The Duran Podcast - Derivatives and the coming collapse w/ Alex at Reporterfy (Live)

Episode Date: October 16, 2023

Derivatives and the coming collapse w/ Alex at Reporterfy (Live)

We are live with Alexander Mercuris in London, and we have with us our good friend and financial expert, Alex, from Reportify. Alex, how are you doing today? Great, great, Alex. The three Alexes, that's going to be interesting. So just blame it on Alex, everyone. No worries. We got Alexander. We can say, Alexander.

We can go, Alex. All right. So, welcome everybody to this live stream to everyone that. is watching us on Rock Finn, Odyssey, Rumble, YouTube, and the durand.com. Welcome and a big thank you before we get started to our moderators. I'm not sure who is in the house moderating right now at the moment. Looks like I may be, I am by myself moderating. No worries.

No worries there. Let's jump into this because this is really big news. This is very, very important stuff. And Alex, I just want to let you know that me and Alexander are actually going to do a show on this about a week and a half ago, two weeks ago. We're going to talk about the bond markets and derivatives. And we were kind of discussing how to approach this. I'm not an expert in this field. Alexander is probably more of an expert.

but we were thinking what do we how are we going to approach this and how are we going to tackle this topic because we got the sense that this is big this is big stuff and not many people are paying attention to it and then we did a live stream together with with with you on your channel and we put together this show for everybody so alexander yeah Alex let's get into this topic let's talk about the financial collapse that seems to be coming our way. way, derivatives, bonds, ass oil. There's a lot to get into. So, Alexander, I pass it off to you.

Well, and thanks and briefly, and in fact, we're very fortunate because you're all together too kind when you say that I probably know more about this area than you do because, you know, this is a technical area. There are a lot of technical issues to understand. and this is not something which is within my comfort zone at all. I'm not an expert in this field. What I can say is this. If you go to the financial pages,

if you read the people who, in my experience, have been the most consistently reliable. And I'm talking not about people who are financial journalists, but about people who are economics journalists. who are looking at the overall situation in the world economy. This is what they're worried about. This is what they're talking about. They're saying that we're heading towards another big financial crisis.

They say that the crisis in the bond markets is being underestimated. They're making comments about how it came about, the fact that there's been these years of quantitative easing that made governments lazy and complacent and made them feel that they could spend money easily, which could be raised through these mechanisms, that we're seeing, in effect, a period of time, we're coming into a period of time,

when government spending programs are not going to be as easy as they were, that governments are going to find it much more difficult to raise money by borrowing, or indeed by QE and other elaborate money printing mechanisms that has been the case in the past, and that this is going to have a deep, long impact on the state of the world and above all the Western economies. And there's also lots of comments.

Again, I'm talking about various journalists, Larry Elliott, Jeremy Warner, Ambrose Evans, Bridgetard, many others, people in the financial times, all those sort of places. They're also saying that one of the major concerns at the moment is the United States, that the United States appears to have been growing up rather faster than some of the European economies, that this can be overstated, but that this has been driven by very, very high deficit spending in the United States. The United States is apparently expected to run a deficit at 8.7% of GDP this year, which is extraordinarily high, and that this is unsustainable, and is perhaps one of the reasons why we're seeing problems in the bond markets, the government

bond markets, and it's unsustainable, and it's going to end in tears. Now, that is what these economists are saying, but economists are not the same as people who understand bond markets. People who actually work in the financial world are different. And we are very lucky. We are very fortunate today in that we have somebody with us who does understand and work with these things. So first, Alex, tell us, is this as serious as people are saying and should we be worried? Well, thank you, Alexander, and thank you, Alex, for having me on the program. I really appreciate you giving me this time. Normally, we're deeply into geopolitical conversations, and I know this might be a little bit different of a live stream for us three.

But, yeah, we're setting up for a super crash. This is not going to be, you know, one or two day blowoff where the market rebounds and we move on with our lives. This one is very systemic. It's going to be deep. It's going to be very hurtful to a lot of people, not only in the banking industry, but people that own assets. And I'll try to explain it to the audience here. You know, just that word derivatives and bond markets, the average person just kind of fades away. They don't really want to pay much attention.

They just say, well, I'll leave that to my financial advisor or I'll leave that to the banks. And, you know, I started to get into this market back in early 2000, around 2001 after I was living in Monaco for about four or five years at that time. And I met up with a Swiss guy who is now Europe's largest independent derivatives trader, hands down, number one. No disputing it. And he kind of took me under his wing here and he said, listen, I'm going to I'm going to show you. a world that you don't even think is possible in the financial markets. And I said, hey, you know, I've traded the markets. I know I'm buying and selling, shorting stocks.

And he says, no, no, no, no, no. We're not even close. And after about three or four months of training with him, I started to see a really small group of traders kind of communicate with each other. And we figured it out pretty much in Europe that there was at this time only about 50 of us trading these really complex instruments. And I kept asking the question, why? Why is there only 50 of us trading these instruments? And they say, well, do you understand who the counterparty is?

And I'm going to back up and I'm going to make this fairly easy for people to understand what I'm getting at. So let's just, instead of using the words derivatives, let's use the word. insurance, buying and selling insurance, okay? So if a bank basically says, all right, we want to buy some insurance maybe on the S&P market, and that's the United States largest market by, 500 companies by market cap, Dow Jones is 30, 30 companies. We're 50. I can't remember.

I think the DAX is 30. Anyway, pardon me on that. So if we're looking at insurance or derivatives, for a better word, but. But insurance policies, you can buy insurance on mortgage bank securities. Sound familiar. Yes, 2008 financial crisis. All right. So that's an easy one to identify, to give an understanding to the people watching how serious this can be.

So most banks out there, they are required to buy this product, insurance policies. Now, you might be thinking, well, why does the bank need to, you know, buy these policies? policies. And I'll give you an example. If a bank wants to borrow, let's say, $10, 20, maybe $30 billion from, you know, the European Central Bank or the Fed, they can borrow it. Now, we hear these things about stress tests on banks. Will it pass the stress test? Will it pass that inspection? And basically, the bank has to say, well, we have security for these assets. And what they do is if I was a banker today. The same thing would happen. I would bring in 10 billion and I would either, A, throw it into the markets. Remember, they were given this money away a few years ago for

next to nothing, basically zero. In fact, the Eurobor in Europe went into a negative rate. Basically, banks take this money. We need to jumpstart these economies, throw in the liquidity. And this was into the tens of billions and potentially even trillions when you add up how much money was borrowed. So the banks would, of course, take this cash. Now, Bernanke and the boys, they would go around, you know, draggy in the boys and say, listen, we're going to do a test on your bank. Be ready. So all they would do to basically protect these, we'll call it deposits or risks that they were taking. Bankers are either taking risks on mortgages or risks on the stock market or risks on the natural gas market. They would buy insurance policies.

or derivatives. And I started to figure it out that it was guys like me that were selling these banks when I was trading. It was me selling these banks insurance. Now, I'm one guy out of, you know, a group of 40. And then we could see, we could see who the counterparties is on the trades. On the back end of these, we'll call it the, I guess that we call it option chain. Okay. I'm just thinking many things when I'm trying to explain this easily to the audience.

So an option chain is you can see, you know, who's buying and who's selling these insurance policies. And I said, wow, there's a lot of market volume in these things. And the first example I can give you is people would like, banks would like insurance policies on the S&P. And they would say, okay, if the S&P drops 10%, I want to be insured in the next calendar month. So they would buy, they would either buy it weekly or monthly or annually. And for a bank to protect an S&P, a $225,000 position, they would have to spend about $300. That's it.

Nothing. Okay. Now, we would think, okay, well, the market's not going to fall off 10%. That's the first thing that comes to mind. But then as the volume gets bigger, we start to identify there's a problem. And I'll give you one example, and we'll try. to then move on to an easier way to show you where this is going to end, which is not good. It's really not good here.

So back in February 2018, I believe it was the 5th of February 2018, the market had a problem in the S&P market. It was flooded with sell orders. No one could identify what was going on. And within the, I believe it was 18 seconds, there is approximately a market value of just under $420 billion in derivatives just vanished. And the counter parties, the insurance parties, they couldn't buy these. You are obligated to buy, you know, the actual market, you know, the S&P, if it was just trading at 3345, you've got to look at that as $3,3,345 per individual unit, time 100 multiplier, times blah, blah, blah, blah, blah.

Bloody expensive. So basically somebody that would maybe get $15 to $1,800, we'll call it, when you're selling these, you get what it's kind of, I don't want to be too complicated, guys. you're given a premium, just like you would sell an insurance policy. So basically what happened on February 5, 2018, a tsunami hit. And it came and it wiped out the market. So at that time, I was on the other side of that trade. Thank God.

If I was on the opposite side, insuring the market, I would have probably had a margin call of anywhere from $60 to $100 million to $125 million. on that position. Wouldn't have been able to handle that, no matter how good a traders we can be. Now, the counterparties, the people that got caught with that, basically banks went under. And this is what happened in the 2008,

when the credit default swaps, mortgages were being shipped to other banks. And it's amazing that still to this day, when you take a mortgage from someone and you sell it as a security or you sell it to another bank, that goes on the bank's books as an asset, even though there's a debt owed. It's absolutely crazy.

