by rewriting the Bible.

Starting point is 01:00:04 The Schofield Bible. Skofield Bible. They also were involved in ISIS and Al Qaeda training camps that was funded via USAID. Elon Musk in the Department of Government Efficiency, accidentally revealed that in 2024, $694 million went to ISIS training camps via USAID. And so ISIS was always an Israeli and U.S. deep state proxy, and so is al-Qaeda. And so if you want to recruit, their job was to radicalize the three faiths, make the Jews join the IDF in order to engage in the ethnic cleansing. in Greater Israel Project. It was to fund and train via covert means with Saudi, Israel, and U.S., the Islamist terrorist.

Starting point is 01:00:59 And it was also to radicalize the average American into thinking that they needed to protect Israel so that the Pentagon could continually push that budget over there. And they always had the justification for the... That's failing. That one's failing. Well, now the project is over because I believe that the financial industrial complex, which is the Gulf sovereign wealth funds, now have leverage and they're able to say, OK, China's got this game with Iran.

Starting point is 01:01:31 We've got this game with the Western banks and BlackRock. Now we're in a situation where we demand regional stability. We'll give you one final war, eliminate the proxies. We don't want any more Iranian proxies in Lebanon or in or in, or in, Yemen or in Gaza. And we, Saudi will not normalize until there is a Palestinian state. And Israel needs to be economically weakened and stop using it in order to agitate the region. And so a very dangerous last final war has, I believe, been set up to try and achieve that

Starting point is 01:02:09 goal. And who's pulling the strings is China. And so this really comes down to, if you want to put it in its most simplest, form, a negotiation between China, Black Rock, and J.P. Morgan. That's what I think this war is. A lot of dead guys. I've always argued, you know, the 9-11 story, there's people who have trouble grasping the idea that you could let that many people die. And I say, look, if you're in a position of great power, and, you know, these are the same guys who had to drop guys to their death on Omaha Beach and Normandy and places like that, that if you can't make that call,

Starting point is 01:02:50 you can't have that job. Now, I'm not condoning that call. What I'm saying is that the idea that you're going to lose 3,000 people means they wouldn't do it. That's highly flawed thinking. Those are the casualties of war. Yeah. I mean, if you think about the best way to think about this is in terms of, you know, you had the Dutch East India company. You had the Dutch Central Bank, and you had a partnership between government and private corporate

Starting point is 01:03:21 interest that would use the Dutch naval fleets in order to go get resources and engage in mercantilism and colonialism in order to build a colony. That then, they outsource some of that cheap labor, and we had the British Empire. The British Empire did the same thing. You had the British East India Company, the private sector interest. You had the Bank of England, the money printing, and the government was the piggy bank. You bankrupt the government and then you change the order. They then set up the games that made up the post-World War II empire. You know, Wall Street effectively funded Nazi fascism.

Starting point is 01:04:03 Wall Street effectively funded the Bolshevik revolution that led to the creation of the Soviet Union. And Wall Street as well set up the Federal Reserve. And so you created in a game where you could profit from the Cold War, you could profit from these strategic tension narratives. And in the end, once America defaulted on its debt in 1971, when it wouldn't let anyone exchange the dollar for gold, as per the IMF agreement, we entered into this fiat currency debt-based Ponzi scheme where the goal was to simply bankrupt the US government. government, put all of the assets in private interest, which became a more decentralized British

Starting point is 01:04:48 East India company, Black Rock State Street and Vanguard. And then you use the Federal Reserve system to basically end up with all the hard assets, burden the people with the debt, and then you reset the empire. The only difference here- End up with the World War, just like we did the Germany, right? Post-World War I. Yeah. But the difference here is that they don't control China and they don't control Russia. And so now you have to negotiate with competing powers, which is why we're getting a multipolar world order and kind of the traditional tools of hegemonic power now require a competing power that you don't control that you have to negotiate with.

Starting point is 01:05:35 So this 400-year experiment, starting from the Dutch to the American Empire, is now at the transition phase. And I believe that World War III is not an option because all these powers recognize that no one's going to be. At least a traditional World War III. Correct. So we need a stage. And this, I believe, to be the final stage. And that's what we're witnessing. So here's what role does the source.

Starting point is 01:06:05 psyche of Joe Sixpack come into play. So, for example, I just finished Jonathan Turley's book, Rage and the Republic. I like his books. They're very good. And he talks about the sort of street level chaos of post-revolutionary France, post-revolutionary America, you know, it wasn't just they revolted and they took over. You know, there was unbelievable chaos that was going on. And And Joe Sixpack can make a difference when they get mad enough. And so you do have to worry about them sort of keeping them along, which is this whole wealth disparity debate that goes on. And we're at a top of a cycle, right? Or we're somewhere still near, but I think we're over the far side of the credit cycle.

Starting point is 01:06:58 Right. So I think we're not going to, rates are not going to go down from here. They're going to go up and it's going to be multi-decade. I think and that sort of thing. So it's downhill from here as I see it, and I think as you describe it, right? We're going to get, we're going to get operationally poor or less rich or whatever. You got a whole generation who have tremendous student debt and can't buy a house and just all the things and, you know, all the available women are trannies and, you know, nothing's working. and we're at the top of the cycle.

Starting point is 01:07:37 So what's the bottom look like? So let's say we do a Niki-like thing, which is an old school. It's just a price of an asset market. But nowadays, we really go to the Valley of Death, which is my metaphor, there's going to be a lot of grumpy people. I mean, are super grumpy because we're not starting euphoric. We're miles from euphoric. I call it the complacency bubble.

Starting point is 01:08:00 I've used AI to try to figure out if that's an original concept and AI gives me credit for it. So that's entertaining. But it seems to be like there's a bubble in everything, right? Private credit, private equity, normal equities, housing market, you name it. Everything is unloaded. It seems to me when this lets loose and private credits already were let loose, which means private equity is going to already let loose. As soon as Harvard started talking about lightning up on their alternative assets, you knew there were trouble. The minute Harvard mentioned it, right, everyone should be rushing for the door.

Starting point is 01:08:35 I think we're going to end up in a very grumpy phase. And I don't know how grumpy the populace can get before they start becoming a parameter to be considered seriously. If you're a homeowner and you want more Bitcoin, Horizon just opened a whole new door. Most of your wealth is locked in your house, growing a few percent per year, while Bitcoin has historically grown far faster. Horizon lets you convert a portion of your home's future value directly into Bitcoin without taking a loan. No monthly payments, no interest, no term limits. You stay in your home and you fully control and custody your Bitcoin.

