Predictive History - The Story of "Civilization", "Secret History", "Game Theory" and more - Game Theory 7: America Game

Episode Date: February 6, 2026

Game Theory 7: America Game ...

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Starting point is 00:00:00 Okay, so let us review last class. So last class, we discussed the British Empire and how it ultimately triumphed over its main rivals who were the French, the Spanish, and the Dutch because of three major powers, okay? The first is the Bank of England. What made the Bank of England so important is that it could absorb foreign capital, okay, from all around the world. So at first it absorbed capital from the Dutch Republic, but then if you were a French aristocrat,
Starting point is 00:00:50 if you were the Catholic Church, if you were the Habsburgs, you could all move your capital to England where it would be safe because it would be protected by the law, okay? That they have property rights. And when Britain became an empire, this was important because local elites in China, in India, in Southeast Asia, would help the British because they were incentivized to do so. They could help the British steal from these places and then move capital, their wealth, to England,
Starting point is 00:01:23 or one of the British colonies for, safekeeping okay so that's a source of english power second is the idea of soft power right so we are in school learning english because we want to go and study in the west that's soft power right so shakespeare the bbc um oxbridge are all components of british soft power which still rules the world today. And the third of course is the British Navy, which controls sea lanes and therefore controls all trade. Okay? So for the longest time, for 100 years, Britain was able to maintain a global empire, which really was the first global empire because it spanned the entire world. But there were three problems or three limitations to the British.
Starting point is 00:02:22 British Empire, okay? So the first major limitation, limitations. The first major limitation is that Britain had an ethnicity, it had a race. It was the white people, the Anglo-Saxons. And so even though Britain was ruling over vast empire, it was very much racist. It saw itself as superior to everyone else and that limited its capacity to work with local elites. So in other words, eventually India rebelled to establish its independence.
Starting point is 00:03:05 And eventually Britain lost its overseas empire. A classic example of course is 2016 Brexit when the English people decided that we no longer wanted to be part of Europe. And so even though Britain is an empire, its people are very provincial. They see themselves as better and they see themselves as separate from everyone else. I've met English people who've told me like English people cannot learn a foreign language. English people speak English very well and that's it. They can't learn French, they can't learn Spanish, they refuse to learn Chinese.
Starting point is 00:03:45 And they told me it's because their brains are different. Their brains are hardwired to speak English really well and that's it. So that's just the British attitude. Second problem is the idea of currency or wealth standard. The idea here is that, okay, yes, you're stealing wealth from other places, but what is wealth? Okay? And for the longest time people understood wealth as gold. The problem with this is that there's a limitation or there's a limit to the amount of gold
Starting point is 00:04:24 in the world and therefore there's a limit to how many people can participate in this game and how it's money they can win in the end. Okay, so it's really a game only for the elite. That's a second major limitation. And the third problem for Britain is that it's really a small island with very few people and very limited resources. And therefore, it was really not sustainable for Britain to control the entire world. There's a limitation to its reach.
Starting point is 00:05:00 And ultimately, other powers in Europe were to rise to challenge British hegemony, including Russia, including Germany. Ultimately, the power that would overthrow the British Empire to create its own empire is of course America. And what America would do, that's very important, is resolve all of the British Empire to create its own empire, is of course, America. do that's very important is resolve all three of these limitations to create a world game in which we all play today okay so britain basically birth this game but there are limitations to how far this game could spread america will then take the concept of this game and spread it all around the world until i conquered the entire world okay so how did it do so all right so let's go over America. Well, first of all, America's not a small island. It is a continental fortress.
Starting point is 00:05:51 In fact, it controls the entire Western Hemisphere. We know that the Western Hemisphere is very, very wealthy, okay? So America is not just the country of America, it's really the Western Hemisphere. And as such, it has unlimited population, and it's unlimited resources, that's unlimited land, okay? So this resolves the issue of resources, okay? Second problem, the currency. What America would do that would revolutionize the world is make the US dollar, the standard of wealth in the world.
Starting point is 00:06:30 And because the US dollar is just a concept, it's just an idea, everyone can now play this game, and wealth cannot be infinite, okay? But that makes sense, right? Before gold was what everyone was playing for, but there's a limit to gold. But with US dollars, anyone in everyone in the world cannot play. Okay? So I'll talk about how the US dollar became the center of wealth in the world.
