Shaun Newman Podcast - #293 - Ross Kennedy

Episode Date: July 25, 2022

Ross is a logistics & supply chain consultant. We discuss the true levels of power, who is pulling who's strings, USA/China & the race for critical raw materials. Let me know what you think Text me 587-217-8500 Support here:⁠ https://www.patreon.com/ShaunNewmanPodcast⁠

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For the past 80 years, they've been an industry leader in bulk fuels, lubricants, methanol, and chemicals delivering to your farm commercial oil field locations. For more information, visit them at Hancock Petroleum. Dat.C.A. He's a logistics and supply chain consultant who works at the intersection of national security and private supply chains. Or you may know him by his Twitter handle, Huntsman. I'm talking about Ross Kennedy. So buckle up. Here we go.

Ross Kennedy, you're listening to the Sean Newman podcast, and it's been my privilege. Okay, welcome to the Sean Newman podcast today. I'm joined by Ross Kennedy. I almost said Robert Kennedy. Wouldn't that have been something anyways. First off, sir, thanks for hopping on. Yeah, I appreciate you being able to, you know, sit down and have this discussion. Lord only knows where it's going to go, but I know it's going to be fun.

Yeah, well, I'm excited. I was saying to you, my older brother put me on to you, and then, you know, you follow down some of your threads on Twitter, and certainly if you haven't followed them on Twitter, we'll make sure that that's in the show notes so you can find you on Twitter. But you have these threads that just, I sit there and I read them,

I'm like, I still don't fully understand. But to sit across from you and get to pick your brain and see what you think of supply chains and a whole bunch of different things will be super cool. For the listener, though, maybe they are not on Twitter. Maybe they have no idea who you are.

I don't know how much you want to give it on your background, that type of thing, but to just the person who's falling on, with the podcast. Let's start there. Who is Ross Kennedy? What would you like to divulge? Yeah, I got out of college and got into the, at the time, didn't know how interesting world of international agribusiness and food and feed and grain supply chains. And found out that while I was not good at commodities trading, because I thought it would be like trading places, you know, that I get to a wheel and deal and make all the cool stuff, found out it was very boring.

and I didn't really get it, but received an opportunity to transition internally at the company I was at and became a key player. And really at an interesting time when the U.S. began to do extremely high volumes of containerized exports of agriculture products to the Pacific Rim, mainly to China. That was in the mid-2000s. So I was really kind of at ground zero as that new form of commodities, transportation, and trade are relatively new as far as that scale. it got to be a huge thing just overnight, and I was right in the middle of all of it. And so it was really a crash course for a young guy just out of college on how the world worked, truly worked. And as my career has developed, I've always stayed in international transportation and supply chain, and almost always been adjacent to the agribusiness world in some way,

not just out of skill set, but out of desire to be a part of that sector, that industry. One of the things I realized pretty early in my career was that when we are talking about the lever, the true levers of power in the world, it's not necessarily military might, it's not necessarily the utility of the dollar as a global instrument of trade, but for the U.S. in particular, it's really been the synthesis of these last dollar commodities. And what I mean by that is if a government has one dollar left to spend to secure the piece, we're talking about food, water, and energy, primarily. You know, people have to eat.

You have to have fresh water. You have to have energy. Without those things in proper balance, you're as a government teetering on the brink. And so I always wanted to be just out of a sense of protecting my own career adjacent to one or more of those. And the desire to not trade or to not be a policymaker but to be a facilitator, to always be the guy. in the middle of the deal no matter who's buying, who's selling, what they're selling and buying. If I had this expertise at moving things more cost effectively and more efficiently, then I would be in demand. What that turned into very quickly, though, is me understanding that I frequently understood the mechanics of the deal better than both

because I was the one that was having to get a thing from A to B. and so I had to not only understand the rules and regulations governing the trade itself, but also how to move things, the opportunity to try to save on cost by exploring a new novel way to move a thing. And it began to over time give me this perspective that I think, as we're seeing, is not, if not unique, is somewhat unusual for how most people look at the world. and, you know, so here we are today. Do a lot of government contract work and have over the years because of that skill set.

It could be moving things like, you know, ammunition. It could be moving, you know, parts for cars. It could be moving grain. But what you learn is that no matter what you're shipping, there are still rules that must be followed. There are rules that can be bent. There are rules that can be broken. And the extent to which you must do one of those, you know, fall into one of those cats, of how you operate is often determined by the government themselves, you know, the governments,

even if it's a private sector transaction. So I begin to apply the lens of rules and regulations and the mechanics of moving things and all of that to trying to understand the world at a more philosophical or almost esoteric level above, you know, and try to figure out why do governments do what they do, why do people do what they do. And so by exploring that, I think through this lens of trying to understand reverse engineer basically not I don't want to understand motivation I think motivation can be revealed by the how and the what and the why of these of these deals and the closer you get to more important fundamental baseline commodities the closer you get to the levers of power the true levers of power in the world and it's not just the guys that print the

fiat currency it's not just the guys that write policy in the various western governments or Eastern governments, whatever it may be. But it's the exercise and application of power through physical things that people need throughout which we cannot live as a species if we don't have these things. And so the race to control them and control the flow and movement of them is, I think, one of the real hidden battles of the world. And so I just said, I'm going to master that. And it's become all sorts of interesting and unusual offsuits of activity and things that flow from that.

but that really is the core of it. And when you talk about these hidden battlegrounds, the pulling of the levers are on food production, energy, clean drinking water. Is that the three? Those are the three most fundamental. And you have some outer tier ones that are almost as important. That's like weapons and material. That's pharmaceuticals.

That's refined chemical products, things like that. But the base three, the base three are food, water, and energy. So as you start digging into this, let's say. you know what was the most like eye-opening holy crap moment because you know for a lot of people we just yeah okay just look out at the skyline and go about our day and do have a beer at the ballgame or you know whatever it is you know the oilers make a nice deep playoff run in the n hl you know everybody's rooting along nobody's thinking about half a dozen of these things maybe never in their life to be honest right um you start digging in you start looking at them

what's the thing right off the hop? I don't know if we've got to go back five years, five months. But I'm curious. Like, what was the thing that jumped off the page when you first started? The, I've had a few of those moments. I've had a few of those moments in my life where you participate in something and then you look backwards. And you begin to sort of unpack it, you know, in the military they call it a hot wash or an after-action review. and what did I learn from this or whatever it may be.

And the most interesting one to me was, and it's not the biggest financially that I've been involved in, it's not the most complex, but it was the one that I think spoke so closely to the truth of how the world really works. A number of years ago, the German weapons manufacturer, you know, H&K or Echlorant Coke, got hooked up pretty bad on a deal where they were dealing firearms and small arms to both sides of the Colombian conflict in South America. The rebels that are trying to overthrow the government, and H&K was also selling weapons to the government. It's like something right out of Lord of War, right? And so the rebels were found to be in possession of things they shouldn't have been able to have access to.

And there was a whole investigation done, and basically what happened was was the government of Germany told H&K, you have a choice. You can lose your entire company or you can agree to only sell to NATO and NATO adjacent entities from here on out. That presented a problem for H&K. There were many millions of weapons and global inventories of non-NATO countries.

Countries like Saudi Arabia, for example, who had standardized on H&K platforms as their battle rifles. So you have these hundreds of thousands of weapons in Saudi Arabia that are in their inventory, and now because of something H&K did in a different part of the world that had nothing to do with Saudi Arabia, had nothing to do with NATO, right? But because of something they did somewhere else in the world,

all of a sudden Saudi Arabia was not able to buy parts, gunsmithing, refurbish, repair, anything, their inventory of hundreds of thousands of weapons. And a significant portion of them had become, you know, what's called redlined, which means they're below, from a maintenance standpoint, below safe tolerances to utilize regularly. And so the workaround, of course, to that was to set up a free trade zone and a location and bring the weapons into this free trade zone. In some countries, here in the U.S., it's a foreign trade zone. Other countries, it's a free trade zone.