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Starting point is 01:10:22 Firstly, I don't think that's a global thing. No, that's a local. That's the local thing, yes. So let's say the Western Hemisphere, Europe, America, Canada, that region. I said that they need war in or they need to continue the strategic tension with Putin in Europe. Europe is vastly more impacted than America. But the wealth inequality is the thing. So the wealth is being concentrated in the hands of fewer and fewer people.

Starting point is 01:10:55 And so after this war, I believe we do get some kind of deal, some kind of three-way victory. Everybody gets maybe there's a Hollywood movie at the end of it, like the 12-day war. And Trump gets to bring it back. And we get a weaker U.S., a weaker Iran and a weaker Israel. And that's what you need for regional stability in the Middle East. So that then happens. Initially from here, we are going to get significant inflation. will be supply chains that break, food insecurity, the World Economic Forum will further their

Starting point is 01:11:31 agenda. They'll say, stay at home, don't use energy, you know, they'll weaponize the whole thing to achieve their COVID-like goals of a technocracy. And, you know, they will do that. But then we're going to hit the inflation, I believe, will take us to demand destruction that can only end in a recession and a big print. And so you have that big print. You have that recession. And I don't see any alternative to that after this. But then what are they going to do with the sheer level?

Starting point is 01:12:10 So if America enters into a recession, the deficit to GDP ratio blows from like 7% to 15%. Tax revenue goes down. Yields go up on the long term. the refinancing of debt becomes more and more distressed. And so what are they going to, well, they'll keep that alive for as long as they can, as long as people will use treasuries as collateral. Right now, they're kind of 40% of all the auctions, the treasury auctions, have been done in Cayman Island.

Starting point is 01:12:43 And that's a basis trade where they're just trying to do 100 to one leverage trade by the hedges in that disparity. How much money are we talking about? What kind of total wealth in the Caymans is like $5 trillion or something? Is it bigger than that? Yeah, no, I think it's about, so Japan's at $1.8 trillion. And I think Cayman's at about $2.5 trillion. I need to check that right now.

Starting point is 01:13:07 Not quite $5 trillion. But it's based upon the Japan carry trade. So right now. Which started to crack. Yeah. The 30-year Japanese debt took off like a skull to dog upwards in terms of interest, right? It appears that Japan just basically flicked it in and said, we're done with this crap. We're going to let the interest rates go up.

Starting point is 01:13:29 There was about a week of disturbance in the markets. Then all of a sudden, everyone's gone out, solve that problem. I go, you do not take the Japanese carry trade and wring it out of the system in five days. Yeah. So where is it right now? How is it hiding? Because that thing should be blowing the hell up. Yeah, it was hidden by repo intervention.

Starting point is 01:13:50 and they swift from QT to QE, but they didn't call it QE because they were buying short-term treasuries and bills. What year? Was that 2005? That was about 50 billion that just happened over the last couple of months. Okay. Yeah. 50 billions peanuts.

Starting point is 01:14:09 50 billions of peanuts. Yeah. So there's issues in the private credit market. The repo market was the mechanism when they had. Like the Bank of Japan did that call where they wanted to, the Fed and the Bank of Japan put in a call to do a trade. And that kind of eased the markets a little bit. You know, weaken the dollar, strengthen the yuan, sorry. And so the Japanese yen, sorry.

Starting point is 01:14:39 I was going to say, I'm loosening the plot here. I didn't realize how little I knew until you corrected that. Yeah, so the Japanese yen. Look, if Bank of Japan goes, if Bank of Japan goes off on its own path, or it is a part of the Bank for International Settlements, and they're strategically trying to break the Japan carry trade, ease off the petro dollar and break the Euro dollar, those are the three pillars. And then you've got Japan is the largest lender to the US government as a single foreign entity, other than Cayman, which is the hedges. And then you've got Europe is actually larger than Japan and China combined right now when you come across all the countries. UK is the largest, but UK is the one that's going into severe stress right now. Well, so is Germany.

Starting point is 01:15:30 I mean, Germany is a total mess. Absolutely. But also this, to take the Hormuz problem back, Japan gets crushed if this goes on any longer than a few more days is my understanding. Maybe they're already crushed. I'm still trying to figure out if it resolved today how crushed various players are. And I think some of them are already in trouble. That's because they're dependent on LNG coming through, correct? Yeah.

Starting point is 01:15:55 Yeah, yeah. Absolutely. And what happened? So we had a taco where in order to get the price of oil down, they relieved sanctions on Russia for oil on water and Iran. We're bombing Iran while we're leaving sanctions. Just to make sure we don't understand. what's going on, right? Yeah, I thought that was incredibly telling.

Starting point is 01:16:17 Now, I know it's probably the case, but I'm reminded of like there's nothing more permanent than like a temporary government solution. And that just really, I felt like showed their hand a little bit. Like, we're still going to attack you, but we can't have oil go up anymore. So starting in 2022, the Russians were selling Ukrainians oil. Absolutely.

Starting point is 01:16:36 Yeah. And part of the reason was, is because the oil wasn't a parameter for the Russian military. goal. Didn't matter. So it wasn't a choke point or anything. And so they didn't say, yeah, sure, well, it's healthy. And they will bomb the shit out of you and destroy whatever it is you do with it.

Starting point is 01:16:53 But I was a massive Putin fan by the time I was done reading and writing about Ukraine war. I finally said, Putin's the only guy's got his shit together in this world, best I can tell. Putin and Xi Jinping are as smart as they get. And Orban's no slouch. And I just like watching Maloney rip Macron's ass off. like she just tears him anewan every chance he gets she hates him but even uh him and him and his father whatever he is right yeah even america buys um enriched uranium from russia for this nuclear program

Starting point is 01:17:26 so we're probably buying the shit hillary gave him um oh by the way just to close that loop though but khan is screwed like Asia and europe so already already already already yeah okay they managed to do a deal with iran and they managed to get a shipment through for $2 million in order to get some of that unsanctioned oil from Iran. So what is happening now is Iran is renegotiating all of its agreements during this sanction relief, and we're kind of easing towards what the agreement looks like in the end. And now we're getting hints that probably someone like BlackRock and China and Iran will provide security guarantees.

Starting point is 01:18:11 Russia might provide some kind of enriched uranium stuff. But the agreement that was already negotiated, and prior to this war, Amman came out and said the framework for the deal is done. I personally believe the framework for the deal was done. And part of the negotiation was this war. And that's what we're witnessing right now. Then they go back to the table and continue the negotiations. I used to think I had a chance of understanding something if I read enough about it.