Starting point is 00:07:00 Now, the ethnicity is another problem, okay? And so what America did that was very clever is tell the world, we are not an ethnicity, Okay, we're not a land. What we really are is a game, all right? So the idea is that America became a nation game. All right. So this is pretty easy to understand, okay? So I'm gonna explain this first,
Starting point is 00:07:29 and I'm gonna explain how the US dollar came to dominate the world, okay? All right. All right, so for the longest time, we had problems deciding what a game, or a nation ought to be. Okay? So traditionally nations have been ruled politically through the monarchy, okay?
Starting point is 00:07:53 An oligarchy, a democracy, or a theocracy, okay? So there are others, but these are the four major ones. A monarchy is very simple. A king is in charge, everyone just obeys the king. Alararchy is where the nobility are in charge. Another name for oligarchy is the aristocracy, okay? And that's basically Rome. A democracy is where the people make all the decisions.
Starting point is 00:08:29 And so what happens is that if a decision is to be made, people get together and they give speeches, and whoever gives the best speech gets the most votes. And then that decision is implemented, okay? And of course, the classic example of democracy is Athens. Okay. And then you have a theocracy, which is to say that the priests are in charge, and the priests represent the will of God. Okay. And of course, theocracy, the last example, is a Catholic Europe. This is a medieval Europe when the Catholic Church was in charge. All right?
Starting point is 00:09:05 But starting with the Enlightenment, when God was no longer considered that important, philosophers debated amongst themselves what a nation ought to be, what society ought to be. Okay? And so let's discuss the major theories of this time period. All right. So the first idea is if God doesn't really matter, okay? If it's up to humans to decide how to search your societies, how can you best do so? And at this time, the most popular idea is social contract theory. Social contract theory. And there are two major theorists. The first is John Locke, who, of course, is English.
Starting point is 00:09:57 And for him, government, it's very simple. Human beings have three fundamental rights that God gave us, which are inelible, which means that no one can take away from us. The first is life, okay? The second is liberty, the right to say whatever. we want, the right to do whatever we want, and the third is the pursuit of property, wealth, okay? So they did profit property.
Starting point is 00:10:22 In other words, government exists in order to protect the wealth that we generate for our hard work. And we steal it, that's okay as well, okay? And we kill our people in India, China, and France, do you get it? That's okay, too, because it happened elsewhere, okay? All right?
Starting point is 00:10:43 So, private property. And as you can imagine, if you have wealth, you like this system a lot. And not only that, but you are encouraged, you're incentivized to work really hard. And that's what actually allowed England to overtake the French, the Dutch, and the Spanish. Then you have another theorist named John Jack Rousseau. And this theory is different, okay? It's also social contract theory, but it's a different idea, which is, okay, we're born in a of nature. We have complete freedom. We can do whatever we want. So why do we choose to give up
Starting point is 00:11:21 this freedom and come into society? Okay. The reason why is when we do so, we create a social contract that creates the general will. Okay. And the general will is a substitute for God. It is the expression of the best of who we are. Okay, do you understand? So by ourselves, we're fine, okay? When we come together, we create a new that allows us to be truly and fully human, the general will. So what is the general will? Okay, all right, so think of Emil Kant,
Starting point is 00:12:01 who's a German philosopher, and he explained that the very basis of humanity, what we should all try to achieve is something called the categorical imperative. Imperative is the highest moral law. It's really God's law. And there are three components to the categorical imperative, okay? The first is the idea of universality.
Starting point is 00:12:38 Universality just means that, imagine this. Whatever you do, everyone else around you will automatically do, okay? So you want to go drink alcohol. Everyone's going to drink alcohol. Do you want to live in a study of alcoholics? Okay. If you cheat on a test, everyone immediately is going to cheat as well. Do you want to live inside of cheaters?
Starting point is 00:13:00 Okay? If you read books, everyone else is going to read books. So imagine that whatever you do will be replicated by everyone else immediately. Okay? That's the idea of universality. Second is the idea of free will. Okay? I know that eating ice cream is bad.
Starting point is 00:13:20 I know that eating protein chicken is good, okay? But I cannot be forced to eat chicken, even though. know it's better for me. I have to choose to eat chicken by myself. If I want to eat ice cream, I can do that, okay? So we cannot coerce people to do what they do not want to do. All right. And number three is human is the end onto itself, okay?