So fast forward to where we are now, just to give you an example, the worldwide market is $105 trillion. That's the total global economy. In derivatives, I did a little bit more digging today. the updated figure approximately is $617 trillion in derivative instruments as we speak on this market. So how is this going to unwind? It's going to get very complex and very interesting.

When you have a figure that big, that means that someone is banking on everything is going to be fine. And that is not just the case. We've seen it many times over. Now, I think what piqued our interest here on one of our last calls together was the natural gas. Now, natural gas, we have to ask ourselves in this geopolitical time, why is natural gas trading so low? It's crazy. It's trading at just over, you know, three spot zero one handle is what I'm looking at live right now. That is, to me, that basically means everything is fine.

There's no geopolitical issues. The flow of natural gas is fine in the world. There's plentiful. Even if it's going to be a dark, cold winter, everybody's great. Well, I decided to get into the trading platform and have a look. And I can tell you now that there's a big problem here. And the big problem here is the bets that were put on these derivatives or this insurance is basically saying, and I don't want to get into too many details to give away my own position.

But let's just say if the natural gas gets over 350 to 380, this is going to be catastrophic. And we are talking tens of trillions of dollars of losses that I have absolutely no idea where they're going to find those funds from. Because it's not like where you can just pump cash into the market, save the banking industry, save the real estate industry, save the money flow. There's not enough money in the system to cover that shortfall. And when you don't pay gas suppliers, they do one thing and they shut off the gas. And just to enlighten your audience a little bit more, the ones that are protected the most in this market are the Russians. Heavily, heavily, heavily protected. They are professionals in this market.

They know exactly how to trade natural gas, oil, these components. They know it to the T. and their counterparties are every American and pretty much European bank. The European banks are the most exposed in this. And this position, I guarantee it. I'm not going to say 99%. We are going to run into an issue here in the next 90 days. If natural gas peaks its head over four, four and a quarter, 450, look out below

because there's not enough to protect it. Basically, Alexander and Alex is the market has promised the Europeans that they can buy it at spot 3 and 2.7 throughout the season. Anytime that thing goes up, you know, 10 cents, 15, 20 cents, we're talking, you know, billions of dollars. And they're not ready for it. And there's no protection for them. It's already been forward sold.

Is this something that somebody has created? I mean, when I say that, is there an intention behind these things? I mean, was the structure modeled intentionally in this way? Or is that something that has evolved over time, you know, organically, where the market being given signals and moving in a particular direction? I mean, I just ask that because obviously gas, you mentioned gas, and that is an incredibly sensitive political topic, especially in Europe, especially in every single European country where I speak.

You're a good question. The Russians knew about this last year. These traders, they know exactly what's going on. I would guarantee as soon as that pipeline was exploded, these boys were heavily in the market. Now I did go back and do some research on it. And there is a lot of contracts that were written. And, you know, some of the European traders might have thought that they sold this insurance and were smug about it.

But there are a lot of really, really worried trading desks going on here in Europe because it's not going to take long to move this. Now, you said, is this a coordinated effort? why not the Americans did it with the you know the petro dollar back with the Saudis they intentionally ramped up oil four times a barrel back in the in the 70s the Russians know they know and they're there using these financial instruments on the American market so this is a big um f you to the Americans when it comes to natural gas they're not going to be able to handle this It's not from what I'm seeing on the back end of our trading. So this is only one part of the problem, though, because we're talking about natural gas,

but from what I can understand, the same sort of problems reproduce themselves in every other basic area. Where do bonds? Where do government bonds fit into this? Because this is the thing that everybody's talking about at the moment. Now, that may be wrong, by the way. It may be because it's often the way. I can remember where there were stresses. I remember back in 2006, 2007.

People were talking about stresses in the financial system at that time. But nobody actually was talking about mortgages. In fact, I remember sitting a paper in about 2005-2006, and I was being told that all of these new mortgages that were being created, all these mortgage instruments at that time made the mortgage market absolutely stable.

There weren't any conceivable problems at all. And by the way, I only just passed that exam because I couldn't make any sense of it. I didn't see how these instruments could do what they were saying they could do. But anyway, that's another story. But, I mean, is this the problem? Is this a bigger problem right across the system?

And where do bronze fit in? Sure. You know, regarding bonds, I mean, normally we'll see the government go in there and just print, bail, write money against it, buy them, throw them on the books and just kind of forget about them. But let's talk mortgages here. So if we look back over the last 10 years until the last 13 or 14 consecutive rate increases here, we're basically seeing most of the market here. was like sheep. They basically said, okay, listen, all right, you're coming out of school. No problem.

Visa master card are waiting for you. And this is, you know, some of the, I'm going to use the American and Canadian business model here to how to trap your average person into debt for life. University student comes out, maybe $100, $125,000 in debt. Throw a visa master's card at them, no problem. infrastructure is not ready for you to take a bus or a subway home safe so you're going to get into a depreciating asset which is a car the average person in america goes through 10 cars in their lifetime so uh they say statistically wise you lose anywhere from 250 to 400,000 dollars in vehicle depreciations in your livelihood once you step into that normally you would say okay

I'm happy with a two or three or four percent mortgage well that was the case at one point And that is not the case now. Almost 60% of these five-year-term mortgages are going to be out for renewal next year. And they ain't going to be the average $1,200 or $1,800 payment. They're going to be $25, $32 or $3,800 a month payment. And this is where it goes wrong real quick. These payments won't be able to be made by the average person. So there's two alternatives for the average person in the world.

And this is where I'm trying to say is that unless this, you know, this banking system becomes a little bit more transparent with people, a little bit more honest about what's going on instead of us derivatives traders know exactly what's going on. Derivatives traders know what's going on before the actual stock market does. We can forecast it just by seeing what contracts are written. But what worries me the most, Alexander, is when these mortgages get reset, you're going to have the average person. that maybe is 35, 40 going in there, thinking that maybe they're going to retire at 55 or 60, and the bad news will come in and they'll say, right, unfortunately, you can't make payments now, but we have some good news for you. The good news is we're going to add an extra decade or 15 years on to that mortgage payment

at 7 and a quarter or 8%. So we're going to lend the money back to you, but you're going to have to pay another 100% back and see you at retirement at 67. it. That's the reality that's before us. Yeah, it's quite unfortunate. Gosh. You talked about, are you talked about a major financial crisis. Now, how is this going to happen? I mean, you know, what, what, what, what, how is this going to work itself through? I mean, is there any sort of sense within the markets that's about, about how this is going to play out? Well, you have to protect yourself. That's one thing. There are.

some financial instruments that you can use to do that. There's something called the volatility index. It's called the VIX. You can ask your, you know, this isn't financial advice, but I would say ask your financial advisor, what is the volatility index? That's basically the fear index for the markets. So if you're a stock player,

you can use components like the symbol that is traded on the CBOE, Chicago Board of Exchange, V-I-X. that's the volatility index. You can buy a little bit of that to hedge your positions. But that's just the stock positions. Mortgages, this is a tricky one. Got some bad news. I mean, if you're in a mortgage now in 18 months, unless a miracle is going to happen here,

I don't see the Americans trying to lower interest rates quickly and within speed. They're on the other way around. Basically, I want to be clear, you know, I don't want to be the barren of bad news to people. I don't want to be Dr. Doom in this. But this financial system has really been screwed up here in the last 15 years here. And it's going to hurt a lot of people. You're going to hear a lot of stories. And we're already starting to hear it of people that mortgages are reset.

They don't know how they're going to make that payment. and either A, the person's going to have to adjust to a different standard of living or sell up, sell out, get out, and find another part of the world that you can live in. Now, I think what's going to trigger this sell-off is the FX swap debt. Now, currently right now, there's about $80 trillion missing. Google it. It's there. You can see the stories. I'll just read you a little bit about it. Its main warning concern that is described as the FX swap debt blindspot that risks leaving policymakers in a fog. FX swap markets were, for example, a Dutch pension fund or Japanese insured borers dollars and lands euro or yen before later repaying them have a history of problems.

Well, currently right now, there's $80 trillion missing in that index right. now that FX and no one really wants to address the elephant in your room but here's the other crazy thing is against that 80 trillion is voila derivative contracts written against those as well so it's only going to take one catalyst to shake this market up and I've you know I've talked to Peter Schiff he's been on my program a couple of times and you know Peter thought was last year, thought it possibly could be this year, but as I see these interest rates continue to rise, these derivative components are written on everything, derivatives insurance will call it. They're written on shares. They're written on natural gas, of course, they're written on mortgages.

They're written on indexes of, you know, the Euro, Eurostocks 50, the Dax, the Futsi. You got to remember, these markets have shown some warning signs. I'm not sure if you gentlemen remember when oil went negative. I'm not sure if you remember those times. Absolutely. Well, very well. So when oil goes negative, that should show you that there's a massive issue here. So we're going to see a slingshot to the other side here.

And this is going to be catastrophic. Now, who are the ones that are going to get hit hard? It's going to be the American financial markets first. You got to remember, February of 2020 to March of 2020 during the pandemic, the S&P lost 42% of its value during that pandemic. And yeah, it's come back, but it's come back with a lot of help from the Fed. So, yeah, that's my kind of awakening moment to the audience. And I think that, you know, there's other things that are going to trigger it. I would say we're watching it on our screens right now, the geopolitical side of this.