Starting point is 01:18:41 I'm now no longer convinced of this. I am convinced that markets have a way of punishing you when they get expensive. That's about that. You know, I studied in chemistry, I studied salvation. It says you dissolve things up and solve it. One of the most famous solvent experts from the past, he said, I've studied salvation for 40 years. And all I can say is the like dissolves like. And that's kind of where I'm at.

Starting point is 01:19:11 All I can say is I don't, I don't have a clue what's going on. I just, it's just the 40 chess, I'm still playing checkers. It's just, it's painful. And I think that takes us to, there is definitely that global game and the big other power is the technical industrial complex. Like they, in an environment of civil unrest, they know how to weaponize civil unrest. And they're building the AI, the social credit scores, the programmable money, the stable, the pre-crime, you know, arrests.

Starting point is 01:19:46 Palantir was doing genocide as a service in Gaza on subscription service. It was doing occupation as a service in West Bank. It was doing the integration with the drones in Ukraine. It's doing closed border, open border within America. It's doing the same across Europe. And all of those social media arrests that are happening based upon your social media and what you're about to say. Apple's buying a bunch of Israeli startups that predict what you're about to say to integrate it with AI

Starting point is 01:20:18 so that we can effectively build the biggest police and surveillance state. And what gets rebuilt in Gaza is what they want to rebuild for everybody. That's happening. I got an argument this weekend with a bunch of guys where there was some video that we also face. This is that even real question? And then we gave me shit. They said, that's so obviously AI. And I go, well, you know, when I first asked Grock, is that AI, GROC said no.

Starting point is 01:20:48 And then other people ask GROC, is that AI? And GROC said yes. I'm going, we're getting different answers. GROC is lying its ass off to us here, right? Yeah. And if you try to pin it down on something having to do with Israel, forget it. GROC does not like questions about Israel. I still think Israel's paying a price.

Starting point is 01:21:04 And I don't want to sound anti-Semitic, but the Jews in the country aren't going to like this. It is a powerful lobby. These guys are not going to fall on their sword for some grand scheme of things. I don't think. I think they're pretty dedicated. I mean, I don't think there's anyone more dedicated to a cause than the Jewish culture is to the existence of Israel and things like that. We don't have the level of passion they have. right so it seems to me that the models got to include Israel not taking a beating

Starting point is 01:21:39 I do agree that that is the the hardest part of this mission but I think that there will be regime change within Israel I think Netanyahu has negotiated his exit is he alive officially well that's the question right we're hitting well I saw something yesterday it may it sound like they said look we've got 20 different camera angles on this particular thing he just did Yeah. The claim was that there's no way they AIed all those camera angles. I'm thinking, well, maybe, who knows, right? That's the problem, right? We're in an era where we don't know what to believe anymore, and that's only going to get worse and worse and worse. Like, we're entering into that phase where we can't, I've been, we've spent the last couple of weeks trying to figure out whether Nittanyahu's alive or not based upon all sorts of stuff. And if he's alive, he's making no effort whatsoever to show that it's true. Yeah. You know he could. He flat out could if he wanted to.

Starting point is 01:22:38 Here's my thought on Israel. And it's an unpopular opinion because people think Israel rules the world. Really? An opinion on Israel that's unpopular. What are the odds? Holy Simon, you've outdone, you've undoubt my expectations. So look, most people think Israel rules the world and that's the top of the chain. Israel as a jurisdiction gets wrecked by the fall of anything that happens in America. They don't suddenly end up like the world empire with Pax Judaica. Oh, I don't think that. I wouldn't support that model. But I don't think they're going to give up positions of strength that they have

Starting point is 01:23:17 just because it's part of some grand plan. Yeah, my personal opinion is the worst thing that ever happened to Jewish people is Israel. And they just use it to recruit an army. and they depend on anti-Semitism to radicalize people in order to use them to engage in inhumane things across the Middle East. I think there will be a change to a leftist, what happened on October the 7th, tell us the truth. Why did you let that happen? That would be fun, wouldn't it? Yeah. A little October 7th fessing up would go a long ways. Yeah, so then I think you get a, you know, a leftist throw.

Starting point is 01:23:57 Netanyahu under the bus. And Israel stops being used by the military for these covert operations. And China holds the whole thing together in the Middle East with the Gulf countries, Iran. And the strategic tension, the

Starting point is 01:24:13 constant manufacturing of war by the U.S. deep state and military. The whole Massad, MI6, CIA stuff, I think they're negotiating their compensation for

Starting point is 01:24:27 whoever is the real power within Israel. Because Netanyahu's just a puppet, I personally think. He works for greater power. I wouldn't underwrite his insurance policy, forgetting about whether it was a closet or saying the Iranians could kill him. I think he's at risk from a lot of directions. Could Israel survive as a nation as a pacifist nation? I personally believe it can,

Starting point is 01:24:53 but I think it would be acquired in distress bit by bit. I think it's doing its partnerships with India and UAE, and they are being penetrated by the financial industrial complex. And so I think the financial industrial complex is effectively looking to acquire many of the assets, privatize them, strip them out, and leave Israel with no national power and control it through strategic acquisitions. And I think Abraham Accords UAE, that was the mechanism for basically having a good cop, bad cop relationship where Saudi looks great, but UAE looks like the enemy and the cock. But I think in this operation, UAE is going to become a strategically acquired financial center and Israel is going to be more and more privatized. And just like America in the West, it will be controlled by BlackRock, State, Stead, Vanguard. and those types of become the Kaman's of the other hemisphere. I think so, yeah.

Starting point is 01:26:01 We've taken out every enemy at that point as well, too, right? There's no threat anymore around them. Oh, sorry, Nathan. I was just thinking about, like, if you can blame basically a lot of it on the Liquid Party and Netanyahu, and you've taken out the hardliners in the IRC, and there's basically, and maybe we have a two-state solution or something with Palestine,

Starting point is 01:26:21 there's no really looming threat to Israel anymore. So I don't think that narrative is necessary. So I think it could. Well, the right way to frame that is there's no justification for Israel being weaponized by being used by the military at that stage. Yes. And their whole reason for existence was to recruit Jews to join the army, to weaponize them, to test weapons in the Palestinian laboratory. and the justification around that. And if there is no longer a threat that they, quote, unquote, is saying they're always trying to get us, then the need for Israel is the change we're witnessing right now.

