PBD Podcast - EMERGENCY PODCAST: USA vs China Trade War w/ Richard Werner | PBD Podcast | Ep. 574

Episode Date: April 9, 2025

Patrick Bet-David sits down for an emergency podcast with economist and "Father of Quantitative Easing" Richard Werner for a deep-dive conversation into the future of global finance. They discuss the rise of de-dollarization, central bank digital currencies (CBDCs), the real story behind quantitative easing, and how China’s latest tariff retaliation could reshape global trade.------📝 SUBSCRIBE TO RICHARD WERNER'S SUBSTACK: https://bit.ly/4cwC29G👕 GET THE LATEST VT MERCH: https://bit.ly/3BZbD6l📕 PBD'S BOOK "THE ACADEMY": https://bit.ly/41rtEV4📰 VTNEWS.AI: ⁠⁠⁠https://bit.ly/3OExClZ🎙️ FOLLOW THE PODCAST ON SPOTIFY: ⁠⁠https://bit.ly/4g57zR2🎙️ FOLLOW THE PODCAST ON ITUNES: ⁠⁠https://bit.ly/4g1bXAh🎙️ FOLLOW THE PODCAST ON ALL PLATFORMS: https://bit.ly/4eXQl6A📱 CONNECT ON MINNECT: ⁠⁠https://bit.ly/4ikyEkC👔 BET-DAVID CONSULTING: ⁠⁠https://bit.ly/3ZjWhB7🎓 VALUETAINMENT UNIVERSITY: ⁠⁠https://bit.ly/3BfA5Qw📺 JOIN THE CHANNEL: ⁠⁠⁠https://bit.ly/4g5C6Or💬 TEXT US: Text “PODCAST” to 310-340-1132 to get the latest updates in real-time!ABOUT US:Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.

With the Fizz loyalty program, you get rewarded just for having a mobile plan. You know, for texting and stuff. And if you're not getting rewards like extra data and dollars off with your mobile plan, you're not with Fizz. Switch today. Conditions apply. Know this life meant for me. Adam, what's your point? The future looks bright. My handshake is better than anything I ever signed, right here. You are a one-on-one?

The sun's right there. I don't think I've ever said this before. So Richard Werner, my guest, we were together three years ago, if I'm not mistaken, June of 2022. So it's been almost three years. And we had a great conversation last time. The nickname you have is the father of quantitative easing. And when we spoke, it was all economy, all data, all fit, all interest rates, all of

that. And today the timing of it was so perfect where Robin 20, we're talking like, Hey, Richard Werner's in town I said we absolutely must do something because everyone's so concerned with what's going on today with the economy tariffs Especially with the big announcement that Trump made so it's great to have you back on a podcast. It's great to be here Thank you very much anytime. So do you mind if I get right into it? Please do so here's the news so first this morning. We get word that China announces 84% tariff on US goods in showdown with Trump.

Europe also hits back. You'll obviously give a little bit more intel on this. Then the president, do you have the Europe on here as well, Rob, or no? Let me see you on the story you were just on. Yes, this has Europe in here as well. If you can go a little bit lower, let's see what Europe's is. Germany-Soviet Union announced it would begin collecting retaliatory duties on U.S. imports starting Tuesday. Okay.

All right. And that's fine. So now if you go back to Trump's tweet, here's what Trump puts on Truth Social. And this is as two and a half hours ago, three hours ago. Based on the lack of respect that China has shown to the world's markets, I am hereby raising the tariff charge to China by US to 125% effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the US and other countries is no longer sustainable or acceptable, conversely and based on the fact that more

than 75 countries have called representatives of the U.S., including the Department of Commerce, Treasury and the USTR, to negotiate a solution to the subjects being discussed relative to trade, trade barriers, tariffs and currency manipulation, and non-monetary tariffs, and that these countries have not, at my strong suggestion, retaliated in any way, shape or form against the U.S., I have authorized a 90-day pause and a substantially lowered reciprocal tariff during this period of 10% also effective immediately. Thank you for your attention to this matter." He posts this.

Immediately the market, Rob, if you can go to the market, the market responds accordingly. Go to the one day. The one day ends up being 3,000. That was up 3,000, nearly 8% in a single day right after the announcement is made. You can tell that, Rob, if you can do that again, that was great. He makes the announcement there at $37,941. The rest of the day ends up being nearly $3,000 today. So for you, with this back and forth, this is your world.

This is what you do as an economist and somebody that's watched the quantitative easing and now we're doing a little bit of quantitative tightening that's going on. We'll show that as well. What do you think is going on here? Is this good news? Is this over with? Is China going to come to the table? What do you think?

Well, the question is for who? Good news for who? Bad news for who? Certainly, the markets take the viewpoint that this is good for most of the countries. So stock markets are up not only in the US, but also in Europe and any market that's open. And actually you wonder, because really what's happened is, President Trump, who previously had this longest list of countries that were faced with these new tariffs and partly extremely high tariffs in one go,

the longest ever, I think, has been announced in one go. But they're now gone, it's all back to a minimum of 10%. Some were at 10%, the UK was 10%. And which one is left over? China. So you're really now pinpointing, zooming left over China. So you're really now Pinpointing zooming in on China and clearly

China is the target now the question is Was this now caving in to the market pressure because it's been relentless selling last week relentless also a Monday Tuesday and You know that that really clearly created a lot of pressure. At Treasury, they were quite concerned and there was some voices at Treasury saying, ah, you know, and actually there was this announcement, I think it was on Monday,

that there will be a 90 day reprieve, which was then denied by the White House. They said, no, no, that's not true, that's a rumor. You see, so clearly it's being proposed by somebody, perhaps from Treasury, ah, you know, why don't we do this? And now it's become policy. Well, we can't know, we can only guess and speculate exactly how it came about, but the result is clear.

Trump has made a major statement last week on this Liberation Day, on these tariffs and certainly woke up the whole world. Like they're paying attention to what he's saying and what the US is doing. That's for sure. So he clearly got that attention. And as he said in his tweet and his, you know, his message on Truth Central, so many countries have got in touch with the US and they're saying, hey, let's make a deal. That's of course what he wants.

