Lemonade Stand - The Trade Wars Have Begun | Ep 006 Lemonade Stand 🍋

Episode Date: April 10, 2025

This week on Lemonade Stand... Atrioc gives us a brief history lesson, Aiden adopts a Korean Child, and Doug explores what happens when you build too much. Recorded on: April 9th, 2025 Clips Channel: https://www.youtube.com/channel/UCurXaZAZPKtl8EgH1ymuZgg Follow us TikTok - https://www.tiktok.com/@thelemonadecast Instagram - https://www.instagram.com/thelemonadecast/ Twitter - https://x.com/LemonadeCast The C-suite Aiden - https://x.com/aidencalvin Atrioc - https://x.com/Atrioc DougDoug - https://x.com/DougDougFood Edited by Aedish - https://x.com/aedishedits Segments 00:00 Pull out a gun 00:22 Secure assets 01:57 Today's topics 03:23 Things have changed 11:25 Three main players 17:55 Bonds and CS:GO Knives 22:54 A history lesson 29:11 Coordinated effort 35:02 Chips 37:20 Aiden in the villian chair 45:28 The Value Chain 51:10 Orphanages and "Technicalities" 1:07:34 "Nuance" 1:11:11 Building too much 1:23:30 Debt Trap Diplomacy 1:26:10 Building Fast 1:33:06 We're getting a Patreon New takes on Business, Tech, and Politics. Squeezed fresh every Thursday. #lemonadestand #dougdoug #atrioc #aiden Learn more about your ad choices. Visit podcastchoices.com/adchoices

Amazon presents Laura versus Fruitflies. Swarming your fruit and terrorizing your kitchen, these little freaks multiply at a rate that would make a rabbit say, yo. Chill. But Laura shopped on Amazon and saved on cleaning spray, countertop wipes, and fly traps. Hey, fruit flies, your baby boom ends here. Save the Everyday with Amazon. It's the family and friends event at Shoppers Drug Mart.

Get 20% off almost all regular priced merchandise. Two days only. Tuesday, April 28th and Wednesday, April 29th. Open your PC optimum app to get your coupon. With all the economic turmoil going on, I have decided to invest in a secure asset. Finally. Which one? Farcoy. So, A-Trag, you can probably guess.

I would say fart coin. It's a stable reserve. No, no, older than that. Oh, cum coin. older than that. I want to do you want me to reach for? Like, what do you want me to reach for? Like, Ethereum. No, no, no. Older.

You're investing in rock and stone. Mead my brain before 2009. That's right. I went on eBay and I purchased a real 1776 Spanish gold de Blune, which I now own in its entirety right here, ladies and gentlemen, I am ready. Now it is a little bit smaller than I've expected. Ladies and gentlemen, my nest egg. Is it really? It's really a gold Spanish to bloom.

It's about 250 years old. Dude, a pirate gave their life to try and get this. $600. And this is my hedge against tariffs. You're in the gold club. I'm so excited to have you. And what's cool is I bought this from Spain before the tariffs, so I didn't have to pay.

You're playing world markets like a fiddle. Gonna be honest. A lot smaller than I thought. This is real? This is real. It's so much smaller than I would have expected. you my whole life, I thought like, Pirates of the Caribbean.

It's like barely, I can't even, it's smaller than a dime. It's minuscule. So how much is this actually worth? $660. Are you serious? I thought it would be bigger. That's kind of nuts. It's kind of nuts, dude.

What kind of topics are we talking about today, well, you know, I, unlike Doug, chose to buy another CSGO skin this week. So we'll see how that pays out. But Today we'll be talking about the ongoing, you know, not that many changes, not many pieces of news, about the ongoing trade war with China. Not any news at all. Tariffs, tariffs around the world, especially those with China that we are not only keeping but expanding.

In contrast to last week, Doug talking about overbuilding and how building too much could be bad in the context of China. and also I may or may not be revisiting the reason that we're getting a Korean child in this studio. You got it to blue and you get a Korean child and I'll get a podcast. These are our nest eggs. Yeah. A hedge against tariffs is a Korean baby.

They didn't put all his hopes and dreams into this Korean child. Yeah. I think it's going to pay it out. Once he starts winning StarCraft tournaments, it'll pay off. He's going to get really into brood war and win those like $1,000 day those schools they have.

I have been getting really into brood war. It's sick. It's honestly sick. There is no money in it. Okay, well, obviously, if you're coming from last episode, you may have noticed that even within the span of us recording that episode, things changed. When we recorded it that day, we didn't have the calculation for how the global tariffs that were listed were actually made. So I wanted Atriok to briefly explain that and just make a correction on what we were talking about last week.

And also, if you want to just jump into how things have changed in the... past week. It was so much sillier than I thought it was. I mean, for context, what he announced it like an hour, two hours before we recorded last week. The same thing happened today. He has done another supposedly

40 chess move today, which we are now processing. Which is actually pretty lucky. I think we're, I am super glad that Trump is making these big announcements on Wednesday mornings. So that us, real journalists, can get ahead of it. Because if he announced them on Thursday, everything we say would be completely out of date.

the tariff calculation when he came out with the big board and the Rose Garden and said, this is what they charge us. It turns out that was a mathematical calculation

based on basically imports minus exports divided by imports. It just basically said, if we buy more of their stuff than they buy of us, and that counts as them charging us a tariff.

That's what they did. They used that number, which is again, I think fit made up, to charge them a reciprocal tariff. But a lot has happened since then, and we're in a fucking different world. So as of the,

today, you know, I say up until yesterday, markets were reacting horrendously, horrendously. The stocks were plummeting, we're having red day after red day. There was one day where it started green. Everyone said, oh, what recession? And they went red by the end of the day. And so it's been bad. And you might have mentioned this off pod or on pod, but one of the theories that has been espoused as to a reason why we might want these tariffs is that if the stock market

is crashing, it is going to push everyone. everyone to buy U.S. bonds. We're going to go buy U.S. bonds. And when you buy them, it drives down our cost of borrowing so that we can refinance our many trillions of debt. That was one of the ideas espoused by Scott Besson. Well, in the last few days, the opposite was happening. Our cost of borrowing was ramping up.

It was getting more expensive. And it was largely because countries were dumping their U.S. Treasuries. Japan was a major one. They were dumping them. So we were getting a rising U.S. long bond and we were getting a crashing stockmark, which is the worst of both worlds. So I don't know if this is 4D chess.

I don't know what happened. But today there was a big pivot because both those things were happening at once yesterday. Every tariff on any country that didn't retaliate is paused, except for a universal 10% tariff that is still staying on everyone. So everybody still has the 10%. Everybody still has a 10%. Okay.

But if you didn't retaliate, if you're like Vietnam or something and you didn't retaliate, then we're getting rid of the 43 and it goes back down to 10. Market rebounding? Switch tariff lift. did? Yes. What recession? Yeah, that's true.

So the market did have the biggest day in like, I don't know, 60 years. It had a massive single green day. And, yeah, Vietnam is down to a 10%. So a lot of things that like Twitch two are coming. But overall, still a 10% like compared to the old world before all this, 10% on everybody and China, which did retaliate, the war has now begun. The trade war has now begun.

It was like, you know, I'll give you a quick brief timeline. we announced Rose Garden 34% tariffs on China China goes no this is bullying whatever they said fuck you they announced 34% back Trump says big mistake buddy

announces an extra 50% on top of that total 104 then today when he like removed everybody else he added more so now we're at like just a couple hours ago bringing the total to 125% which when I someone saw someone mention this in a message

I thought they were joking. Because as we dove into last week, you know, a direct personal business investment in how this Chinese tariff specifically shakes out in the next few months. And I had a quick question for you

because one thought, I was trying to like put into layman's terms basic questions that I could ask you this week about kind of why this is going on. 125 to me, knowing that something like Chinese EVs, already had a hundred percent tariff on them before all this. And that's like a big part. The main reason why Chinese EVs can't be sold in the U.S. Right. What is the point of raising something from

104 to 125? Aren't we already at a point where there's basically no reason to raise that? I don't understand. What I will say is a 125% tariff is essentially a total trade decoupling. That is like no good can really be sold profitably at a hundred and twenty five percent markup. And is a hundred and four not that already? You know, for some small goods, I think China is so much better at manufacturing. Like, you know, making certain nuts, bolts, certain things that we have no factory comparable. So yeah, if there is no alternative, then yeah, that we'll still pay it for certain things. Yeah, exactly.

So it is a troll. I mean, the number is astronomically high, though. It basically means total trade decouc from us and China. And the only real big question that wasn't answered today, I just want to get this where we go back to China is the EU did retaliate. So the EU before today's announcement did like a 25% counter tariff back on America. And then today we're like, our allies are good. God is good.

We're back only on focusing on China. And someone reeled out the question, what about the EU? And they ignored it. So I don't know exactly. I don't know where we stand on that because EU is our massive trading partner, one of our biggest and, you know, the second biggest economy block. I don't know where we're standing on that. Because they said if you retaliated, we're keeping the tariff.

So I don't know. That's the one that I will know by tomorrow, maybe. We don't know now. Before I jump into my villain chair questions that I have this week. My first thought when I saw this was, wow, more immediate inconsistency. Like, this does nothing to fix the concerns around uncertainty. We just hit a 90-day pause on these terrorists for the majority of the countries that they were set on. This feels similar to the back and forth that was happening with Canada and Mexico at the beginning of the year.

And because it changes so frequently, it doesn't really give me any, removing the China factor from the situation and just thinking about this in a global sense. This doesn't really do anything for me personally. Yeah, I mean, I settled. I can't imagine being the guy with a bunch of capital to make the investments in factories in America or wanting to make investments abroad. and this being that comforting. Yeah, I saw a great joke that was like, you know, the guy who started a factory in America yesterday is feeling pretty stupid, right?

The guy who saw his 40% tariffs and it's like, oh, I'll move to America. No one was actually doing that. But the idea, the argument that this is going to bring factory jobs from all these different countries to America seems pretty foolish now that it's up and down. The mug mug factory was getting bill already. Yeah, we were moving it.

