The Duran Podcast - UK Cuts Infrastructure Spending to Fund Nukes; Germany's Railways Collapse

Episode Date: July 6, 2026

UK Cuts Infrastructure Spending to Fund Nukes; Germany's Railways Collapse

All right, Alexander, let's talk about what is happening in the UK, in the UK economy, and Stammer's final days as prime minister, where it appears that he is trying to get as much money to the military as possible. And I was listening to a speech from Kimmy Badenuk, the conservative leader. and she was complaining that Stommer is not giving enough to the military. They're playing this game. I mean, it's obvious that they're both on the same page and it's this good cop, bad cop. You know, Stommer, I'll give $10 billion or $11 billion, and Kemi comes along and says, it's not enough.

And so you have this little game that they're playing, but they're all working for the same team. Anyway, Stommer's trying to get more money to the military. And this is something that a pattern that we're seeing throughout Europe. your thoughts. Well, this is exactly right. I mean, we got another commitment to spend 15 billion pounds more on defence over four years. Now, the problem is, and we've discussed this in many programs now, Britain is very heavily taxed. Some would say, I would say overtaxed. It is in very acute debt, debt to GDP ratio is about 100%. There really isn't very much room to increase defense spending in the way that people

continuously and persistently demand. The only way to increase defense spending is either to borrow even more, which is of course what is happening in Germany, but then the Germans are are not yet at 100% jet to GDP ratio, as Britain is. So they have a little bit more space to borrow. The British don't. So how are you going to fund increases in defence spending? Well, Starmer obviously has decided to increase defence spending.

That was inevitable. The way he's done it is by cutting the infrastructure budget. So there'll be less spending on roads and on the energy system, which is upset many people. Who needs that stuff? Who needs that stuff? Exactly. So that is his proposal. Then, of course, what happens is you get all the people in the military.

The military is now demanding more and more money to be spent. Because as far as they're concerned, more is never enough. we have the entire political class from one end of it to the other demanding that even more money should be spent. Nobody explains how this money is going to be funded, what exactly is going to be cut in order to fund defence spending. You sometimes get the impression that some people think that the benefit budget can be cut. Well, probably it can, but then, of course, if you start cutting benefits for people, Social Security, that tends to be very unpopular. And which group within society? Whose social security are you going to take away to fund defence spending?

Bad an argument, people like that, never ask that question. And then, of course, the other thing that you quickly discover is that when you drill into Starmer's figures, yes, he is increasing the amount, the total amount that he is spending on defence, but the greater part of it is actually going to go on beefing up Britain's nuclear forces, which means that the conventional forces, the army, the Navy, the Air Force are actually going to get less. And the point is that spending money on the nuclear forces is very, very good for the big defense contractors, because that's where the big contracts are, the big amount of money is. But spending money on making drones and building tanks and shells and artillery

guns and all of that kind of thing. Nobody really wants to do that because there aren't big profits to be made in it. So what ultimately is going to happen is we're going to spend more on defense. We're going to see our infrastructure in Britain deteriorate, our roads and our energy system deteriorate. And we're going to get more in terms of our nuclear weapons capability in about 20 years when all of these investments eventually deliver something if they ever do. And in the meantime, our army, our Navy, our Air Force will continue to decline. So we spent more and we get less. Yeah, it sounds like a good scam that he has going on. It is. It is a perfect. I thought drones were the wonder weapon that's going to defeat Russia.

Well, there are a lot of people are talking about drones. But it's not big margins. not big margins, nowhere near big margins. And you see what is already happening is contractors who are being asked to build drones are coming forward and say, well, you know, we can make these drones better. So let's add a jet engine here. Let's add a radar there. Let's make them more and more sophisticated because, of course, that increases the profit margins and makes it worthwhile to build these things. So the result is that we are going to get more drones, but they're going to be very expensive and they're going to be very complicated and they're not going to be drones of the kind that many people are thinking about the simple cheap drones that we've seen be used in the war in Ukraine.

And that, by the way, I predict we're going to see the same pattern right across Western industry, the United States and Europe too, because ultimately it just isn't profitable for companies to make drones. of course, that you will get scammers. And I want to say this because already there's some evidence that some contracts in Britain are being picked up by people who you might describe as scammers, people who have no experience of weapons production, no experience indeed of any kind of production, but who are well connected. And probably, they're, They will make quite a lot of money out of this, but what way will deliver exactly?

Nobody can ever be quite sure. I have to be extremely careful what I say here, because obviously there are legal issues, just to say. But already this is being talked about, and I know it's been talked about privately, and we're going to see an awful lot of this happen. By the way, that is also going to happen across European industry too. You said Germany has more of more space, more of... Germany has more space and it has a bigger, of course, industrial base. And they can borrow. And they can borrow.