So in that sense, you could say, well, it's worked. They're all coming crawling back to the US saying, oh yeah, okay. We realize we did have some tariffs on you guys and you wanted to have a level playing field so fair enough. Let's come to a deal and in many ways that was clearly the goal. Of course you need to get those deals worked through and signed and you know done and dusted so we're not there yet but he's got the reaction they know he can be very serious and if they

don't negotiate properly it will become serious again there's no doubt so in many ways and I think that was in favor of this idea that hey let's have a reprieve because you've got everyone's attention they want to negotiate negotiations can be tricky can take a bit of a while so why don't we have this reprieve and I can imagine when somebody suggested that perhaps from treasury I'm speculating here but I'm sure Trump's, President Trump's response was, but not China, surely. We can't, we can't let China off the hook. I'm not going to let China off the hook. What do you think is going to happen with this?

I mean, meaning, you know, earlier today I tweeted something out. I said, this is really going to come down to one of three things, right? Who needs who more? Okay. And then, yeah, right? Who needs who more? And then, yeah, right there, zoom in if you could, Rob. Who needs who more? Who has more leverage? And then who has more time?

Right? So when you look at the two here, back and forth, 84, 104, 125, who do you think can tolerate this pain long enough until the other has to cave? It's a tricky question. We're talking about the number one and the number two economies in the world. We're not talking about, say, the US negotiating with the UK or some other lesser ranked economy in the world.

It's number one and number two. And of course, by some measures, purchasing power parity measures, China could be considered number one in some way. And of course, by some measures, purchasing power parity measures, China could be considered number one in some way, and obviously that's disputed. But so, it's a big thing. This is a big thing. Now, timing is important because had this happened

only 10 years ago or 15 years ago, China clearly would have been in a much weaker position and it would have been from a US viewpoint, strategically much better to have it done then. And interestingly, if you go back to some of the old interviews that president, well, Donald Trump in those days gave, there's one I saw from 1988.

Oprah Winfrey. Amazing. There's one I saw from 1988. Oprah Winfrey. Amazing. And he's already saying, hey, we've got to have some proper tariffs. We can, you know, there's some unfair things going on. We're paying, you know, our products are being, you know, faced with this tariff wall as they're trying to export to other countries.

We need to do this. And of course that would have been for some countries a brilliant time, even for the following decades vis-a-vis China, because China was still building up its industrial strength. Now, it's not so obvious, the answer to your question is not so easy, because China is now in a very strong position, clearly stronger than 15 years ago or 10 years ago,

and also it has other trading partners. The US remains, and this is the strong side from the US viewpoint, and that's what President Trump of course is very much aware of and is playing on, the US remains the number one desirable market to export to. There's no doubt about that. And of course that gives the US a strong hand. And that's the whole point of this way of bringing about trade negotiations. But, having said that, China does have options. We've had in the last 10 years, increasingly

rapidly, an expansion of an alternative network, the BRICS groups of countries and in fact the BRICS has grown more and more countries have joined. Also China has set up this Shanghai Corporation organization and there is the Belt and Road Initiative which recently celebrated its 10th anniversary last year, where more than 150 countries signed up, and they are in bilateral arrangements and deals with China. So China has other options, but of course as a single market, the US remains, number one, also for China,

the most attractive single market. With the others, you have to aggregate a lot of countries to get anything close to what the US offers. So it's fairly, it's quite balanced. And I think that's what the Chinese response also shows. Why have they been so, well, disrespectful is how President Trump puts it, but clearly not very accommodating, let's say, okay? Why? They seem very self-confident.

Who's they, US? Sorry, China. So China has not been accommodating and has been quite aggressive in its response, unlike other countries, has not been accommodating, and has immediately said, we're not gonna be pushed into a corner, we're just gonna do the same.

We're just gonna have higher tariffs on the US products and so on. And so now we have this literally, this very aggressive bilateral mutual raising of tariffs, which will kill off trade between these two major economies and that will Even if everything else now is fine Everyone gets a deal and then things will will be sorted out with all other countries that still will have a negative impact on global

global trade and reverberations in many sectors whether it's you know shipping or whether Particularly industries with China China is a necessary partner, you know rare earths and and various Actually even inputs that other countries need Not to mention final products that we've been getting quite used to buying from China So this trade war has become at the moment with this 90-day reprieve very focused on just the US-China trade, well dispute trade war if you want.

And in that sense and market stake of you, okay that's much better than before with all these dozens and dozens of countries, but it still remains an issue. If that continues to escalate, it will actually hurt the world still. And yeah, your question, you know, who's got the, who's got more time, who's got more leverage. It's fairly evenly balanced. On some things the US is stronger on some things China has built up a very formidable position What what are we stronger in? We have the best customer base. We have the best buyer base. I just looked up right now China's top ten biggest trade partners number one is US roughly 600 billion

Hong Kong 297 Japan 308 South Korea 328. These are big numbers. Vietnam 260, Germany 202, Netherlands 110, India 138, Malaysia 212, and Russia 245. So it's not like US is 50% of the trade. It's not. How much total trade does China do in 2024? How much was their total trade? What was China's total trade in 2024? China, 6.1 trillion? Okay, of the

6.1 trillion, so if you divide 5, what was the number I said, 582, I mean it's at 9%, right? 582 divided by 61. So if we do 582 divided by 61, 9.5%. Still a big number, but it's not 25, 40%. Yeah. Now of course this is from the aggregate, you know, six point one trillion imports and exports aggregated if you say, okay Let's look at just exports, you know, you probably get a higher figure. So but yes, so it's it's not you know It's not negligible either way. So maybe check Rob. What percent of China's export is us?

What what percentage? What percentage of China's? export is US. What percentage of China's export is US? Yeah, yeah. 15%. That sounds right. So total is nine and a half aggregate, but just export is 15%. 15% if I lose, because here's the thing, if China does, let's actually do this, and maybe this is the better question. So for example, if China agrees and say, you know what, reciprocal tariff zero, we're not going to put any on you, you put nothing on us. If that was to be agreed upon, who loses more and who wins more? Actually, that is the best scenario and that's where actually the standard international trade

theory has a bit of a point, unusually, you know, I'm usually quite critical of mainstream economics, but that's the one point where they're perhaps slightly stronger Everyone would win Because you see tariffs The reason is the following Trade is really the source of wealth creation for everyone trade whether it's internal trade or external trade But actually when you then have the country divisions and you look at how countries are doing compared to each other you will see that international trade is the

main source of wealth creation between countries. So trade is extremely valuable. Now most economists very simplistically follow from that that you should never have tariffs not even unilateral tariffs not even if the other guys have lots of tariffs against you you should not respond by putting tariffs on, it's always better not to have tariffs. That's the official mainstream economics response and they're very clear-cut about this. That's not entirely true and therefore to some extent, you know, President Trump has a bit of a point, namely, tariffs have proven in history to be extremely successful and in fact necessary when you are a developing economy that wants to move up to the next level and you want to raise