Starting point is 01:27:05 But there is some deep-seated tribalism that goes so far back that I wouldn't underestimate the desire of some percentage of the population of Israel's neighbors. to just wipe them out. Just just just my wife ran around Morocco for a year and she ran into people who hated Jews who never met one. And it was so sort of deep-seated in the culture of some of the people that. And this idea that Israel is no longer a threat, I could imagine some of the countries surrounding it would say, yeah, right now. But but but if we stop them out, then then they won't. ever be a threat again. And that wouldn't shock me if

Starting point is 01:27:51 that was the plan saying, look, we can't let them up now. Yeah, but nukes, as long as I hang on to those. Well, that's a problem. That is a problem. I think they'll get left alone. Well, except I'm not sure the Arab states worry much about the nukes as we do, right?

Starting point is 01:28:05 I mean, the other thought I have, by the way, is if Israel, by virtue of its actions against Iran, let's pretend like it's that simple, causes a global catastrophe of energy shortages and steep global recessions and things like that. I could imagine Iran declaring that a very big win because they'll say, look, next time Israel says they're going to come bomb us, every other country in the world is going to mug them and say, no, you're not going to bomb them because the last time you did, you made us all suffer. So put the gun back in the holster, leave Iran alone because that didn't work out well. Because I think Iran has surprised some people on some topics, right?

Starting point is 01:28:52 I think so. And there is a- I don't think it should have. I don't think it should have. It should not have been a surprise. There is a rebranding of Iran that's happening because obviously Israel and America where the aggressor in this situation. So it have been branded as the defender that is fighting for their survival,

Starting point is 01:29:11 which is a rebranding of, you know, the head of the snake and the terrorists that's causing all the problems. So they are definitely getting that, you know, that rebranding. They're getting the victim Trump card. They're getting the victim Trump card. I think it's important to say that Iran does have the second largest population of Jews in the Middle East. So they've never had a problem with Jews. And 98% literacy, right? You know, an interesting experiment as you go on YouTube and you search streets of Tehran

Starting point is 01:29:44 and you watch the videos. Now, they look like they're put together by the Chamber of Commerce to me, right? These do not look like just some guy walking around the streets. The whole thing looks very well orchestrated. But it looks like New York City. It looks like a Western world, blue jeans, no face coverings, good looking food. Everyone looks happy as a clam. And the very fact, let's say it is a chamber of commerce of Iran output.

Starting point is 01:30:10 There's a bunch of them, and they all look similar. It shows you that Iran is attempting to sell itself in that representation, which means they're trying to meet the Western world and say, look, we are you. Don't do this to us. Well, Iran has always wanted to trade with the West. They've had a problem with that. This has been a manufactured war by military. operations to ensure.

Starting point is 01:30:35 I mean, an unsanctioned Iran and an unsanctioned Syria that is allowed to do, what it always wanted to do, is two of the highest growth cultural, like just the tourism, the resources, the location, if there was unification, you know, there was a degree of regional stability in the Middle East. That's what America never wanted to happen. So I actually tried to find out if there's a way that an American could sneak investments into Iran. I had a British money managing friend. I was trying to figure out, can you buy them for me?

Starting point is 01:31:17 Well, this is where the ETF conversation comes through. That's exactly right. That's exactly right. BlackRock will be managing the capital flows via ETFs into these countries, and it wants the U.S. military to open some of them up. in this transition so it can leave America as a nation state and just focus on America as capital markets. And that's where I think what happened.

Starting point is 01:31:42 I think the nation state in the West is fully financialized, securitized, and controlled by transnational capital. And they're trying to get a foothold in these new areas because they know that the jig is up and the birth rates are absolutely diabolical. like 1.5 now or something? Yeah, something is catastrophic. And they know that the labor is in Africa and the Middle East. China has its end.

Starting point is 01:32:11 It won't be able to reverse its demographic issues, so that will become issue later. But also we have this AI and robotic trade, where the utility of humans is becoming less and less. And China has the infrastructure to utilize renewable energy and new forms of energy, that makes the oil trade disrupted. So we have a lot of craziness ahead of us.

Starting point is 01:32:34 I'm less convinced that the alternative energies can battle oil. I try to get at the question of are these alternative energy is really a threat to the fossil fuel? And I've not been able to convince myself of that. Their return on, their return, ER, O, I, whatever, the return on energy seems too thin. I agree, but I don't underestimate China's desire to become oil and gas independent. Well, the nukes. This is why I own some nuke investments. Again, handcuffed as an investor, I have this such a deep-seated faith that the markets are way overvalued. And once they start

Starting point is 01:33:19 going down, every boat sinks. You don't sit there and make money on Philip Morris while in Vydea's tanking 50, 60, 70 percent. They all go down. Let's play that out just a little bit. Because Simon, with your view, if we get this deal coming up here in April, we're shifting to that multipolar world, it would seem to me that there's basically capital moving away from the U.S. and it's going to be going to these emerging markets and kind of elsewhere in the world if the financial industrial complex gets its way here. So I would think that would mean that like U.S. bonds are going down in price up and

Starting point is 01:33:53 yield. U.S. equities are going down in price as well, too. is this going to, is this, are we going to have basically if, if Dave is right about being well over historical averages, are we looking at potentially then having some sort of financial crisis in the, in the US markets or no, like there, there, there, it's going to be a managed transition. I don't necessarily see that sort of thing happening. I'm curious what you're seeing in terms of, um, the markets right now, how you think it's going to play out, particularly looking at, uh, precious metals, their recent moves. And then also your thoughts on Bitcoin, how this, how this fairs during this whole phase. Yeah, I do think the FIC want a managed transition, but doesn't mean they can achieve it. And so as long as US treasuries are able to be rolled over and they are used as acceptable collateral for the financial system, then they'll just try and extract as much wealth in this case-shaped economy as they can. Now, I think they want to utilize the dollar for as long as they can. I think they like that monopoly, but I also think they see massive opportunity in connecting all the different rails and the fact that there is financial rails in China that they can't control.

Starting point is 01:35:07 And so it's a recognition that there is more money in building rather than one US military base. What if they build military bases everywhere? What if they could try and get a foothold in connecting financial rails across multiple financial. So I think they're hedging that. And the way they manage that is by through ETF flows and through currency flows, make sure foreign currencies outperform the dollar, but keep the dollar going for as long as they can. And foreign stock markets outperform the S&P, but keep the S&P going for as long as they can.

Starting point is 01:35:43 But if you enter into a recession, you can't defy this gravity. The cost, the growth, if the growth rate is not above the average cost on the debt, and we enter into a recession, then to me there's nothing but you can't stop that correction unless you can stop it with money printing. But I think we enter a breakaway point. There you just, the jig is up. Historically, when the money printing starts, the assets start looking like lousy investment. So the 70s being the model, you know, equities were a bad return on investment.