But the thing that's unique about an FTC by design is that no matter where it is geographically and physically located, it is not technically, from a commercial standpoint or a political standpoint, that location is not considered to be part of the country and the municipality that it's in. In the U.S., we say that that item has not entered the commerce of the United States. So I could have a thing that was entered into an FTC, notified to Customs, we're going to put this inside this specific foreign trade zone. And so long as it is physically located in there and not moved off the premises of that,

Customs does not consider that thing to be on U.S. soil and thus subject to duties, tariffs, formal customs entries, things like that. So what myself and a few bright guys figured out was that locating an FTCZ somewhere in the West, we would be able to bring H&K weapons in to the FTZ, perform maintenance and repair services on them, and send them back out, and never have to go through the normal chance. of making it very, very difficult to import, legally import certain weapons into this location or whatever it may be. And that ended up being quite a lucrative thing for some of the people that were involved. But it was one of those, and this was years ago, and this was one of those like teaching experiences to me of, like I said, rules that can be bent depending on who's doing the bending and the limits or tolerance of the host government to allow that to happen. It was enlightening, right? And from something like that, you know, 10, 12 years ago,

it gave me an appreciation and respect for seeing how politics, not just politics at the moment, but long-term political trends as well, could play into it where you find that NATO knew what was going on, Germany knew what was going on, H&K obviously knew what was going on, Kingdom of Saudi Arabia knew what was going on, was going on. Everybody involved knew what was going on. And they knew that we had found a legal

loophole that nobody was going to go to jail for to maintain a needed status quo while still serving, you know, while still serving a partner country and their need and their requirement. It's very interesting. But if it hadn't been for people that I was working with that had this very deep, very in-depth knowledge of regulations and laws and, and, and, and, and, and, and, and, appetite for risk. I would never know that something like that exists, but you can bet that that type of thing, that mode of thinking, if not another specific situation like that, taught me an awful lot and has stuck with me to this day about saying, okay, there's a story. Don't tell me that a thing is sanctioned if I know that that thing is physically still entering the United States.

So then if a thing is allowed to move or not allowed to move from A to B, there must be a reason for that. Let's dig into that reason, right? Because at the end of the day, people lie. The media lies. Data can lie because fundamentally people control data. And so if you really want the ground truth of something, the only thing that cannot lie is this concept that a thing can only exist in one time, in one moment, in one place. And if that thing moves from one time, from one time, one moment, one place, now there's a reason. A motivating force moved it, and you just got to dig into what that might be. Conceptually, law enforcement uses it all the time. That's called activity-based intelligence. That's why these phones that we have track us. That's why all of these things happen.

It's how you build a pattern of life on a specific target. So when you're talking about applying these concepts of activity-based intelligence or in the military, there's something called targeting, which is a very complex way of locating a desired target in time and space. And it's like a master's or almost a Ph.D. And understanding, you know, synthesizing human nature and physics and everything else to say we're trying to find a guy and we're trying to find the car he's in or the building he's in and we want a precision target that one thing with no collateral damage. and so somebody sets to the task of by utilizing activity-based intelligence and all these things,

well, we can take all of these concepts and begin with the baseline idea of a thing can only be in one moment, one time, one place, and if it moves or it doesn't move, there is a reason for that. Let's dig into that. And so I think that me seeing everybody involved in a very complex, high-level supply chain interaction, essentially being so willing to bend the rules of a high profile sanction case against a weapons manufacturer, that's when I realized that the world was very, very different than the world we're told exists. And thus, that is both exploitable and also worrisome, right? So there's been other moments like that. There's been things I'm involved in that probably don't talk about publicly that were similar learning experiences, but that's, that one was a very good

example of learning how to see the world maybe through a little bit different lens. I've been running on this somewhat over the theory. Sure. I consider myself green to a lot of different things. Yeah, sure. What you're talking about, green, right? Just lack of experience. Politics, lack of experience.

They don't pay attention to things. Now you start paying attention to things. COVID ram that down my throat. Yes, I did. Living in Canada, rammed it down my throat. and all of a sudden you start paying attention. Like, hmm, you start to see things. One of the things I've always, you know, pondered, I guess, kind of as a hypothesis,

is that certain families, maybe even politicians in general, just understand that the world is a game. We're playing on a chess board, so to speak, each country has their play, et cetera, et cetera. But you've got to know the rules. And if you don't know the rules, I could think we're playing Chinese checkers, right? And, you know, down I go, and I'm not even buying by the rules, and people are just staring at this guy going, like, you know, sanctions get put in, this and that. If you know the rules, you go, oh, that's whatever. It's not even a big deal, and you just kind of push it aside. You agree with that, thought?

Yeah. At the end of the day, you know, the Biden's are a great example. And, of course, before people start objecting and saying this is a one-sided political thing, it very much happens on both sides. I've gone just as hard at the McConnell family, for example, Mitch McConnell and his wife of Lane, child that as I have the Bidens for overt and covert forms of corruption. But the interesting thing that you learn when you look at the Biden situation, for example, you look at Burisma, this Ukrainian natural gas company, right? Hunter Biden wasn't installed on the board of this company as a means of influence and connectivity between the commodity oligarchs of Ukraine

and the political oligarchs of the U.S., it wasn't an insurance company, right? It wasn't a university think tank, right? It wasn't a company that makes tractors. It was a natural gas company because natural gas is a fundamental critical energy source in Ukraine and in Europe, right? And a fundamental critical energy source that has exported to the world. he was there because that particular commodity, that particular company is a source of power in Ukraine. And thus, because that power is derived from that company's ability to move, extract, manipulate the physical location and inventories of a critical raw material like natural gas. That was why that company was an important one.

Of all the things it could have been, it was a natural gas company. If you look at the same types of things they targeted in China with the various deals that they've done there over the years. And then Peter Schweizer, for example, has two good books that both deal with the Biden family corruption amongst, you know, many others from both sides of the aisle and the U.S. But if you look at what the Biden's targeted in China, it was investments. Yeah, it was financial investments, venture capital, things like that. But they were taking equity stakes in companies like UNIPEC, which is a state-owned Chinese enterprise of petroleum and, you know, trading and refining. So why Unipak, right? Well, because it's oil. It's refined products. It's energy, right? It's all of these base materials that get used in hundreds of millions of applications

every year around the world, different companies, different stakeholders. And so if you can be in a position of power over or adjacent to power over a critical raw material and a company that is very successful and dominant in that, that's why those types of things are targeted, right? So that's an example of saying, why do people do the things they do? How do politicians accrue power and maintain power? It's through utilizing one form of influence, but they almost always seem to try to horse trade that into influence on the boards or within the sea suites and the decision-making ability of these companies that engage in the trading, refining, and ownership of a relatively small pool of critical materials and finished products.

It rarely works the other way. It always seems to be the politicians that are playing Pied Piper to the companies and to the resources themselves, you know, that are drawn to that and follow it. You think the politicians are pulling the strings of the companies? Broadly speaking, no. The companies are pulling the strings of the politicians. The easiest way to say is that it is almost like the interaction of companies and of markets and of people produce an almost like, I don't want to say sentient, sentient's not the word, but there's certainly an almost mystical way, if you will, that the interplay of all of those things becomes almost a sentient thing that is capable of, attracting and managing its own presence within the political world.

So just to want to point it out and say, okay, well, in the case of the U.S., Raytheon is the bad guy, right? The weapons contractors. Well, why would you single out Raytheon? What about Lockheed? What about Boeing? What about General Electric?

What about General Dynamics, right? All of these companies that have billions and billions and billions of dollars invested interest and the United States more or less being at war. Are they solely to blame one of those companies? Is it the interaction of all of those companies and their lobbyists and the politicians that they're close to and they donate to who vote on going to war, not going to war, who shape foreign policy towards or away from conflict? It's almost easier to say that it's the combination of the need to make and control the flow. of money, the need to make and control the flow of influence and power, and all of these people

sort of interacting in some quasi-coordinated fashion because they're all pursuing the inevitable same self-interest, if you will, that's really the locus of power, particularly in capitalist economies like ours. In a place like China or North Korea, power is more naked, right? It's bribes. It's President Xi Jinping of China coming up with excuses to jail or disappear dissident CCP rivals who maybe don't like the way he's trying to run things or install himself as dictator for life. And now we have these corruption purges. Now we have these planned collapses of specific targeted economic sectors or companies within China

that take out rival power bases and their financial bases of power. So we see all of these things happening, and we say in some parts of the world, it's just the more naked pursuit to power that manipulates people and events and companies and assets. But here in the U.S., in Canada, most Western countries, it works the other way around. It's the interplay of people and systems and self-interest that drive the requirements of how politicians behave and the things that they do. So it's a very interesting dynamic. What do you make of Black Rock, Vanguard, owning, you know, like everybody just, you know, every person who tries to point out a web of how it's all interconnected always comes back to, you know, what is it, five companies, five people, five, whatever, Black Rock, Vanguard, I mean, there's several of them, but those two stand at the, you know, top of the pyramid, whatever you want to call it. when you talk about all these different politicians and how they interact with companies or vice versa, even at the heap of all the companies stands these two juggernauts.