And that is what's going to speed it up even faster. And these Middle East guys, I mean, they are very, very good at these derivatives markets. Do not underestimate that they know very well how to hedge this position. So I'm more concerned for European countries like Germany, France, that may stress the banking system there. United States, Canada, the collective west, all these, the five-eye countries, these are countries that are heavily, heavily leveraged. And most people's wealth in these countries are in real estate and the stock portfolio. And you'll, you'll chat to the average person and they'll say, you know, I got four or

500k in shares. I've got, you know, my house. And you'll say, well, you know, is your house paid? Well, I got a mortgage. And you'll say, well, would you buy your house for? 500, but I think it's worth 1.2. Well, that 1.2 could easily go to 200 grand like that. And that's where I'm really thinking we're on the way.

And I think it's geopolitics that are going to push it. This recent event that's happened here is going to make things very interesting over the next couple of weeks. I agree. We'll come to that in a moment. One question I do, I want to ask is simply this. Do governments understand this? I mean, do you get the sense that people in the United States government,

in the European governments and the European Central Bank, the Federal Reserve, or do they understand how difficult the situation is becoming? These are the same people that have walked us into a housing crisis. These are the same people that have, you know, going to, to walk us into, you know, a derivatives crisis that is, is going to be catastrophic. This is, this is going to be the, the biggest, you know, super crash we've seen. Are they aware of it? I would say the smartest people in the room probably are, but they're keeping their

mouth shut, you know, because this would cause panic if everyone understood what's, what's really going on here. These positions I see when I'm trading and with the small consortium of traders that I've worked with, you know, there's 40 of them. Alarm bells are going off everywhere. And of course, as a trader, you want to take advantage of that trade. I'm positioned. I'm ready for it. I have already started to see it move, you know, as I was giving Alex a couple of snapshots over the last couple of weeks.

I started to see movement in the national game. natural gas market. And it's not just about natural gas. This is about every component that you can imagine in the world. You know, Peter Schiff, the gold bug, as we call them sometimes, he just might be 100% accurate on this one, where he tells you to go out and buy some gold because it's going to get interesting. It certainly is.

Let's talk about the geopolitics of this, because we now have multiple crises. We have this long-running crisis with the Russians, which entirely self-created, in my opinion, completely avoidable. But we are there, and that's, I suspect, already put big strains. If you're as close to the news in Germany and indeed in Britain, where I live, as I am, you will know that there are absolute stresses here. And people are already struggling with payments.

And by the way, and just to add, the government is struggling with payments as well. I know that the revenue people, the tax people, have become much more aggressive in their revenue collection efforts over the last year or so. And that's the case in Britain. And that is a clear sign that the government is government funding, is under stress and that the government has just basically passed down an instruction. We need you to collect and bring in money as fast as you possibly can. So there are lots of signs of that here. So that has partly been created by this conflict with Russia.

We've got this simmering colossal crisis, which you've talked about often on your programs about China, because that is the big geopolitical fault line in the world at the moment and there doesn't seem to be any real stopping of this. On the contrary, I've been reading articles about how we must now make up with the Russians. This is in the foreign affairs

so that we can come after the Chinese and there's places in foreign affairs where they're not talking about this. Very strange articles, by the way. But now we've had this massive crisis in the Middle East, which looks incredibly dangerous and incredibly intractable. So all of these crises are in some kind of a way connected with each other. I mean, that's always the way that it is.

And geopolitical crises, as we know in Europe, can affect the economy. They can disrupt supply chains, as we've seen with the Ukraine crisis. they can lead to all kinds of unexpected items because what you've been describing is a world of derivatives, but it's always struck me that what people don't understand about derivatives is that at the end of the day, if you follow the line through to its conclusion, there are always real actual concrete goods that are traded, that move backwards and forwards to the system.

And if that really starts to break down, then everything else gradually follows from that. Am I wrong in this? Well, you know, I saw a comment earlier where someone said that I'm not smarter than the Fed, the Chinese Central Bank, the EC Bank of Japan. I'm going to tell you, and I'm going to be bold on this one.

In this case, when I'm seeing these contracts written over the last 20 years, I know that something's going on in the derivatives market. I've picked it up about four months ago. I've written contracts 18 to 24 months into the future against this. These contracts are already paying massive returns, and we haven't even got started. So when you're talking about systemic issues, when we're talking about the geopolitical issues, of course this is going to play a major factor. Let's look at the Chinese banking system for a moment here.

Sure, they do some transactions through Swift. And just so of the viewers, that's the Society for Worldwide Interbank Financial Telecommunications. You'll see it when you're sending somebody money. Do you want to send it by Swift? No problem. The Chinese have really changed their tune on that. And most banks that you go into here in China are using SIPs. this is the cross-border interbank payment system.

They've pretty much scaled back swift payments out of a country of $1.5 billion. And most, and I just was told this recently by another branch is time to shut down your U.S. Denominated bank account with our branch and go to RMB. I'm not going to name the branch. I'm not going to name the bank. but that's the type of vocabulary used over here. So when you're seeing that from even a commercial banking side, and that is very transparent to customers that, hey, wait a minute,

let's get rid of these dollars. Let's shut down this trading of U.S. currency. Let's take a step back from the Swift banking system. and that just shows that China is focusing its financial to kind of cut off from this. The other thing that's interesting is that a lot of these branches, for example, the Bank of China is one of the fastest growing branch operators in Russia. And in most of these other countries like Kazakhstan are the stands in general. So we're seeing the Belt and Road go much deeper than just infrastructure products. It's, you know, the Chinese are trying to tell these other countries, get ready.

You know, the big bad wolf that has been ripping your country off for years, whether it's America coming in there or, you know, threatening your country. As we know, America's bombed 36 countries since World War II. Regime change. That's why the petrodollary. and the Saudis are stuck in that situation. But as these smaller countries, most of the African ones I'm going to focus on now,

are now saying, wait a minute, we don't want to take money from the IMF anymore. We don't want to take money from the World Bank anymore. Enough of this nonsense. And China is even saying, well, look, guys, you know, we're only spending some of our reserves

to help you with the infrastructure. We're not indebting you guys. These are just our reserves. Okay, if you don't pay it, you don't pay it. You should pay it. But they're teaching these other countries to start to work with, you know, their own banking systems, the credit unions that used to build the Canada and the UK, the old style of banking. And they're saying, we want these countries to be independent when it comes to lending,

to have, you know, branch managers, loans officers that really understand who's borrowing the money and how they're borrowing money. And when you start to see that type of talk happen here, especially in the last year or two, the Chinese are understanding that there's going to be a major financial crisis and they are doing everything they can to cut off from it, whether it's financial markets, derivatives markets, banking markets, currency, you name it. And it's going to get very, very interesting. And I don't think, I don't think the average person is ready for it. But it's going to be hard hitting.

Can I just say, having had ample experience of contacts with people from the Bank of England, Just say, I think I would rate your intellectual and understanding of these events far higher than any of those about other central banks. I've not had the same context. But, you know, when I look at the European Central Bank and who's running it, well, I can't believe that things are much better there either. I'm not going to talk about the Fed. I'm not going to talk about the Bank of Japan. So the Chinese sense that there's something going wrong. And of course, they are the world's biggest trading country.

They are the people who have the contacts in more places than anywhere else. They're the people who presumably are most heavily involved in ensuring trade. And they will have the best economics intelligence, because where trade flows go, that's where the intelligence comes. And they're also, I believe, I am right in saying, the biggest shippers. I mean, I think they have the biggest. And I did work once long ago on the margins of the shipping worlds. And I can tell you one thing about the shipping world.

The amount of intelligence you get, just information that you get, if you work in the shipping industry, is huge. And countries that are involved in shipping get a huge amount of simple, raw intelligence about economics, about geopolitical events, very fast through the fact that their ships have to trade and move around and do things. That used to be an asset that the British had, and of course they no longer do. So the Chinese are taking all those precautions. They've probably tipped off the Russians, I'm guessing, because if the Russians are doing exactly

the same from what you tell us, they've managed to protect their positions in the energy markets. So if there is a crash, where does that leave China, Russia, these other places? will they be okay? Or will it be focused on the West or will it become systemic and global? Yeah, you know, that word crash. I'm throwing super in front of it, Alexander, because crashes, it's politely, a polite word for it.

I mean, you know, I'm going to go back a little bit here. You know, AIG had a lot of speculation, Bering's Bank, 1995, took one guy to bring down Bering's Bank in 95. Then we had the Enron fiasco with derivatives. We had LTCM 98, Bear Stearns collapse, all these types of collapsing. Now, if we're going to talk about China, I saw one of your guests was mentioning. They wanted me to talk about the Chinese real estate market here. Yeah, of course, the Chinese real estate market is going through a rather difficult time.