Starting point is 00:13:52 And the idea here is that you cannot use humans, a human, being to achieve a higher purpose because humans are the ultimate purpose. So I can't be like a king and says, you know what, I'm sort of war to make a lot of money for everyone and I'll sacrifice 50% of my people. But the other 50% who live will be happy. They'll live in paradise. You can't do that, okay? Because you cannot sacrifice anyone's life in order to achieve a higher end because the ultimate
Starting point is 00:14:19 end is the human life. Okay? So that's the idea of the categorical imperative. And this becomes the theoretical basis for, or the general will. Okay? Now in practical terms, how do you implement this in society? Well, the general will gives rise to government
Starting point is 00:14:39 and then the government gives rise to laws. Okay? So the legitimacy of the government comes from the consensus of the people, which is a general will. The general will is not democracy, right? The general will is an abstract idea which represents the best of who we can be. All right?
Starting point is 00:15:00 So if you think it's everyone is like, okay, we should all vote to kill that person because we don't like him. No, that's not the general will. The general will is everyone is important. Do you want to others as you would want others to do onto you? So you can't kill anyone, okay?
Starting point is 00:15:17 And if you, if people vote for this, then the government is illegitimate because it goes against the general will. All right, and this is important for us because this becomes the basis of the French Revolution. And the French Revolution, the entire European continent, including Britain, Prussia, Austria,
Starting point is 00:15:44 everyone got together and attacked France. France was poor. France had no monarchy, but France defeated everyone. Why? Because people were energized to fight for their nation. They believe that I am now part of a greater good. I have equity in this game. Therefore, I will defend this nation with my life.
Starting point is 00:16:07 And France, for the longest time, was unbeatable on the battlefield. Okay? All right. So that is the French conception of a nation. A nation is a social contract, which guarantees rights to its citizens. And in return, its citizens must be willing to sacrifice its life for the nation. And that's why the French Revolution was so successful, which ultimately led to the French Empire under Napoleon.
Starting point is 00:16:39 Okay, doesn't make sense. Now, there's another conception of the nation state, which is this. Okay? And these are the Prussians or the Germans, okay? And it's an idea of iron and blood. So a nation is that something that you choose to get into, okay? It's not something that you start to contract with. A nation is in your blood.
Starting point is 00:17:05 A nation is language, heritage, land, okay? And you prove that you are worthy by sacrificing yourself in battle. Okay, this is, this comes to us from the German Republic. In 1870, okay, in the Franco-Prussian War between Prussia and France, these two concepts of the nation state came into battle, okay? The French was the social contract. You fight for us because you agree to be a citizen of this nation, which guarantees you certain rights. Prussia is like, no, you fight because it is your duty to fight, because it is in your blood, it is in your language, it is in your culture, it is in your family.
Starting point is 00:17:52 And then when these two cultures clash, it was the Prussians who won. And that created, of course, Germany. So in 1870, the modern nation of Germany was founded by the Prussians when it defeated France in the Franco-Prussian War. So now we go to America. Okay. And America has a different conception of the nation state. So at this time in history, first of all, America, it's a very small place, 13 columns. And the continent is controlled by these indigenous people, the French are there, the Spanish are there, okay?
Starting point is 00:18:38 But the Americans are very, very ambitious, and they are expanding really, really fast. And Britain, the home country, actually becomes afraid of America. Because at this time, about the 1700s, America has more people, it's wealthier. It's welcoming people from all around Europe. And so Britain tries to limit it. to limit the expansion of America. Okay? It tries to say, you can't cross the certain line,
Starting point is 00:19:08 the Appalachian Mountains. America says, screw you, we're gonna revolt, okay? Let's create the American Revolution. And in 1789, America creates the Constitution, which becomes the highest law in the land. And so at this point in history, America, the American founding fathers, they look around the world,
Starting point is 00:19:30 They know about the British system, they know about the French system, they're trying to grow the country as fast as possible. They have to fight the Spanish, the French, the British, and the indigenous people in their land. They're trying to welcome as many people as possible, okay? So they decide that the nation will become a game. Okay, a game where the citizen is a player.
Starting point is 00:19:56 And the citizen is trying to maximize maximize his wealth. Okay? And through this process of maximizing his wealth, trying to get as much wealth as possible, he will be energetic. He will work hard. And this energy will contribute to the overall wealth of the nation,
Starting point is 00:20:18 which will allow America to go very, very fast. Okay? That's a plan. All right? So for this to work, they have to control the game that has three major characteristics. All right?