Enough mugs in America. Finally, you can bring those jobs back. The thing is, it may happen with China. I mean, this China thing is the real thing, because they can't sell in America now directly. I don't know what, it's a new world order. I think we hadn't mentioned it last week, too. Something interesting that I saw was they lifted the exception rule

to where you could avoid tariffs by ordering directly from China for things valued under $800, which is how companies like Team You, and I think Wish. Sheehan made basically their entire business, was based off of that existing. And now that exception is gone. Yeah, I had a chatter who's I think works at the North American branch of Sheehan and he talked to his boss and they were like, yeah, I mean, if this doesn't get figured out, we're

there's no, there's no way to do that properly. Everything is 100% more expensive. So I don't know. I think it's a good time actually to just jump into this. I want to. Oh, you want to show that Scott Besson. Oh yeah, you can show that. Show that.

So Scott Besson, as far as I can tell, correct me if you guys have heard others, there's like three main players in the Trump administration who are advocating for tariffs. Essentially, everyone else, including all the people on the right, hate them. There is Scott Besant, who's the secretary of treasury. Yeah. There is Howard Lutnik. You hate his name. I'm kidding. I'm kidding. Howard Lutnik, he's the Commerce, Commerce Secretary. And then there is Peter Navarro, who's a senior advisor to the White House. Yeah. So Howard Lutnik, having watched a little more of his stuff, seems to be a hype man with no substance. Yeah, I hate that guy. Yeah, I was trying to, trying to maybe give the benefit of the doubt.

He just, any question he's asked about tariffs, he's just like, American people are going to be so stoked. And it's like, no, that's not what we were asking. He also, Alway, he specifically said, and this is the first one I've seen a commerce secretary do this. He said to camera, you should buy Tesla. It's under value. Like, he's had a specific stock, you should buy them. And it's down from there. So, like, you can't do that. You can't pick and choose as Commerce Secretary, specific stocks to Peter Navarro is advocating a whole bunch for tariffs. He supposedly is like the big guy that is convincing Trump about the value of tariffs. And I listened to an interview with him on CBS, I believe. And then again, doesn't really answer the questions. And he has this belief when asked about how long it would take manufacturers to move factories to America. He's like, I don't want to hear about it during COVID. We got things set up in two months. It's not going to take years. So he has this belief that like America can refact like remanufacture factories in a country. He's like, couple months if we wanted to. He also, Peter Navarro, has over

half a dozen books where he quoted an economist named Ron Vara to make up a justification for some of his beliefs. Ron Vara is his last name rearranged. It's made up. He made up this person. This has been exposed. He has made up a source that's himself. So,

again, I'm not... Two out of the three I don't like, but if you get this guy best in it. That's base mode. No, that's base mode. That's some Harry Potter, Voldemort, Tom Riddell. He's in the chamber of secrets whipping up the reasons for why, for why this is actually all fun. And then Trump found his journal and has been reading from it and learning about tariffs. He's been talking to the bathroom.

Lonely Trump finally found Navarro's journal. Yeah, Peter Navarro, he recently has been saying that car manufacturers are just assembly lines here in the U.S. And they need to start making everything here. And he talks about how Elon has been advocating against tariffs and saying there should be free trade. He's been pushing back. Navarro has gotten into a tip and said, well, Elon is a car guy and they should be manufacturing everything here in America. This so upset Elon, who, to Tesla's credit, they do make most stuff in America. They're fairly integrated here. Is now we're calling Peter Navarro publicly on Twitter, Peter Retardo. And so that's the new, he's now using like Trump Eskian slurs against the people in the cabinet. So there's this strange kind of fracturing happening. It's a big fracture. Yeah, it's very, very strange. It is so awesome to watch two high-level government officials act like the people in my CS solo queue games.

Yeah. Let's see. Maybe it's not awesome. Maybe Elon should have covered B-Sight as a whole thing. Yeah. Yeah. So, however, we do have an opera here. His name is Scott Besson.

So Scott Besson, Secretary of Treasury, he, you know, A-Track, please elaborate more about his policies. I like Scott Bessent of all the options that could have been picked. I think he's a reasonable smart guy. I think he's got a background in what he's talking about. I read his stuff before he ever was part of his administration and thought he had. It is funny, though, because when I read his stuff, he used to be like, yeah, tariffs are pretty fucking stupid. And now he's in the administration. I think he has to tow the line.

But he might be like, I don't know, an operative on the inside who's like trying to, he has to cozy up to Trump and say the nice things, but he's like trying to get reason to what we're doing. And so this is his statement. Yeah. So he last week was advocating for everything about how tariffs are great, how this is good. He was advocating how if we bring the bond yield down, that's going to allow us to refinance debt and save a whole bunch of money on the debt. Which didn't happen. Just to be clear.

Yeah, which didn't happen. If you pull this up, Perry, so this is him after a stray week, right, of talking about how tariffs are brilliant. This is Trump's plan. We're going to do this. Here's the video. And all this was, again, this was driven by the president's strategy. He and I had a long talk on Sunday. and this was his strategy all along.

And you might even say that he'd go to China into a bad position. They responded that they have shown themselves to the world to be the bad actors. Damn. Okay. Keep going. There's a little bit more. Yeah, yeah, yeah. And we are willing to cooperate with our allies.

The allies. Who did not retaliate. It wasn't a hard message. It's like, dude, if like, We were hanging out, right? Yeah. At, like, um, basketball court, whatever. And then, and then I, I pull out a gun.

And I start pointing at you guys and say, I'm going to shoot you, right? And Aetriac, you, uh, say, hey, please don't shoot me, right? Please don't. I'll do whatever you want. And Aiden pulls out his own gun says, I'll shoot you back if you shoot me. Don't fucking do that. And I put the gun away and I say, that was a test. Aiden, you're not a good friend.

I'm only hanging out. That is a perfect example. I'm only hanging out with Aetriok from now on. He's my ally. Yeah, he's my ally. In this case, if we were following this with the EU example, A truck also pulled a gun out. Yeah, but you're still friends with him.

No, it's crazy because I, again, I've talked about this before, and I want to do a little presentation about why possibly coordinated tariffs on China make sense. There could be a reason for it. With the idea that this was all a master plan to get us and our allies, no, we want allies. We pissed off everybody. I got a video we may be able to pull up of like the Australian people.

p.m. Australia buys more of our stuff than we do of theirs. They're not even, even in the weird formula they used, Australia is our friend. We still put 10% on them. They have, there's Singapore, same thing. All their leaders are like, this sucks. We're, we're mad at you. And that's supposed to be our allies that we like let off the hook. It's crazy. I mean, there's nobody in any country that's like more friendly to us. We still have longstanding relationships that haven't totally dissolved that can sort of be allies here. Again, I can see the, the rationale behind a China tariff, I think this is like a last ditch,

oh shit, everything was breaking. Because again, when the stocks are down and the bond yields are up, and I want to explain that right now because you ask for a little bit more of a clarification. I think when people say the word bond, people's eyes start to glaze over. And when you say bond yield,

people's eyes roll back in their head. Yeah, I think this is a good thing to explain, like, in general, because I think a lot of people don't know about this stuff to begin with. And then for me, specifically, like my main interaction with this stuff is I, you know,

I bought some treasury bonds last year. So how does this work? At one point you had a portfolio, 50% Treasury Blount 50% CSGO knives. Yeah, the most responsible portfolio. And guess what? That portfolio right now would be holding up. That's true.

Like you and Warren Buffett have the same strategy. Okay, so quick, quick primer. If you're a rich person or a pension fund or a government, someone with a lot of fucking money, I'm cursing a lot today, you could pick a lot of things to invest in because you don't want to hold it in cash. Right. So you can put it in stocks, you can put it in bonds, you can put it in gold, you can put a real estate.

And what bonds is are essentially IOUs from governments. They pay you back. Okay? A lot of time, especially lately, people have been putting their money into stocks because they've been going up. They've been, they've had so many good years, a lot of money's been stocks. But the idea is, based on historical patterns, when stocks have a bad period when they're crashing, when they're down, people flee to safety. So they go to things like real estate gold bonds. And bonds has always been the bigger one of the three.

And correct my wrong. bonds generally are going to be lower yield, but it's lower risk, right? It's like if you just want safe money that's pretty much guaranteed, that's where you go to, but stocks is the higher return. Exactly. Bonds are guaranteed. So if you buy I owe you from the government, if you're, if you're America and you're like, can I borrow $100 million and I give it to you, you offer me a guaranteed 4%.

And historically, I think the idea is that American bonds are the most, are the best thing you could be putting your money in because, you know, the dollars, the reserve currency, it has the U.S. government behind it. It's basically a guaranteed return with no risk, whatever that return happens to be. Exactly. And the way bonds work, this is a little, it's a little confusing. It's like an auction system. So I say, I'm the U.S. government.

I need to borrow $100 million. I'll offer you 2% interest. And everyone goes, crickets. They say no. And I say, well, offer you 2.5% crickets. I say three crickets. I say four, they go, all right, I'll buy some of our debt. So the more demand there is for bonds, the lower that auction.

The more easier it is for me to get a low year. I can go for 2%. that everyone buys it. That's not what happened. That's why it's so crazy. Because that was the big idea of tariffs is like, okay, we're going to crash a stock market, but everyone's going to buy U.S. debt

and we're going to get a real low interest payment. And this idea of it being refinanced at a lower rate, from my understanding, is that if bonds are available right now, and we can list those bonds at a lower rate, but the economic situation elsewhere is dire enough, it doesn't matter that the rate on the bonds is 1% or lower.

People will want to buy those bonds, which is refinancing in the debt at a lower rate, than what it's been sold at for the last couple years during inflation. They don't want to lose money in stocks. Everything else is unpredictable, but I can get a guaranteed 1% or 2% from America. I'll buy their bonds. And the reason that's so relevant right now

is because we are ridiculously far in debt. We owe a bunch of money. We have to raise more money to keep paying down the debt. So if the U.S. government can raise money via bonds while paying less because the bonds are low, that saves the U.S. government a ton of money. A ton of, like massive amounts of money. Interest expense is like almost as big as our military budget right now.