Starting point is 01:36:25 because of inflation. So if you somehow, everyone thinks, oh, I'm going to get rich because they're going to cause inflation. My assets are going to go up in price. I guarantee you you don't get rich with inflation. You just, especially big inflation. You might get rich with a little tiny bit of inflation where no one's noticing, but you're not going to get rich.

Starting point is 01:36:47 A staff that has just boggled my mind from 1981 to the present, which is a half a century, essentially. The valuation of the market, not the price, the valuation, which should not trend is compounded 4% a year for 45 years. What happens when it compounds negative 4% for 45 years? That's just going to be ugly. It's just going to be unbelievably ugly. Absolutely. I think the Bitcoin story, Nathan, let me tell you what's happening right now in Dubai.

Starting point is 01:37:19 So in Dubai, there is a massive transfer from retail assets to institutional at deep discounts in distress. But also, their gold started trading at a discount, $30 to $50 discount to spot within Dubai. So those that wanted to leave Dubai and bring their gold with them because it's the largest gold market in the world, they couldn't. because you can't land in UK. If you fled UK because of the draconian tax structure and immigration issue, you know, you ended up in Dubai. And if you were taxed on your worldwide wealth and now you're thinking of going back to UK, you got an issue.

Starting point is 01:38:05 And so what started to happen is the war kicked off the bull market in Bitcoin to a small degree. Gold had that big correction and sell-off because I, believe that the market knows this isn't catastrophe. If the market thought this was catastrophe, I think gold and oil would be going up together, and that didn't happen. But the direction, I believe in Dubai, they started selling their gold, rotating it into Bitcoin so that they could then go on the plane and leave. So at the end of this, this becomes a self-custody story. And the Bitcoin story has always been a self-custody story. Gold in your hand or Bitcoin in a

Starting point is 01:38:46 hardware wallet, and you can flee any country, go anywhere and scale your wealth that way. Now, we have had many, many talks about force measures and derivatives contracts that can't be fulfilled by the underlying asset. We're seeing that in silver. We're seeing that in gold. We're seeing that in oil. We're seeing that in many different commodities right now. And eventually, you realize that you don't own your stocks, you don't own your bank deposit,

Starting point is 01:39:14 you don't own your bonds, you don't own your gold in custody, you don't own your silver in custody. And to me, the Bitcoin story becomes when people realize they don't actually own their assets and they can't hold gold at scale in their own pocket. And that's where I think it becomes a real story. So I'm buying into weakness. I think Bitcoin has a great future in a multipolar world. But right now it's still connected as a NASDAQ high-risk asset. So I'm a key-

Starting point is 01:39:42 So that's one of the things I noticed. I think, Nathan, we talked about this when Simon didn't show up on Friday. I like Dave who waited until Monday not to show up on time. So I put a pager in my laptop. I know. We sent him a golden pager. And but Bitcoin was tracking the NASDAQ, which really should have had. The Bitcoin guys crawling, you know, skin.

Starting point is 01:40:12 crawling. And I talked to Marty a couple times before I said, Marty, Bitcoin's tracking the NASDAQ. That is a problem, in my opinion. And so I've got a number of tweets out there where I said, I'm down today, but the good news is that I'm not tracking the markets. And well, I don't, if your, if your portfolio is tracking the markets, you're going to pay at some point, my opinion. You want to be, you do not want to be there when the correlation goes to one, right? Yeah. Yeah. Great. But I do think in this changing market, Bitcoin becomes a tool in a multipolar world that becomes a vital part of these currency wars. I think self-custody is a very, very important use case. And I think it will break the correlation between a high AI stock.

Starting point is 01:41:01 Maybe not in this round. Maybe this is another cycle of purchases. But right now, you can't, I believe, you know, gold is definitely overvalued at this. level of, but I do think there's a bigger story here. And I do think you can't have enough gold and enough Bitcoin into this. If you've got a long-term dollar cost average, I don't think anyone can time the markets right now. It's 100% geopolitical. So when you say gold is overvalued, I'm going to see if I can get a clarification on that. I was going to say it's currently 4,397. But I don't know, there is not a price to me that represents fair value for.

Starting point is 01:41:42 gold, if gold's overvalue, it sounds like a momentum statement. That is, it's over bought. It's over the enthusiasm's too high, something like that. But if gold went to 40,000, I'd say, okay, you know, the guys would say there's not enough gold to back the currencies. They go, not at these prices. Yeah. Yeah.

Starting point is 01:42:04 Right. So I believe that gold is world reserve asset and as treasury is less useful as world reserve asset, if the currency is being weakened, then. everyone goes to gold. So I think the future, the next 10 years, the demand for gold only goes up and that only can be reflected in price. Right. And to show you how nuts the markets are, I notice that gold is down about 2%, silver is up about 2%,

Starting point is 01:42:29 and the XAU is up about 3%. With gold down about 2%, and I'm going, okay, so there is some fair trade unwinding here or something. I don't know, but you would think the XAU might track. gold a little bit, right? But it's not today. And it's been a, it's been a couple of weeks. Now, someone made the argument that gold is, is collateral being liquidated because of, they made the argument that if you've got some, some boatload of oil that's not moving

Starting point is 01:43:01 through the straight, that to cover your costs, I can't remember, they, they referred to it as shorting a tanker full of oil. I think it was Duneberg, who made this argument. something by shorting a tanker full of oil, you need to sell something to cover this problem. And as a consequence, they're selling gold. I don't know how to process that information besides just acknowledge that I think Dubeberg's a smart bastard. And what I don't know, here's a question for you. Duneberg's base case for energy is that it is operationally unlimited, right?

Starting point is 01:43:37 Not to say that it's ever unlimited because it is a sphere that we live on. But he says, for all intents of purposes, it's unlimited. And that's a relative minority view, in my opinion. Where do you come down on that? Sounds pretty interesting. I think there is the whole peak oil concept has become like unproven. It's just a. What hasn't held up for the last 20 years.

Starting point is 01:44:04 Exactly. But yeah, I do think we're going to get technological innovation in terms of the energy play. And I do think that the price of energy just verges down. You know, this is one, the demand, on the demand side, there is just if this AI trade, if you crash the price of oil, you get the energy down, you do a deal, then, you know, last time we went from like $147 to $35 with Brent crude, I think, from memory. I think, I think.