That's what happens when Black Rock, Blackstone, Vanguard, Bercher Hathaway. Yeah, you're talking about a very elite cabal, if you will. of interests that exist above wealth, they exist above systems of power to where they're almost inherently from a policy side, from an output side, at least kind of a nation state under themselves, because they're the tail that wags the dog. But even then those companies have vulnerabilities,

their power is not omnipotent. So it's a bit reductionist. I think a lot of people want, though, there to be a villain. We're conditioned because we watch TV shows and movies. So you don't think there's a villain then? I think there's many villains. I think there's many villains.

But oftentimes the people that are also villains or designated villains are simply the vector through which a bigger concept or strategy is being implemented. And so if we look at Black Rock and Blackstone and Vanguard and these guys, you know, like let's look at the real estate markets in the U.S. famously, these companies have been involved. for years now in buying up property and inflated values, which inflates general property values in a given area. And of course, the cities and states and everybody, whether they admit it or not, went along with it because increased property values means increased property taxes.

And they're not going to fight that. And they're not going to fight that, right? So now you're looking at is there a planned and deliberate approach from these companies who are operating in a very amoral, fashion, arguably immoral, right? I would say immoral, but certainly amoral from an objective standpoint, where capital is pursuing its best and highest reward. So these guys create these systems and these big moats around themselves and say, we're happy being an oligopoly. And so five of us are going to go around and buy up as much property as we can. And we have, because of the influence that we have in government, we can create legislative and regulatory moats around ourselves that protect us.

and then do they consciously think it? Maybe, maybe not. But part of that decision-making process is who's going to stop us from pursuing our capitalist ends because the city and state guys win too, right? The only people that loses is the guy who's trying to buy a house for his family that when the house was built in 1999, it was a $200,000 home, and that home is now half a million or more, right? because as property taxes inflate, so does the budget of school districts and the ability to buy

MacBooks for the kids instead of, you know, cheap Chromebooks, all of that, right? And so it becomes this like this recursive process of self-interest, political interest, financial interest, all these things working together and was BlackRock and Blackstone the, you know, the generative force of that, arguably but then if we look upstream from them and say well whose interest doesn't serve in the political environment to allow a black rock and a blackstone

to continue to operate this way so is it the motive and interest of whatever that that mythical higher cast is the mythical cloud people that black rock and blackstone serve while they're in the business of serving themselves who are those people are they the real villain and Black Rock and Blackstone are just the vectors of that, right,

or the implements of that strategy. And it's an interesting, it almost gets to be like an esoteric philosophical question that you can enter at any point in that chain of thought and begin to work up or down that chain. And I think the preoccupation of that is what spun me all these years ago into going, I can't try to see the world through this mystical lens anymore. I need to start, I need to anchor myself in something really, real and then at least work from that.

And that's where this idea that logistics is a map of human action or human intent, depending on what you're trying to accomplish with the mental model, I decided to start there because with that notion of a physical thing can only move, you know, one thing can one move one time, one place, all that. And that allowed me to at least anchor in reality and begin to work from that as a focal point. When you look at, certainly when you look at the behavior and the actions of a, you know, Steve Schwartzman, of a Jamie Diamond, you know, like a J.P. Morgan Chase. You have individuals that control vast, unfathomable amounts of wealth.

They pull the levers of power at a level the average human can't even comprehend. But those guys are still vulnerable, too, because they're still human. And so they're playing a game by rules that they have created to a large extent, that they control to a large extent. But the thing that they can't know that any of us can't know, is how situations may come along that catch even them off guard and sweep them along with time and tide. And they are just as lost and just trying to figure out what to do next as any of us are. If there is a moment in the U.S. where enough people at scale can no longer afford to pay those property taxes,

they can no longer afford to buy the home that's inflated 400% value in the last 15 years, They can no longer afford to do the things that they want to do when the promise of upward mobility at scale collapses. And I think we're on the verge of that, most likely. The game changes for everybody, including the people that built the system that has now failed. Because at the end of the day, humans are going to do what humans are going to do,

no matter how much you try to control them, no matter how much you try to build these systems or incentives or disincentives to modify human behavior and to keep people in a box, humans at scale are too unpredictable in certain ways to fully contain forever. And so a human system, whether it's capitalism, communism, whatever it may be, will always tend towards entropy decay. Energy will leave the system. It becomes stagnant. And when that happens, then these chaotic attractors seem to come along, and it could be a moment.

it could be a general feeling, almost sort of like a zeitgeist, right? It could be anything. But at some point something will come along that's a strange attractor and the laws of chaos takes over and the system collapses. And that's where we're at right now. That's where we're at right now. And it's interesting to watch. It's interesting to model my own maybe wrong, maybe right,

maybe half right way of looking at the world through that sort of paradigm. of if we're coming into collapse, that's terrifying. But it also means that many things that we took for granted are going to be washed away, both good and bad. What opportunities is that going to unveil? And what does that world look like once this avalanche reaches the bottom of the mountain? That's the nature of all of this. It's the nature of self-organized criticality.

It's the nature of humanity itself. We will always, because it's what we do as people. We will always, always, always sort of burn the fields of our civilization because it's the we're wired individually and at scale. But there always seems to be something inside of us as a species that eventually over some period of time allows us to learn from those mistakes, rise again. And for a time we build these empires, we build these systems that produce peace and prosperity, whatever it may be, only to find ourselves in 10 years, 100 years, 1,000 years,

on the downward slope again, right? And I think that's the moment we're in. I think a lot of things we took for granted over the last 50, 60, 70 years in the post-World War II era are coming to a crashing halt. But that's not always a bad thing either, or at least all bad. I mean, you're talking about an avalanche, right? We're at the precarious time going over the cliff. Maybe we're already over the cliff and we're kind of like Wiley Coyote just sitting there and all of a sudden you look down, right? Like the one thing that, you know, I've heard a lot of people, you know, a lot of people love to compare the United States to Rome.

And we all know how Rome finally at a point where the barbarians start basically pulling it apart and it falls apart and blah, blah, blah. But A, that doesn't happen in one day. Didn't happen in one year, right? And so this chaos or this burning or this falling down, this tumbling down the avalanche, etc. one of the things I'm you know do you see it happening in the course of like man you're going to feel it in a year's time and boom away we go or is it going to be this 100 year 200 year 500 year um almost not trickle but you kind of get the point instead of it being an avalanchevary straight down like wiley coyote running off the cliff right everybody can see that pick well at least people my age and older I think grew up on that cartoon where he just looks down and it's just straight down. There's no stopping it. It's straight down.

This isn't a slow roll down the hill. You think, you know, you sit in one of the greatest nations on the planet for like the last good chunk of time. Sure. Maybe the greatest of all time, who knows? You're saying off the cliff we go. Is it straight down or is it a slow roll?

I think it's a really painful 20 foot fall to a fairly steep, you know. So what happens in the 20-footfall? From your expertise, what's going to happen in the 20-foot fall? So at the global scale, we're in the middle of that 20-foot fall, and I call it a kinetic bifurcation or kinetic decoupling, which is to say that there are some decouplings or unravelings that take place gradually over time and then all at once.

And then there's kinetic decoupling, which is that some very rapid fire sequence of events force the issue whether anybody was ready for it or not. In the case of the global bifurcation that we're going on now, this kinetic decoupling, this was initiated largely by Xi Jinping and people that are adjacent to and cooperative with him, Vladimir Putin, part of that, of course, Iran. And at some point in time, from the time he sort of ascended to the leadership of the Chinese Communist Party in 2012, 2013 to today, Xi Jinping has decided that whether the West is ready or not, whether the United States is ready or not, there will come a time when China will, to whatever extent possible, be completely independent of influence from the West and from the U.S. specifically,

because we are, of course, sort of the hegemonerite of the West. That's the 20-foot fall we're in right now. We're seeing whole mechanisms of trade, the global order alliances, everything that we have taken for granted for quite some time is now completely up in the air and is reshaping. The landing, the hard landing from that is going to be a lot of companies, a lot of individuals, whole systems, perhaps some country, degrees disintegrating, right, losing everything that they built.