So we really need to get the interest picks down. So that was the idea. The problem is people were not buying American bought. They just weren't doing it. In fact, they were selling them, which drives up, makes the bar, you have to go four and a half percent,

five percent. So it was rising because Japan was dumping. China technically didn't dump, but a lot of people were dumping. And so it was creating the opposite effect. And when both things are bad, it's chaos. I mean, it's like,

it could break the whole system. So I think that's why he panicked today. This was my big question for you, is that I think that was the part I did not understand. So from my perspective, somebody who's bought a treasury before, a bond. Yeah.

I could, could I have sold it for the period of time that I had it? Like the, I guess the right to get the payout? Yeah. And why does them selling their bonds at, is it because they're selling bonds that they bought at the like four or five percent during inflation? So if the government's selling at the time, they have to offer similarly high rates?

Exactly. Yeah, exactly what it is. They're selling their bonds. People can just buy it from them. They don't need to buy it from America at whatever rate. You have to go higher to, that's the idea. So, you know, probably more than anyone needs to know, but a good way to understand, like,

the plumbing of the financial system and what was happening and why it was so chaotic as of yesterday. Because the bonds were spiking, the stocks were going down, and that is a terrible double combo that needed something to change because it could get disastrous. So now, now we're into the situation. People were flooding into the de plume market.

Yeah, no, I'm not even kidding. So we have our little stock game where we all drafted some stocks. The number one stock yesterday and the whole competition was gold, was just gold. Oh, the gold stock that is just directly tied to the value of gold.

Bricks of gold was number one because everything was chaotic. That's not true today because everything's bounced back, but as of yesterday. So I want to do a little presentation here and I want to catch people up because we're going to talk about China today.

I think this is a good intro into why a China tariff might make sense, but why I think we went around it a weird way. So this video, tariffs are on, tariffs are off. We've been out of duck season, rabbit season. We don't know what's going on.

I want to flashback to World War II and give like a super brief primer on how we got here and what's going on. Because you were there. You know what it's like. You know what? Old Adiocke is? Not only was I there. Some other people were there.

So there was the Axis Powers. As you can see here. That was a good transition. These are the Axis powers. And they were fighting. I'm sorry. Historical images. Can we please focus here.

These are the Axis Powers from Germany and Italy in Japan. That's our thumbnail for the episode. And then these were. the allied powers, okay? The guy in the bottom right kind of played both sides. He was kind of like, a part of the war he was on one side. So we had the axon allied powers, okay?

Turns out at the end of the war, the allied powers won. And the bottom two here, the American president famously only had like two thirds of a head. That was the style at the time. Right. That was the FDR.

That's why he couldn't walk. He was just missing a lot of brain. A lot of people don't know that. It was brain rot. Anyway, the Allies win. These bottom two here were kind of destroyed, though. UK and Russia were kind of destroyed. So it's kind of like an American empire,

American golden age. Post-World War II, America's still got all the infrastructure. They got everything built. And it's a great time. And because they're the most powerful country in the world of the time, biggest military, best manufacturing, they set up the global world order basically in a way that benefits them. So there's the UN, there's the,

Then there's the World Trade Organization. There's a bunch of other things that the United States sets up and is like the leader of that sort of organized global trade. And that has run for decades. Through the Cold War, it was the only other power that kind of opposed America was Russia. But then by the 90s, they're gone, collapse. So now it's, they called it the end of history, kind of in 92.

America's one, it's over, there's no other. This way of working is going to be the end. Okay? Then in 2000, again, it's like all we're little kids. the year 2000, something significant happens. I think Bill Cleans, the president of time, they welcome China into the WTO, which is the world trade organization.

They say, China, you are now getting the same trade rules as everyone else in WTO. You can trade freely. There's no tariffs on you. You're all part of the thing. We talking, we talking Deng era? Is that, that's... You know, I don't know the Chinese leader at the time.

But so it's 2000. At the time this happened, these are the nations that traded more with America in blue and ones traded more with China in red. Okay? This is the state of the world at the time of the WTO entering China. Flash forward just 24 years, the world is drastically different. Now almost everybody trades more with China than they do with us.

China now makes a third of all manufactured goods more than U.S., Japan, Germany, and South Korea combined. They have just leapfrogged the globe in terms of manufacturing. Half of the new world's industrial robots were made in China. Global shipbuilding, 55% in China. China. They control the lithium ion battery industry. They control the drone industry. They're leading in electric vehicles.

There's a lot of areas that China has now become a strategic power in over the course of the last 24 years of trade. And whether it's fair, there's many arguments that most sides will make about who's being unfair and what's going on and whether China stole IP or what. There's a lot to talk about. And I think there's merits on all sides here. but what I think America is seeing, I think through a really kind of

unfortunately foggy, dense Donald Trump lands, but it's like that something is going on here. We're falling behind. In some way, we need to stop this. And that is where the impulse to get these tariffs on China specifically comes from. And again, it's not just America. So I want to point this out because I think it's really important,

is that China has really focused on exports to grow their economy. That's their main thing. They had a real estate bust. Their internal stuff's kind of actually struggling, but exports are great. They're crushing exports. They're selling EVs all over the world.

And every other country in the WTO, not just America, has been reporting more and more challenges. They've been flagging. They've been issues. This is a spike you can see in 24, but also just rising over the time, of other countries doing WTO complaints

or investigations against China. Specifically on the right, you can see they're coming from India, EU, Brazil, Australia, Turkey. Everyone has been kind of mad that China's, all the manufacturing is leaving their countries and going to China, which has been just the global mecca superpower of manufacturing. So that's where we find ourselves. And that's why it's such an interesting time.

Even the tariffs of Trump's first term did not stop this rise. In fact, it's grown in the past few years. Biden kept the things. So that's where we find ourselves. And that's why a coordinated global, having a lot of allies working with you, to maybe do a slowly but increasing tariff on China to keep some of the manufacturing out of there, makes some sense.

But when you're pissing off everybody, I want to show this clip. This is Australia. The unilateral action that the Trump administration has taken today against every nation in the world does not come as a surprise. For Australia, these tariffs are not unexpected,

but let me be clear. They are totally unwarranted. President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero. God. That's all you really need to say. He says not 10%. And we have a 10% on Australia. Australia would be a partner

that we'd really want on our side if you were trying to make some deal against China. And that's why you can see. I mean, this year hasn't ended yet, but in 25, the probes against China have dropped because people are focusing on America. Every one of these countries in the WTO is more worried about what America is doing than what China's doing with manufacturing. So that's where we find ourselves,

but I wanted to set the stage on like how much has changed in the past 20 years and why this is like a big issue that's being talked about. One of the interesting things I was reading about some folks who run factories and were just giving their experiences with this. One of the things they mentioned is that even like, it's not just raw materials to make things.

It's even, for example, you showed all the automation robots to build things in factories. The idea that America is going to rebuild or any of these countries that basically the manufacturing has been lost because China just exports to everywhere and reduces their need to manufacture themselves. Like, they make all the equipment

that you would use to make a factory. Like, if you were like, you know what, we are going to build our factories here? Okay, where are we going to buy the robots? Where are we going to buy the parts? Where are we going to, where's the expertise for building these things? It's all from China.

So it's like, yeah, it's crazy. And why I have been shocked at the, you know, again, those couple people who have been saying like, oh, yeah, we can definitely rebuild. Peter Navarro, we can build in America. It just feels it's not lined up with reality at all. So I mean, what you're saying is if you had kept the, the allies in good standing with you, with the U.S. Like if the U.S. had treated everybody better along the way and had said, let's come up with a plan to build manufacturing globally in a way that doesn't allow China to

dominate this market in this way. We can all work together to make that change. Yeah. But we're isolating ourselves from them as well. Yeah, that's why, that's the part that makes me the most frustrated because it feels like a self-own for no gain. There's like not even a strategy to that. Pissing off Australia and Europe and all these partners at the time when we need them the most for a coordinated plan, you bring up a really good point. And the reason why we need to have coordinated efforts is not just because it's a nice thing to do or because it might work better is because in the past, what happens when you tear up a country like China is, let's say,

it's a thing called trans-shipping, okay? if they're sending goods to America and we put a 50% tariff on them, then usually what happens is they stop sending it from America and they send it to Thailand first or Vietnam first and they put a bow on it or they add one little thing or they and now it's suddenly made in Thailand or made in Vietnam or made in Mexico. Yeah, the classic example in clothing is that you put the, you put literally just the tag on.

Yeah. The final tag of the good and then you send it on for there. And now it's under a Vietnam tariff of 10% instead of 50% And that, there's no answer to that unless you have that, unless that country's working with you, then this is what's going to happen. Even when they're not working with you, I mean, it's so hard to clamp down on global trade when someone is a better manufacturer. So here's an example.

We've had a pretty coordinated global blockade or something on Russia. Sanctions on Russia. In the meantime, suddenly, Finland and Kazakhstan are buying a lot more European and American goods than they ever were before. And it's finding its way across the border into Russia. You know, luxury cars that are not allowed to be sold in Russia are ending up in Finland and suddenly ending up in St. Petersburg. That's just what happens. And that's with like a coordinated effort. It's like, it's very hard to clamp down on it when if they can't make the cars and they want to buy them, it's going to end up there. They'll find a way. It's like how you want the Xiaomi S.U.7 and

you're going to illegally import it through Mexico. That's right. You've been talking about that on and off the pod. I have thought about it. And then I found out that. that would be arrested for smuggling. It could be a massive jail sentence and fines. I do want that SUV. We should bring Chinese EVs back to America. Yeah. I want what's ours.

Yeah. Respectfully. That brings up one last story I want to say, which is about this is a Chinese company named CIMC. They make like tractor trailers, like the chassis for a trailer. They just take steel, they bend it,

they make it good, they make it cheap. It's amazing. They're really good at it. They were selling them in America and undercutting everybody because they were just better at it. American chassis tractor trailer guys were pissed. They demanded a tariff, some way to stop it.

That was, this is his first Trump term. It was granted. So what CIMC did is they rebranded to CIE manufacturing with an American star and Eagle. Yeah. And they set up a factory in America. They did what everyone wants. They made a factory in America.