Lending is available for people that want to buy into the market. But it's more of the developers that are really taking. the brunt of this. And I think in a good way, if the government and these companies can't sit down and figure, okay, how big is this problem? Is it a 10, 20, 50, 80, 100 billion dollar problem? The Chinese can write checks to support that. Now, home buying here is a lot different than home buying in the United States. It's a sport here. It's, you know, you buy one home, two homes, three homes. We also got to remember when we're mentioning Russia, these are countries that don't have a lot of,

I would say, population that takes out major loans. For example, I'll just use the Baltics, for example, prior to their economy is really getting, let's say, complicated when the European Union came in and the ECB, and then they brought in the Euro. God help some of these countries. But I would say, give an example, the Baltic countries,

over 92% of Baltics owned their own home. When the Soviet Union collapsed or disbanded, whatever terminology you want to use of that, most of these people were given, we'll call it a coupon or a document that says, okay, you're a policeman or baker or a banker during these times. This is what you are allowed to get.

You can, and that's why you see a lot of these people in the Baltics, they have summer homes. I mean, this was Eastern Europe. You know, my wife was from there, and I said, hang, how do you guys have two homes, summer home? And what, I thought things were, you know, pretty difficult. And they said, well, they were, but, you know, having that home was your right back then.

And so most of these countries that don't have high mortgage, mortgages are going to be okay. But we're on the opposite side of that now when we're bringing up the Western countries, where some of these have 90 to 93% of the homes under mortgages. So all it is is, I would say, to be honest with the audience, the financial people that are running these markets, they're just looking for a new way to basically, screw us. And this is it. This is it. It's very clear what's going on here. And I think,

you know, the derivatives market, there's not much backing up here. I mean, the S&P, you know, everyone talks about the stock markets. The S&P is only $40 trillion. Derivative market, $600 trillion. So, I mean, yeah, we're in trouble. How we're going to get out of it. Massive crash, massive loss of wealth. you know, the big boys, the billionaires, they're going to be able to probably handle this in a way where they benefit from it. So it's kind of a repeat, yeah.

I mean, just to finish from my part, I mean, we talked about the geopolitics driving this thing, but the geopolitical consequences of it are going to be absolutely colossal. We have a super crash in the West and the Chinese and the Russians, to a certain extent, are able to sort of cut themselves off from it. Well, the shift in the global balance is going to be enormous. It's going to be something, it's going to be an event.

The only comparison I can come up with would be with this sort of collapse. of the Qing, the Chinese dynasty, in the late 18th, early 19th century, where it went to be the world's biggest economy by far. And it just imploded. And you saw the West rise and fill the vacuum in its place. It's going to be a colossal event. And of course, in the 19th century,

that had big geopolitical consequences. But it's going to have even bigger geopolitical consequences. this time. And we are not really prepared for it at all, so it seems to me. At least in the way. You know, Alex, you mentioned, you know, Russia and China. I mean, Russia has pretty much been cut off by the American banking system. And that might be a blessing in disguise here when you think about it. From a geopolitical angle here, okay, so they cut us off the banking, they cut us off credit cards. They cut us off from the markets here. They can still trade derivatives. And at the end, most of these countries or companies have exited Russia in general.

You know, this recent event here that's happened here over the weekend here, this is going to disrupt a lot of, a lot of money in the system. it's going to sit back and really you got to analyze who the players in this region are and how much control they have on the worldwide oil market. And let's look at Russia in general here. Then you can bring in the other countries in the Middle East to, you know, you have to understand why is it that most of these countries are analyzing the situation and away from, okay, we have geopolitical tensions,

but how are we going to maintain these oil markets? One disruption in any oil pipe coming out of the Middle East is going to be catastrophic. We're just not ready for it. We can't rely on the Europeans pumping the oil into the market. You can buy expensive natural gas coming over in tankers from the United States. But, you know, I think that just this geopolitical issue in regards to the financial markets

is going to cause more attention. And more people are going to take to the streets. We've seen them do that this week. You'll probably see the French do it first. There are always the ones that get out there and do it loud and proud first. And, yeah, I think it's 1930s all over again. Yeah. Right.

Well, I think this is the... I'm rather terrifying now. This is what I'm going to stop. I'm going to ask Alex if he wants to add anything and maybe there's some questions. Well, we'll get to some questions. I don't know. You have time, Alex? Absolutely.

Let's fire away. I know a lot of people want to hear me say, okay, you know, there's a rainbow at the end of this. But I really think that the people that were vulnerable a few years ago are actually almost bulletproof now. And these are the countries that have said, wait, man, you know, we're, can our economies survive without the United States? Can we, you know, stop trading in U.S. dollars? You know, it's happening before our eyes.

And I think if the, the only way we're going to get to a very happy, smooth, soft landing out of this is if China really comes in and everybody starts to say, wait a minute, can we trade, can we trade the, the RMB, can we get out of a, you know, financial system that has been screwing people for years. But yeah, I'm ready for some questions. Let's rock. All right. Let's see here.

Tool FATSH says, any chance of a Stux net like virus to take care of this, like a computer virus, take care of this. I see no one wants to fix the issue from the folks that actually can do something about it. I think an easy, fast solution is. in the midst, including a new 9-11. That's pretty deep, man. And I know where the guy's going with that. I mean, when you, many years ago, I think you guys might have heard that there was an issue.

They blamed it on a guy in London, I believe, where they said he was manipulating flash crash of May. I don't know if you remember that. Like hell, one guy in his bedroom brought down the financial market. And we saw the entire index in the United States, the flash crash, they called it, basically dropped, I think it was 15 to 1,800 Dow points in the matter of 11 minutes, wiping out hundreds of billions of dollars. I wouldn't rule it out. Sabotage in the market, blame it on some guy. I wouldn't rule it out. Could happen.

BFTE wise wise says when you say mortgage reset, are you? you referring to flexible mortgage rates locked for three to five years or so or all types of mortgages, including 20 to 30 years? So the average person, there's not many countries that you can get a 20 to 30 year mortgage. They will lock you in. They'll say, well, we'll lock, you know, prime plus three or prime plus two, prime lending. But the average person, the average individual out there that is buying a mortgage has been pretty much given a pretty easy ride from 2008 to 2000 and 2021.

And then the shock to the system happens where that mortgage goes from 2 to 8%. Now, when I say reset, that means that most people that have to renegotiate or extend another five years term onto that mortgage, they're locking it in. They'll, you know, when they get the mortgage, they say, okay, five years, let's lock in for that price. After five years, you come back. it might be lower, you can pocket more money. It's not this time.

And they're going to be in for a big surprise here. Within the next 12 to 18 months, some people are going to get a shock what their mortgage payment's going to be. At Ag says, currently in the U.S., the average consumer is hitting their credit limit, close to 40% of those in delinquency report. They have used their credit card for groceries

and now moving into default, 18-month default reports point to December for 2023 as a steep decline. And starting this month, 40 million Americans resuming average $400 student loan payment will suck $16 billion a month out of economic circulation. This while corporations are reporting collapsing demand in most sectors. Yeah, window dressing. And whoever sent that message has really done their homework on this, because that's just one example of what's going to add to this, you know, this mega shock to the market here. And it's interesting that people are educating themselves in this and they can see that just even reading it in the local financial newspapers.

But yeah, wow, these are great questions. At GAG says the U.S. commercial real estate market is looking at over $7 trillion in debt turnover in the next 16 months, all of which was entered at zero percent, it must now be refinanced at over 5%. This will create a commercial vacancy is increasing monthly. This itself is yet another aspect of the impending polycrisis. Exactly right. And there's a lot of empty towers out there.

There are a lot of empty towers. No matter what city center you go in or CBD that you go in, There's floors and floors and floors of empty commercial real estate. I think you're seeing that even in European countries. I think some of your videos that you've walked around, Alex, you've seen that there's some commercial real estate that are just ghost buildings. Ghost buildings, exactly. Let's see here.

Tool F-A-T-H says, Alex, Alexander, and Alex, What is Black Rock and their ilk doing about this? Black Rock. Well, Black Rock is in the derivatives market massive. Okay. Now, these boys probably trade anywhere from 10 to 20% book value of the S&P market. These guys run the financial markets and these guys run the media too. Some of their biggest investments are news agencies and investing in,

weapons. So yeah, I think a good, it would be good to attend a annual general meeting of Black Rock or watch it online to see who they're going to hurt because they make a killing on killing. And they, that's, that's their business plan. And when it comes to the financial markets, these boys are probably putting down some pretty heavy bets. They got some serious trading rooms in, in New York, these guys are for sure. Will they hurt the market? Like I said, they're looking for new ways to screw people. So I think the commercial real estate market is going to be one where you're going to see some of these builders that were told, okay, we're coming out of the pandemic, start building, building, building. They probably lent to them.

And through a offshore company, they might be one of the first bidders when that company goes to the wall and buys it for 10 cents on the dollar. You know, Alexander, you know this. We've seen this many a times where. A lot of these companies think that they've got an ally that is standing behind them, but that ally that has funded him or finance them know that, okay, they borrow this money, they go to the wall, we can buy them for 10 cents on the dollar. That's exactly much. Yeah.