Starting point is 00:20:31 The first is that it has to be open, meaning anyone can come and play. Okay? But that just means also limiting the history and the ethnicity of the place. Okay? So the concept that America creates is the idea of melting pot.
Starting point is 00:20:55 We welcome anyone who comes to America, regardless of your race, regardless of your history, regardless of your wealth, as long as you're willing to, assimilate into America into the melting part, okay? That's the first idea. The idea is fairness.
Starting point is 00:21:09 And the third is clarity. So in other words, people are willing to play a game and work really hard to win this game. If, first of all, they can play this game, they're allowed to play this game, they're not discriminated against. Also, if the rules are really clear, okay? You understand what the rules are.
Starting point is 00:21:34 In America, the rules are very simple. You go to America, you follow the law, you work really hard, you get rich, okay? Really simple. It's called the American Dream, right? And the third thing, of course, is that the game is fear, meaning the only criterion to generate wealth is how hard you work, how much talent you have, how much merit you have, right? The idea of merit.
Starting point is 00:22:00 Okay? And look, this is true. When you go to America, you will discover this. If you work really hard, if you're really talented, if you're really smart, they will respect that, okay? I've been to a lot of countries, and I can tell you that America, in America, this is true. But it's not true in Canada.
Starting point is 00:22:15 I grew up in Canada, and they don't really care if you're ambitious, if they don't care if you're smart, don't care if you work hard. They don't care. They expect you to follow the rules and conform, okay? That's Canada. You go, China, okay? We all know what China is, okay?
Starting point is 00:22:29 No one cares if you work hard, no one cares if you're smart, no one cares, okay? It's all about your guise. Guanxi about with your family okay but it's true for actually this is true for most of the world and I would say that the idea of merit is only true for two places America is the most obvious example okay I've been to meetings where at first Americans are like this guy's Chinese but he's speaking in English he's not that smart okay so there's discrimination going on but the moment I
Starting point is 00:22:59 speak the moment I try to make my case they are win over one over by my logic by my arguments, by my creativity. And they welcome me into the club. That's the American attitude of being open-minded, of being generous, of appreciating talent above everyone else, okay? The British are, the English are also very similar in that way, in that, yeah, maybe they're racist, but if you can make a good argument in front of them,
Starting point is 00:23:25 they will accept your argument, okay? But guess what, guys? No one else is this true, okay? In China, China, you have the best argument in the world? No one cares. Right? Okay, so we, there are lots of issues of America, but in all honesty, America is a place that really does appreciate merit and which really does reward merit. And that's why everyone wants to go to America. All right? All right. So, the question then is, how did America create the system? Okay, well, it did so through the Constitution. The idea of the Constitution is to create a game and make this game, above power, okay? And how they did that is creating a system of government
Starting point is 00:24:10 that checks and balances each other. So you have the president, you have the Congress, okay, and you have the Supreme Court. The Supreme Court, it's very simple, is to interpret the Constitution, which is the highest law in the land, okay? And then the powers of the government are divided equally amongst these different branches.
Starting point is 00:24:49 So the Congress could create laws and control spending, okay, what's called the purse. The president has war powers basically, or the sword, okay? But if the president were to declare war, he needs Congress to approve, because Congress has to give them money to start the war. Okay?
Starting point is 00:25:11 And the idea that the Constitution is the highest law on the land means that It's really rule of law. So even though you have this government system in place, you also have another parallel system called the judiciary, the court system, which protects property rights, in the same way that they do in Britain.
Starting point is 00:25:36 Okay, does that make sense? So the very idea is that this is a game, the government is a system to maintain the openness, clarity, and fairness of the game. And because of this, America was very quickly able to dominate the world. Okay? The thing about this game, okay, that's very important for us to understand, is it is expansionist. Okay?
Starting point is 00:26:07 So what happened is that in its history, America faced certain challenges to this game, and this game won out every single time, okay? So the first major challenge to this game is called the American American. civil war. All right. So let me explain what happened. From 1861, 1864, the civil war was fought between the North and the South. This was a clash of economic systems, okay? So the North played the game, okay? And so we believed in free labor. The South was its own independent economic system that focused on agriculture. And so it used slave labor. For many Americans in the North, slave labor was offensive because it corrupted the game.