And that has a definite downstream impact. The steep slope for a while that follows from that is going to be the reaction of people in both sort of spheres of influence. People who claim not to be in either sphere are going to find themselves in a position where they still have to define their own reality by the interplay of the two big systems, of the CCP-led. order, Eurasian order, of the U.S.-led anglosphereic order. Everybody else is going to sort of define themselves in opposition or support or neutrality to it, but they're not going to be able to escape it. It's going to define their existence because there are things that exist in both spheres that the other sphere will need, and so you're going to have this middle group of people

lining up around it, and so you have... Like what? What's in both spheres that the other side's going to need? So, for example, here in the U.S., we talk a lot about critical strategic materials. A very simple one would be something like cobalt, for example. Cobalt is, of course, famously a critical raw material for battery production. And the vast majority of cobalt in the world exists in only a few places and few very high concentrations. people you know the whatever the Congo goes by these days but you know so in the Congo you have an enormous issue of child labor you used to mine this stuff very dangerous and it's taken

to market where it's bought from slave labor certainly indigent miners whether they're independent guys just out in some common area looking for whatever or they're part of a more organized labor force that's being taken advantage of, but a lot of that cobalt is ending up back in China. It's probably accurate to say that China has a sort of de facto grip on that country. But another major country that is a major source of cobalt is Canada. You don't say. I do say, right? So it should be incumbent upon if we're worried about the fact that China has co-opted an enormous source of cobalt in Africa. And we have this huge amount of potentially extractable, likely extractable,

in a somewhat difficult location, which is way up in the northern part of Canada. Where are boats in Canada? You're talking? Yukon. Yukon, okay. So is it more difficult for us to extract that, get it to market, get it to refineries in Canada and the U.S. and turn it into a useful material for battery production? Yeah, it's more difficult.

But the question is not, is it difficult or how difficult? The question is, do we want to continue to allow, in this specific case, this raw material's availability in the global market to continue to be dictated by China exploiting another country? Or do we want to apply this sort of almost epigenetic will to success that the U.S. and the Anglosphere have largely demonstrated over the last couple of years where against all odds, right, we come from out of nowhere and we figure it out, which, you know, sort of which way Western man is a bit of a thought process there, right? And then you look at it and you say, okay, well, maybe the third, you know, by some reports, the third largest source of potential cobalt, extractable cobalt in the world's Cuba.

I chuckle about that. Why? Because Justin Trudeau's real daddy is, uh, yeah, I went there. I'll make the joke about Castro and Bridget. Well, I mean, it couldn't be, you know. Come on. look just alike. Well, A, you've hit on two things, right?

Well, obviously, a joke my listeners will certainly know about it is that one. But, I mean, like, it couldn't be one of your great allies where Colbolt is. It has to be Cuba. It's got to be Cuba. Where you basically fucked them over. That's exactly right. Right? I mean, like, for the greater part of 50 years, maybe longer.

That we could do a whole two hours on my thoughts on U.S. policy regarding Cuba. But in general, I agree with you. It is, there's like mistakes you make out of good intentions, and then there's like really bad mistakes that you make because you ignore truth. And then they're just like the mother of all fuckups. And in a lot of ways, U.S. policy and behavior towards Cuba falls into that last category. So it's always fun to see a massively important critical material where some large percentage of world availability of, of a material that's currently refinement or extractable, or refinement, et cetera, accessible is probably the best way to put it,

is in a place that the US has very little influence. Another large deposit of it that's certainly exploitable if we apply a little bit of mental power and capital towards it from the public and private sectors of Canada and the US exists well within the control of two very strong allies, which is Canada and the US, right? And then a third large bucket of potential access, right, in freaking Cuba, 90 miles off the coast of Florida, you know, within the U.S. is EEZ by,

in terms of like nautical zone, but certainly not within the realm of our diplomatic or territorial legal control. And now all of a sudden, the race to extract that material and get it onto the global market and make use of it is almost completely outside U.S. influence because we've spent 50, 60, 70 years doing a lot of wrong. things right so that's an example of where we say does politics and geopolitics influence influence these factors in the private sector in this case a specific the status and availability and use of a particular commodity or is that the commodity's importance itself that we've overlooked at least since we've

known for a decade and a half that this existed there and we weren't forward thinking enough and forward leaning enough in our strategy to try to show shift that dynamic. And those are the interesting questions, right? It's almost a chicken and the egg question, but I would argue that at the end of the day, power, success, winning is binary. Right.

When it comes to the great geopolitical games, great grand strategy, someone's going to be the first to get their hands on that cobalt in Cuba, pull it from the ground and make use of it. It's going to be an anglo-sphere country, or it's going to be, or company, or it's going to be someone that is adjacent to or directly involved with the dragon bear, you know, China and Russia and that axis of anti-American power. So for everything that we do politically, for all of the good motivations and intentions that a lot of us hold for a country like Cuba, and we would love to see it be better than it is, at the end of the day, some people's just calculation just boils down to, I want that. what does it take for me to get that and how do I beat the other guy to it and a lot of things a lot of

mistakes that we make in not only our geopolitical policy but our economic policy and how we view critical and strategic materials how we view supply chains have been informed by profit not by security and stability of the greater system. It's nice that Glencore, formerly Mark Rich and co, Mark Rich famously pardoned by Bill Clinton, it's nice that Glencore has become such a massive juggernaut of mining and materials extraction, refining, and transportation. Glencore holds more power than the vast majority of countries

because Glencore holds access to numerous of these raw materials and assets and resources, right? So why aren't we doing everything we can as a partnership? If you just take the Five Eyes in general, Australia, New Zealand, UK, Canada, and the U.S., and say, as an sort of anglospheric entity, why aren't we collaborating very closely to co-opt these sources, these assets, these capabilities, these people, these entities, and strategically shifting things within that sector and shifting that. balance of power back towards our requirements and our needs and our stability and security rather than saying, well, let's just allow this one company to maximize its profits.

There's ways to do that that don't involve naked power grabs and nationalizing companies and taking control of things by force. But it requires political will. It requires a little bit of imagination. And it certainly requires understanding that there is a higher and better best interest than money. and that's the question that Trudeau in Canada, that Biden here in the U.S. face with regards to that critical material and many others is what are we willing to exchange for stability and security and for the long-term health and benefit of the citizenry of our countries?

That's the open question that the status of a single material leads us inevitably to. What are we willing to do to make the right to? decision for the people or what are we willing to do to make the right decision for a few people who put money in our politicians' pockets? It's a, I don't want to be nihilistic and cynical about where this leads because I do think that with enough critical mass of people who are motivated and who understand the rules of the game and who understand how rules must be followed can be bent or can be broken. We can find ourselves at a place where we have these moments like, for example, the trucker convoy in Canada. That was a moment, right? Did it end the ways a lot of people would

have wanted it to see it in? No. But it ended in such a way, and it was conducted and carried out in such a way that you're talking about an organic, almost spontaneous, grassroots, roots, protests that involved no violence on behalf of the citizenry, but for the first time in Trudeau's entire administration scared the shit out of the man. He wasn't in charge. For a time, he was not in charge. And it was through very significant application of very dictatorial almost powers that he was able to regain some semblance of control.

But he won that battle. and I would argue he lost that war because there were a lot of people watching there were a lot of people who were on the sidelines of this fight who said the emperor doesn't have clothes and for the first time they realized the emperor doesn't have clothes and for all of you now imagining Trudeau naked, you're welcome.

But it was a moment, it was a shift, it was a turning point. We may not see the fruits of that turning point but what we're going to see is people who that was their political awakening and six months from now, a year from now, two years from now, five years from now, another critical mass of these people who are radicalized to some extent, and I use that in a good way, but they were awoken from whatever slumber the system had put them under for a long time. And now they're asking the questions of, in the case of COVID, why is the

U.S. so dependent on China? Why are we so dependent on a country that, whether through negligence or some people believe deliberate, whatever it may be, but it was the source. and the origin of so much global misery for the last two and a half years. And yet, we as Western countries have done so little to recognize that and to separate ourselves and give ourselves some insulation from that threat to our own system. If they can do that, what else can they do? If they're willing to kill a million people, what else are they willing to do? Those sorts of questions, a lot of people never asked until COVID.

What is our government willing to do to maintain control over us in an unfair way? A lot of people never ask that question until the trucker convoy in Canada, right? When you start to add these moments up, they reach a tipping point where it's, you know, gradually then all at once. And we see whole system shift almost overnight. People like me, people like you, people like a lot of the ones who are listening are going to be the kind of people, though, who have been at the front end of this and said, this is coming. It's coming for these reasons. Maybe they get the reasons right. Maybe they get them wrong, but they certainly feel it.