Starting point is 01:44:38 Negative 34 for one of the oil. crisis, right? Yeah, exactly. And so, look, there's no, there's no, there's no choice, but to crash a price of oil. And that's what is going to determine the outcome of this right now and the time frame. There's only two things, which I think whoever's, whoever's in charge is looking at, the 10-year treasury and the price of oil. And you need both to go down. And the only way to go, to get those down is to return to where we were before this Iran war. But what you can't, you can crash the price of oil, but you can't, you can't print oil. And so you end up in this scenario where you say, look, I totally concur.

Starting point is 01:45:27 I read every peak oil book. I could lip sync them 25 years ago, which by the way made me a fortune because from January 1st to 2000 to December 31st of 2009, because I was a gold bug, oil bug, inflation hawk, and I even had some short positions in there's the right time, which I'll never do again, I compounded 13%, which was by far my best decade when graded on a curve, right? No one was getting 13% a year that decade. But it seems to me that we are having to dig deeper and we're we're having to dig deeper and weirder to get the oil that we want. Somehow that tells me where, you know, and I remember all the Matt Simmons, you know, the water cuts coming out of Gawar and are getting higher and higher and higher. It seems to me it's like squeezing water out of a sponge metaphor.

Starting point is 01:46:29 at some point you're applying vast amounts of pressure to squeeze the water out of the sponge. And I also would add, I'm not convinced that our energy independent due to shale oil was profitable. I think it might have, I think it might have been a subsidized. You know, someone said, get me the goddamn oil. I don't care what it costs. And so we gave them cheap credit. They were able to leverage their ass off. But I'm not sure, I'm not sure how much money was really made, you know, sort of net profit or how much it was based on a credit bubble to get the energy out of the oil center.

Starting point is 01:47:10 Do you have any opinion on that one? It sounds very logical to me. I'm listening through it right now. I haven't got anything too intelligent to say about it. But I think what is interesting is my, I don't know if you. saw throughout this war that Comex came out and said that in the FD that the U.S. government should stop manipulating the price of oil. I think the U.S. Treasury have taken on a ginormous, ginormous short oil position.

Starting point is 01:47:47 And I think they're managing something right now. But I do think, I do think that. But you have to cover that at some point. Exactly, which means that they have to reach a deal and then they have to cover it. And that same argument was used for driving the price of gold down, you know, shorts, driving the price. But at some point, the squeeze appears. Exactly. And so, yeah, if they're on the wrong size of a squeeze, I think is catastrophic.

Starting point is 01:48:16 But if they can cover it at a lower price by signing a deal, I think it's 100% market manipulation. So do you think we'll still be pumping a lot of oil out of the ground in 50%? years? I think so. I think so. Okay. I'll take the outside of the bat just to make it interesting. And by the way, I'll be dead before I have to pay up.

Starting point is 01:48:43 Yeah. But I do think the other side of all these contracts, I think there is a structural fraudulent nature of many of these force measures and not being able to take delivery. Oh, yeah. We're definitely going to see something. And that's why I kind of turn back to that if you can't hold the gold in your hands, you can't trust the custodian. And if you can't trust the custodian, the only asset I know that I can cryptographically

Starting point is 01:49:14 and mathematically prove that I own and do it at scale and go anywhere is Bitcoin and self-custody where I can verify my own transactions with nodes. And I think there is tremendous utility in that as his story. folds. So it does, this all reminds me of the big short. Yes. I, by the way, did write about the upcoming subprime crisis precisely on May 6, 2002. You say, well, you're too early. I go, if you predict the collapse of the banking system, five years is pretty good. You know, if I predict the Dow's going to drop a thousand points, five years too early, it's no good. But if you really predict Armageddon, five years is an error bar spot on, but they just declared that there was not a problem, right?

Starting point is 01:50:09 When they were trying to cash in their credit default swaps and stuff, they just said, no, we don't. What are you talking about? Right? They just, they did duck feet, right? Duck feet and said, we don't see a problem here. And I remember watching that play out and going, they're just denying the fact that there's a crisis. They're just declaring there's not a crisis. And it was the biggest transfer of wealth.

Starting point is 01:50:33 And we create these behest financial institutions that control our governments, all lobbies. And I think are greater powers and have no oversight at the moment, really. They've got regulatory capture. They've got government capture. And they've turned the world into collateralized debt obligations. I know, I know. CPDOs and squares and cubes and Jesus, none of this is worth a shit. None of this, none of this creates wealth.

Starting point is 01:51:04 Robert Gordon's book, which I always recommend about wealth creation, is really a must read. It's really a brilliant treatise on what actually is wealth creation. And moving money around is not wealth creation, it's a tax. Boomers, boomers, boomers health care should not be in the GDP. We're depreciating assets. Yeah. Right?

Starting point is 01:51:26 If you had a Corvair that was in the shop each week, are you better off? No. Right? It's a depreciating asset. And the way you can tell it is, is if, you know, it's like, I got an argument with a Berkeley professor, an economist, and I said the depression lasted until after World War II. And, you know, I made some argument about rationing and stuff like that.

Starting point is 01:51:49 And he said, no, but the. But the GDP shows that the GDP grew, you know, 5% a year for the five years in the war, whatever. And I thought about it, about 10 years later, I went at him and pointed out that there should be a depreciation rate built into GDP. So if you make a bomb and then you drop it and it becomes worthless, that's different than if you make a bulldozer, right? that if you build a factory if you you know so so our GDP during World War 2 was completely and it was debt based and that broken window fallacy on like an international level it's the broken window fallacy it's it's it's a it's the it's a broken boomer

Starting point is 01:52:34 fallacy when it comes to health care um i like that one um so so you really have to i We got to get back to this question of what's wealth. And AI is potentially wealth, but it's also, what I fear about AI besides authoritarianism is the fact that it's going to cause creative destruction, which is fundamental to capitalism, contrary to what a lot of people seem to think. But if it happens too quickly, right, if you go through too many cycles too quickly, each generation has to pay for itself or you go broke. And people say, well, that's that true.

Starting point is 01:53:15 And I go, well, try bulldozing your house every five years and building a better one. Tell me how that works out for you, right? No, you have to get a certain amount of usage out of something before you creatively destroy it. Or you're going through too many generations too quickly. And AI is going to do that, I think. It's going to break the system because it's going to cost change that it's future shock. It'll come too fast to process. Yeah, I completely agree.

Starting point is 01:53:43 And I think there's also an interesting one where the models between, I believe that China is developing AI because it wants productivity increase to use it for its manufacturing base. And it has the demographic issue. So it's trying to solve a real problem. And so it's government subsidized. Whereas American model is obviously it's private. And so they're trying to figure out how to monetize AI, which guarantees that they lose the race.