the level of value added of your entire domestic economy. The principle to be successful as an economy is through international trade and you have to follow the rule of Mainly importing raw materials that means low value added goods Then you do the adding of value and you export high value added goods and the US is very good with certain high value added Goods and services are included. Of course, particularly the services US is is very good. And there's high value, whether it's software, technology related, telecommunications and IT and so on. That's the principle that applies throughout history to all countries at all time periods. And that's where tariffs can be very useful if you want to move up to the next level and

you put on tariffs such that you enhance that pattern of You know, basically you want to get raw materials very cheaply So you'd never put tariffs on raw materials that you're importing import tariffs you'd never have that and you're importing, import tariffs, you'd never have that, and on raw materials, but of course, if the other country is mainly exporting finished goods that you are also trying to manufacture yourself or services, they're offering services

that you are trying to offer, that's where the tariffs make sense. If behind this tariff wall, if you want, or tariff protection, I mean it's only partial protection because you're not banning those, it's just getting slightly more expensive depending on the percentage. If you, behind this protection,

you make sure that industry and your domestic players are actually stepping up to the plate and are getting ready because in the future you wanna take this off and then let them roam freely and let the foreign things come in freely and that pressure has to be there. And then it can be extremely successful. That's how Japan was in the 20th century, the country that had the most dramatic economic development only overtaken towards the end of the 20th century and then beginning of 21st by China.

Although if you take the whole country because it's huge and rural areas, some are still not so developed. It's a bit of a mixed batch, but big chunks of China did beat Japan in that respect. But they all followed the same pattern. And it's also true if you go further back in history, German economic development in the 19th century, the US development in the 19th century overtaking number one economic power, Britain, happened with the same pattern, namely very selective tariffs. So that this trade pattern was encouraged where you get your raw material imports cheaply

and you have development of your domestic high value added goods and service industry and you then encourage the exports. And so usually it's a combination of tariffs and subsidies to work on that pattern. But it's only justified because it is a government intervention. That's quite clear. This is a government intervention. That's quite clear. This is a government intervention, tariffs, and normally free market is preferred. But if you do it cleverly, you combine this intervention with incentives for the private sector to step up to the plate and deliver shift to the higher level manufacturing or

service sector value addedadded activities, then it's extremely successful and has been in history consistently. That's how the US overtook Britain. Yeah, but the question for me, okay, so who's the biggest loser? So I went, while you're speaking, I'm trying to see what Chad GBT is going to tell me the biggest winners and losers are if they agree to 0% tariffs. Rob, if you're going to pull this up and ask the question, who are the biggest winners and losers if the tariff on China and US goes to zero?

Reciprocal tariffs go to zero. Who are the biggest winners and losers? Here's what it says. Winners, big US retailers, Walmart, TARS get Amazon with benefit from lower import costs, consumers would see cheaper goods. Electronics, clothing, furniture, toys. Lower prices equals lower inflation, more purchasing power if they go to 0% tariffs. US tech companies, Apple, Tesla, HP, which manufacture heavily in China, would save on

cost and avoid supply chain friction. Text imports like Qualcomm, N and Nvidia would expand access to Chinese markets. Okay, I just saw a story about how much an iPhone will be right now based on what it's going to cost. Rob, if you want to pull that story up, this is from five days ago. I saw that it would be quite a bit. Yeah, $3,000 is what I saw. $3,000 is what I saw. I saw $3,000. So this one's saying $23,000. I think it's $3,000 for the one with bigger, if you go a little bit lower up It'll tell you let's go a little bit lower in the story. It says all the way up to three thousand. I think

Tony's only got $2,300 43% increase with what's going on with tariffs. Okay, so that's that let me continue Chinese manufacturers and exporters with us tariffs gone Chinese firms in Electronics machinery textiles regain full access to us markets because it's cheaper to get exports. Increases China's export momentum. Okay, next. US Chinese logistics and shipping firms. Global financial markets. Wall Street would rally on improved US-China relations, reduce geopolitical risk, investor optimism. Six, South Asian and global suppliers. These are all great winners. Now, let's look at losers US domestic manufacturers

Steel aluminum textile furniture. Yeah, so that means jobs still gonna go over there. It's gonna be cheaper labor there China substitutes Vietnam Mexico India these countries benefited from US China decoupling the trade war So a lot of us started sending business to Vietnam Mexico India They would take it so they may not want reciprocal tariffs with the US and China. US labor unions, which I don't understand these guys, these are the protectionist policy makers, unions will likely see a betrayal of bring jobs home, to bring the jobs here. Okay, fine. US defense hawks and China skeptics.

Companies that relocated from China during trade war. Domestic industries. These are saying who the losers are. For you, I see more positive on doing reciprocal than not doing it. Why isn't China agreeing to do it? I think we do have a political element here. On both sides. We saw it in the message from President Trump.

It was the second or third word of his message. Disrespectful. And the Chinese have the same attitude. They feel what President Trump's been doing has been very disrespectful. So we do have, I mean, it's like between, between humans, you know, we're sort of, is the, Oh, this has not been the nice way of doing it. We're slightly miffed now and we're going to, you know, we don't want to be pushed around. So there is that element.

But in principle, if you have no tariffs on either side, basically each country still has to think is this a healthy relationship and I mean there's this long history and we're just you know President Trump is being quite you know quite focused on this and willing to have a dramatic policy change because until now all the presidents didn't touch this and they let the the state department and all the trade negotiators work in line with standard trade, orthodox economics. And so there really hasn't been much of a dramatic policy change. But the end result has been essentially, previous administrations overseeing the transfer of

labor of US jobs to China. And that's really essentially also been US policy. And so the US policy has helped in making China very strong because all the US companies were more or less encouraged. Yeah, that's fine. You do that. The environment was like that. And so President Trump is unusual because he doesn't care about all this economic orthodoxy.

He just sees the jobs going and he wants to reverse it. He sees and has seen since the 80s, as we saw from that whole interview, that there isn't really quite a level playing field when it comes to tariffs. And he just thinks, hey, let's change that. But in my view, there's a slight missing element and that is one needs to combine that with a policy that sets the right incentives, not to dictate to anyone at all, no, but to create the incentive structure for the private sector in the US such that you will have still boosted high value added activities expanded in the US. You want to keep that.