And they certainly understand it in a way that a lot of people don't because they're not paying attention. But enough people now meet that requirement, have come to this sort of awakening for whatever reason over the last couple of years, that the world that we know is no more, that it's coming, that things are moving in a trajectory in a direction that's almost unstoppable, but that there is opportunities to do this right and to get it right. and that makes me happy beyond words that so many people see that and have chosen hope, have chosen to say, well, what can I do about it instead of saying, well, it's hopeless. There's nothing to do about it. Well, one of the things, I think it was Keith Morrison who said it, Dateline.

He mentioned, you know, with every advance in technology, it has, it's positive, or negative, but like both grow with it, right? So you have your positive, but you also have your negative. That's right. No one thing about COVID that, you know, when you look back through the course of a decade, you could argue that they tried or that the similar type of hysteria was tried to be spread, but it didn't have the power of social media yet. And so you didn't have, you know, like the last two years of,

everything on social media. Oh, yeah. But one of the things you couldn't have foreseen was a truck convoy. You talk about it. That's right. I got to ride in that sucker. That thing was something else. That's pretty cool.

And it got its life from social media. That's right. I'm seeing all the videos of all these things coming together. And God bless Canada. We got a lot of things that aren't attractable to most people, you know, the cold, the dark, et cetera. How about one route across the entire country pretty much to Ottawa, right? That's right.

And yet, isn't that what just made it beautiful? Here it is. It's like minus 30 Celsius, you know, not that Fahrenheit's far behind at that point. I don't recognize anything but freedom units, Sean. Well, we're talking like minus 25 Fahrenheit. I think when you get below zero Celsius, like the units just match up, right? At minus 42, they equalize. And then after that, Fahrenheit's worse than Celsius.

Anyways. So North Dakota, Alberta, and like the height of January blizzard season, right? So you can imagine it is close to minus 42 Fahrenheit, right? That's kind of where we're at. That's what the convoy went through. Yeah. Right? On one lane of some of the worst highway known to man.

And that there was people out there waited all day for them because, you know, as I've pointed out multiple times, there was a stretch in between Sue St. Marie and, and, uh, I'm sorry. forgetting the end destination that day. But it's on the north side of Lake Superior. So you're in just terrible roads, single lane highway, minus 30. You know, it was light for like six hours. The drive's supposed to take eight. It takes 17.

And the reason it takes 17 isn't because of road conditions. It's because of the amount of people on the highway. Things like that, you just can't imagine. But part of the reason it happens is, you know, I go back to social media. Why did COVID encapsulate life? because social media spread it. Absolutely. It was unbearable at times.

And yet the solution out of it, or maybe one of the beautiful things came out of it, was social media. And so when you talk about, you know, like the impending doom is probably coming, but you might be on the side of like, oh, but there is hope.

It's like, well, things like that certainly gave light to that, I think, the hope. Like there are people that are paying attention want better things and are willing to endure in Canadian fashion minus 42 Fahrenheit to do it. Well, I mean, I guess I assume that if it's only cold if the maple syrup actually stops flowing, right? Maple syrup is not flowing. At that point, I don't even know what it would be.

It's, I think you got popsicles. Actually, that sounds not delicious. I can't lie about that. So Canada is a place that I absolutely, I like I adore and I love and for so many reasons and at first it's a beautiful country. I've been to Canada numerous times and there is something really incredible about almost like the the homogeneity of certain parts of Canada, right? Like you go into certain places in the U.S.

You can begin to make some broad assumptions culturally about that area, right? but in Canada, that's almost like more reinforced. The middle part of Canada in particular is the most crystallized, dense concentration. And when I say middle part, I mean geographic middle, not necessarily the political or cultural middle like Ontario and all that. But the middle part, right, like farm country, oil sands country. When you're talking about that, you have these vast distances across which, people are so spread out. And for the first time with social media, they were able to connect in a meaningful, real-time way.

After two years of no hope. That's exactly right. It just sprung hope. And you had, you know, oil rig hands and truck drivers and farm wives and pastors, right, leaders of the first nations, all coming out and coming together and for the first time able to coordinate and unify. And you had BC and Alberta and Quebec and Manitoba and Newfoundland and Yukon and all these places that compete for the most part in a healthy way but in some ways not that healthy. Sure. All of a sudden Unify like we have a common enemy. His name is Justin Trudeau.

What's going on is not right. And we are brothers and sisters for that matter in this and we're together. And that in my lifetime other than Sidney Crosby scoring a goal in the Olympics. doesn't happen. You don't get, you don't get all the provinces to align and a huge portion of the population helped align all those together.

You could feel it. It was like palpable. Like everybody was seeing it first hand. Like, wow, this is something. It was extraordinary. And I think,

and I think you're touching on something that we can even go a level deeper on, you know, to sort of the focus of my own expertise of logistics, is that it was truckers, specifically truckers. if it had been a convoy of righteously angry and justifiably so nurses, it would have looked different than it did.

If it was educators, it would have looked different. If it was bankers, it probably would have not ever happened. Let's be honest. Bankers aren't incapable of coordinating on anything. Yeah, the lifeblood of North America is tracking. that's exactly what it is. And I would argue with you. Brunna argue with you,

but like everybody has a family member. I'm not fighting you. I didn't play hockey. I was like a mediocre baseball player that had like two good moments in his whole college career. I tell you what, I was a mediocre hockey player, but I found a way to play more years than regular folk do. And I wouldn't argue that I went that far or anything,

but I had fun doing it. Yeah. But the thing about trucking is it's like not even five degrees of It's so close. Everybody hasn't. For me, it was my father, right? That's what he did for his life. He talked about it well.

We were going across Canada. And I remember seeing him get emotional about it because he used to drive long haul across Canada. And as kids, I went with him. Think about this, you know? And you're driving and you're watching your father, who's on the, you know, in the job scope, I would argue on the low.

I don't think we praise truckers for what they do, right? They're not the flight. attendance of the 1980s, right? But in that scope of work back when he used to do it, they all had their wave. And they used to talk on the radio nonstop. And then over the course of 15, 20 years, it stopped. More or less with the introduction of cell phones. Sure.

No waving. No, like everybody, like I remember as a kid perfecting my wave. The truck wave, man. That's right. Absolutely. Everybody had theirs. And when the truck convoy went, he was talking to me and my sister. and all of a sudden he goes, the waves come back, every trucker's waving again, every trucker's

talking again. That's cool. Like it kind of gives me goosebumps. It's amazing. It's amazing. And as someone who works, you know, at the most grunt level of logistics still, you know, like I do the high-flying policy crap and I go to D.C. and I talk to people and try to motivate them or convince them to do this, that, or the other.

But my heart and my soul is always going to be with really a few very small. underappreciated segments of the blue-collar world. Truckers, farmers, mariners, sailors are the truckers of the sea. Yeah. Longshoremen. The people that show up every day and do the really hard, really difficult work,

are there spoiled truckers, unprofessional ones, guys that give the profession a bad day, but of course there are. It goes across. In the U.S. We have 50,000 trucking companies registered with FMCSA, right? You're going to have a few.

But as a culture, as a culture, as a breed of human being that tends to gravitate to that job, you're talking about largely self-motivated, independent-minded people who are professionals at their job, they take it seriously, that they have an 80,000 pound or whatever that is and the rest of the world units of kilos, I'm kidding. But they take it responsibility, they take it seriously that they have this obligation to get a load that may be worth $1,000 or maybe worth $100,000 or a million dollars, safely from A to B without wrecking multiple cars and killing families along the way. It is fundamentally a big responsibility and the

vast majority to do it. But there's another hidden thing about farmers and truckers, in particular Mariners too, is that they have a lot of downtime mentally to kill on the road. Most of them are listening to audiobooks. They're listening to the news. They're thinking about things in the world, and they're coming up with clever solutions or networking with other people, and we saw that with the trucker convoy.

And the other thing is, is they're seeing the world? That's exactly right. You say something's going on in Phoenix. Well, I was just through Phoenix the other day. That might have been a street, but it wasn't the rest of it. Yeah, that's weird that they would say something like that.

Right? They shut down all of Canada. To the common person, you go, oh, all Canada is shut down. But if you've driven Canada, A, there's no way you're ever shutting down all of Canada. It's a way too massive country. It's a freaking huge. Yeah, it's enormous.