But even Germany is now running into problems. So we've had a major crisis a couple of about a week ago in the German railways, the German railways, which used to be, you know, one of the most efficient railway systems in Europe. They came to a complete grinding stop. The problems with signals. The entire railway system had to be shut down for two hours. It took many days for things to be sorted out. Anybody who uses German railways today, as I have had to do several times, will know that it is becoming practically a nightmare.

Infrastructure in Germany is also in decline. Friedrich Mertz, of course, when he became Chancellor, he announced that there would be a relaxation of the debt break in order to sort out these infrastructure problems. But what is really happening is that the big profits, of course, are being made in defence, which is where maths is really interested. So the funding on infrastructure isn't happening to anything like the scale that many people expected.

Germany continues to run up debts and it continues to find problems in increasing defence spending because even though it has a bigger industrial base, again, it's not geared and it's not structured for high volume production of weapons. No Western country today is geared for high production volumes of weapons. And we're starting to get problems. So there was this big plan put together by Rheinmetal to build. very big warships, bigger than the Ali Burke destroyers of the US Navy. The whole program proved beyond Reinmetel's ability to manage. That's my view.

The shipyards, which were mostly in the Netherlands, really couldn't cope with this program very well. It had to be cancelled, even though huge amounts of money have already been spent on it. They're now thinking of another new program to build smaller frigates to replace these big destroyers. I don't think we're going to see these frigates either. We saw the same thing happened in the United States. The United States was going to produce all kinds of very advanced frigates. Then they were going to produce cheaper frigates.

Then the frigates they got were more expensive. This is going to reproduce itself right across. the industrialized West, we really would require a major reorganization in our industrial system to be able to produce weapons in a cheap way. The Germans, the Americans might be able to do it. The Germans, in my opinion, cannot do it. The British don't not even try. I'll disagree with you on that one, Alexander. I don't think we need to to look at the military production and reorganize that. I think we need to look at the politicians and the political structure.

Oh, yeah. I mean, but I'm talking about. I'm joking, I'm joking, but I'm serious as well. I mean, you know, this is, it's a grift, man. I mean, what else can say. It's exactly what it is. I mean, spending more money on nuclear weapons in Britain, I mean, we sort of were short of those.

It's just going to make the lot. It's going to put money in the hands of people who already have it. In Germany, too, there's at least two programs now to make fifth generation fighters in Europe. The Russians, the Americans of the Chinese, already have fifth generation fighters. My guess is it's going to take at least a decade, probably two, before we see any kind of fighter jets appear in Europe, modern fighter jets. By that time, they'll already be obsolete. But, of course, in the meantime, lots and lots of people are going to make lots and lots of money. We're going to have all sorts of trade fairs.

We're going to have linkups of companies. We're going to have all sorts of stories about how this is great European collaboration on projects. We're going to have all kinds of projects on missiles, especially I suspect air defense missiles, because that's going to become the priority. Weapons are not going to come up out in quantities at the end, but the politicians will be happy and the people in business will be happy. And when I talk about business, not necessarily even the industrial companies, but the finance people who are the people who are putting up the loans for these things,

they get to do very well out of this. Because remember, all of these loans, even the loans that private companies take out to build these weapons, ultimately they are done on orders from governments. So the governments ultimately stand behind the loans. Yeah. And don't complain. Don't you dare complain because we've got to fight Russia. Of course. It's all about fighting Russia or Iran or North Korea or two.

China or North Korea, China, or any one of these countries. And, you know, we can talk about that and talk about that endlessly and silence anybody, scare anybody who says otherwise. But that's going to be the story. And it's going to be the story in Europe for at least the next 10 years. Whatever happens in Ukraine, we're going to see a major push for this. And of course, the other thing that's going to happen eventually is that U.S. Isula is going to say we need pooling. Germany's struggling to fund all of this by itself. So we need Eurobonds. And that means we need to tighten up and integrate our financial systems even further

because that's the only way that we can prepare properly to fight the Russians or the Chinese, or the North Koreans, all the Iranians or whoever else is coming after us. that's coming too. But in the meantime, infrastructure, real industrial activity, economic growth in Europe will stagnate, and Europe, which currently runs a current account surplus, at some point in the next 10 years, it's going to see that go into deficit. It's such an obvious wealth transfer that they're putting on, that they're imposing on everybody. It's as clear as day. Indeed, sir. I mean, can I just say something else?

Again, this comes from UBS. In another program, we talked about how over the last five years, there's been a big increase in wealth, actual wealth that people have in Russia. This is from UBS. We have identical, we have studies about what's from UBS as well,

about what's happening in Europe. Over the last, over the last five years, wealth, median wealth per adult in Britain has fallen by around 23% in the Netherlands by about 25% in Germany by about 14%. Europeans are getting poorer. This will continue. Some people, of course, will get very, very much richer. We know who.

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