I've seen that happen many times. I mean, I used to be an insolvency lawyer, amongst other things. And I've seen how that has worked out. And I've seen also how, you know, certain institutions. make the you know that is their business model that is what they do liliana says thanks alex r for such important info and lessons on the economy and i am happy to not own anything no mortgage no bonds good good good um i think um there's one there i'm looking at uh if you bring it up i think there's an interesting one i think it's 40 percent of

the U.S. stock market, that one? Yeah. Then we bring it up. Okay, so this is, I was, I was waiting for this one here. Alex, you can read it if you want. I can. Yeah, let me read it. 40% of the U.S. stock markets are zombie corporations, only being able to survive

because they have been able to roll debt over, not much longer. So what David is talking about, and he's right on this, the S&P market that has, you 500 of the top companies by market capitalization in the United States are actually worth nothing. They're worth nothing. If you take the amount of money that they borrow during the pandemic, look at the balance sheet of Boeing. How much is Boeing worth? How much did Boeing that grounded planes for over two years and was still building planes on payrolls for two years? years, they borrowed tens of billions of dollars, actually more at one point of what their

market cap is worth. So if you take the debt against the market cap, is what he's alluding to, is these companies are zombies. They're worth nothing. And the American stock market is where a lot of people, at least $21 trillion of wealth is locked into. And can you imagine that, that $8 trillion to $9 trillion of that is worth nothing. That's pretty scary. Nicholas Walker says, as a young person about to get on the property market, should I jump off a tower or a poster in the bathtub?

I mean, it's interesting. In this day and age, if people have this ability to work from home or have a talent where they can work remotely, there's many countries out there that really have low tax systems for them that they can handle. Instead of jumping into a huge mortgage of $7,000, $900,000 million, a million a half per house, you might be able to move to a country that you can buy a house, build it, and not have to take on so much debt.

This is a different world in what it was 10 or 15 years ago. Now things are much different. You can get satellite anywhere thanks to Elon Musk. It doesn't matter where you are out in the bush or whatever. Instead of taking all that debt on in the property market, you got to remember a lot of people do speculate on the property market too. So if this is a home that you're going to buy and live in for the next 20 to 30 years, okay.

And if you can handle these mortgage rates, then, you know, go for it. But I would, if you have that flexibility to work remotely, shop around, see what else is out there. summer of 1970 how does the fact that there are 400 million firearms in the hands of people in the US factor into all the doom and gloom? Interesting question. Alexander, I want to pass this one over here. Come on, please. Potentially, it could factor in after all.

Was it the purpose of it, you know, that spreading guns across the population, which the founder's idea of keeping the government, under some kind of check, I suppose. I mean, if there is a massive financial crash, if there's a super crash that Alex is talking about, then of course we have a potential for violence in many places. It's probably there in the United States. Probably these guns could be used in that way. But don't underestimate the potential for violence in other places as well,

including in Europe. And the fact that we don't have widespread gun ownership here is perhaps something which makes us more complacent about something like that, that kind of possibility, than we should be. If there's a collapse in, there's a social collapse, if there's a political collapse and a social collapse, which, you know, big economic events can bring about,

then violence is certainly possible, and if people need guns, they will find them. That is the iron law of insurrection. Racy says Western media overplayed this Kuwait incubator hoax for justifying Israel's revenge attacks against Gaza. Well, I think we can agree. Yeah. All cars of stories get spread at these times. We should be, I mean, we've said this on our programs. We should be quadruply careful about not be swathing.

swept along by some of the stories that spread. That doesn't mean that there aren't real, very violent atrocities taking place. Let's see here. B.G.N., thank you for that. As a Shane, thank you and keep up the great work. Ryan says, will the crisis be felt equally here in the U.S. or will certain states be better off than others? It's hard to know how to prepare.

Yeah, it's going to be felt in the U.S. the hardest. Always is. they always get the brunt of it. They want to be top dogs. They're going to be top dogs on, you know, a super crash. And there's really no way the average person is going to come out of this unscathed. I mean, let's look at how these countries operated when there was a world pandemic. That will show you how fast they can react and how unprepared they can be.

and when the global financial system shuts down on them, it's going to be very, very tricky because the average person doesn't have savings. And when you don't have savings, what are you going to do? You're going to be running out of options real quick. And yeah, we may watch some of these crazy videos of these preppers, but there is some reality to this. And there is some truth to this because if this global,

global financial system again collapses. And trust me, I don't want it to. You know, and I see a way out of it. The only way I see out of it is, is if, you know, China steps up there and really helps a lot of these countries prepare for the blowback. And I'm more concerned for, you know, U.S., yes, of course, and European countries. We saw people last year, bars and pubs, even hotels closing down. in Poland because they couldn't handle the electric bills. And that's what I'm saying is if this natural gas issue gets out of hand and we can see it already getting out of hand, the Russians will make a lot of money on this.

China is well protected because they are now one of the largest net buyer of that. smaller countries in South America, Central America, you know, when you have major oil exporters down there, they should be okay. But once again, it's we saw this world unravel in 2008. And again, we saw the collapse of the financial market here in 2020, one here with the S&P. This is very real. And how do we get through it? Will there be homelessness? Of course.

But will the governments really care about that? Probably not. They haven't today. So why would they care? J.J.HW says, can Alex R talk about the knockout clauses in OTC derivative contracts? You know, it's interesting we bring out the knockout clause. Similar to we would use a mechanism in the financial markets, kind of like a stopgap. that just you're not going to see that it's masked by many other okay I'll give it to you guys the easiest way I can say is

these insurance policies have been backed up by other insurance policies which are backed up by other insurance policies so that's why we're getting up to the 600 trillion dollars in derivatives worldwide and when you start to see that kind of insurance followed by and more insurance insurance insurance there's no way of saving it. Once it goes, it goes. There's not enough money in the world to save it. Even printed. There's not enough money in the world to get through the size of this.

So I don't think there's a soft landing for it for sure. Right. Budge says Bitcoin is the escape hatch. Hmm. You know, I'm not a big cryptocurrency trader. but when things get crazy in this world I'm open ears about this. My ears are open.

Elsa says it has become difficult to get credit from a German bank. Individuals can't buy property companies can't produce because of bad profits, 2022. We're going to see more stories like this. It's going to continue. And I want to give, you know, some positive signs of this. But, you know, let's go back to the geopolitics here, guys. This is America.

You guys know this the best. You know, this is how I got really to follow what's going on in most of the areas here, geopolitical-wise. Listening to you guys, you clearly understand that, you know, this is much deeper. for the nations just having a beef with each other. This is going to get really crazy here. If countries start to get involved in the latest events from a military aspect, I mean, how bad could it get?

I'm going to kind of put that question onto one of you guys to answer is how bad could the Middle East get here in the next three months and how fast? Well, incredibly fast, and things can get out of control incredibly fast. And where this is going, I don't think anybody knows. I mean, I really don't think anybody knows where this is going. And that's what makes it so frightening. And when we have that kind of a situation, then, of course, secondary consequences, which might indeed become primary consequences, become much more real,

much more possible. they might, you can perhaps start to see situations where, for example, oil supplies begin to become disruptive. Because nobody knows. Nobody, when doesn't get the sense that anybody really has a plan or an idea for the way forward. What about the huge credit derivatives exposure? It's huge. And it's, it's, and it is exposed. You know, there's no other way to say that. The credit derivatives is what got us all in trouble in 2008.

Like I said, they've repackaged it, and it's a new way to screw people. And it's back. And it's much bigger than what it was in 2008. 2008 is nothing. You can go to some of these cities still in North America and just see blocks and blocks and blocks of empty homes that have never, ever had a hammer into putting a new piece of plywood in there since, you know, the, the gentleman who were building those houses walked away from it. It's, it's massive.

We spoke about that already on this program, that the global derivatives market is over $600 trillion. There's not enough money in the world to, you could be printing until the end of time, and you still won't have enough money to cover the size of it. Yeah. Jamila says, thank you for the amazing work. Where is the missing money? Who paid? Who paid this missing money? And who is supporting the West? If I wonder, you guys or your guest knows. A lot of this is hidden money in T-bills. Now, if we are to trust the United States of America, who first got the world. on to trading the U.S. dollar backed by gold and then fast forward to revoke that and take us off the gold standard and then told us, well, Saudi Arabia, let's get you in the petro dollar and 80% of the profits that you're making from the petro dollar.

You have to reinvest them back into T-bills or bonds into the U.S. economy. Now, that's a lot of money. And for that, the Americans said, well, we won't regime change your country. So where is all this missing money going?

The usual spots. Offshore bank accounts. You know, sitting in the islands of the Bahamas, the Bermuda, Turks and Caicos. The Panama Papers, if you're ever up for reading

Jamila ever up for reading some information. Just Google the Panama Papers and enjoy an evening of the global financial disappearing money because that's where it's sitting right now, ready to be spent. Yeah. I think before you type says, I remember cash per gold ads during the 2008 recession. I expect more of them during the upcoming recession depression. It's a way to confiscate precious metal in return for worthless paper. That's interesting. I mean, this is what Peter Schiff has always been saying on, I'm not sure if he's been on your guys' program. Yeah, well, he's been, he's done one show with us, with Glenn Dyson and myself. He's adamant on gold. We are seeing some manipulation going on in the gold markets right now. It's trading strange.