You want to offshore essentially low value added activities. That doesn't, you know, that's not the big problem. And I think where the where to draw a line is the question. And I think it's being drawn at too high a level so that the US has been quite successful in the IT sector and in software and things like that. But too much of the manufacturing has been offshored and that's where President Trump has a point. But is this going to change? Is it going to be reversed just through tariff policy and perhaps even this agreement.

If you do this agreement, zero zero, then it's not going to change actually. You don't think zero zero is going to make any difference? For this point, on this point that really you'd like to have more jobs in the higher value added manufacturing sector in the US. The zero zero doesn't create the more jobs here, so it doesn't solve for that. Exactly. Okay, so it doesn't solve for that. Okay, so perfect. So then I guess maybe let me ask this question a different way.

So let's say we're two vendors. You have a software, I have a software. I have my customers, you have your customers. And there's about 100 people out there, 195 to be exact. These are countries, right? 195 people that do business with both of us. Out of these 195, let's take the top 40, the ones that matter the most. Germany, Italy, Mexico, Canada, the ones that these are the ones.

Which one of those, if you had to lose one of them, if one threatened you to say, to be with me, you cannot do business with the other guy, who do they need more? That's quite a complex setup. Meaning, I'm US, you're China, who do they need more? Who can they not afford to lose? There's a reason why I'm asking this question. I think maybe you know where I'm going with this. Who do you think they need more? Who are they more relied on? Do they rely on more on the relationship with us or do they rely more on the relationship with China? I think it totally depends. It totally depends on the specifics of the

of the of the type of software. China has made great progress in creating its own software and still has a price advantage. There used to be the attitude, well, it's just copying and it's just copying and it's similar to the US, but it's cheaper, okay, but the US is really where the creative new ideas come and so on. And that's also being challenged in China because you've got new developments, things that are not even available in the US are available in China and they're trying all sorts of things with various apps and combinations of services. And they still have the price advantage, although this is what a tariff policy could address.

I think really though, it's beyond just if you look at software, because you're looking at the sector where the US is doing best. And so perhaps that's not really the main concern because, you know, the US is doing okay with that one. It's the level below, which is still high value added, but is lower where there's still some manufacturing. There's an argument for maintaining manufacturing in your country because manufacturing gives you basically the skill set required in having certain assemblies and manufacturing. And the people involved in that, that's also what creates new ideas about processes, how

to improve process, how to offer new things, working with different materials, you know, so important. All the new materials that are being worked on. If you don't even have to manufacture, you'll never get into the new materials. China is making massive progress in new materials, you know, and the US in some areas has lost the skill set because it's been offshored. There's not even by a little bit, by a lot. Ever since they allowed China to join the World Trade Organization, we sent our manufacturing to them. Even Nancy Pelosi talked about this in 96, right?

Where she said, you know, we charge 2%, they charge 35. Our 2% made us 170,000 jobs. Their 35% made them 10 million jobs. Do you have that clip? Have you seen this clip? This right here, I don't know if you've seen this. This is Nancy Pelosi. I think it's interesting to note that the average US MFN tariff on Chinese goods coming into the United States is 2 percent. Whereas the average Chinese MFM tariff on US goods going into China is 35 percent. Is that reciprocal? On exports,

China only allows certain industries into China, of US industries into China, and therefore only 2 percent of US exports are allowed into China. On the other hand, the US allows China to flood our markets with a third of their exports, and that'll probably go over 40%. And it's limitless because we have not placed any restriction. In terms of jobs, this is the biggest

and cruelest hoax of all. Not only do we not have market access, not only do they have prohibitive tariffs, not only are exports not let in very specifically, but China benefits with at least, at least 10 million jobs from U.S.-China trade. The president in his statement, requesting this special waiver said that China trade supports 170,000 jobs in the United States. 170,000 jobs. This is back in the days when she was a nationalist. Today she's more global.

Yes, sure. She's made it. She's changed teams because she's about the world. She's no longer about what it was about our economy. So the question, okay, going back to it, who do they rely on more? Labor, China used to have the cheapest labor, where it used to be 20 cents to 50 cents an hour pre-joining the World Trade Organization. At that time, 2001, minimum wage in America was $5.15. So let's just say it's 25 cents. It was 20 times cheaper to do it there than

to do it here. Now, labor is not that big of 25 cents, it was 20 times cheaper to do it there than to do it here. Now, labor is not that big of a difference, China versus here. Matter of fact, there's an article that came up about Haffezan in Mexico, that China's building Haffezan in Mexico with their BV, whatever that car is that they're doing, the BVD, BVA something, what's it called Rob? BYD, build your dreams. Build your dreams for $9,600.

They're building it in Mexico because labor is now cheaper in Mexico than it's in China. So they're kind of getting competition with labor that's going different places, right? I asked a question about how the other 195 countries, which one of us do they need more, is because if you remember what Trump did to Huawei, where he told everyone in the States and he told everyone in China, if you do business with Iran, I'm putting sanctions, you're done with us. So Iran wanted to do business with Huawei, the CFO, which was the daughter of the CEO, was in Canada doing a deal with Iran.

If you remember that, he said, we're done with Huawei. Was this the Trump administration hits China's Huawei with a one-two punch? This was in 2019, six years ago. So Trump's got the reputation to show that I'm going to go hard with this. What if Trump calls all the partners that say, hey guys, here's what I need you to do. I need you to not do business with China for three months. And if you do this, I'll give you zero tariffs for the next three months.

What if he puts that kind of pressure? What if he, because he's capable of saying something like that. He's not somebody that's gonna be worried about it. What if he says something like that? What if he says, I will give you, to save you money, 0% tariffs for whatever, 12 months, six months, but in return, you have to tell me

that you're not gonna do business with China for 90 days. What if he does something like that? Well, it could work for some countries. This would be attractive. And if then they say, okay, this would disrupt the supply chains, this would disrupt the supply chains, this would disrupt the relationships because suddenly you have to find other sources,

you have to find other partners. Once you've done that, you have actually let other companies from other countries substitute China and then it could stick to some extent it could stick. So it could work. This hasn't been tried and it could work. But really, I don't know, I mean, in many ways, yes, and this very aggressive policy with Huawei,

at the time I was a bit surprised how this lady who was the CFO, she was arrested and she was essentially kept, was it house arrest in Canada or something like that for a long time, a year or more. That was, to me that didn't seem quite right because these are sort of Soviet methods. That was a bit unnecessary.