Starting point is 00:27:05 Because remember, America started on the idea of openness, fairness, and clarity. But if you're a slave, that's not fair, okay? Because you were born a slave and you can never participate in this game. And so they fought a civil war to decide which who was trying to the end. And of course, the North won. the North focused on free labor. So that meant that there were more people than North, that meant that the North was wealthier
Starting point is 00:27:34 because of manufacturing, and that meant that the North were more energetic, okay? So they defeated the self. And so that was the first major challenge. Now the game is spreading, okay? It spreads across America, and now it stops because America can't expand anymore, okay? It basically conquers the West.
Starting point is 00:27:58 And now the game is an issue because of the nature of money. The problem of money is that ultimately, the longer you play this game, at the end of the game, one person controls all the money. That doesn't make sense. That's a problem with capitalism. That's a problem with this game. So now that the frontier has been settled, now that the borders have been controlled, A few people are now controlling all the money,
Starting point is 00:28:29 which leads to the Great Depression, okay? So now the solution is America has to go and conquer the world, which it does, okay? In World War II, America conquers the world. And so now what America needs to do is spread this game throughout the world, and it does that by creating the U.S. dollar. Okay?
Starting point is 00:28:48 So, 1945, America wins the war. A year before, in July, July 1944, for one month, What happens is that America organized something called a Brennan Woods Conference in New Hampshire, okay? And the idea of the Britain and Woods Conference is to establish the world game, okay? Before America's game was limited to America, but now America wants to scale its game to the entire world. Okay, so how does it do that? Well, first thing it does is it makes the U.S. dollar. the reserve currency of the world.
Starting point is 00:29:30 What does that mean? It means that every other currency has to be derived from the US dollar. Every other currency will find value from the US dollar, okay? Which means that if you have Canadian dollars, you can now change it for US dollars, which is what's valuable.
Starting point is 00:29:53 The Canadian dollars is just not valuable, okay? All right. They also agree on exchange rate. It doesn't make sense. And this is a system that we have today, okay? All right. The global reserve currency is the U.S. dollar. That's what's valuable.
Starting point is 00:30:12 The RU.N. B derives value from its relationship with the U.S. dollar. The Rune B is not valued by itself. Okay. All right. That's number one. Okay. So now you're like, wait a minute here. If this is true, the U.S. dollar can,
Starting point is 00:30:28 the markets can just put as much money as, they want. And so to solve this problem, the American said, the US dollar will be pegged to gold. Okay? Doesn't make sense. Okay, meaning like you can always secure your dollar and change it for gold. And because there's a limit to gold, there has to be a limit to the US dollars, which keeps the system stable.
Starting point is 00:30:52 Okay? All right, that's number one. Number two is America needs to expand this game, okay, because it is in competition with the Soviet Union which is against this game okay so it creates two new organizations to spread the game throughout the world and these two games and these two organizations are called the World Bank and the National Monetary Fund the IMF okay so um I'm so for the sake of simplicity okay understand this the World Bank the job is to give you loans okay so let's say you are China and you are poor right you need to build dams with the
Starting point is 00:31:34 The World Bank gives you money. And when it gives you money, what it does is it allows you to start playing this game, okay? It allows you to participate in this game. Now what always happens is eventually the countries bought so much money, they have to go into debt and they can't pay off the money, right? So then what happens is the IMF comes in and changes your government and its economic policies to make it conform more to the game. Does that make sense?
Starting point is 00:32:06 And its main mechanism is called privatization. All right? So what the IMF says is, okay, well, you're inefficient, you can't pay off the debt because you're inefficient, you're inefficient because the public should not be controlled of infrastructure. The public should not be controlled of water, okay?
Starting point is 00:32:22 Private companies should be in charge of the water, electricity, and the land, okay? So the go of the world back in the IMF is to spread the game. throughout the world. All right. Okay. Then in
Starting point is 00:32:36 1947, they create something called the GATT. The GATT is a general agreement on tariff and trade. So this is the WTO, basically, okay? That changed into the WTO in 1995. All right? So it's basically an agreement on free trade.
Starting point is 00:32:57 Doesn't make sense? 1973, Swift. Swift is an agreement amongst different banks in the world on how to transfer money, okay? So, for example, if you want to transfer money from China, you can be into America to go to university, right? Guess what guys, let's go through Swift, okay?
Starting point is 00:33:24 So now it allows for more cooperation among banks in the world to use US dollars. All right? Now the last thing is, okay, how do these countries get together and decide on how to cooperate economically? And the answer is the Bank of International Settlements, okay? Okay? And this is the idea is that the central banks of different countries get together and they agree on certain policies.