You couldn't shut down Brazil in a similar way. And they tried to do a truck or convoy in the U.S. But it was less organic. It was more organized. And that spontaneity almost of the moment was really the magic of it. In some ways, that will never be replicated, right? But there are lessons to be learned from it. things that we can do. And it was, it, it had to be the truckers. And in the Netherlands, it has to be

the farmers. Yeah. It's a similar thing where it's, it's a group of people who have gone overworked, underappreciated, and, and essentially disregarded, despite their absolutely critical role in the function of society, irreplaceable role. And they've said, the hell with this, I've had enough, whatever it may be. And we see these moments and we see these populist uprisings in the past. And what's interesting is sometimes they're job-specific and job-dependent. But now, thanks to social media, thanks to, I think, increased awareness from the way COVID has reshaped the world in our relationship to the acquisition and availability of things at a cost we

can afford, things we need, things we want. there is a new appreciation now for the individuals who show up every single day and enable these things to get from A to B they either manufacture the thing or they're involved in their mission critical essential people and the transportation of A to B. And I don't know that we've ever had a moment in human history where the world is so united in it, if nothing else, at least an understanding for the first time of how much we've disregarded these absolutely essential but invisible to most professions. It's beautiful to me to see these things because I don't have a dog in this hunt and anything

other than I want to see the average man, the average woman, the average family be able to live as free and prosperously as they possibly can. I happen to think that Western systems of government that are rooted in the tradition of the Magna Carta and carried forward through the legacy of guys like Locke and Burke and Hayek or so, these institutions that are built upon, in our case, the Constitution of the United States, that are built upon the dignity of the individual. We need to be doing everything we can to respect, reinforce, and protect the people who at the most basic ground level are the ones who enable us to live in such a manner. And that's not the politicians.

It's not the black rocks and black stones and vanguards of the world. It's the guys who go to the poultry barns and scoop all the chicken shit up, right? It's the people that are working the heavy mining equipment, long hours, are the people working on the oil rigs, the people that are maintaining pipelines, the people that are driving trucks, the farmers, right? Robert Oswald, he was, the guy was telling you about before we started, he has Global Roswell, he's from my hometown, right? And in Florida, he does different boat, maritime parts, and anyways, anyways,

really cool company anyways, what he was saying was we have to find a way to teach the average kid that being blue collar is cool, that building things is really cool. And what you're saying is, what the trucker convoy did was make us all understand and maybe even popularize trucking again, like getting things from A to Z, because if that doesn't happen, we're all in a world of hurt. Could a kid who goes to college for four years acquires a mountain of crushing lifetime, almost, levels of debt, gets out, and they've got something they're passionate about. maybe they studied really hard at it. And the only job they can get is some menial $30,000 year job. And they're never going to get out for the rest of their life if they don't do something drastically different from under that debt. And under that bad start their adulthood.

They did everything the system told them they should. They went to high school. They got a college degree. They did all of this. And through only a little bit of fault of their own, they find themselves in a life that is defined by the fact that they can never get ahead or have any sort of freedom. Right. Then you look at that 18-year-old kid who had a little bit of fun in high school but didn't

have the grades or even the ambition, really, to go to college. And he says, well, I got to make money somehow, right? So he goes and he gets a certification or a license and he learns a trait, whatever it may be. It could be welding. It could be diesel engine repair. It could be whatever, right? And by the time he's 30, that guy owns his own company.

he's got employees you know he's got vehicles that he would have never been able to afford otherwise because the business is able to pay for them he's got a nice home he's got freedom he's got downtime he can he's got the money to go buy a gun or two and go get to shoot or uh to become a home brewer whatever it may be but he's got a life that was never promised to him but yet he was able to make it because he learned something that was spit upon or not given or shown to most people as a good path through life. And he's going to die a happy man because he was able to live life more on his own terms. I don't, I'm not always a good dad.

I'm not always a good man, right? But one of the things I have tried to teach my kids and encourage others to do is to develop something that is useful, that's tangible and that's somewhat timeless. And the trades in particular are, is always going to be the most overlooked path to a better life for a lot of these kids. Not all of us are meant to go. I went to some podunk school in northern Missouri,

and I was only able to afford that because I had a baseball scholarship and I had parents who were like super supportive and helpful and put themselves out on a limb financially to help me, plus financial aid. and I got very fortunate by the standards of following that like path one to the traditional life of success, right? But a lot of kids that I know that I went to school with or that I was friends with growing up achieved from a financial and from a life satisfaction standpoint a lot better life early on because they recognized in somewhere, they were forced to recognize in a couple of cases that doing a thing is better than thinking about a thing or talking about a thing.

that at the end of the day, a thing still has to move or be maintained or be repaired or whatever it may be, and that most people are not going to have the skill set to do that. And so by focusing on that, they acknowledge reality for what it is, humanity for what we are, and said, I'm going to come up with a way to excel and advance myself in my life station and that and be useful. and usefulness, utility is always the most robust way to go through life. I couldn't agree more. Now, I've kept you for a bit, and I'm curious now because as we go along, I'm wondering, do I have you for more time, less time?

A few more minutes. And then what we'll do instead of being able to actually find a way to get together in person, if nothing else, we'll certainly find a way to do another follow-up, I don't know, five hours. I don't care. Give me a timeline. What does a few mean to you? A few means a lot of different things. Eight minutes.

Eight minutes. Can you break down? You bring up... We've been talking a lot of philosophy the last thing. I'm curious... That's the root of everything I do. As some form of first principle. It's probably why I enjoy the conversation.

Because I love a deep conversation. My listeners certainly know that. But I look at some things going on in the world. And I go, in eight minutes, I wonder, can Ross tell me his thoughts on what are going to be the repercussions of what's going on with Ukraine, Russia? Just that part of the world. Let's just stick. And probably is a corollary China potentially invading Taiwan.

I know, right? Because that seems to be like the twinned issues that everybody's worried about is like, well, what Russia did to Ukraine are we going to see China do to Taiwan, right? And it's something I do deal with professionally and personally on like a daily basis, right? Um, yeah, we'll pour, uh, and while you do, do eight minutes, uh, to the listener, pour me some for the last leg of this discussion here as we pull into the home stretch. We're drinking bourbon to the average listener. We are drinking bourbon. It's a great American liquor.

Cheers, brother. Yeah, absolutely. Um, I'm chuckling because I'm like, well, we got eight minutes. So, I mean, how much does it? So pour another finger. It's fine, right? Um, what happened with Russia and Ukraine, it was really interesting. When it happened on day one, um, even before,

I got a call from a few people in D.C., and this was in like November, December, even, and the discussion was around the unusual movement of Russian military assets, which, of course, the claim was that it was like exercises, right? We were doing exercise, and I said, well, that's an awful lot of things to be moving to the border of Belarus and Ukraine and into Belarus in that particular case, just for military exercise. And concurrent to that, you were saying movement of naval assets and things like that, and it was all very strange.

But the thing that I noticed, the thing that was odd of all of that was not Russia moving enormous quantities of material and manpower across Russia on rail and by truck. It was the fact that the inco terms, which is the internationally accepted legal terms under which a transaction is conducted for the purchase and sale and transport of a product, The Inco term suddenly switched in a way that shifted all of the risk suddenly, or most of the risk from the buyer to the seller of cargo leaving Ukrainian and Russian ports. It was like the people that were engaged in the buying and selling knew ahead of time that something was coming, maybe not imminently, but within a few months, where they were trying to get ahead of potential risk. right and that was particularly true in grain and an energy products crude oil natural gas and that was weird normally in these transactions the buyer agrees to take more of the risk in exchange for being

able to control the transportation and in exchange for being able to acquire the product at a cheaper price right so I'm going to take some of the risk but my upside is I get to buy product at a better price and I get to control the transport of which means I nominate the vessel I nominate the ports that are used, all of that, right? And so that whole complex interplay happens all under these three-letter Inco terms of SIF, FOP, you know, DDP, delivered, duty paid, all of these things, right? And these are internationally recognized things. But when you suddenly see overnight a transfer of these things happen within a week or two where the entire calculus of trade in a given region, in this case, the Black Sea region shifts, you're like, what is going on? That's a dog not barking in the media.