But you're right, as a result, he has his reputation of being very brutal when it comes to China. But is this really the right way of dealing with China? In my experience, it's not. And that's I think that's actually the reason why China has responded this way, because there is this baggage, there's this history of how President Trump has dealt with China. And sadly, that brings out this, you know, the politics where

they say, well, we're not going to be pushed around by President Trump in this way. We also want to be respected. You have to understand, I mean, it's like on the human level, everyone wants to be respected and countries want to be respected. Russia has the same issue. They want to be respected as an equal when they talk to the US and now here President Trump was the first who said yes, we'll talk to them as an equal and it works like magic Although still a long road, but to go but it's clearly working Why isn't he trying this with China? It would it would soften up China, you know, it's Particularly Asia you see it's all about not losing face and being spoken to like that Forces the Chinese leadership to respond strongly even though really perhaps they don't really want to that has sort of have to they can't lose face

Um, you know within Asia within, you know, all their partners all the relationships they've built up Um, and so it's it's an unnecessary Risk to the world economy to have this very brutal trade tit-for-tat raising of tariffs, when really he should have the same approach as with President Putin and say, hey, let's go and have dinner. I'll show you some good American whiskey. You'll show me the multi fairly high octane stuff, you know, and you start to and this would work very well in China. And let's come up, you know, he likes to make deals, the Chinese love to make deals, they're famous for it. So why aren't we talking about proper deals? It's because you know, in the past, things already

fairly early on turn sour. And now it's all about not losing face and now we have to be tough to each other and it's a pity because it's unnecessary China can be you know the relationship with China can be moved so that it's beneficial for both also for the US a part of a part of me the way I see it is, China became a behemoth because of us. And if you take us out, what Nixon did, first time a president visits China in 25 years after the terrible relations, he goes and he opens it up with the Pink Pong diplomacy deal, whatever that they had. For 25 years, no president had ever gone to China for 25 years. Relations weren't good.

So then he goes in, then O-1, the Clinton deal that gets done under Bush. You take us out, who's China? They needed us to become that. It's almost like somebody gave them credibility. It's like all the other countries around the world. Who's willing to give China reference? Call US. Yes, you can do business with them.

All right, we're doing business with China. And you forget that? Yeah, yeah. No, you're absolutely right. In fact, that's my earlier point. And it took a while, you see? So if the US policy had changed a bit earlier, it could be a totally different story.

But it's happening now when China has and partly thanks to this, you know, policy, it was Nixon, President Nixon and Henry Kissinger and the strategy they had with China. They did a lot to to put that in motion. And then China, you see, of course, why was China then so successful? Because it's one thing to get the right environment and get the US market, but you also have to deliver. And they managed to deliver because Deng Xiaoping came to power in 1978. That's really when it took off.

He was very pragmatic and then Trump would have liked him because he was a pragmatist and not ideological. He said, well, let's forget about this ideology. Obviously he's talking about the communist ideology. He couldn't say directly, but really that's what he was saying. Let's do what works, what delivers, and let's actually find out what sort of policies deliver.

Now he looked across the China Sea and saw Japan doing extremely well, 20 years of double digit economic growth, 15% growth. That means every four and a half years, you double national income, and then you double it again the next four and a half years. And that's what Japan did. That's how you move from being a less developed country, a developing country to developed country status in a generation. They did it. And he said, well, I want to do the same. He went

to Japan in the first year when he took power, 78, when he rose to power and he asked the Japanese fairly openly, although he was sure to meet for dinner, drink the sake and the motai, you know, it works magic. And the Japanese, he told them, tell me the secret of your 15% growth for two decades. Tell me the secret. I want to do the same. And you know what?

If you do this in Japan, if you ask sincerely, off the record at a dinner with a bit of sake, they will tell you the truth. And the truth was, they asked him, so how many banks do you have? And he was like, well, banks, we have one. It's a Soviet system, one bank. I mean, the Soviet Union, they call it Gosbank, the mono bank system, central planning. And the Japanese must have, one bank, I mean, the Soviet Union, they call it GOS Bank, the Mono Bank System, Central Planning, and the Japanese must have loved one bank. China's so big at the time, I don't know, 600 million people perhaps at that time.

You need 5,000 banks at least. Because why? Because growth means more transactions this year than last year. That means more money is used for transactions this year than last year. That's only possible if you've got more money creation. But you've got one institution to create all the money. The central bank is not going to work because that's central planning and central planning actually doesn't work. So you need decentralized money creation and that means, because who creates money is actually the banks.

So you want 5,000 banks instead of five people at the central bank deciding how much money to create and who to give it to. Why don't you have 5,000 banks in 35 branches with 30 loan offices each receiving, you know, small local banks receiving the loan applications from small and medium-sized enterprises Then you have five million loan officers doing the job instead of five people at the central bank get out of here This is and that's what they did. That's the truth. That's that's the secret actually I published it in two academic journals. Wow recently that's the Chinese success Well, the secret goes to his diplomacy good for him. Yeah. So he went to Japan. Yeah. That they're whooping on him and he asked them what's the secret.

And they told him. Five thousand banks, five thousand loan officers, five million loan officers. Yeah, exactly. Wow. And then and of course you get a multiple of that in loan applications. Maybe fifty million, a hundred million loan applications, but it's local and you have so many loan offices, they actually, because it's local and these are small amounts, but that's more efficient, you see, and more resilient, more stable. They go and kick the tires, they check the loan application, they only give the loan when it makes some sense. Of course, there's always some mistakes, but if you do this in overall and small firm lending

is actually the safest form of lending. You never have an asset bubble and a banking crisis from small firm lending is actually the safest form of lending. You never have an asset bubble in the banking crisis from small firm lending. There's never been a small firm lending banking crisis. That's how you get productive credit creation, which gives you economic growth. And that's how China managed to have 15% economic growth for four decades, doubling what Japan did for four decades, 15% growth. Were they allies in 78? Were they allies in 78? No, were they allies in 78? No,

not at all. Japan has been in the US camp, you know, US troops in Japan. But you see this is Asia. So if you meet like this sincerely, and you meet and then you discuss off the record with some, you know, alcohol for dinner, they're people, they want to be helpful and friendly and particularly, I mean, the Japanese, they love to tell you the truth if you ask off the record after hours. That's why they have to work such long hours because during the day you have to tell the official story,

which is not true. So let me ask you, so what based on history and what you've seen work, what would you, if you were in a position of influence and you're in Trump's ear, President Trump's ear, how would you resolve this yourself? Knowing how their wiring is, their history is, and where they are today.