Starting point is 00:33:58 All right? And this is all done privately in secret. No one knows about them, okay? All right. So this is the game that America creates. It's very simple, okay? And there are other components, but we'll focus on this now.
Starting point is 00:34:13 Throughout the semester, we will focus on how this game is played, specifically, but first I just introduce it to you. All right? Okay. So now let's talk about how the US dollar conquers the world. All right.
Starting point is 00:34:32 So for the longest time, this system works well. Okay? The United States is in competition with the Soviet Union. But over time, the Americans start to abuse this system. So they pay for things they can't really pay for.
Starting point is 00:34:47 For example, the war in Vietnam. For example, a space race. For example, something called the Great Society. They're just spending too much money. And other countries start to freak out. So France basically withdraws all its gold from the United States. So in 1971, what Nixon does
Starting point is 00:35:04 is say, you know what? Here's the secret, guys. We actually don't have enough gold to pay off everyone, okay? So screw this, we're not gonna peg the gold, the dollar to gold anymore, okay? Do you understand? You can now no longer redeem your US dollars for gold. It's done, okay?
Starting point is 00:35:26 So now what happens is the US dollar becomes a Ponzi scheme. All right? What is the Ponzi scheme? A Ponzi scheme is basically, the US dollar is valuable because people want to use it. Do you understand? There's no value in itself. It's only valuable because people want to use it.
Starting point is 00:35:48 So now Nixon has to go and create the man for the US dollar, right? So the first thing he does is he goes to Saudi Arabia. He creates something called a petro dollar. The other petrodollars is very simple. Saudi Arabia, which is the largest oil exporter in the world, will only accept payment in US dollars. Therefore, if you want oil, you have to have US dollar. That's the first thing that Nixon does.
Starting point is 00:36:21 The second thing that Nixon does is actually even more important. What does he do? Do you guys know? He visits China. Not only does he visit China, but he establishes a framework in which America will give China everything, okay? In 1980s, what happens? America gives China its market access.
Starting point is 00:36:50 Now US consumers can buy goods from China. That's a huge deal, guys. Okay, that's number one. Number two is America gives China FDI technology education. All right. Imagine what happens. America gives foreign investment to China, gives all this capital of China,
Starting point is 00:37:16 gives all this technology to China, right? All these military secrets that America has, it gives us China for free. And knowing that, but America educates the Chinese elite. Okay, 1980s, all these Chinese students, Chinese students for grad school, go to America to learn America technology. Okay? And the third thing, and this is the most important, is military protection.
Starting point is 00:37:47 All these conflicts that China has with Southeast Asia, with Japan, Vietnam, America will now protect China. When Chinese ships export goods to Europe, Africa, and the United States, the U.S. Navy will not protect these Chinese ships. Okay, they understand? You're like, oh my God, America gave China everything. America made China rich. Why would America do that? And there's one answer, and only one answer, it should make China use U.S. dollars.
Starting point is 00:38:21 Okay? It's not simple. So now when China trades with the world, it gets US dollars in return. You understand? And the entire idea is to make the world addicted to US dollars. And now that the world is addicted to US dollars,
Starting point is 00:38:43 now that the world depends on US dollars, America can now control the global economy, okay? So in 1999, sorry, 1991, the Soviet Union collapses. Okay? And now America is the only game in town. There's no one who can challenge the supremacy of the Americans. And so now what happens is America creates something called the New World Order.
Starting point is 00:39:12 The New World Order is based on global trade. But because United States controls the US dollar, it can now control something called pricing. Pricing just means that the Americans can decide the value of everything, okay? So what America does is create a price hierarchy. So at the very bottom are resources. All that is manufacturing. Then there's knowledge. And then finance.
Starting point is 00:39:50 Okay? This is the price hierarchy for the world. All right? It divides the world into a division of labor. Okay? So what is resources? Well guys, it's Russia. Doesn't make sense.
Starting point is 00:40:06 Russia, Africa, South America. What's manufacturing? China. What's knowledge? Europe. What is finance? America. Okay, doesn't make sense. So what's going to happen is that America is going to take its manufacturing and transfer to China. Okay, because it's cheaper for China to do it than for America to do it. And all America is going to do is finance. Okay, what is finance? Finance is just the creation of money for the purpose of creating
Starting point is 00:40:41 more money. Okay, so this is the system in place. And at first it sounds great because everyone's making money, okay? But there are an inherent instability in this system. We will discuss all this instability throughout the semester. But for the sake of simplicity, let's talk about America. What happens when you focus on finance is that you become a speculative economy. You focus on gambling, okay? Basically gambling.