I went in to check the derivative positions on that. I didn't see anything unusual yet, but it wouldn't surprise me with the instability going on here in the Middle East, that, you know, that market's going to, that market's going to get very active. Yeah. Arrow says the IMF technocratic Basel III Accords are a huge problem, little relationship to the real banking world and how finance information can be manipulated. Basel 3 distorts the market. Absolutely. it's like sending in the principal to mark students papers but he gives everybody the same mark the IMF is not going to hurt or damage the reputation of a bank that it lends money to so business as usual

yeah think before you type says gold land or livestock which is best to invest not financial advice interesting that's interesting I think a little bit of each jungle jingle says how will this affect the shadow economy as in the Cayman Islands accounts etc have those people prepared

accordingly I think you will find that those people are perhaps the best prepared of all judging by the kind of people who open up those kinds of accounts as I've myself encountered in the I think, you know, as Alexander says, all they're going to have to do is just pull up the more and float the $150 million yacht and just set sea for a while until things blow over.

Yeah. There's a reason why they all own islands. David Mart says in the spring of this year, the Bank of Canada kept interest lower than the USA in order to renew a huge tranche of mortgages. where I lost it. Mortgage is at a lower rate. They are preparing. Canada has joined SOFR for a reason. Yeah, this is once again another issue where we talked about, you know, the mortgage resets. We're going to see this guys, and it's going to come fast, and it's going to be 12 to 18 months. You're going to hear stories, whether it's the neighbors, whether it's relatives, they're going to tell you. How do I make this payment? And one of the options is the banks are going to come there and they're going to say lock in for,

five or lock in for 10. You know, seven, eight, nine percent interest rates. Don't worry. You only have to retire 10 years later. And when they lock them in, lo and behold, they may start in with QE and reversing those rates right back down to zero. But by then, the damage is done and everybody's locked. Paul Walker says this could be by design to make way for digital currencies. Good point.

Yeah, good point. Interesting. Yeah, interesting. Yeah. What about Australia? Jungle June. What's going on there? You know, I don't really focus too much on Australia. But, you know, as we say, you know, if Asia sneezes, the rest of the world catches a cold. So they'll be exposed as well. They had a tough time in 2008. So yeah. Good to have a governmental crisis there. They had a referendum which didn't go at all well. And I suspect it was not because of the topic so much,

but because of the fact that there is general discontent and unhappiness about the general state of things in Australia. Leftless says neocons constant play on emotions to justify war we're not caring about babies, women, children in the US, everything they touch turns to. That, dot, dot, dot. let's see uh basil where are we basil bashobe she says nixon gold link to the dollar severed was replaced by plastic that's right i mean uh his announcement that we will temporarily remember this you can you can see

this when he talked about it uh just open up youtube later tonight if you want to see his speech about, you know, pulling the dollar off, the gold back of the currency. We're going to temporary suspended. I'm not sure if you guys were aware that the French were getting a bit nervous about their gold deposits. And they ended up bringing two destroyer ships, to naval ships to the east coast of the United States to pick up their gold reserves. The American says, well, yeah, we don't mind you buying these gold reserves for U.S. US dollars. But we're going to hold the gold in the vaults in the Federal Bank in the Federal Reserve Bank

and in the in New York. And no, they ended up bringing two big ships from France to come pick up the gold with captains and take it back. Yeah, that's where trust was broken. And that's when France wasn't part of NATO. So they didn't feel threatened by, you know, the U.S. and having troops on the ground. So that's a different ballgame today now, though, for sure.

fragments of the USSR. What is the reason behind the ruble dropping? Is it being done on purpose? If so, why's why? We get this question a lot. Yeah. And you guys want to,

I've got some speculation. Maybe Alexander. You talk to them any times. Tell us your thoughts. You know, I don't really think it's a bad thing to have the ruble drop. Now, to the average person,

they might think, well, you know, we need a strong currency, we need this. If you're traveling, if you're buying outside, you know, equities or, you know, some assets in other countries, I understand that. But if you're exporting to the world, whether it's selling a lot of cars or, let's say, whatever, you know, trees, whatever, you know, Russia is, is good at making, then it's not so bad because you can play the game where you can, you know, hold that currency until it turns the other way. You guys' thoughts on that? I mean, what do you?

I think that's exactly. I, my own view, that's exactly what it is. And I suspect that a lot of the original weakening of the ruble that took place in the summer was, in fact, deliberately intended. I think the Russian central bank and the Russian. I've said this many times that the Russian central bank of the Russian government, they were running a very, by their standards, high spending program. The deficit, the budget deficit was getting a bit big, not by American standards, but by Russian standards. So how do you cover the

deficit? You lower the ruble. You get higher earnings. The deficit falls. The deficit is now going to be apparently less than 1% of GDP this year. That is a direct result, firstly, of the rise in energy prices, but also at the fall of the ruble. So this isn't, this isn't the first time, by the way, that the Russians have done this thing. Now, there are other factors at play. There was a big economic surge in Russia, mid-year, bigger than the government itself had expected. That sucked in imports. That caused ruble to fall. But I think this is going to become a historic problem. And I think the reason it's going to become a historic problem is that now that Russia is no longer linked to the Western economies in the way that it used to be,

we're going to see a situation where the Russian ruble becomes like the Chinese R&B and the Indian rupee and other country currencies like that, a much more tightly controlled currency than it has been in the past. You can see that the government is gradually sneakily now. Step by step, it's building up a system of capital controls and eventually we're going to get a system very similar to the fact of the one that we see in China. And all countries within the new brick system trading. with each other through that system, through the Bricks Bank and all of that. The whole point about making the ruble freely convertible was because the idea was back in the mid-2000s when it basically happened, was that you traded with the West.

And you wanted people to come in from the West and take money out and be able to put more in and all that kind of thing. Now that isn't the case anymore. Why continue with that system? which didn't work out well for you. So I think this is going to be a historic issue. And very quickly, by the way. I want to add something. Alex, when you were in Moscow, you were mentioning that you're seeing a lot of Chinese cars

on the streets there. Today, I was with a lot of staff from RT here in China. Or, pardon me, yes, in China. And the first thing they said to me was, oh, we're starting to identify some of these cars on the streets in in Russia as like, which car? Oh, that car driving by there. That's a Neo brand or that's, and they were naming all these brands. And they said, yeah, these cars are showing up.

It's for us Russians, we can spend a little, spend a lot. We're given many options. And this, when you're starting to see how fast that market is being replaced, which normally could have been North American cars or other countries. This is amazing. We are seeing some very big shifts in the financial system and as well geopolitics, geopolitical-wise. I mean, when you're starting to see entire countries switch who they buy automobiles from, probably refrigerators, you know, computers, I mean, even restaurants, I mean,

it must have been quite the experience. I was also with Carl's another friend of mine. He lives in the U.S. He said he went to Moscow and it was just like business as usual. Some Chinese brands on the street there, some restaurants renamed, but they're ready to go. The impact is already, they've already had that impact and they've moved on. It's extraordinary when you think about it. Yeah.

Germany blew it. Can I just say Putin? They really, really messed up. Putin, no less of person, has. spoken about Chinese cars today. And he gave an interview to Chinese television, I think it was. And I could just quote his words. He says, in all sincerely, not knowing that we were going to have an interview with the Chinese today, I talked yesterday to some people who could well be called car enthusiasts with great and long experience. They told me, you know, Chinese cars are

certainly in our market, not simply because others are becoming fewer. This is not the only reason. It is because the quality is improving and is high. The quality of Chinese cars is getting better. So our own consumers, particularly in terms of the quality to price ratio, are happily turning towards products of Chinese manufacturers. And that was said today by the man himself. Road Thunder says, so what do what to do when comes to the UK mortgage renewal? Because now they offer 10 years locked term, which I think is a bad idea. Any thoughts? Well, I think one thing to say is that prices of houses in Britain over the last 10 years have gone so high

and have become so far out of reach of people. that in some respects, in a kind of strange way, that is actually reduced to some extent the mortgage problem in Britain, because young people just can't afford mortgages. They can't afford the mortgages to buy the houses. So the result is, to the extent that they're able to get onto the property ladder at all, what they're having to do, what has been happening increasingly, is that they've been going to their parents and borrowing from them instead.

when the parents have the money to offer them help to buy houses. It's an astonishing situation. And the result is that I believe that the number of houses in Britain, which are mortgaged, is at a relative low at the moment of around 30%. That doesn't mean we're protected. It means we're in a very bad way, but in a different sort of way. For those people who have mortgages, what is coming, and there's still a lot of them, what is coming is going to be grizzly. It is going to be absolutely hellish.

And of course, what it's going to do to our banking system, which is heavily based on mortgage lending, mortgage lending to residential and commercial buildings. I just don't even want to try and imagine. I don't think the government, I don't think the Bank of England, there's any idea of how to respond to the problem that's on its way. I heard an interesting comment the other day, is it five-year, 10-year, or do they have a plan in the bank called Mortgage for Life? And that was a sound bit that will resonate in my head for a while here

because I think you'll see, Most people just move into their parents' basement or just to stay at home till 30 or 40. Well, and I mean, we're starting to see increasingly a sort of political radicalization amongst young people, which is, and there's even some talk in Britain now of intergenerational conflict. By the way, on a completely different topic, talking about empty buildings, once not, you know, another time. I used to work very close to the city. In fact, can I just say the actual city, city of Westminster boundary passed through the room

in which I had my office, my desk. So if I went from one part of my desk, I was in the city, if I went from the other part of my desk, I was in Westminster. And I had lots and lots of contacts in the city. I used to go there quite often, and I used to do some work for many people in the city at that time. This is, you know, a long time ago.