You also said something very interesting. That's, how do you pronounce his name? Gianan? Gianan? Is this the one you were talking about the leader in 1978? He was under this one was under Deng Xiaoping and Yes, he thinks he was he the pragmatic one that's thanks helping he's the one okay, so she is not So it's a different story to deal with a person like this versus him. So he was the decentralized I mean he came after not directly but essentially versus him. So he was the decentralizer. He came after, not directly, but essentially after Mao, Chairman Mao, who was the communist

central planning Soviet style type. And that really doesn't work that well. In fact, it was a disaster. This cultural revolution is like we're facing it today with the woke movement. And then the Great Leap Forward, which was a great leap backwards, and then 10 million people died from starvation. That's how great it worked. And Deng Xiaoping actually suffered during that because he was always arguing against it.

He was imprisoned three times by the previous regime, but he was prominent, you know, and so then when he rose to power, essentially everyone was exhausted with his Mao stuff and it didn't work. And so then, OK, to power, essentially everyone was exhausted with his Mao stuff and it didn't work. And so then, okay, let's have Deng now. And so, and he understood the magic of banking. He understood it because when he was young years, he was actually involved in setting up some local banks.

So he understood, you know, for most employment is with small firms. That's true for the US as well. 75% of employment is with small firms. And small firms don't get money from capital markets. The media love to talk about capital markets, big business, big names. But that's irrelevant for small firms. They can only get external funding beyond family and friends.

The external funding is entirely only from banks. But big banks won't lend to small firms. It doesn't make sense. Big banks need big deals. So what's necessary for high and stable economic growth is to have many, many small banks. And that's in fact the strength, the historic strength of the US. China has now 5,000 banks and America has 5,000 banks. But in the US, the number has been declining

in the last 20 years and also in Europe because the central planners here, we have central planners in the central banks. They love the Soviet system. They have been saying, we need to reduce the number of banks. They've been closing banks. The FDIC has even closed dozens of healthy banks. There's a whole study by the Federal Reserve, a Federal Reserve

researcher Ashcroft, American Journal, American Economic Review, 2005. What happens when we close healthy banks? Because the economists say, oh, nothing should happen. There's so many substitutes for the bank lending. But if you close healthy local banks, they found, of course, there's a negative impact. Why do they even close healthy banks? Why does such data exist? Because the FDIC does that.

So in Europe and America, we've been reducing the number of banks. The US used to have more than 10,000 banks. In fact, if you go back earlier and earlier times, more than 20,000 banks. And that was the strength. We need to go back earlier and earlier times, more than 20,000 banks. And that was the strength. We need to go back to that, set up local banks, and we need to set up, there's some places, there's one state in the US where they have a state bank.

It's the state bank of North Dakota. And that has a job, namely to support the small local banks in the state. And as a result, in this relentless drive to concentrate banking systems, forced by the central banks through regulation, the various low interest rate policies, punishing banks also with regulations when they lend for productive business investment, release the jobs where that was punished, or do speculation for asset purchase oh that's great we encourage that as a result the number of banks have gone down but in North Dakota North Dakota not quite as dramatically wow we have from over 8 000 banks in the last 24 years to less than 4200 yes that's right and actually unbelievable if you just go back a few more years you'll

find is even more dramatic because it used to be way more than 10,000, 14,000 exactly, there's the number. And this is central bank policy. In Europe, it's official ECB policy. Europe is overbanked, we have to close the banks. Well, not the Goldman Sachs, they're closing the small local banks. They're crucial for job creation and wealth creation.

And this is in fact my research area. And I'd love to reach out to the Trump administration because you need to have that, the right policy there. Then your tariff policy can be extremely successful. If you do the tariff policies because you feel, okay, we need a level playing field. I can understand that. I get all that.

But if it's without the backup of the right policy, and I'm not talking about micromanaging government intervention, not at all, quite the opposite, but some policy, namely to encourage small local banks, that is decentralization. That is the real capitalism. That's what made America great. There used to be free banking, used to be super easy to set up a bank. Why is banking now the most regulated industry? That favors the big banks. That's part of this drive to kill small banks. It's overregulation. And if we go back to that era, that's when America had high growth.

America was a fast growing, emerging economy, double digit economic growth like China for decades. That's how America overtook Britain. Britain used to be number one economic power way ahead of everyone. And then the US and Germany in the 19th century started to create lots of small local banks and that created this drive. You see, let's talk about tech industries. Not software, but you know, there's still manufacturing, but at the high end, this is where Germany has been very strong.

And the amazing thing is that Germany has the largest number of small firms. And of course, you know, Germany used to be the top exporter, even exporting more than China, even though China is like 30 times the size by population of Germany. And so the surprising thing is that many of these exports are by small firms, family-owned small businesses. They're leading in the world in their market niches. They're called hidden champions. Hidden champion because,

hidden because they're small firms. SMEs, they're not brand names, we're called hidden champions. Hidden champion because, hidden because they're small firms, SMEs, they're not brand names, we don't know them. But in their particular market niche, they are world leaders, whether it's the taps in the bathroom or whether it's, you know, it's small things they're specializing in. And you'll find German firms are, many, many of these small firms are world leading champion because market share number one, two or three in the world champion like, you know, gold, silver, bronze with this definition. If you look at how many hidden champions that means small firms that are top market share

one, two, three in the world are there in each country. You will see Germany is head and shoulders above everyone else with you know 1500 plus of these firms number two is the US and China is way down the road so how is that possible because of banking Germany used to have the largest number of banks in Europe by far and particularly the vast majority over 80% of those banks were small local banks only lending in the local area for productive business investment. What year is this?

Well until 2009, Germany was number one exporter in the world and the data on hidden champions is sort of 2000, it's a bit late to 2014. So it's not too long ago. Germany has now been in a recession with terrible government, terrible leftist socialist policies. So it's a disaster. But, and they're killing the banks, of course. ECB is killing the banks. So it's at the moment, it looks pretty bad,

but we know why that is. It's these wrong policies. But before the strength is due to this, essentially an industrial policy that was non-interventionist, but creating the right environment. I just want to make one more point on this because if you compare for example to the other extreme which is Britain, United Kingdom, five banks dominate the banking sector and then you see the contrast and you see why this makes a

difference. So in the UK, a small firm gets no loans from the big banks because they're so huge. Lending to small firm 50,000 pounds, 100,000, 200,000 pounds, it's too tiny. They're just exactly who cares. They'd rather lend a billion to a hedge fund, private equity fund. That's how it works. So let's say we have a UK firm, small firm,

and a German firm that competing in the same market. Now there's a new innovation. These small firms, they're not necessarily the innovators. Sometimes it happens, but rarely. They don't need to be the innovators. But when a new innovation comes out, they need to be able to very quickly apply it, you know, actually apply it, get it. So what happens in Germany is the leadership, usually the owner of the small firm realize, okay, that's the new technology.