They brought their knowledge and expertise. They set up in a cheap area of America. And they started making these things. things. And then they noticed they were getting out-competed by their American counterparts. They were like, damn, this is crazy. We can't, we just can't do it in America. And they looked into it. And they found out that their American counterparts were buying Chinese ones from Vietnam, shipping them in and rebranding them. So the Chinese company was competing against American companies that were actually Chinese. You know, it's a whole weird system that is happening

that creates these weird incentives. And what I'm trying to get across like the best solution is just to be the one that can make it good. If you're good at manufacturing, all these problems disappear. But if you're not, there's so many loopholes and whackamoles you have to do to try and protect your less competitive industries. A couple episodes we talked about, I think, subsidies. That's kind of the other end of this, right? Like the carrot instead of the stick is that if you wanted to put something into place

to help an actual American manufacturer compete with a Chinese company, you could subsidize it instead of applying terrorists to the Chinese goods and go that route as well. Yeah, I think that was like the build back better plan a bit. They tried some of that. They did with the Chips Act. There was, you know, it's mixed because we've had, there's real problems with getting the funding. Companies that got the funding did pretty well. There was some growth in manufacturing.

It's stuff to say. But I would lean more towards that than this entirely stick route because I just don't think it deals with these very obvious workarounds. that are... I also seem so clearly that the tariff should be targeted rather than blanket because then you can be really focused and say, like with chips,

that's a huge, huge, huge security vulnerability for America and anybody to have to depend on Taiwan for chips, right? If China goes and takes Taiwan, which is, you know, the kind of nuclear scenario that people worry about,

like, chips are in everything. They're in your car door handle. Not just your car, your car door handle. They're in our important switch two. They're in our switch twos. It's not just, the things you think about like your phone. It's in everything. It's in our fridges. It's on our smart

devices around like everything uses chips now. And there is an increasing level of production that the rest of the world is trying to do, particularly China with less sophisticated chips, but the best ones still come from Taiwan. That's what powers everything right now, including military stuff as we start to like get military drones and the crazy like sci-fi stuff. And so it is so critically important to have chips. And right now that it's like not being manufactured. Up until recently, TSMC has opened a factory in Arizona that's starting to get up to speed and doing well. But that was like a big focus with the Biden administration

that I think they did well. I think it was called the Chips Act. Yeah. With the chips act where that was like, okay, TSM, the company who makes all these chips in Taiwan, basically the only one in the world is doing this,

we got them to come build a factory in America. And that's like a critical vulnerability that is not solved, but it's better now. In the process of fixing it. Yes. Yeah. My understanding is like that's such a small amount

of the number of chips that we need for any kind of sustainable future, that if right now Taiwan were to be taken by China and China says, fuck you Donald Trump, no chips for you, you don't get our chips? Like, we are super boned, like super insanely boned. Yeah, I mean, it's stuff from Taiwan's POV because like if they do build the best chip manufacturing in America,

then America doesn't have incentive to protect them, right? Like right now, the entire rest of the world is super incentivized to not allow China to take Taiwan because then everybody else in the world is mega-fucking. That was my first thought when I started reading about this specific topic. I was like, if I was Taiwan, I would not do this. I would not do this. It's like slowly getting rid of my big shield and then handing it to something else.

You'll protect me, right? All right. All right. Okay. Say, I'm in the villain chair. I think he is playing 4D chess. I think there was no problem with the across-the-board tariffs. I think this is all a part of the plan.

And I think we need to shake the system up to make significant change. Okay. You've been saying that off the pod. And I've been saying that on and off the show. Oh, we. One of the, I had basically a few questions to try and get you to push against these arguments. Okay.

I don't think a lot of, it's interesting because I don't think that many people are necessarily even in this camp, even if they did vote for Trump. It is interesting to see the public divergence. on opinions of him right now. The first thing I wanted to bring up is the stock market gets mentioned all the time. We're plummeting, we're going in a recession,

stock market used as an indicator of economic health. But I would argue, hey, I'm just a normal guy. I have a middle income job. I don't have a lot invested in stocks, maybe nothing invested in stocks, like most people in the country don't. And if the market's going up or crashing, that affects, you know, the rich people, and it's not a very good indicator of economic success

in the country. What would you say to something like that? Because I do feel like that argument comes up a lot. And the reverse of this argument is when stocks are exploding in value, but wages are stagnating, people are struggling, and people point to it then as like, well, the stock market's going up, NVIDIA just 300x, but I still make the same salary I made five years ago and inflation's digging into it. So from the other side of it, now that it's crashing, why is that something I should care about? I totally agree. I don't think stocks are the perfect indicator of economic health. I think stocks can be up and the economy can be doing bad for regular people. However, stocks crashing is certainly not good for regular people for two reasons.

Number one is you say most Americans don't have stocks. Most Americans actually do is just that the most of them are owned by rich people. But they do actually own stocks and they have them in a 401k, which is largely in the S&B 500. When the SB 500 drops, especially for people who are nearing retirement age, they are fucked. We are seeing people actually flooding social media saying, I have to now retire five years later.

I have to post my retirement because I was accounting on this to sell and retire on, and now it is 20% lower, 15% lower than it was. So that's part of it. The other part of it is the thing called the wealth effect

where people that have a certain number of stocks that have been up that are green, they feel comfortable spending. They don't clamp down on spending. They feel like they, they'll buy that RV or they'll go on their vacation or the little one thing is they feel like they're in a good spot. When things are down, they clamp down. They tighten spending.

They keep saving. They hold back, which slows the economy down. The third thing, and that's probably most important, and you could probably deal with your, with your, mogul merch is like if you are importing a bunch of goods from, let's say China or Vietnam or anything that has a tariff, and it gets to the harbor and you have to pay that tariff, you need working capital. You need money in your bank account ready to pay that. And if you don't have that, which most companies don't, you have to do immediate layoffs just to get your goods out of the harbor.

Because if you don't get them out, they auction them. And then you're competing against your own goods that are being sold at auction. So what we're seeing, and this is what happening already, we only had one day of real tariffs. They're 10% now. But companies are having to do immediate, like close plants, do layoffs immediately. There's no delay. And that means working class jobs lost instantly.

So I'm making this argument as the, is the 28-year-old who isn't retiring, who doesn't have a lot invested, you're still saying that the downstream effects of something like this happening do... So, trickle-down economics is real. There's no good downstream effects. That was my point.

What I'm saying... It actually reminds me speaking of trickle-down. The Chinese Communist Party official Twitter account tweeted a Ronald Reagan speech on tariffs. Yeah. We were in the upside-down world. That's crazy. I saw it.

I don't know, yeah, I don't know, but that would be arguing. Reagan was a Chinese plant. And I have been, it's a long term, saying it the whole time. The whole time. That's 40 chess.

They sent us Reagan 50 years ago. Damn, part of the deal. Okay, fair enough. Elegant answer. Okay. But haven't there been times in Atrioc? Haven't there been times in history where tariffs were necessary

for the U.S. to succeed and grow? I remember something from a very own stream of yours where you mentioned that tariffs used in the 1800s when the U.S. was trying to develop its own manufacturing sector, used tariffs against countries like the UK in order to

protect from competition of countries that already industrialized and then they utilized those tariffs to grow in the 1800s. I believe you said that in a video. I'll never use my words against me. So I'm wondering Aetriac if it worked back then

and we can point to an example of it working at least once in the past that I do remember. that you brought up. Yeah. Why couldn't it be that happening again now? So what I would... You got him. You got him.

Fuck. What I would say to that is that that sounds like a targeted tariff on a specific industry that you think is critically important. I think in this case it was shipbuilding. We're like America wanted to build us on shipbuilding so that UK could do it better, so they tariff so they could build their own. I am not necessarily opposed to it in a very targeted case to get one industry you think is critically important.

As a broad case, and I think in the 1800s has happened anyway, it still creates rising tensions, trade wars, tit for tat tariffs where they try to counterbalance on you that ends up with everyone being poorer. That's my overall stance. I think if we thought EVs are so important to have in America that we're going to tariff them and I don't get my nice Jalmi, SU7 at EV that I can drive around and look cool in, I can at least understand. I'm not, I'm mad about it, but I can understand it. But trying to do all goods at all once every country is disastrous. It's, it's crazy. I feel like you're, you're deconstructing my generalized argument

in making very specific points that are difficult to argue. So I would like, you're a piece of shit. You're a piece of shit. Old, bald. Oh, no. Oh, no.

Okay. I'm wearing a hat, you can't tell. I had another thought. I had another thought. All right. The current, uh, Argentinian president,

who I forget the name of, Alvier Malay. Basically campaigned on this idea that in order to repair the economic circumstances that we're in, we are going to need to go through a period of pain in order to succeed and come out the other side more successful.

The pain that we're feeling right now is a part of the plan. It has to happen in order to create large economic change in the country. In order to get to a state where we're a happier, better, financially better off country, we need to go through a period of damage like this in order for that to happen. And Javier ended his speech calling you bald. And then he did mention that. This is the period of pain I'm going through to grow. And then he called me a ball. In private, he apparently is buying a lot of Spanish to blues.

Yeah. Okay. Last one I want to say on this. That is fucking insane. That was the dumbest thing you've ever seen. Because, because I want to target. The dumbest thing I've ever seen. Because Javier Malay, not that I agree with everything he said, but had a completely

opposite viewpoint. He's completely anti-tariff, totally open, free trade, totally. So it's like saying, if I, if I shoot you in the leg and you're like, I'm in pain. I'm like, well, Javier Malay said going through a period of pain. It's an entirely different thing. It doesn't, it's not a relevant example. It doesn't mean all pain will always lead to growth. It just means that guy thought and that is this. Hobbier says anytime you're in pain, it's good. I disagree. I disagree wholeheartedly. Okay. Counterpoint in the 1800s, we used to do bloodletting to heal people. That was me guilty. I'm old enough. Yeah, okay. I used to bloodlet.

No, listen, I don't know. Again, I think I'm trying to be as generous as I can to what I think is a pretty dumb idea. I think we're not benefiting. Okay. I have one more question. And this is something a little more genuine, less Phil and Cherry, is you mentioned last week that a big part of becoming a more developed economy is you sort of naturally lose these manufacturing jobs over time to developing nations behind you that kind of pick up those jobs and are able to support. apply them with like lower cost of labor, right? Yeah.