But I was there about, a couple of months ago. I went to the city for the first time in a long time, and I was astonished. I was appalled at how quiet it's become. I mean, you know,

this is a place which used to really bus, and it used to be a community, and, you know, people used to come out and pile into the pubs when they, you know, it used to close at 4.30, and they used to start very early, and it was all, anyway,

it was a kind of world. I mean, it had its odd features, but it was a community of people. And that was part of it. I mean, it was the fact that people met, spoke, exchanged ideas, met in pubs, grumbled. It was part of the way the city functioned. Now, I understand that a lot of people, since the lockdowns now work from home, and that's part of the reason for this. But I have to also say that you see all these.

buildings in the city now. Apparently, Canary Wharf, which is a kind of, you know, other part of the city that isn't in the city. Apparently they can't rent offices there any longer. So that's in financial problems. And this, you know, was the great financial centre. It's like, it's like a, it's becoming almost like a ghost town today. And I was really disturbed. and shocked by it. And, well, I didn't expect it. Doc Holliday says, do you agree that Joe Biden is strong?

The other world leaders shake in their shoes at the thought of his wrath. Surely Mount Rushmore awaits him. Thank you for that. With the flood of information, online broadcast TV at all, what's the best way to determine truth from AI or something? staged. I don't think it's actually very difficult in truth. I don't think it's particularly difficult. I mean, just be skeptical about everything you hear and then eventually you will get

to the truth. Sooner or later, you will find out who's telling you truth and who isn't. If you take that approach, especially be careful of what governments tell you, absolutely but we're seeing a lot of information here over the last few days wild wild stuff going on yeah uh fiat money printer goes burr yeah sophisticated caveman says a basic pillar of geopolitical economics is transfer of essential resources will commodities always be king banking and stocks is just bookkeeping they're not just bookkeeping I mean, I mean, there's a core of reality, obviously, in what you say. But banking is in a sense where it all begins,

if you're talking about the development of modern economics. And this, and not just banking, but all of the things that happen with it. I mean, people assume, for example, the derivatives are a new thing. They're not. They go back very, very far. And, you know, this is what happened in the early modern period, in Europe, you started to see banking institutions created then, and that raised capital, made it possible to raise capital, and capital was invested and used, and that was how modern

economics developed. So, yes, it's all about exchange and production of goods and services, but it isn't just bookkeeping. Yeah. Pepper Waxes, thanks, very interesting. Thank you for that. I think before you type, how soon will CBDCs be linked to with RFID chips?

CBDCs. It's coming, maybe. Hero Bird says Basil 3, example of distorting the markets. Capital requirements for mortgage is only 35%. Hence a huge exposure to mortgages. Australian banks balance sheets are 60 to 65% mortgage asset. You know, it's interesting.

You see that one point there where it says capital requirements for mortgages is only 35% in fact that can be lowered depending on you know the lending facilities i know haven't been back to canada in a long time but let's say you wanted to get a down payment for a home there used to need 15 20% down payment but then they would send you over to another bank and said no problem we can finance the down payment for you so in fact uh they would throw in a furniture package on that and you're pretty much 110% intent. So there's a lot of interesting ways of everyone getting their piece of the pie. It's just we're in a state of musical chairs right now.

And it's worrying, very worrying for me. Yeah, I think before you type says, thanks guys. Keep up the great work as always. Trevelling Gale says, is Gaza crisis a plan to land ground? this valuable see from real estate by the usual suspects? I don't believe that. I mean, I know there's a lot of people who think this, but I don't believe that.

I think that this was something that was coming for a long, long time, which had lots of different causes, which all came together in this event. Now, of course, it is not impossible that what you've described may be how it's, it results. That might be the consequence of it. But I don't think that was the intention behind it. Jeff says, hope this isn't my final super chat. Thanks for your informed show. Thank you, Jeff. Let's see. Harry Smith says the Australian referendum was just a condescending

empty gesture. Plus, they wouldn't reveal the details till afterwards. I'm a lefty, but that's why I voted no. Thank you for that insight. It was an interesting comment I heard yesterday. We are blindfolded, but our opponent is not. That's a good saying. John Roberts says, I've heard the U.S. government will adapt,

yield curve control to erase its debt, meaning the Fed will fix a tubial interest rate, but still print money, inflation. Bondholders eat the loss. Is this true? There is some truth to that, I believe. But, you know, when we're back into the printing money thing. I mean, the Fed has got their targets on getting inflation under control.

How many more times are they going to shock this market with interest rates? Are they going to bring it up to 10%, 12%, 14% by that, it's game over? So really it's they're out of options. They're out of options. They have and this is for all the marbles now. So this is going to be very interesting. out of road. Yeah, they're running out of road. Yeah, that's a good point. With the U.S. confused and distracted, it is the perfect time for the U.S. enemies to strike. If they don't, that means all U.S. defense spending is for nothing and that the CIA, etc. are parasites. Thank you for that. Super Chat. Do you, will Armenia ban the mere card? What's the U.S. endgame in Armenia?

Well, we'll see. I mean, if they do that, then, of course, it's a disaster for that. Remember the Russians, it's a big country, they can live without Armenia. But if you know the geography, it's not easy for Armenian. Bear in mind, far more Armenians live in Russia than live in Armenia. And one of the reasons the Armenian economy functions is because those Armenians who live in Russia send remittances there. So you ban the Mirkart. How does that continue? Yeah, I think before you.

Type says, mortgage is defined as mort equals death gauge equals pledge. So in a way, it's a kind of life contract, specifically when looking at a 30-year contract. It's insane. Yeah, it's mortgage for life. You know, there was something I wanted to bring up to the show that I just remembered. I think it's very important to tell the audience, anybody that has a stock portfolio that they have at a bank or a financial institution. if you ticked the box where you allowed the financial institution to trade against your securities, they're making a lot of money selling against the positions that you have.

For example, Microsoft or let's say Apple, if you have it in your portfolio, there's traders that are saying, no, we have a long position on this. So let's sell a position guaranteeing that it won't drop to X dollars. and they get these premiums. I had a friend in North America questioned the bank about that, and he had quite a sizable portfolio, and he went into the bank,

and he asked them, he says, are you trading against my position? And they said, well, yes, we're allowed to, but we are also allowed to do that, but we will pay you a small, you know, user fee, they called it at the time.

And what happened is, it was a staggering amount of money weekly what they were selling these derivatives and options against this position. So he decided, well, I would like to sell those positions against my portfolio and keep the premium. And 10 days later, they asked him to move his account. And we're seeing that happen as well. I spoke about derivatives here. I'm not sure you guys are aware of this, but the average American is not allowed to sell derivatives on their own market. Yet Europeans or people that have accounts that, whether it's Swiss banks or whatever, we can sell against those markets.

They use it, well, margin issues, you don't have enough risk, the volatility, and they make up all these excuses. most banks in North America, I would say over 99% will not allow you to trade these types of derivatives. You have to be very in the know to which bank to go to, how to open up the accounts and understand it. Most banks will ask you to take a small exam before you write these positions against it. And yeah, it's kind of like the big boys get to play and they're not inviting anyone else. in. So yeah, it's not well advertised. You're not going to walk into a bank and they're going to say, hey, do you want to open up an option account or a derivatives account?

It's there. They have to, but they won't advertise it. Yeah. Seas Big Pharma and M.I.C. Vanguard Black Rock for war crimes, says Stan. These are interesting comments to read today. Man. Wow. Savina says, what's coming is going to be worse than the big depression, The lack of vision for the Western politicians towards the economy and the constant warmong green will destroy the West. Summer of 1970 says 70 trillion in assets are being passed onto airs by the boom by the boomers in the U.S. implications.

Well, I'm almost certain that 70 trillion, if that number is right, is going to be taxed heavily. Let's see here. When is Alexei coming to Australia for a walk and talk? I'm going to be coming to quite a few more countries, actually, so keep on the lookout. Might see me walking around somewhere. Let's see. Jeffrey, thank you for that super sticker. John Roberts says, thank you for the answer. Love the Duran.

Keep up the great work. George, thank you for that super sticker. Jungle Jingle says Free Gonzalo, Lira, and Julian Assange. Anna Karasian says, Israel has a cloak of the Holocaust to victimize and oppressed as well as attacking not only the Palestinian people, but in the entire region of the wider Middle East. And Matlis X says, what affected Russia manipulated debt have on the credit default swap market? That's not a question I can answer. Okay, so.

Yeah, to my understanding, what affects Russia's manipulated default have on the credit default swap market? So my understanding here, Matlis, is you're saying. that, you know, Russia actually was manipulating these markets and speeding up the process of credit default swaps in the market. Now, would they do that? What effects could they have on that? If I'm, I'm going to fast forward to Martin Day right now, they are heavily involved in this, market, the derivatives market now, especially in the natural gas.