My guys have shown me they go to the local bank. The local bank is headquartered in their village. It's very decentralized because everywhere you can work because there's a local bank everywhere and that means there's money everywhere. And the local bank knows the small firm very well. And the owner explains, look, we need to buy that technology, we need to apply it, otherwise we'll lose market share,

otherwise we'll fall behind. The bank manager understands, knows, quickly does the figures, within 24 hours, sometimes 48 hours, they get the loan. They get the new technology, they buy it, they implement it, they stay ahead of the game. UK, same situation, they will never of the game. UK, same situation. They will never get the loan.

So they can't apply the new technology, they don't have the money to do it, they fall behind. So funny when you're hearing this now, this is what Sowell and Milton Friedman used to talk about. I remember Gordon Chen, when he once came on the podcast, we talked about what China was lacking. China was lacking law schools. They used to only have four law schools like 50 years ago 60 years ago

So when it comes down to competition business owners didn't trust the fact that it was such a thing as law and order so contracts and Agreements would be kept so the moment China started you know building law schools and students became lawyers There was actually law in order there was trust so if I know it's no longer a handshake You have to commit and abide by the agreement that we came up. And that's a very different conversation than banks, but it's a similar angle that we're talking about here. I just want to process here just to look at how long, Rob, can you pull up what does it take to become a bank in the U.S.? Okay. What does it take to become a bank in the U.S.? Just out of curiosity, how much work does it take?

Actually, I looked into this and to get a new banking license I mean hasn't in most states it hasn't happened in the last five years so the number of new bank license licenses given and new bank creations has really dropped and it's quite clear the regulators are very reluctant to do this. I mean, banking is very profitable. And we need to always create new local banks because what we see over time is. Let me tell you what it shows you to me. First, decide what type of bank you want to create, okay?

National state charter credit union industry loan. Then submit a bank charter application, okay? At the federal and estate level, which includes business plan, proposed name, cap structure, risk management, market analysis. Number three, meet capital requirements, $10 or $30 million to be a tier one. Number four, apply to FDIC insurance. Number five, build a strong management team, fit in proper criteria. Okay, cool. Number six, set up core operations. Got it. Number seven, undergo onsite examination by regulators to come and visit you and view.

Receive final approval and launch once approved. This could take three years. But you're saying we haven't done one in a while in America? Yeah, yeah, yeah. Okay, so go back to Trump and go back to Trump and go back to the gentleman we talked about earlier, Deng, what was his last name? Deng Xiaoping. Deng about earlier, Deng, what was his last name?

Deng Xiaoping. I went and looked up to see his relationship with Xi. How Xi views him. Does he respect him? Does he not respect him? Does he admire him? Like, is there a level of admiration? Because if there is, maybe that's a good thing for Trump, right?

That's an opening for somebody to allot somebody to go negotiate the deal. And he says Xi gave high regards to him on the 128th anniversary of Deng's birthday, August 2024, which was littlest than a year ago, right? And he referred to him as an outstanding leader with high prestige recognized by the whole party, the whole army, and the people of all ethnic groups in the country, and a great Marxist who made great contributions to a world peace and development." This is what he said. However, despite this admiration, he's marked a departure from his approach. Deng emphasized economic reforms and a more collective leadership style while Xi has consolidated power and reasserted the Communist Party's control over

various aspects of Chinese society. And Alice noted that Xi has moved away from Deng's low-profile foreign policy, adopting more assertive initiatives to reshape the global order. So this is not Deng. So it's not like Trump can go to China, sit down, have a conversation with him, or invite him here and say, let's fix something out. What does Trump do today? I understand what you're saying with the banks. We need more banks.

We're down to 4,000. We used to have 14,000. Yes, get that. But right now during the tariff, right now it's the trade war that they're having. What should he and his administration do now? Do you have any suggestions or any ideas? I would try to defuse this now because otherwise we'll see a standoff where each party, I mean, this is number one, number two economic power and political power in the world. So you want number one to cave to number two? Well, exactly, we avoid that.

We need to avoid that both parties think, oh, I can't cave in. But it is though. No, no, no. Well, this has to be done the right way so that of course the US also is not caving in, it's not seen to be caving in because likewise China doesn't want to be seen to be caving in, that's the whole tricky bit. So what's an ideal situation?

Well of course ideally you would have never got into this situation right? Because that was pretty predictable. But no, but you have to though because they've been bullying, they've been controlling, they've been coming up and they're they've been doing things that a lot of people in America don't feel comfortable with. They've been buying properties right next to our military units. They've been buying up land all over the place.

They've been doing certain things where we're sitting there saying, what is your motive? What are you trying to do long-term? Is this closely, slowly going up through Mexico and other places, what are you trying to do long-term? So it makes a lot of people in America feel uncomfortable. Still the way to address this each time, I think would have been to sit together,

write people, maybe fairly high level and say, look, we have these and these concerns, can we deal with this? And this is off the record. First you have these discussions discussions not in public, precisely because you want to avoid a public standoff where each party can't be seen to be caving in. I think it can be diffused,

and I think it will be successful to diffuse it. In many ways, okay, both parties have now shown, okay, there can be tough guys. Both are tough guys, okay, both parties have now shown, okay, there can be tough guys, both the tough guys, great, fine, so let's now get down to business and resolve this issue. So maybe they have to be- How do you do it?

Private meetings, secret meetings that are not official, but between, you know, respective top guys, whether it's Trump himself or potentially, you know, Secretary of State or, you know, you have to find the right level, but and meeting their counterparty and saying, look, we want to diffuse this, but of course we want to achieve, you know,

if to understand what we're trying to achieve, can we agree that, you know, certain things we are saying are reasonable and we get your viewpoint, you don't want to be seen to be bullied. So let's come up with a formula. They will make suggestions. That's the Asian way. They will also, they will be very creative suddenly.

Okay, we understand. You don't lose face, we don't lose face. We'll come up with a solution. It's possible. It could be, I mean, there's all sorts of things you could think of. I mean, potentially even with another party or you create some kind of diversion

where both parties are seen to have to now change something because of something else happening. You know, there's so many things you can do. If both parties want to diffuse it, and it's made clear that we don't want to lose face. I'm convinced Trump wants to defuse it. I don't, I, a hundred percent. I'm convinced Trump wants to do that.