But you mentioned that the developed, developed country, like the U.S., maybe the Norway's or the Denmark's or France, you move on to producing more complicated goods that those countries aren't able to produce and you're specializing in offering like new services that allow your country to keep making things, basically. Yeah, like move up the value chain. You move up the value chain. That was the way you described it. Is there no, what is the end game of moving up the value chain, though?

We could, there's forever, you're forever progressing in a game where countries are chasing your country and trying to catch up. Is it not worth fighting to maintain the original base manufacturing jobs in some way? Because even if I move up the value chain, maybe 20, 30 years from now, those jobs are being chased by Vietnam because they developed even further along the way. Do you know what I'm saying? I sort of know what you're saying. And that's not a problem I can solve in this chair. I'll tell you. I don't.

I feel like we've been, we've been solving so many global issues along the way in Lemonade's. After we talked about terrorists last week, they went away. They're gone now. It's true. That's a good point.

That is a good point. They went away before we recorded our next episode. Right. Right. That's a good point. I think Trump watch it. I think he's hooked. I don't know.

I think you had a good point. Actually, last week you were talking about this, where it's like, if you lose the base manufacturing, eventually you kind of lose the skill set that allowed you to get to the, you know, if like you can't make batteries, you can't make the higher. Yeah, I'm not convinced that we will just be higher on the value chain than the rest of the world forever. I don't think there's many indicators that we as Americans or people in the West are inherently. I mean, it's like if you just think about like most of the centuries where the West has dominated the global world, right, and technology. China, India, the global southeast, like, it's been, they've been an immense poverty. And then over the past few decades, you've had, what, two billion people lifted out of poverty. The idea that we are some sort of like, God race is just insanity. And like, I don't see if you just look at what's coming out of China and Taiwan and Singapore and India and the sheer number of people. It's like, I don't see how America maintains its position as like, we are the ones high on the value chain. We should be managing everything. So I'm somewhat pessimistic. about this. Like the tech industries are exploding in other parts of the world. Totally.

Well, yeah. I think a good demonstration of this actually is Chinese manufacturing because I think up until recently, and now that these discussions are more popular and more in the news, I think people used to have this idea of sweatshop in China, like getting together this like shittily made good, and that's what Chinese manufacturing is. And people have that idea from a really long time ago. But what people don't realize is that the manufacturing industry and this push for exports is they specialized and developed supply chains to create really complex high-end goods, even doing something within the world of clothing that I gave the example of is it's not just

about doing like things more cheaply. It's about offering more refined services that are not, they do not really exist in other countries a lot of the time. They're the ones moving up the value chain. The level of specialization is made. In America, we don't have people who can make these factories. And China has just this obscene amount

of STEM graduates who are focusing specifically on manufacturing. It's like, dude, they're lapping us. Like, they're going so far beyond any other country. And like, it feels a little daunting. I don't see how it stops. And I don't think Trump's shit is helping at all. But I don't know.

It's funny because to, maybe do you have something one more thing? Well, I want to say, I don't have the graph in front of me, but what I saw recently is that China is kind of going through at the very beginnings, the baby steps of a similar thing where the bottom part of the value chain is going somewhere

else. Yes, yes. Like it's going to Vietnam, it's going to Indonesia, it's going to India where it's like it's now too expensive for that very basic level to do in China so they're going somewhere else. So it might be a cycle. You know, I think at the end of the day, you want to be the one making the electric vehicle or the Boeing jet or the tech company rather than the company making the toasters

and the t-shirts. I think I believe in that, but I can see the value of having some competency at the base level. The cap to this conversation in my mind is this stuff is changing literally day to day, almost hour by hour. So it's hard to draw like a conclusion about what even the short term will be. I'm very curious if this. 90 day pause will last. I'm very curious to see if it just comes back or if a bunch of the countries. Dude, if in 90 days we're in the exact same situation, I'm going to freak out. I'm going to lose it.

Like, I'm assuming this 90 day pause is a nice way of saying, we're going to go out and get deals with everybody, bring it all down except for China and focus. I assume that the best case scenario, that's what they're doing. But if we end up with no negotiations, no deals and in 90 days, we're back to this, it's going to be good content, I guess. It's going to be disastrous. Well, I have a very different topic that I was thinking about bringing up last week that I thought was really interesting, which was recently the South Korean government came out and for the first time ever took public accountability for the fact that they were basically just selling kids for a long time. The post-Korean war, there was a bunch of South Korean children that were adopted primarily to the U.S.

I think there was over 200,000 children total in this like kind of post-war period. You bought a couple of them, right? You were... Yeah, back when I was... Back post-Korean war, I was like, why don't I get a couple kids? Korean kids.

This is a different life for me back then, no. How's a different guy? And the... And of those like 200,000, 150,000 of them were kids that went to America. The thing is in this, you know, this is kind of during the period of Korean economic miracle, like a rapid growth in the country. And there's two sides to this issue that are coming

up. And a lot of these kids abroad realized over time that they had fake like background or history given to them through a variety of needs. They made it up? They made it up? No, or kind of. So the most common example I could find is in a lot of cases, these adoption agencies in Korea, which are making money off of like letting foreigners adopt the kids would run into situations where maybe a child in their care would die. Jesus. So I as an American who wants to adopt a child

maybe thinks, oh, I would love to help out this orphan from the Korean War and I learned her name and I want to bring her over, adopt her, bring her into my family, right? And I go through that process and the agency gives me all their background information. I adopt the child.

I sign like paperwork. in the U.S. to make them a U.S. citizen. Okay. But on the other side of this is the adoption agency that quietly that child passed away during the time in their care. They're just switching the kids? And they just swap a new kid in that who's,

for example, whose parents are still alive. So a lot of the kids weren't orphans at these agencies, right? They're just kids put up for adoption with their birth parents still alive. And then a bunch of these Korean adoptees over time found out that their backgrounds were fake. They're not orphans. And that this large scale, basically adoption fraud had been happening in Korea throughout all this time. And a bunch of people have challenged this and tried to take these cases to the South Korean government and to get them to acknowledge that this happened. And to get an apology, to get like payments for damages,

different types of things, right? And I sort of first encountered this story, I think, six or seven years ago, way before this apology happened because there's a short vice piece on this Karina adoptee in the U.S., whose name is Adam, and he was adopted by a family that abused him.

They were a really shitty family. He lived basically a terrible childhood, and the family he got stuck with never filled out the paperwork in the U.S. to make him a citizen. And then because of his, like, I would say, because of his upbringing, he wound up in a lot of situations where he, he wound up committing

like crimes when he was younger through like his teenage years and his 20s. He cleans up his act, becomes a business owner, has a wife, has a kid. Now he's, now he's in his 40s, right? And he applied through through this process, eventually finds out that his paperwork was never done properly and then submits an application for a green card. Like he should be. eligible for. But because he submits that application, it flags the system that if you have any criminal history and you're an illegal immigrant, they deport him. Oh, shit. But he hasn't lived in Korea ever. He doesn't speak Korean. He doesn't know anything about Korean culture. And then he gets sent to Korea. And this is a big story back then. During my research of this general story around

Korea apologizing for their end of the fuck-ups here. I followed up on Adam's story now that it's been years later. And he managed to successfully sue the Korean government for the situation that he was in. And he got paid out $75,000. But he can't go back to America? But he still cannot go back to the U.S. So he's stuck in Korea.

As of 2023, he was still stuck in South Korea and couldn't come back to the United States. And this is a bizarre. situation where in the wake of this economic growth period for Korea coming out of the

Korean War, at least in like within the ceasefire deal that they had, the Korean companies have this awful incentive to like get through, basically get as many kids

as they can into their facilities and sell them off as adoptees to as many families as they can because of the money they were bringing in.

And then on the other end, the American process, if the family wasn't willing to do the paperwork or just made mistakes on the other end, it has long-term consequences for the adoptees on the American side. And I thought that was a pretty wild fucking story. Yeah, it's fucking crazy.

And then this one more like little tie-in that I thought is, you know, in the wake of the Trump presidency, there's been a lot of changes to the way like immigration and deportations have been happening. There's a big story right now with this guy named Abrago Garcia, who basically is from Maryland. And he's originally from El Salvador. He came to escape gang violence in El Salvador when he was 16. He's now 29.

And he has his paperwork. He has asylum in the country. The reason that this happened is in 2019, he got arrested or pulled over on accusation of being involved in, gang activity in the U.S. Okay. And he gets let off because the gang activity accusation is totally baseless.

They're saying he's an operative of like MS-13 in New York. He's literally never lived in New York. He's from Maryland. Okay. And through this process, he's granted legal asylum and protection that he cannot be deported. He's now like legally living in the United States. Okay. And now he, you know, just normal, basically normal.

citizen in the U.S. has a U.S. citizen wife, has a kid, and Ketz deport is in the group of deportees that just got sent to El Salvadorian prisons. So he's in the El Salvador prison right now, and he legally could be in the U.S. and the Trump administration said directly that this is just an administrative error, that it was just an accident. Whoops. But now that he's there, the Trump administration is like he's under El Salvador's control, we can't do anything about it. And they're not bringing him back. And he's still there right now. Which is insane to begin with. And this has been litigated. It's gone to like a circuit court. They demanded that he be returned by like Monday of this week. And then the Supreme Court just overruled that and said like you can't give that

deadline. It's like unrealistic that it doesn't make sense that you as the circuit they just overrule the deadline. Just the deadline. But they're not commenting on whether or not he needs to come back or not. And the Trump administration's whole argument is like, this is just out of our

hands down. We can't do anything about this. So this guy who was illegally in the U.S. through the asylum process is now stuck in a prison in El Salvador because of it, an acknowledged quote, administrative error. Which I think is insane. And I

think these are just two examples. I think I have like pretty, pretty, you know, hard opinions about like anyone being deported in the first place. But I think these two stories, uh, years apart, you know, in Adams case, I, uh, I think he, his may have been in the first Trump presidency, but I, I think his type of case, it's like, wouldn't have mattered if Biden was president or not. Like, that is, uh, nothing, nothing necessarily would have changed. Uh, it's just two examples of like, where technicalities, like, ruin people's lives and put them in unwinnable positions because of the way we, like, choose to conduct this process. And then on the other end of it, it's like people being, like, having their history robbed from them because of money. And I, I just thought

this was all, like, really interesting in the different examples of... It's actually sad. It's very sad. It's very sad. Interesting wasn't the word. Yeah, it's incredibly depressing. Me talking to a guy in the prison. This is so interesting. Yes. Yeah. Obviously, sorry. You know what I mean. It's not the right, not the right word. I'm sorry. I'm so interesting. So yeah, I just dug into that is like the, you know, the greed, the greed of the adoption agencies, the immigration process on the U.S. Is your point that we should start an adoption agency? Because there used to be good money in it. And I was, well, if we start adopting Korean kids, I think we get, we would just do it right. I think we should do the agency. The agency side's making the money. They're selling the kids, right? Oh, so we do want to make the money. We do want to sell the kids. We would just do it. Where's the, where's the, we would just do it. Where's the. We're just the. Where's the. We're just the. Where's the. We're just the. We're just the Probably have to pay 75. Well, we got to get higher on the value chain. Yeah, exactly. You know what's wild?