It certainly doesn't get the attention of really anybody, but because of what I do for a living, I happen to be pretty close to that situation, and it was just like a head scratcher, right? When I put the pieces together, and then in December, I had some conversations with people, and I said, hey, look, I think Russia's kind of like, if not invade Ukraine,

they're certainly gearing up for something odd or unusual, and probably bears watching, right? We saw the same pattern of activity in some ways happen when Russia kind of annexed part of the eastern part of Ukraine in 2014 and the Crimea. And so I say all that to say this, is that where we are at in Russia and Ukraine is what looks like a military and geopolitical stalemate, but in fact is a very interesting shift. Russia now controls the entire, almost the entire, right up until the Danipa River. So you have a small stretch of Ukrainian shoreline that's still under Ukrainian control.

that includes basically everything west of the Deneepra River, mainly the port of Odessa, which is a hugely critical port in the area in the region. But for the most part, all of the other shoreline along the Sea of Azov and the Black Sea is now controlled by Russia, which means that Russia, for reasons that are much longer to get into, Russia is now able to do some things geopolitically, but more importantly, logistically and supply chain-wise, from inside their own territories to get product onto the world market and a more efficient, manner. It's an enormous win for them as of today, but also from the long run. Putin plans and very long cycles of thought. So does China. That's one of the reasons they get along, despite,

you know, that arguably both are very evil in terms of how they approach treatment of other human beings. But from a pragmatic standpoint, from an amoral standpoint, a game theory, strategic, whatever you want to call it, that's one of the reasons they understand each other very, very well and work well together. So where things end, it's going to be somewhat hard to say. It's in a bit of a stalemate now. Russia has a lot of material, you know, it's its artillery rounds and tanks and things and equipment, but most importantly manpower to reconstitute in its ranks. But Ukraine is running on empty as well. They fought admirably as an insurgency. They've had a huge lift from NATO, particularly the U.S., both from our dollars that we've dumped into them, as well as all of our various, very high-end technological equipment.

Turkey has provided something of a boost to Ukraine as well with use of drones and what have you. But at the end of the day, things are more or less kind of entrenched. You're seeing some fighting, but Russia now controls the vast majority of what was territory or waters of Ukraine, its oil and natural gas reserves offshore, and the shipping lanes. That's a big deal. if we look at where things go next, Russia very much is in the catbird seed as far as Europe is concerned. Europe is drunk for the last 20 years on Russian natural gas. The global markets is drunk on Russian, you know, heavy sour crude.

It comes out of the ear olds. Russia is now in a much superior position to this, but then the West miscalculated, particularly the U.S. You know, in between ice cream cones. You know, President Biden was like, hey, we're just going to slap sanctions on them. and cut them off from Swift and the Euro dollar system. And Russia said, go to hell. Europe doesn't get natural gas anymore. And anybody who wants to buy our natural gas or our crude now has to denominate in rubles.

Or in a currency that we say is okay. Chinese yen, you know, Indian rupee, whatever it may be. So overnight, we saw the one big nuclear option that the U.S. had, which was disconnecting Russia from the global financial markets. Russia was like, great. We knew it was coming. We planned for it. And I would argue, and I argued, I mean, literally at the beginning, like I have time stamped public statements on this, like on Twitter and Facebook and all that, where I said at the beginning of this, this is about undermining NATO as a power presence, as a strategic base, but also about undermining the euro dollar.

And enforcing kinetic bifurcation or kinetic decoupling the financial and trading systems of East and West. And that what Russia did had very predictable consequences that we followed to a T, and they are in a lot of ways in a much superior position. Take that to China and Taiwan. From an ego standpoint, from an ethnocultural standpoint, whatever, Xi Jinping sees Taiwan as dissident, rebel, little brothers that need to be brought to heal. He doesn't see them as Taiwan or is a Republic of China. He sees him as a rebellious breakaway province that needs to be brought to heal.

And so for him, the Taiwan, what we call the Taiwan Strait, is two things. One, it's a small body of water that's easily conquered in some way that allows for a maritime assault on the island of Taiwan. More importantly, though, it's one of the most important as far as traffic, cargo value, whatever, trading lanes in the world. And that's both threat and opportunity for him or strategic resource for him, depending on how he chooses to employ that. So we've got now the calculus. And so two years ago, and when a lot of pundits on Twitter and think tanks and whatever, we're saying, China's about to invade Taiwan. And I said, no, they're not going to invade Taiwan. China needs the free and somewhat unrestricted flow for a time of exports out of China because they need capital.

They need hard cash, hard currency. The only way to do that is to keep making stuff and getting it quickly into the world market. Over the last two years, we've seen that dynamic shift where they're now moving into a more restrictive mode. They've made a couple trillion dollars of foreign currency reserves because of all the things we had to buy from China and couldn't get anywhere else during COVID. And China has really in some ways consolidated control of the international flow of things at the same time they've hauled themselves out internally. Their financial markets are very weak. Their real estate markets are teetering on the brink of collapse. and Xi Jinping is purging and disappearing anybody that's not all aboard with him becoming dictator for life in October at the party Congress.

So it's a precarious moment for them. The calculus with Taiwan then is if the U.S. stands to fight, if Japan and Korea stand up and support Taiwan, can we delay the fight long enough to make it an ego defeat, a strategic, defeat of Xi Jinping, such that it weakens him domestically as a petty tyrant who brought China's shame for losing, essentially, right, to this little bitty country. For Taiwan, the calculus is, can we hold out long enough that the U.S. and others can come to our aid before we face total occupation? China's not going to be able to come by sea. They're not just going to launch a million missiles and destroy the island.

They can't do that. That's not what they want. What they do want, though, is to be able to collapse Taiwan politically and economically while preserving the people and preserving the assets so that they can be rebuilt and co-opted by the mainland, you know, by PRC, by the People's Republic of China and by the CCP. I don't think that Xi Jinping goes for broke before October because he stands to lose everything right at a critical moment where he's attempting to finalize his consolidation of power forever. I think the risk comes after the people's, you know, the party, you know, the party Congress. That being said, I could be wrong. I've been wrong in the past. But the indicators show us in terms of the movement of logistical resources, in terms of the needs of all the stakeholders involved,

that an invasion or an attack on Taiwan is not imminent, but probably due to happen before the end of the year, or into Q1 of 2023. That probably can we can do two hours on, like the knock. on effects of that the next time we talk. I tell you what, we'll do the next time we talk because one of the things I said to you about when we started, right? I literally listed off like 10 things I've been calling you on. I'm like, I feel like we do two hours on that. I'm like, unless we stay here all night, we're not going to get to half of it.

This has been a great introductory to Mr. Huntsman to Ross. And to me, I'm like, I look forward to chomping into a couple different things because because I'm really curious about it. I think one of the final things I want to ask you, and I know the time is we carry on here and just into the abyss, is, you know, you're the common man. If you're the common man, you're listening to this.

You go, okay, Ross. What's maybe one thing, either I should be preparing for or I should be paying attention to. Maybe they go hand-in-hand. I'm not sure. But you're watching a global scale of things that are just a complex system that are constantly working and, you know, trying to see where the trajectory goes as things fall off, grow, you know, split, divide, etc.

If you're the common person, listen to this, you go, all right, just break it down to me real simple. In the next three months, six months, whatever you want it to be. It doesn't need to be, you know, this is exactly how it's going to go. But what should you be paying attention to or maybe planning for or both interlocked? I'm not sure. things that, number one is that things that we've taken for granted as being widely available, if not in terms of, these examples of TVs at Walmart, right? You used to walk in Walmart like five years ago and you were spoiled for choice.

You had like five different models of every TV and every size, and you could pay whatever price you wanted for the feature set, but it was all available right there. You pack in your cart and take it home, right, if you could fit in your vehicle. Well, now you have fewer models of TV available, fewer sizes available. The feature sets are less rich. etc. Right.

That's going to be the story across the board for most things that are manufactured. So the ability to preserve capital. And I'm certainly not going to get into a, you know, crypto versus cash debate or whatever, crypto versus fiat. But the means and the optionality to arbitrage, one thing of value for another, is now king. right and that could be a guy who you like you love tomatoes and the guy grows really good tomatoes he doesn't know how to repair an engine you know how to repair an engine but don't know how to grow a tomato right like everything old is new again in some ways like so the the barter the barter system is coming back maximizing your ability to quantify and exchange value for value by whatever mechanism you choose whether it's crypto or fiat or barter physical things or skill sets that's number one figure that out and quickly.