Starting point is 01:54:19 Although the innovation is a lot faster in America, but trying to figure out how to monetize it and how you justify the capital markets is the issue because China's just actually trying to use it to make everything more efficient to get further ahead. and I think that becomes a thing. And the other side is the silver part. I still don't know who's on the wrong side of the silver trade from that crazy,

Starting point is 01:54:46 those crazy events. And I still don't know who's on the wrong side. We haven't seen who was on the wrong side of that trade yet. So which corpse is floating to the surface? And they talk about how so-and-so is hedged. And I go, someone had to hold the hedge. Right? So when China's hedge or when Cutter's hedge or whatever, these hedges, I remember when Citigroup in 07 or something said, we're fully hedge. And my response was, what, by the Klingon

Starting point is 01:55:21 Empire? I mean, who can hold Citigroup's hedge? And the answer is the Federal Reserve. They're hedged by socializing losses and privatizing gains, which is a unique way. But it doesn't create wealth. It ultimately makes us poor. That's the problem. You have to think in widgets or something. There's digital widgets. I get it, but they still have to be widgets.

Starting point is 01:55:46 Yeah, true. And even if Elon Musk is allowed to acquire X, you know, by borrowing against his stock, and then he has to give a backdoor to the NSA and Israel for digital ID. and then they're probably building a social credit score. Is that real net worth or is that a financialized and securitized subordination and black? We're selling them the rope to hang us. Exactly. Yeah, I think it's possible that the day the Internet went live guaranteed authoritarianism.

Starting point is 01:56:27 I think it's possible that that that was like the day they split. lead an atom, you know, that it guaranteed that we'd end up with a very risky nuclear world. Now, I don't know if we're going to blow ourselves up with that. Did you read Annie Jacobs's nuclear war? That's been on my reading list, but... It's a little horrifying. So she basically interviewed all these famous, all these prominent guys in the whole nuclear military industrial complex.

Starting point is 01:56:57 And she puts together basically a chronological scenario from the first. microsecond, which there's a flash out of North Korea, and tracks it second by second, then minute by minute, and she says, you know, the president's now going to be getting on Air Force 1. So it's like the movie, like the show 24. Yeah. Right. And so she tracks it. And her conclusions, 78 minutes later, the world has been destroyed. Yeah. Wow. And from one flash out of North Korea. Yeah. Because of the protocols. Now, here's the problem with the mutual your destruction. It appears as though, as stated, our protocols say it's not a judgment call. When this happens, you must do this. And that's what causes it to spin out of control. The problem I have

Starting point is 01:57:48 is that for you to be convincing, you have to convey that you believe that, even if down deep in the bowels of the deep state, they go, but we could never do that. They can't let us know that. Wasn't there a Russian sub that there was like a miscommunication? Some guy called it. He said, I'm not doing it. He's like, I'm not doing it. Yep. Could have been doomsday all over at that point in time.

Starting point is 01:58:13 So a couple things I do want to touch on and then we'll move to close out a little bit is one. Simon, if you're wrong about your thesis, what evidence, what would you expect to see to lead you to go like, okay, this is not what's happening? We've gone in a different direction or even kind of similarly that the military industrial complex is winning in this situation and take us as a job. just boots on the ground, or is there something else that we should be alert for? And then, Dave, for you, especially with the moving purchase metals, what currently in markets has your attention, what would be a signal that maybe that great overvaluation is going to correct? And Simon, I'll start with you.

Starting point is 01:58:54 Yeah, I mean, good questions. So if we don't get a deal before the meeting between Xi Jinping and Trump, then I think the analysis is wrong. Okay, so set my watch here. When is that meeting? When is that meeting? It's meant to be April, but then there's been questions around, is it delayed? Is it not delayed?

Starting point is 01:59:14 Yeah, they'll delay it if they don't get a deal. Yeah. And so, yeah, if there is a deal and then Xi Jinping and Trump meet, then I think the analysis was right. If there, yeah, if this escalates to the point where there's boots on the ground, they try and take over Iran and they price the oil in dollars. There's a forever war and Israel gets more and more aggressive. Then the military industrial complex beat out the financial industrial complex.

Starting point is 01:59:45 But the boots on the ground isn't even required, right? It's just if there's an escalation of the destruction of capital, right? With the desalination, if Iran or somebody else takes out the desalination facilities, would that be a sufficient escalation to go? okay, we're stuck here. Yeah, if someone blows something up that creates a humanitarian crisis that leads to like the death of civilians

Starting point is 02:00:09 in the Gulf States or something like that, then we're off track. It means the rules changed. Yeah, it means the rules changed. Yeah, yeah. Okay, perfect. That makes sense to me. And then Dave, your thoughts on currently like,

Starting point is 02:00:22 it feels a little tense out there. Your thoughts on the market, what to watch for and what might be a sign that we've actually entered this correction phase? Well, ironically, I've stated many, many times over the years, I don't think geopolitical events are anywhere near as much of a trigger for financial markets as people think. So if you look at the history, World War I starts and the markets get a little jittery and then they seem to be okay. And so geopolitical events tend to not, I think, rental markets as much as people think they do. This one could be an exception since it's geopolitical into the heart of what the entire free market is, and that is,

Starting point is 02:00:58 run on energy, right? I don't know, Simon, do you think we're already going to see starvation because of the restricted fertilizer production, things like that? Do you think we're already committed to some level of famine? I think, from what I can tell, India had enough strategic reserves to make this year's crop, but there's going to be, you know, in-bamination of energy issues. So I think there'll be food supply chain issues, but I don't think we're going to see like that level of. So third world. Third world. So the markets, the thing that's got my attention is I'm confident, almost positive at this point, that the credit markets are now fractured.

Starting point is 02:01:44 They're fracturing. So I think they put away the regional bank crisis pretty effectively, but surprise me. I don't think you lose three big regional banks and all of a sudden just button the whole thing down. I think they got lucky. I think the private credit market followed by private equity, which has a Venn diagram that looks something like that. And the exit people trying to get out of their alternative assets where they're 40% of retirement accounts are alternative assets. I think that problem has already started and is ripping along. And the only thing that's stopping it from becoming a crisis is the gating, which is like, which is, which is, which is operationally like saying the only thing to stop the bank run is they close the banks.

Starting point is 02:02:33 And so, so, so I believe that no one who knowingly in a sophisticated way owns private credit is doing anything but trying to get out of it. And as a consequence, I think the private credit market game is over. The quantity of money committed to private credit is very hard to get since it's unregulated. And the word privates, it's anonymous as fraud. And then you got private equity, a stettishing number. There are more private equities than McDonald's. What? Yep.