Well, that'd be great. That'd be great. Cause I mean, I could help. I could help defuse it. I 100% I am to, I'm not him, but I'm convinced he absolutely wants to defuse it. But I think the part that needs to be clear in a situation like this is, hey, you've gained more from us than we've gained from you over the years.

And I understand that's probably not where you're gonna go, but Trump to him, he's not gonna change from that. Even that one time when he had Netanyahu there up on the podium and everybody is thinking, oh, he's gonna say this, he's gonna say that. He doesn't even want Netanyahu to sometimes think he's got full control. He said, yeah, we're thinking about

what if we, the US buys Gaza? And it's like. That was a surprise. And then Netanyahu goes like this, like, wait, what did you just say? He threw him off. Because you have to kind of throw off sometimes because even your allies sometimes will take advantage

of you because they feel behind closers, they own you. You can't do that. This is America. I want a leader like him to lead. And FYI, I just had a curiosity for my own reasons. How much do you think these two ports, the one that BlackRock is buying from CK Hutchinson, the 43 ports they're buying, but the two main ones in Panama,

do you think that's gonna go through? In what sense? Do you think that deal will get finalized? Right now there's a lawsuit saying that CK's breaking some contract laws for taking too much time. Only reason I'm saying this is because this is leverage. If US controls those two ports, we also have a little bit of leverage here.

Well, I mean, this can be part of any deal. And it seemed like a bit of a concession, that this will become, essentially the Hong Kong company selling those ports okay. It seemed like an olive branch from the Chinese side. And therefore, I mean, I assumed it will go ahead if it's also recognized. I mean, this is the thing,

both parties also want their actions to be recognized and appreciated. I think the way to approach it is to, is not to say your Chinese success has been due to us Americans and America. It's partly true, but only partly, because it was hard Chinese work, very hard work at low wages, people really working their ass off for a long time, long working hours and so on. So the Chinese worked for it, that's for sure.

And it's, but it's also true at the same time that both, in fact, the Japanese rise and the Chinese rise wouldn't have happened in this way and wouldn't have been so dramatically successful if the US hadn't been this very open accommodating market that they could sell into quite nicely in the sense, you know, so that is a contribution. So I think one, if one appreciates both parties contributions, then what you come to conclusion there is, well, it's a team, this is teamwork. We've done this together, let's be proud of it. There's a way of shaping the conversation where both sides see that, okay, what I've done is being appreciated.

And yes, now we have some issues, let's try to resolve them. I think it's possible. I've been in China, a professor of finance at Fudan University in Shanghai for three years. So I've spent some time there. And, you know, I've met some senior people. Bless you.

I think it's possible, it's possible to diffuse it in a way that both parties will be happy and then actually establish a long-term relationship. There is one aspect where I see difficulties, and that is the military side. Because we have this military-industrial complex in the US, the deep state, and in China they feel this is so strong we need countermeasures. And the Chinese feel like we're doing all this because we're kind of afraid of all the US military threatening here and there and accusing

us of stuff so a lot of work would be needed on that side as well but it but it's good to start with the economy and then you can move on to the onto that tricky a bit well look China stopped the world with COVID and for the longest time Fauci and all these people said the virus didn't come from there. The entire world lost a lot of money. Hundreds of thousands of businesses were decimated. Decimated, who did that?

China did that. The rest of the world is supposed to just sit there and forget about it? Was it just China though? Yes, we know these experiments and sort of research was outsourced to Wuhan by who? By US institutions. When in Fort Detrick, they were told by judges to shut it down, then they moved and Fauci moved it to Wuhan.

So it was actually on US instructions. That's often what gets left out. And of course, all these institutions, I mean, the roads go back to the World Economic Forum and some for sure string pullers there. But I type they're even they're just using China and China saying, Oh, this is Americans, we help them, you know, actually, you know, they've also been used and tricked, I think, into this, because they thought it's an American virus that they did perhaps in Wuhan on, you know, sort of tricked into it in China. But they that's's why there were these, this very strong lockdowns because they

always suspected because the US side was working on this genetically targeting viruses. You know, we've seen results in all these Ukraine locations, US locations in Ukraine that Russia has been unhappy about and has been working to shut down, where there's genetic targeting of particular ethnic groups. And once you have evidence for that, the Chinese of course felt, well, maybe they're targeting us, we better be careful and have these extreme shutdowns and lockdowns and extreme measures that were then world famous, right? And sort of set the stage. I can see that this was sort of triggered by the US deep

state doing all this stuff. But the deep state is a globalist that's working closely with our enemies and I don't put them as Americans. I put them as people that were for sale that are bought by our enemies such as China and China learned how to play puppet master with these guys, but that's a different story. Richard, every time you come here, I get smarter. And now for the next two months, I'm gonna be repeating the story of what happened

when 1978, where a pragmatic guy, Deng, how'd you say his last name? Deng Xiaoping, Deng is actually his last name, Deng. Deng Xiaoping, Xiaoping. Xiaoping. Xiaoping name? Deng Xiaoping. Deng is actually his last name. Deng Xiaoping. Xiaoping. Xiaoping. Xiaoping means some plane or even thing.

Yeah, my Chinese is a bit rusty. Deng Xiaoping goes to Japan, talks to them about the secret, has drinks, and they tell him you need 5,000 banks and 5,000 loan officers and they do that and the tell them you need 5,000 banks and 5,000 loan officers and they do that and the rest is history. Five million in fact.

Five million loan officers. Five thousand banks with 35 branches, 30 loan offices. Insane. Richard, I appreciate you coming out. Talk about crazy timing. But thank you for coming. By the way, are you on Manette yet or you're not on Manette? Because I'm sure a lot of people are going to have questions for you.

You're not on Manette? Not yet. No, let's do it. Okay, I'm going to have Tony talk to you about getting on Manette so everyone can ask some questions. And if I could just mention my sub stack, rwerner.substack.com. I'd love to have some more subscribers. I put out reports on things like this.

We will 100% put it below. We're going to put your sub stack below and on the way out, get an account set up with Tony on Manette because you're going to have a lot of people asking you questions. I'm going to send a lot of people your way. Excellent. Thank you. Appreciate you for coming out again as usual. Thank you. Take care everybody. God bless. Bye bye bye bye.