And it's so individualized, I can't even give people like a list of things to study, right? It's very individualized to people's skill sets and technical abilities and worldview. Second one is understanding that things as availability and quality of things are reduced, that availability and quality of things is increased by being able to network with people and system. rather than just being able to be a lone wolf and go and acquire. And that's sort of kind of a part of number one, but it's adjacent to it and really optimizes number one. Being able to get into a community of people who share a common interest, who share dynamic skill sets that are complementary and diverse, whether it's a town, whether it's a social organization of some kind, whatever it may be,

target first the ability to build a network that matters and as productive and is useful rather than as sustains a hobby or whatever it may be. And the third thing, and this is one of the things I encourage people so much is don't get wrapped up into the politics of the moment and keep your eye on the long game. understand that everything takes time. This thing I've dealt with in North Dakota with Fou Fang, for example, you know, it was March I stood in front of the city council members of Grand Forks. And I laid out several things, they should do several things,

or X, Y, and Z consequences will happen. I knew in March that it would be June, July, August, September, October, before any of those things came to pass and I would look like an absolute clown for saying they would in that moment. every single one of them has come to pass in some cases because I can predictably rely upon certain things to happen. In other cases, because I had a direct hand in influencing those outcomes. But the most important thing is that I had time and I had patience and a willingness to take the hit because I knew I was right long term. So people need to change our perspectives and of what success is, of what resiliency looks like, what all these things are and understand that the long game is now supreme.

China and Russia are in the positions they're in, this ascendant, fragile but ascendant position in some ways, where they are now a true pacing threat to the U.S. and to the Anglo-S., order, if you will, the Western order, because they were patient and we were not. And so for people to say, well, I want to be able to go to the store, like we're conditioned to, like, two-day delivery from Amazon and being able to go buy what we want at Walmart or Target right now or Best Buy or whatever, and we have to change our mental models towards good things, resilient things, things that will sustain us and maximize our chances for success as individuals, as families, as tribal and social systems, those things will take time,

but they are worth the payoff to stay with it. So, yeah, it's, be able to add value and quantify value, be able to build and maintain and participate in networks and mutually reinforcing networks. networks and be able to be patient. Like those are really from a first principal side, kind of the best things people can do. In the short term, things are going to get more expensive and less available and probably a lot more frightening and uncertain.

Could you break down frightening? The reason I say that is such a bleak term, you know, instead of just saying, well, frightening means tensions are going to rise politically. China and the U.S. are going to. And kind of giving a face to frightening. Once you have a face of it, you can, oh, okay, that makes sense. The inevitable doom of civilization and we're all going to go up in flames is kind of what everybody pictures when you say frightening or...

Yeah, it's not going to be World War Z, right? Yeah. For the most part, in some places in the world, like Ukraine, it's real, it's tangible, it's horrible to see the photos and the see the things we've seen, the consequences of actual all-out war. Whatever Putin calls it, it's war, right? And it's horrific. And war crimes are being committed really on both sides, on all sides.

It's because war is a terrible thing inherently, right? But the vast majority of people listening to this, that's not what frightening and terrible and horrible is going to look like for them. It will be different. the degree to which it's different, the degree to which we quantify or compare one thing to another is probably up for debate. But for a family that earns, you know, it takes home $40,000 a year after taxes and whatever, seeing a 3x rise in the price of meat is frightening. It's frightening. The feeling of being a man who is less able to provide that life he wants for his family, a life of stability and security and comfort. The ability to do that to see wages be stagnant even as the cost of everything seems to rise, that's frightening.

It's demoralizing and crippling on a spiritual level for a guy, right? For a mom having to make the tradeoff, not just between generic and brand name, but between, does my child need this or want this and have to make that decision 50 times every time she goes to the grocery store, puts an order in for pickup at Walmart or whatever. it may be, that's frightening. It's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, and, and, and being faced with that every day or multiple times a week, uh, can really begin to impact your whole worldview and make you think things are awful and they're never going to get better. And yet, when you put it that way, I go, as you prepare for that, you can prepare for that. Absolutely. You can. That's why I try to frame it that way. Like, yeah, it's frightening, but there's still things you can do about that. Yeah. And we live in a world where,

I feel like when the rubber meets the road, like when you put your full amount of force into something, good things can come from it. Absolutely. And when you're talking about frightening, this isn't, I don't know, I'm trying to think of the scariest thing known to man. Nuclear war. Yeah, right?

Nuclear war is probably the most frightening thing known to man. Sure. You know, I think of, I don't know why I think of Mike Myers, where he's walking around and you're like, how is it? How, well, that's the funny Mike Myers, but the killer Mike Myers like literally he walks everywhere

nobody can't escape. Well if you're mentally ill Halloween you know as a comedy film as well. It kind of is. Well actually if you take it in the right light it totally is. Well if you're certainly you know drank enough like tequila or something

it's probably hilarious but Hey I appreciate you doing this I appreciate you breaking down frightening a little bit because I one of the things that politicians, media, for certain those two groups in the last year, if not two years, have done, like, just in all spades, has been pumped everybody full of fear and not trying, not trying just like ease the pressure of it.

Yeah, COVID's going to kill you. Take the vaccine. Take the vaccine. Whatever it may be, right? Yeah. It has been fear porn for basically to an after year's true. Everybody's going to die. Like, everybody thought everybody's going to die. Everybody pumped that.

Yeah. And here we all are, and there has been a tragic loss of life for which there needs to be some level of accountability for. But at the same time, objectively speaking, it's not as severe at a macro level as we were led to believe. But the knock-on consequences of it, in addition to the terrible loss of life and sort of the tragedy of what a lot of humans at an individual scale have endured over the last couple of years. at a macro scale too we have degraded and devolved in ways that are very frightening and then the more you know about how the system works that probably the more frightened i'm probably more scared at like a human level than the average person is because yeah but i mean i'm a sociopathic enough that i'm you know that i'm able to sort of like reconcile it at some level and say yeah okay

but here's what we can do about it and i can kind of overcome that um but what scares you you right now? What scares me is that in the face of all compelling evidence that our politicians for whatever motive are going to allow this moment to pass to be able to address the challenges and accept the opportunities to do something good for our fellow man within our institutions here in Canada and the U.S. and elsewhere, that they're just going to let the moment pass. because they're co-opted, because they have a profit motive, or simply because they're scared and they're dying the death of paralysis analysis, right? What's the moment you're talking about?

What could they do at this moment? What could they do that just pushes the pendulum just like off the rocker, so to speak? The most direct, the most kinetic response to kinetic decoupling, right, by China and Russia and the others would be to absolutely say, fine. If this is the game you want to play, go to hell. And we're going to dump every single cent, Looney, pound, right? Whatever unit of currency we have. But we're going to dump it all and bet on ourselves. We're going to double down on Canada. We're going to double down on the U.S. We're going to double down on our people and our institutions. and we are going to rebuild every single thing we've let vacate our shores over the last 40 years,

and we're going to build our own safety and stability and security for our people. That right there for me would be the best response possible is to say we are going to bet on ourselves and only on ourselves and on our partners and our friends and our families. And you can take your geopolitical game and shove it. right like I think that would be for me the most compelling way to go about this with the current leaders we got that and have and also then we and myself and many other people have to find creative ways to change leadership to modify the incentives for them to build a world where it's more you know I think Milton Friedman was who said it where it's more politically and financially profitable for the wrong people to do the right thing and I do still think that opportunity is in front of us. See that line again. It's more politically and financially. Profitable for the wrong people to do the right thing.

Oh, that's a thought process to get through, isn't it? Yeah, that one marinate. Yeah, absolutely. I've really enjoyed this. This will not be the only time. No. Although, you know, the distances have allowed us to sit across from each other once, I hope it allows that in the future.

Well, I would love to visit Alberta. How's that? Because it's always better in person, always. Yes. You know, body language and everything else. I broke this down to my listeners. So many times they're probably irritated me bringing that up. But body language is just so key, so human.

Next one we do on skates with Lavalier microphones on each of us, and we just try to talk for two hours while drinking on skates. An advantage you will definitely hold the, you hold. Well, I appreciate you invite me and doing this with me. Yeah. This has been thought-provoking. It's good. right or wrong, at least this thought-provoking right.

Yeah, absolutely. And I hope you've enjoyed it as well because, yeah, we will do this again. There's just so many parts of this conversation. Like I say, it could get broke down into two-hour segments of its own because it isn't like you understand this, you understand the world. The world is vastly complex and that goes just from a world standpoint and then break that down into every different region, every different country to the smallest, microcosm you want to do you can literally break that down so yeah I appreciate you give me some of your time and finally meeting yeah this has been super cool and I look forward to you know the next conversation absolutely look forward to it as well