Starting point is 00:41:15 And this leads to something called the 2008 Great Financial Crisis. when the economy collapsed, okay? And at this time, the entire world economy should have collapsed. And so what happened was, all these central banks from around the world came together at, in Basel, Switzerland, the Bank of the National Settlements, okay? Right? The secretive body in which all economic policies are made. And they decide the only way to save the world is
Starting point is 00:41:48 if China spends money. You understand? Why do we have all these skyscrapers? Why are these airports? Why are all these high-speed railways? Because China, to save the global economy, decided to invest in infrastructure, okay? And Belt and Road Initiative.
Starting point is 00:42:08 And that saved the global economy. Now, as China did this, China developed a lot of debt. Okay? And China basically said to the world, listen, We save the global economy, so we deserve a seat at the table, right? We deserve to be equals to America.
Starting point is 00:42:27 And so we're going to sell our products, our Huawei phones around the world. We're going to compete with America for global dominance. And America said, screw you, okay? And that led, of course, to Donald Trump, 2016, Donald Trump. And the first thing Donald Trump did, of course, was initiate the U.S. China trade war, right? China wants to be an equal to America. America says, nope, screw you, we're gonna destroy you, okay?
Starting point is 00:42:57 So America tried to sanction China, America try to blockade China, okay? So we'll discuss this again later on for the semester, okay? Then what happened of course is 2022, Russia invades Ukraine, okay? So what Russia is saying is, you know, this price hierarchy, screw this. Because guess what happens, guys? If you don't have any resources,
Starting point is 00:43:26 this system doesn't work, okay? Try and manufacturing manufacturing resources. Try having knowledge about resources. Try having finance out resources, okay? So when Russia invicts Ukraine, it's trying to control the resources of Ukraine. Russia and Ukraine together controls one-third of the world's carbohydrates. Africa, the Middle East, starves the death about Russian and Ukrainian grain, okay? Doesn't make sense. So now this entire system is in jeopardy. And so what's happening today is America is fighting
Starting point is 00:44:05 to save its game. It's trying to fight to save the system. It's trying to fight to save the US dollar. It's trying to fight to save its hegemony, okay? And Russia and China are trying to exert themselves. So we are in a time of game reset. All right? Game reset.
Starting point is 00:44:27 And this is the world that we live in today. Okay? All right. So we will discuss this throughout the semester. Any questions? Are you guys clear? I know this was a lot to take in, but we'll go into the specifics throughout the semester, okay?
Starting point is 00:44:51 We'll go and we'll apply to current events to explain why this is happening. Any questions? Okay. So the only purpose of America, like they produce a service for China is to let them use US dollars, right? So American can use this game to everyone. But I think China does not do the same thing as American, like they created this game. Why?
Starting point is 00:45:30 Okay. So we'll discuss this for the semester, okay? relationship between China and the United States. So remember that the United States wants trying to play this game. But they can't really say to the world, oh, we're doing this because we're greedy and we want China to be subservient to us, okay? So they said that we want China to play the game because this game will allow the middle class to rise and will make China much more democratic, okay?
Starting point is 00:46:06 But that was just BS, that was just a fraud, a lot, hypocrisy. All right, so now that China is in this game, all right? What is trying to do is restructure the game so that it's more independent, okay? Because the problem for China is, okay, to play this game, what you're doing is you're taking resources, all right? You're creating manufacturing exports, okay? And so that's the role of China in this game. There's certain problems with this game.
Starting point is 00:46:45 The first problem is America controls the entire game, right? So America can say, you know what, we don't like you, so you can't train anymore. So basically they stop, they limit the resources and they limit the market access, okay? So what China needs to do to survive is the idea of diversify. markets outside of the United States create like five resources that are dependent on the US. Okay, so that's a game that China is playing and that's the idea of bricks. Okay, we'll discuss bricks later on. All right, but the bricks is a very different concept where before America was trying to impose its game on
Starting point is 00:47:31 everyone now China is just trying to create a system that is not so dominated by the Americans. Okay, that's the Chinese mentality. Like, does that make sense? Okay. All right. Any more questions, guys? Okay, great. So I will talk, we'll continue this on Thursday, okay?

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