Speaking of, speaking of... Speaking of selling orphans who have parents, a little segue. When I was 18, I went to Nepal for three months and volunteered in an orphanage. And that sounds great, right? Like, wow, what a virtuous young man. How smart and humble and handsome. But which, you know, it's all good.

And there's all these pictures of me like... Which I love. I was. No, and I am, it was. Humble handsome. Yeah, Perry and I went to the same high school. They wrote an article about me. It's like, Doug went off to Nepal to help the children in the hills.

No, this is real. Yeah, yeah. And so I did this. This was right after high school. And, you know, I was like, okay, things seem to him a little off, but it's a good organization and all that. And then over the subsequent years, turns out that a lot of particularly in Nepal, these orphanages that are a sort of popular place for foreigners to go and volunteer at to help these orphans. A lot of them aren't orphans because the parents, in the rural countryside and Nepal, realized that if they send their child

to this orphanage in Kathmandu, the city, that a bunch of foreigners will come and support them with money. And then they'll get a better education. And so really what I did is I went and hung out near a school that said it was an orphanage that had parents, like a boarding school, I guess. And so already it felt a little weird when I was there. It's like something felt kind of off.

You can see the kids' parents right over there. Yeah, yeah, they're like peeking over the corner or whatnot. And so it's strange. that I think well-intentioned, I mean, certainly people running the orphanage were very well-intentioned. They were trying to help orphans, right? And there were legitimate orphans. But this reminds me of that story of like, this orphanage in Korea is literally selling children who have parents. Like, that's a lot more, I think, vile than what was happening in Nepal or is, I don't know. But it's weird that that's a common thing, apparently.

Well, I think the theme that hits both these stories and almost everything we've talked about is like not enough discussion of incentives. You know, that's if if there's an incentive, because there's money to be made from... People are willing to abuse it. People will abuse it. And it may not be everybody, right? It's not that everybody has the same moral code and always face with the same decision.

Everybody would be, you know, robbing those Korean kids of their history. Yeah. It's just that because the position is allowed to exist, the guy willing to make the decision is willing to step up to do it. Yeah. Which is, like, that.

It is bad. It is fucking hard. No, no, no. You said it was interesting. Yeah, it was interesting. I think you should be kind of, I don't like it. I don't remember what he said. Yeah.

It was like a little smile. You get a little smirk. For the audio listeners. He gave us a podcast story out of it. He gave us a toothy grin. I know you suffered in you. You have trauma about your whole history being robbed from you. But I just got to chair it on a podcast.

Every time Aiton sees a really depressing story. He smiles because he knows he can get content. Yeah, just being green, dude. He's gleaning. Maybe I need to be lighter. I'm sorry. No, no, no. I mean, I don't know what to say about it, to be honest.

It's really depressing. It's sad. No, I don't think it's, it's funny because it's funny. It's funny. Funny and interesting. It's interesting and funny. Aiden Calvin. Funny and interesting story about children being sold. If you show any of these stories, if you approach almost anyone at an individual

level and you confront them personally about one of these stories and the human being behind it, there is almost every single person would come to an agreement about, oh, this is bad. This is a bad thing that is happening. Why do we do this? We should fix this. It shouldn't work this way. The easiest example is like, or a personal example in my life is, uh,

shake who edits for Ludwig is a DACA recipient. And if shake, you know, if shake had a, maybe a harder life growing up in the U.S., he came from, uh, the Czech Republic when he was like two.

And he made some mistakes when he was younger and like, you know, committed a crime. He made some mistakes now. He works for Ludwig. he's made many mistakes. Well, he's made, you know, that's not a felony. It should be.

So far. And, uh, and the taxes get out. If something just happened, like, if he made a mistake along the way, uh, then the, he could just be deported from the country. And it's like his, you know, his primary identity, it's like he does appreciate that he's checked from like talking to him about it. But then you can just have all of that robbed from you basically on a technicality. And, uh, even, I think the idea behind this is like, you don't,

want to protect people that are criminals. You don't, you don't want to deal with them in the system or deal with them in your country. But I think it's kind of on the obligation of the system or the country that these people existed within to deal with it. Yeah. I mean, it's like, even if, even if this person were, like imagine shake is, is a violent criminal. Imagine. I don't even imagine. Visual examples. He goes on a little rampage. And he's been in the U.S. his whole life. I don't feel like it's chill to just send them back to the check. Like everything's chill. You just want to jail him here.

Yeah, I feel like we should deal. We should take responsibility in that action. Shirt drizzles is our problem. Start building those Venezuelan prisons back here in America. Put the prison. Thank you, Doug. And that's where I wanted to circle back to. And if we could give all of those jobs to private prison, private prison companies,

we'd be the best. Min max the profit of all of those companies. And maybe we dump a little money in the shares of those companies. we did that. No, you bring up a point that I think ties in too, which is like, I don't think I'm even at the point where I can disagree ideologically because I don't like the implement. I think the implementation is so random. You know what I'm saying? If you're of the opinion that we have to, I don't know, reduce the number of DACA recipients we give out a year and you're like measured doing that, that's something you can argue about. But when you're like,

if you're randomly setting someone up for 30 years to think one way and then you cut it out from under their foot. That's that random cruelty that really bothers me. The idea that you're not making a measured change to like the future, you are undercutting things you've promised in the past or you're causing damage. No one could have prepared or planned for. That, I think that's the really frustrating part. It's something, it's a basic situation that anybody would look at and agree is unfair. And I think the, I, I think it helps to boil things down into these specific examples of issues because then if you can also clearly agree about it, then it kind of points what you were talking about last week is maybe it can be easier to work towards to change. That's what you would

hope at least. I think we change the tariffs. We can change this. Everything we talk about in this show will get fixed. Yeah. This, I think this actually loops into last week because a lot of people had positive and negative things to say about the idea behind abundance, the book, the idea that building is kind of the future of solving problems, like building up the supply side of things so that the demand for it can be matched. Housing was the specific example that you dove into really heavily. I want to come to the other side of that if we have time to talk about building too much. Yes. Because you had talked about that. On a lighter note from this, God, this extremely sad orphan stuff. Let's talk about this power plant in Ecuador collapsing and all

all the people they're dying. Oh my God. Let's lighten the mood a bit. Okay, so the main thing I want to chat about today is China and the Belt and Road initiative, which is their thing around the world that they are basically trying to help all of these countries around the world build up a whole bunch of infrastructure. And it's an interesting counterpoint to what the U.S. has done. I do want to quickly follow up on some of the things that were said last week because I

was very heated in the way I discussed things and saw a lot of comments that match that passion in various ways. So just a few follow-ups just to touch on things that I saw on the comments about what I said last week. I talked a lot about housing about like red versus blue states. I just want to follow up and acknowledge that yes, a city like Houston is blue. And I understand that. But the point is more about the fact that so many people are moving from blue states to red states that in an electoral college, the way our presidential system works, that will actually majorly affect the ability of the Democratic nominee to win. That is the relevancy of

red versus blue and the context of building a lot of housing. I might not have expressed that super clearly. But the point isn't that Houston is blue, it's that it's in a red state. That is what is relevant to that particular conversation. On top of that, I think people felt frustrated that I conflated Democrats and various groups on the left, and that's a fair criticism. I will

be more cognizant of that going forward. I also realize it'd be really frustrating if you're if you see yourself as, for example, progressive. You're also very fed up with the way that the Democratic Party is governing as I have been. And then I am sitting here like lumping you all together and being like, you're all doing a bad fucking job. Like that would be very

frustrating. And so I can very much empathize with that. I'll be more thoughtful of that going forward. Again, though, for me, this is not meant to be a left versus right thing with building. It's just, I think, the country doesn't build enough, and we just need to build more stuff. And of course, there's a lot of complexities of homelessness, like empty

units held by corporate interests. I don't personally think that would solve affordability. Maybe that helps with homelessness, but there's many nuances to that that obviously we didn't get into. I wanted to at least touch on those things. Yuck! And again, I hate nuance. and I hate you and I'm going to leave a comment about it.

Yeah. The fact that you would cave like this, I lost so much respect for you. He fucking caved. Don't let them shake you. Yeah. I appreciate constructive criticism. And I think there's valid.

Yeah, and I think there's valid things. It's not like I want to like get riled up by every single comment. But I think to be fair, maybe I didn't express some nuance to the extent that I could have in my passionate rant. And I think at the end of the day, like, I just, want people's lives to be better. And I think building is necessary for like people being able to afford to live. It's necessary for the future being better with like medicine and health care and new technologies and a better life. And it's necessary to solve the climate crisis. Because we have to build a lot of stuff to solve climate. So I just think building. I'm not saying

the right is doing some great job. I don't think that. I just, we just need to build. And, and there's examples in abundance specifically that I kept highlighting over and over that I, again, to me not about Democrats versus Republicans, really. It's just build more. Or you don't build too much, which is what China's done. So let's segue into it. So as you actually mentioned earlier,

okay. We're back to China. We're back to China. Okay. And I think it's an interesting counterpoint. It's always back to China. Because, again, you know, I was bitching and moaning about how America doesn't build anything.