If they are going to use this word manipulate, I'm going to call it they are calculating. They're not manipulating. They're calculating that these prices are going to skyrocket. They're already hedged. Now, the Americans might say, well, they've manipulated this market after the damage is done. Like I said, there are huge positions, 25% higher positions, especially in the oil and natural gas market and in some of these refinery stocks are are starting to get interesting. So I hope that answers your question.

I think that's the best way I can interpret it. All right. Let's see. Tool FATH says there's a complete collapse in the cabin marked in Norway. This was postponed due to the coup where up the middle class people chose to buy a cabin since they cannot go on vacation outside Norway. This market is now in free fall. And with rising mortgage percentages,

this will cause a fall in the pricing of one to three-year-old cabins. I also think the percent will not stop until 15 percent, like back in the 90s. They cannot say this due to the panic, but 12 to 50 percent of the mortgages will come in my opinion. Interesting. And two left. Yeah. Elon Musk has a really interesting take on this living off the grid.

If you see what he's been doing here in the last few years here, of course, with his satellites in the sky for internet. He's also come up with the, you know, a battery that can power homes for an extended period of time and water filtration systems. He's quite clever. He said that the average person will be able to live out. side of a city limits so they won't be taxed in a city limits and be able to live off grid and fully function

their homes. I mean, kind of an interesting way of thinking when you think about it. I think it's quite brilliant. Very. Tool FATH says for diapers and coffee. That gag says is it too conspiratorial to see a plan to use zero interest rate

policy to get banks to buy U.S. Treasuries, then raise rates and thus distress all those banks so that during a crash, the biggest banks can consolidate all those failed state and regional banks and they're collateral. Never attribute to malice what you can to do stupidity and greed, but this looks too perfect. I've heard that. I've heard that. I've heard that. I have to say, and again, this is, I mean, I'm not, I'm not familiar with financial people in the United States, I am in Britain to some extent.

And I think this is too clever for them. I have to say that. I think that they never look quite that far ahead. I mean, you know, if you have some, you know, wizard person in the Bank of England and committees, you know, in the Bank of England, bring together all the big people that I've never met or heard about, then perhaps that kind of thinking does exist. And perhaps in the United States it does.

but those people I've met in the financial world and I met some pretty senior people in the financial world including from the bank of England they don't seem to me to be able to think that far that's all I can say in response to a question like that Sevi Ferry says hi thanks for the great program at this time would you rather buy a house in Dubai or in Europe I'm going to pass that to you guys

I haven't been to Dubai, so I'm not going to say that. I have the sea there is very good, but it gets, apparently very whole. If you ask me, it would be off the grid following Elon Musk's plan and just sitting outside in a low-taxable country just to wait this one out. Geopolitics and analysis says, any words of support for Andrew Tate? Also, can you invite him on X? he is a fan of Alex and Alex will you make the move reportify are you in the war room quite a lot of different questions would we invite him on X

yes I'm quite sure about that because we do and Alex are you in the war room I'm not sure I don't mean is that I don't know

I mean I'm in a hotel outside of the Great Wall in Beijing, if that helps. Thank you. Thank you for that question. Matless X says, I was saying that the West manipulated the default. Russia was able and willing to pay bondholders. It was technically force majeure, not default. Yes.

I agree. I would agree with that, yes. I definitely would agree. What they were trying to do last year, what you're referring to is what they were trying to do last year. I think it was force measure. And I have to just say this. I mean, I don't think it was seen around the world as a default. I mean, you don't hear people talk about Russia having defaulted on its debts. So, you know, Putin is said to be coming to China. He's coming to China perhaps within the next couple of days. He's coming as the leader of a solvent

country. I think that is how the Chinese perceive him as a country that pays its debts. So I don't think it was seen as Russia defaulted. Savina says, if you were in the place of Ursula Vanda crazy, what would be your policy

towards healing the energy crisis in the EU, Alex? How would you deal with the energy crisis in the EU? This is loaded as they can be this one here. I mean, I would buy, I would buy a lot of derivatives if I was Ursula right now because she is going to get one hell of a bill here in the next, you know, 30 to 60 days. One cold snap, this thing goes up 10, 15%. It's long gone from there.

You can see these stories all over the internet of some of these firms going under. And I know I continue to go banging on about this natural gas. But yeah, when you take a major pipeline out of the German economy, which is one of the largest economies in Europe, you're going to get smoked. And it's coming. It's coming. There's no doubt about it. I thought we'd be here. I thought we'd be here last year.

But maybe they had enough built up. But no. They had enough stored. They had enough stored in the mild winter. Yeah. Yeah. Tool FATH says James Colbert often has programs with people who work on making their own systems of trade, often anarchists. Philosophies behind it and those values are pretty close to the trail that Jesus, the Whitmaster, walked.

By the way, I bet Jesus would be surfing eBay right now looking for batches of sturdy whips. Money changers are awfully fat and happy these days. Got to go, folks. In 1960s, 2 plus 3 seat couch is awaiting in the local U.S. Door 50. bucks just put in it out there. This is from locals, by the way. Thank you for that. And let's do a couple of more, and we will wrap this live stream up.

Anon Kalerisian says Israel has all but become Nazi Germany and the very actions and tactics they use against the Palestinians. And TQCX says, what does international law say about Assange being repatriated to Australia for the guns? government is pressed on the issue. Well, that's actually an excellent question, because I think international law was engaged when he was granted asylum to Ecuador. And the UN agencies of the time, the relevant UN agencies, said that Britain was breaching international

law, because as a refugee, because that's what he became when he was granted asylum by Ecuador. Britain was under a legal duty to assist in his repatriation to Ecuador. But of course, as we know, the British did what they, I mean, they just disregarded that and they ridiculed the decision of the UN agencies. And I mean, they just ignored international law. War Room, by the way, Alex is Steve Baddance podcast to the War Room. I just saw it in this right now. And as far as inviting him on X, sure. I mean, we don't stream on X, but yeah, we would invite Andrew on X. He would accept the invitation, but maybe Rumble better, but I think he has a much picture of the following that we do on Rumble.

I don't know. We're very, very small. But we're growing. We grow. We love Rumble. Thank you to everyone that's watching us on Rumble. Thank you to everyone that's watching us on Rockfin and Odyssey and the durand. dot locals.com and on

YouTube. Thank you to our moderators. Alias is in the house. Valies, I hope you are doing well. Peter is also with us, as is Zarael, and who else? And those are our moderators

for today. Basayaga says Israel is not Nazi Germany. The push for a global Islamic state is closer to Hitler. We are all in danger, even in the West. That is the final super chat. And a big thanks to Alex at Reportify.

Alex, thank you very much. I will have all of Alex's information down below in the description box. Actually, it's already in the description box. I will have it as a pinned comment once this live stream wraps up. Alex, Alexander, any final thoughts before we sign off? I think it's most enlightening, rather frightening program, if I have to say. It's always better. It's always better to be aware of things

and to know what's coming than not. If you can see a storm coming, then you can prepare for it. If you don't see it, that's when it really becomes difficult. And my own view is that nobody really foresaw the storm that we're seeing in the Middle East. And you can see that everybody's trying desperately

to come up with some kind of way through. and that's the worst situation to be in. Anyway, I have learned a lot today. Can I just say that? I've learned an awful lot today, which I didn't know. I missed one. Sorry, guys. Yes, right before Alex, before Alex, you give us your final thoughts.

I missed one question from Rumble. I just didn't see it. It's from Snarky Guy. Russia launched their CBDC this summer, yet no one covered it. Why not? And have there been any implications effects to this? either domestically or internationally. Right.

Have you heard about Russia's CBDC? I do think they've launched it. I think it was a pilot program. This is what I've understood about it. I think that, in fact, the Russians are slowly, are behind the Americans and the Chinese on this. So I just wanted to say this. Obviously, people aren't talking about it as much

because obviously the ruble, to be straightforward about this is a small, it's a tiny player. I mean, you know, we're not talking about a currency with the global weight of the dollar or of the RMB. But yes, I think they launched a pilot program. I think it's, I think the plan is to actually launch it properly in 2025. I think that's when it will probably properly speak income. Everyone's going to launch a CBDC. Absolutely, yeah. Everyone.

Putin should ask for a Sajek's tradition. And Luke Balmer is a fan of the Duran. Can you invite? Also, Tate said, he waits for your phone call. When, Alex, any chance of Tristan Tate? Oh, yeah. Sure. We'll reach out and give him a call.

Alex. Thank you for that. Meister, thank you for those questions. Is Alex, any final thoughts? We'll sign off with your final thoughts. Yeah, I think this is going to be a big week here. You know, I'm based here in China. I think this meeting tomorrow, the Belt Road form is going to be huge.

You can see who China is lining up to be allies. It's going to be very important. And, you know, again, to say, once again, thank you to both you gentlemen. You've been very helpful also with my subscribers. They enjoy your show. And once again, it's very important to follow channels like yours, the Duran, Alexander McCurrus, and Alex Christopher. This is a daily event for me because this doesn't look like it's going to simmer down anytime soon here. In fact, things are going to, I feel, escalate here over the next few months.

And we need guys like you to continue to help us understand and dissect this troubling time we're in. But thank you anyway to the audience. I greatly appreciate your help. Thank you, Alex. Thank you, Alexander. Thank you to everyone that's tuned in. Have a great Monday. Take care.