Starting point is 02:03:06 There's 19,000 private equity, supposedly. Holy crap. And so it's a cottage industry of morons, right? It's just, and each one's doing bad things behind clothes. doors and not marking to market. And so I would say that there are many trillions of dollars that are hard to know how many that are at great risks now of that they're trying to unravel. And the only thing that's stopping them are the rules.

Starting point is 02:03:35 Yeah. Income Trump. You can dump it on the pensioners in the 401. Well, and that's not going to work, I don't think. I think that's, I think that's going to become too, that's too obviously, that's too Well, that's a humanitarian crimes against humanity, right? If my money, if my money manager lost my money because they did that, I put a ball in his forehead, right? That's inexcusable, irresponsible behavior to put 401ks into private equity. It's just absolutely irresponsible.

Starting point is 02:04:08 They probably already have, because I have TIAA money and they probably are dumping that into private equity, but I can get my TIA, the account I have is not gated. There's two kinds of TIs. One is the one that Cornell puts in that I can get it out over 10 years. Back in the late 90s, I said, I don't like that. And I rolled it out over 10 years while simultaneously putting it in my supplemental retirement account where I can get it out with a phone call. So my TIA money, when I say, holy shit, I think these guys are going to break the buck. inside this account. I'll just send it over to Fidelity into a Treasury money market, hope those guys survive. So I think that's the problem. I think it's already showing. When the real

Starting point is 02:04:56 estate market rolled over in 2006 quietly, the market ABX derivatives index started drifting away from par in either late 06, 07. I told my class in March of 07, I told my class in March of 07, that the banking system was about to collapse. And then I had the same group in 2009 as seniors. These were sophomores. They were now seniors. And I said, did I tell you the banking system was going to collapse? They go, yeah, it was February of 2009, right?

Starting point is 02:05:26 So it was just heads on fire. And I said, did your e-com professors tell you that? And they said, no. And I said, what are those assholes paid for? Right? And my first guest lecture for chemistry honors, right? chemistry honor sequence, my first guest lecturer is the former CEO of Morgan Stanley Bank of Morgan Stanley Bank, who I happen to have a connection to it. He came in two-hour talk, two-hour talk

Starting point is 02:05:52 to the class. He says, who, who, which you guys are planning on going to med school. This is in February 09. And some hands went up. He said, good luck getting a loan. And they all of them one, whoa, wow. Now, I asked him a question. This guy cut his teeth on mortgage back securities and then became CEO of the bank, the banking subsidiary of Morgan Stanley. So this guy said, he in this talk, he said, he talked about having some $900 million billion, I don't know what the number was, probably million at that point, an account which was backed by some quantity of money. I go, wait a minute. That's a two million false. leverage you got brewing there. I did some quick math. He said, yeah, it was back by nothing.

Starting point is 02:06:37 It was just pure leverage. And they said, and then I looked up and everyone was doing it. And then he left in 06. He retired in 06. And I asked him a question at the depths. I said, New York 10 years from now, is it distant memory or does it look like Detroit? And he says it looks like Detroit. So he got it wrong. He saw them not able to fix the system. And they somehow fixed it. I think Wall Street showed evidence that they didn't think they could fix the system when they paid themselves huge bonuses.

Starting point is 02:07:19 I think they basically said, look, we just got all this bailout money. The game's over. Pay now or never get another paycheck. So we're going to take the money. And then they looked up a year or two later said, holy shit, we're still in the game. I don't think it's going to work again. I think that's going to fail. I think that's going to fail.

Starting point is 02:07:39 So I think we've started. Yeah, I think they'll hedge globally and adjust to a multipolar world and get more powerful. That's right. The hedge will be in some other continent somewhere, yes. But we're going to go into the Valley of Death before we come on. We can't back out of this one. And by the way, I see famous guys quoting unfunded liabilities. And I see people quoting 60 billion.

Starting point is 02:08:04 I go, not even close. I saw someone the other day who was a smart guy quote 100 billion. I've seen the Treasury report that quotes 175 billion, trillion, excuse me, trillion, trillion, billion, 175. Larry Kolokoff, who's the world's expert, puts it at 250. Wow. So it's like three or four million per taxpayer of unfunded liabilities. These are liabilities that we promise.

Starting point is 02:08:30 And if you project revenues forward, you still don't know how you're going to pay for it. Yeah. These are the IOs use that your revenues can't account for. Four million per taxpayer, something like that. We've got half our population is not working. Half of our population is not working. Yeah. It seems like no matter what we do, the game is over.

Starting point is 02:08:52 Or it's going to reset. Yep. But you shake the out of scotch. move on. You just start over. You dust yourself off. But I think Joe Sixpack's going to be pissed off. And I don't think the boomers can get out of this one.

Starting point is 02:09:11 I don't think the boomers. They're McMansions. Who's going to buy their McMansion? Oh, no. They're going back to multi-generational households. I think so. I think the boomer's wealth is all on paper and it's getting written down by 50% pretty quick. Because there's no one to buy it.

Starting point is 02:09:26 There's just no one to buy it. There's so many assets. There's no one to buy it. There's so many assets. that there's no one to buy. Simon, any final thoughts? I think we had a great conversation. I think we should come back and do another one and see how we got on.

Starting point is 02:09:41 See who is full of shit. Let's check back and see how we did. I think we agreed on almost everything, really. I think he did, yeah. I think it was a wonderful kind of, I think Simon added some more color kind to his worldview of how we're kind of moving and what forces are driving the conflict in Iran, but I think it's largely agreement.

Starting point is 02:09:59 Right. That's boring, isn't it? What can we disagree? Well, I think I believe in chaos theory more. So you have more of a kind of a Luongo model where things, this happens, this happens, this happens. I'm more like, you know, Jackson Pollock, a believer that nothing happens according to plan because no one can plan for the shit that's coming our way. When I first got into Bitcoin, I was overwhelmed. The jargon, the security risks, the fear that one mistake could cost everything.

Starting point is 02:10:28 I remember staring at my screen and wondering, are my keys safe? Did I do this right? That experience is why I started BTC sessions. For over a decade, this channel has helped millions of people like you learn how to use and secure Bitcoin. But I realized something. For many people, videos aren't enough. Everyone learns differently. Some need to ask questions in real time as an expert walks through their setup, their goals, and their threat model.

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BTC Sessions - Next Phase of the New World Order | Simon Dixon & Dave Collum

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