And China has basically done the exact opposite. So in the 90s and 2000s, China was massively ramping up in production. And then based on, largely the financial crisis is my understanding. This is a from an article by Noah Smith, who's an economist. Due to the financial crisis, China's economy was hit really hard. Basically, they were manufacturing all this stuff for people. And then suddenly they weren't buying as much because Europe, America are in this huge recession, right? And so to compensate for that for

two-ish decades, they started building tons and tons and tons of housing and other infrastructure. And so because they were just building this absolutely obscene amount of stuff, one of the stats is they were spending about 44% of their GDP every year on infrastructure compared to like 20% that other countries do. So they're like massively investing at like a double rate of anybody else. And then that bubble sort of burst in 2018. The housing price is cratered and they've now shifted to this like heavy export model like you talked about, which is causing a lot of the problems in the world. So that's interesting on its own. But then the Belt and Road initiative is an interesting part of this. So the Belt and Road initiative is their global plan that they started in

2013 where they're going to go to a whole bunch of countries around the world. There's 150 of them signed up right now that and they're going to loan them money to do all these big high infrastructure projects. We're going to go into Kenya. We're going to build a train. We're going to go into Ecuador. We're going to build a power plant. We're going to go to Kazakhstan. We're going to build a whole bunch of trains. Airports. I was going to say ports. There's like a big one in Sri Lanka. Yeah. And so and so they have this plan and this sounds good on paper. Right. It's like, oh, yeah, No, that's awesome. And so this kicked off.

And at first it was doing great. And the first five years, all these, you know, they were building stuff. All these countries were happy with it. And then there started to be issues. So if you look at the list of projects that China has done under Belt and Road Initiative, it is crazy. It is like so many of the major infrastructure projects in Africa are being funded and planned by Chinese contractors and the Chinese government working with the African government.

Same with South America now. same with the Middle East, same with like Kazakhstan, that whole area. Like, it's everywhere around the world, China's helping countries to build stuff. It's crazy. Do you know how there's a big industry

in the Congo of like mining cobalt and other... Like with your hands or something and you're dying? I mean, that is part of it. I think there's an unfortunate reality to the mining there is that it's not being done ethically. Yeah. But if you watch these undercats, cover reporting videos of stuff like that, of these like mineral mines in Africa in general,

there's so many Chinese like intermediaries there. Yes. And you can watch people go with like, you know, little spy cams on their chest and they go check out the mine and the human rights abuses. And then they go to where the minerals are being sold at a market. And it's too, so many Chinese companies operated in these spaces. Yep, like a giant percentage of the infrastructure investment is going to Chinese companies in Africa. A lot of the countries, it's like 40% is something in the number I saw.

It's crazy. So China has successfully become incredibly impactful around the world building all these projects. And that contributes to this like trade that you talked about earlier, Brandon, where like, now China is the main partner for most of the world in terms of trading in terms of infrastructure. And to their credit, right, they've been building such an absolutely obscene amount, often to their own detriment. like they caused this housing crash for themselves a few years ago. But they have just been building an insane amount.

So they do have the expertise. Could you speak a little more to that? Because I know this is a topic you've talked about a lot too. And you mentioned 2018. And I know that the real estate sort of crisis that was ongoing, like they had a huge, I want to say one of the their biggest, was it one or two shuttered like two of their biggest real estate companies? They're the biggest in the world.

So what is the consequence of how did building too much tie into that specific? So basically they tried to get out of this problem where they weren't growing in other areas like exports by basically saying we are as a country are going to invest massively in housing and infrastructure. And we as the government. We're going to put huge, huge, huge quantities of our money into just building tons and tons and tons and tons of stuff. And so there's one of like Guangzhou is the province, I think. They like are so proud of the fact they have like 1500 bridges and 11 airports and they're like

$400 billion in debt. The province is like the size. It's smaller than Arizona. It's like a small area. I mean, not small. It's China, right? And there's a ton of people there. But like, they way overbuilt.

They're way in debt. And that was kind of how they funded things. That's how we as America are funding a lot of things. We just keep throwing money at the problem and getting deeper in debt. And they just kept doing this. And the reason everybody was like, yeah, let's keep doing this is because the housing prices kept going up. But it didn't make sense because they're building so many.

I can pull up the numbers in this giant stack of paper somewhere. But like they have like hundreds of millions. of empty apartments because they just overbuilt. And the problem is just like the financial crisis in the U.S. All of the citizens invested their money into housing as an asset. They were like, this is going to be our investment. So they were paying insane rates to buy into housing. This bubble kept growing, but the actual value wasn't there. It didn't make sense. They had built way too many housing. They don't need that many apartments. Okay. The quality turned out to be really bad in a lot of cases, which is what we're about to get to with Belt and Road. Turns out massive, rapid.

rapid building isn't perfect. It doesn't work all the time. The quality part is interesting to me because I do think how this ties into what we were talking about earlier is this idea of something like Chinese manufacturing being like cheap and like badly made. And so I think when you present the argument initially about homes not being made well, that is a as a counter argument. It's like this disdain of the idea of that Chinese building is cheap.

But on this topic specifically, somebody came into the yard discourse. She's originally from China, and she talked about how this is a really big issue, that the quality of housing and a lot of areas in the country is super low. They've built it and it's available, but it's very bad. Yeah, and then all these Chinese citizens, like, put their entire net worth into buying one of these things because they're like, this is one of the few ways as a Chinese citizen I can invest in my future. You don't really have the same options of the stock market necessarily that we do. It's much more controlled by the government. same with the tech sector or IPOing. And so they were like, we're going to put all of our money into this.

But then like you said, it doesn't make sense and all these problems with the building. So that actually segues into the Belt and Road thing, right? On paper, China over the past decade, 12 years, has with hundreds of countries, I guess 100, has built all of these incredible things of infrastructure, including successfully a train in Kenya or Kazakhstan or Ecuador building this giant power plant. There's many, many, many examples of successfully completed projects. But if you pull up this Wall Street Journal article, Perry, this is basically, they're all falling apart. And so this Wall Street Journal article literally called China's global mega projects are falling apart.

And some of, I mean, if you can just kind of like scroll down through this, like some of the quotes are insane. Low quality construction on some of the Belt and Road projects risk crippling key infrastructure and saddling nations with even more costs. In Pakistan, officials shut down the Nielum Jalum Hydroelective Power Plant last year. after detecting cracks. Uganda's power generation company says it has identified more than 500 construction defects in a Chinese built 183 megawatt hydro power plant

on the Nile. Ugandan officials have blamed a Chinese built hydropower plant in Angola, the vast social housing project is the locals there are saying it's not well built. Even Indonesia's high speed rail line in Jakarta, which is sometimes successfully said

like, oh, this is one of our big key success stories of Belt and Road has had massive cost overruns and fell years behind schedule. It turns out these things are not working well. And so if you go to, there's another Wall Street article journal that is about, I think it's down here. So this Ecuador power plant that they made with the Chinese,

Chinese offer them a bunch of money to make it. And there's so many problems now with it. There's 17,000 cracks in the power plants, eight turbines. This in Ecuador, a small poor country, which wouldn't... Is that a lot of cracks? Or like, is that fine? Yeah. To be fair, I don't have a good...

I feel like every turbine has a few cracks. I actually have a quote for that. No crack is acceptable. The utility said in response to questions from the Wall Street turnover. That's the first question you want to ask. In my head, if you told me 100 cracks is chill, I would have been like, oh, sure.

Yeah, it doesn't seem like that many cracks. Turns out, no, you don't want any cracks in your hydroelectric power plant. And this was like, so this is a huge investment for the country, this whole area, it powers like 160,000 homes that weren't powered consistently before. great thing, except now it's potentially shutting down,

and this thing costs so much money to make. The Ecuador is now in dire straits, and the president, or sorry, energy minister, Fernando Santos, told the media in November, over my dead body, will I accept this poorly built plant? And so at first, they're like, this is awesome. China's coming in, they're going to help us with their expertise and their money.

We're going to build all these amazing stuff. We're going to get infrastructure that we wouldn't have done otherwise. And then the quality of so many of these projects is so bad, that these countries are getting extremely concerned because the problem with this whole Belt and Road initiative is that it's not investment really. If you and I, Brandon, want to go and we want to make a power plant together.

If you're, I don't know. You guys have been talking about it. We have been talking about it. Off the pod. And we said crack free. Yeah, we're going to go crack free on this one. In a bold new vision. We are going to do some crack.

But we're going to have a crack free. What if we had no cracks? Yeah. We could just fill it with spackle. I don't understand why it's a big deal. Duck tape. What's the slap? Flex tape. Let's flex tape it.

That's why I heard of this problem in American. As the Ecuadorian president talked about putting flex tape on it. Unbelievable. If not. Yeah, they're just not. So we're going to build a power plant. You and me.

All right. Yeah, so we're going to build a power plant, you and me. If the way, let's say, your Ecuador, the way we might do this as partners is you say, hey, Ecuador, you invest 10 billion.

I, China will invest 10 billion. We make it together. And then if it does well and it makes money, we're both well off, right? and it pays back our loans and we benefit in totality, right? That is normally how investment work. That's not what's going on with Belt and Road. What China's doing is loaning the money.

So I'm saying, hey, Ecuador, you historically don't have the funds for this. You don't have the tax revenue for this. I'm going to lend you billions of dollars and then I want you to pay me and my contractors to build your power plant. And then you have to pay it all back at the end. It's just a loan.

But if you don't pay it back, then I get control of the power plant. Yeah. That is how these are structured. And so from China's perspective, it's like, this is great, dude. You loan money. You make them pay your contractors so your companies and your country get a bunch of work. And then they have to pay you back.

And then if they don't, you get key infrastructure in these major areas. Like, for example, Sri Lanka, which is a small city south of India. They have a giant port in Colombo, which is their capital. And China loan them money to build a new port in Hambontota, which is the south. It's like the small fishing village, right? And so China helps them build it. And nobody's really using it. And so instead of it being a co-built thing that they're doing together, like Sri Lanka is basically,

we can't fund, we can't pay you back for this stuff. And so in 2017, Sri Lanka had to give China back the port. So China just has for a hundred years, they have controlling equity stake and a hundred year lease on this port, which people are now worried China is going to use as like a naval military base because it's just in the, it's just in the Indian Ocean, right? and on the day that China got control, the China official news agency tweeted another milestone along the path of Belt and Road.

They completely fucked Sri Lanka. It's wild. I do think there's merit to what you're saying. I wanted to push back a little bit because I also read about this specific port today because this is one of the ones that I've heard about and known for a long time is, yeah, it didn't go back to like,

the state, which you clarified, a company has like a controlling percentage of ownership, and then there's like a 99 year. They're always doing 99 year lease. 99, baby. It's always 99. And the efficiency of the port since this takeover has gone up. Like the amount of traffic that goes through this port and the amount that it's used has increased greatly since this change was made. I think it speaks to something of like, okay, well, it actually is being managed and used more effective. effectively since then. And then if you were to give like the good faith interpretation of this, it would be that their intention in their export strategy is to create a bunch of bullet points

like around this like region so that trade is, uh, more viable in this whole region of the world, right? Yes. I do, uh, I do think that one of the main criticisms that has come along with this strategy in general is that, uh, these loans don't come. I mean, the loans don't come for free. beyond like not expected to get paid back. You expect to have, what do you call, I don't think you'd call it hard power, right? You'd call it soft power.

Yeah. Through the influence of like giving all these countries money. And then I have kind of the pushback to that, if you will, that China is offering these opportunities and loans at lower stakes and lower cost, not just monetarily than the IMF is before them. Yeah, that's what I was going to say. pushbacks is like these countries would normally be going to the IMF, but it's not like the

IMF is not abusing the position when they finally give these struggling countries the loans. And the argument is that it has been better for a lot of these places to take the Chinese loan for infrastructure than the IMF one. Yeah. It's been called debt-trap diplomacy. And people, there's a lot of articles that are written about China side of it. But I think the IMF and the World Bank have kind of done a similar thing over the years. International monetary funds.

It's kind of just like countries that don't have a lot of power get, you know, it's like poor people with high interest credit cards and loan sharks. I think countries that don't have a lot

of economic heft are often getting abused by bigger and more problem countries regardless. I mean, that is just what it seems to be. So I agree that this is happening. But they are in a spot

where they have to take a kind of a bad deal to get this infrastructure they need. So it's interesting because I think this kind of loops back to another question

that I was thinking about because if I were to take maybe my interpretation of Doug a week ago, if we were to ignore the, if we were to ignore, which is a pretty bad aspect, a big aspect of this, the debt trap aspect of it. And I were to just say, well, isn't this build a lot and build fast strategy better than the alternative? Is this not just a normal consequence of when you try to like create this much change in a short period of time and you're trying to build great things? Is this just not a downside of doing that? Yeah. So that's why this is so interesting. And it's such an interesting. And it's such an

counterpoint to what we were talking about last week, which is build more. And again, you have on one side, America just building extremely little and China building, I would say, too rapidly and too recklessly. And this is causing huge problems. It's, it doesn't matter if you build a hydro power plant in Ecuador really fast. If it doesn't stay up, right, then everybody's screwed. And so there, they're, they're obviously, we have to land in the middle. You should not be on the extremes. And there needs to be a degree of sort of, you know, scrutiny around like how this stuff is built. It actually leads into what's happening. So the past few years, if you pull up the second article Perry, so this is from Noah Smith, an article that he wrote about China dropping investing. Basically, at around 2020, a few years before, their investments into new Belt and Road initiatives have plummeted. So China, in response to all of these projects failing, right,

of these high profile cases where it's like, hey, we helped Ecuador build a power plant, we helped Uganda do this. And those things failing. And the government's basically being like, China, you have fuck. us. They're now dropping investment dramatically. And they're saying, essentially, they're putting the brakes on the expansion plans and saying, we're going to become more focused on the viability

of our existing projects. Is this, so is this more a response of the demand for this fading or China choosing to offer it less? You're saying that the, you're saying that the countries have been badly afflicted by these choices so many times that there's less people lining up to no, no, no, no. No, no. So if you go to the next one, so This is a story from Bloomberg where they talk about how there is a train. And actually, if you scroll to the top here, so this is in Kenya. This was one of the big success stories, right? They built a train in Kenya from Mombasa, which is on the coast on the east, to Nairobi,

which is the capital in the middle. They didn't have that before. So this was one of the first big projects. It was lauded by the president who is saying this is one of our big infrastructure. This is a huge deal for Kenya. This is massive. And they've estimated the amount of GDP and economic activity and stimulants. list this is done. So now if you scroll down,

recently, China said, we're not funding anymore. So they had, if you look at the map, they had made this train track. You can walk the last bit. Well, no, the last bit is half of Kenya. I was like, I was like, damn, that's a long long way. So this black line,

they did successfully go from Mombasa to Nairobi. And China had said, we're going to help you fund all the way to Uganda. And they were going to connect Kenya and Uganda. So there's this East African, infrastructure and transit route that would really, really help these countries. Great stuff. And they've built 75 miles out of Norobi. And then China just said, nope, we're done. They were supposed to give them like four billion dollars more to do this and just backed out.

So China is the one pulling the point. China is the one who is in response to the projects being received so badly or having so many issues, or at least that's, you know, seemingly. A lot of them just didn't get paid back. And not being paid back, right? It's like it's a bad investment. Right. They don't want like the Sri Lankan port, that's a strategic port for them to have. They don't need a broken hydroelectric power plant in Ecuador. They're not getting paid back for the president saying they're not going to pay. Right. That's not helpful. That's just lost money. We have to assume what China, the reason. They're just saying, we're going to tighten our belt. We're going to focus on the viability of existing projects. That's, that's kind of what they're saying. I mean, this all ties in. This is the same impulse they had to overbuild in the country.

They had that building area where they were just, everything was funded through building. And when that sort of stopped working, they made this massive pivot to, fuck it, we're going all in on exports. Yes. And that is why we're in, that's, you know, everything has a consequence. Now we're in the area where they're dominating global exports and everyone's pushing back, especially the United States. Yeah. And so everything leads to each other thing. So this, what you're saying is that this approach, like these type of projects, don't necessarily map very well to the current strategy. Their current strategy, no, I don't think. Well, I think it did for about 12 years. It mapped their thing of we are just going to build immensely.

And then the past couple years, unlike some of the other parts of their economy, they're saying we are going to pull back from just mass infrastructure as a way of getting ourselves out of these problems. So they are pulling back from Belt and Road as a major global initiative. And to me, it's like, okay, as much as I want to sit here and rant

about we should build nonstop, build constantly, this is a real cautionary tale of like it matters if you build shitty stuff. Like this is absolutely crippling some of these economies. Like Kenya now is trying to go around raising $3.6 billion from all these different private companies, right? Like this is like a disaster for them.

And they just have all these plans that are done now. Yeah, it's bad. Yeah, I mean, if you go to like a Kenya, or I don't know if it's Kenya, but a Central African country now, or if you go to Kazakhstan now, or you go to the countries where there used to be trying to build power plants or railroads, what they're doing now is they're selling you BID cars. They're selling them, they're just exporting it.

Like, that's what, that's their new plan for these. It was, we are going to build infrastructure in China and around the world, that's our way to get out of our problems. And as that has been failing the past few years, it's now we're just going to build an absolutely obscene amount of stuff in China and sell it to the entire world. Everybody else in the world is going to buy it. Because one of my thoughts with this is when you said they were pulling back on this,

I was like, oh, is this soft power strategy maybe fading away? Maybe that was never as big of a part of it as I thought or it had been reported because it seems to be very much about money and not getting paid back on these loans and them deciding not to do this anymore. But if you're the exporter of all goods to the rest of the world, you also exert a different kind of soft power in that way. And people end up falling in line for like different reasons. So it's very, very interesting.

It's, I just is, we got to be somewhere in the middle. That's, that's the crazy thing that I assume everybody agrees with. The middle of the road. Unlike you guys. Get a man to the bill of chair. It's Mr. Middle of the Road, robots. Look down. Looks like we need to find a compromise. Yeah, fucking win an election on that one, Doug.

Anyway, I think building responsibly and affordably is good if it doesn't cause any problems. And we've done it again. We've done it again. We've done it again, folks. Lemonet stand does it again. So thank you for watching this week's episode of Lemonade Stan. We'll be back next week with 60 different updates on how the tariffs changed again.

And honestly, you guys can, can we do a little leak? It's not a big announcement, but maybe a little leak. We're going to be launching a Patreon alongside the show. A lot of people have been asking a Discord community do you engage in? You're going to be able to give more feedback on stories or things that we talk about in the episodes. You'll be able to submit stories as possibilities of what we talk about on the show. We're going to be doing a book club every month and doing some additional episodes in tandem with the book club, following up to comments. And the main benefit, a bonus hour of the show every week.

Yeah, should be hype. And every single Patreon suck, Doug will eat a lemon. Yeah, yeah, yeah, yeah. Full limit on camera. And Aiden will, what are you going to do? I just double down on the lemon thing. A Korean child. To be honest with you, if you're...

Yeah, you will adopt a Korean child. The problem is if Doug is dead set on the lemon thing and he's the one who eats it every time, He's going to die within the next two years. So we better. Do you see how many mean comments that work? That'll get so many patrons. This is how we fund it.

Dude, there's at least a thousand people who want me to die from lemons. I don't, I don't want you to die. Get into the Discord so you can hurt my feelings more closely to me. Really just dig in, you know? I need to, I can't be in this chair forever. I need you to take back up the mental. Yeah, yeah, I'll be back. Don't worry.

Next week, a hot new AI is going to drop. Gallum and you're Sam. You can't, you can't. Next means Crypto Week. Who's down? Crypto Week. I actually crash out. All right.

Thank you guys for watching Lemonades. We'll see you guys next week. Crypto week is canceled.