The Duran Podcast - US Policy Slowing Down China's Economy w/ Jeffrey Sachs (Live)

Episode Date: August 25, 2023

US policy slowing down China's economy w/ Jeffrey Sachs (Live)

Okay, we are live. We have Alexander Mercuris joining us in London, and we have the one and only Mr. Professor Jeffrey Sachs joining us from the Center of Sustainable Development. That link is in the description box down below, as well as the link to Professor Sacks is a blog full of amazing articles. That link is in the description box. And I will also have that as a linked comment as well. When the live stream is over, Alexander, Mr. Sachs, what are we going to talk about today? We're going to talk about perhaps the single most important subject of all, which is the looming confrontation between China and the United States over economic policy and the attempts by the United States to basically contain China and to push back and to prevent the development of its economy. And who better than Professor Sachs to help us through all of that. not just because he's an economist, but also because he's been there.

He's seen it before. And I remember it to some extent from the 1980s. I remember a meeting at the Plaza Hotel in New York with the United States and Japan. Japan at that time, its economy was surging and all kinds of agreements were reached after relentless pressure imposed on Japan by the United States. and of course soon after Japan entered into its long period of economic stagnation, and some would even say decline. And we're seeing problems in the Chinese economy now, which have some resemblance to what we saw in Japan around that time.

We see similar patterns in US policy as compared to those with Japan in the 1980s. And by the way, I'm sorry to say this, lots of. of gloating articles, especially at least in the British media, about how China is now in decline, how its economy is going to fade, about how the challenge from China, which I think is greatly misunderstood anyway, is going to dwindle in the future. So Professor Sachs are China's economic problems like Japan's from the 1980s, and is the United States playing a role in bringing them about? Now, that's a huge question. Let's take it in part. Let's start perhaps with the United States and its role in these matters and its perspective on these policies.

It's amazing. It's not only in the UK media, if you look at the US press, the delight, loading over China's purported difficulties, fill the pages. And this recent issue of foreign affairs, which is the publication of the Council on Foreign Relations in New York, just across the park from where I am, and is the kind of center of the American establishment, is just filled with end of China stories. Of course, a few months ago was China about to take over everything stories. This is an elite that talks to itself in circles and with utter confusion, but also a lot of dissimulation. What's happening with China is, of course, complicated. It's by some measures the world's largest economy, by other measures, the second largest economy,

but it's big and it's complex, so many things are happening. But one of the things that definitely is happening is the United States is doing everything it can to try to derail the Chinese economy. It claims, of course, it isn't, but it is. And as you mentioned, we've been through this before. Of course, the whole Cold War non-military side of the U.S. vis-a-vis the Soviet Union was about economic and technological containment. That was the core organizing idea. And that playbook was used ironically against America's ally, Japan, in the 1980s. And it's a period I remember well because I started as a assistant professor in economics at Harvard in 1980.

And I went on my first visit to Japan in 1981. and I went with a wonderful colleague, Ezra Vogel, who had written a book, which was the Japanese bestseller of the time called Japan as number one. And Japan as number one was about this surge of Japanese manufacturing, Sony and Toyota and so forth. And it said Japan has developed a lot of remarkable process improvements just in time manufacturing and so forth. And it was now a dominant manufacturing power. And, of course, it was not only in consumer electronics, but increasingly in semiconductors and other cutting-edge technologies. And this was a celebratory mood of Japan in the 1980s. And one could watch, and I watched it close up how American policymakers, wait a minute, this is an ally that's supposed to be subservient to us.

us. Now it's taking our industry. And by the second half of the 1980s, all this American rhetoric and supposed ideology of the liberal order and so forth, of course, was turned on its head. We need to stop Japan. We need to stop Japan's economy, but we can't do it in just those terms. Japan's a bulwark of our power in East Asia. So we have to do it by agreement. And in the late 1980s, the agreement was Japan would stop exporting to the United States, even though it was hyper competitive vis-a-vis the United States. And the Plaza Agreement that you recall rightly was an agreement that Japan would massively overvalue its currency.

Kind of a remarkable idea. but the Japanese yen soared in value, but by design, this was a policy of the United States. The U.S. also imposed many export limits on Japan, and these were called voluntary, because Japan as being a part of the U.S. security system accepted them and said, we won't export to the United States, automobiles or semiconductors, and so forth. And by the end of the 1980s, Japanese growth had stopped. But it had stopped absolutely because the United States had stopped it. And Japan, in its way, had exceeded to that in public.

So the public rhetoric was, well, Japan's entering a recession. The behind the scenes, of course, was the United States had engineered the stop of Japan's relentless manufacturing success. And Japan went into a financial crisis because finance is based on extrapolation. So asset prices are based on extrapolating the rapid growth into the future. And when Japan's rapid growth into the future was no longer rapid, then asset prices collapsed. And in 1990, 1991, 1991, 1992, we had the so-called bursting of the Japanese bubble. And Japan went into a long and prolonged crisis. And the U.S. policymakers said, well, Japan's aggregate demand is down, meaning it wasn't selling exports anymore.

That was the U.S. policy. Japan should increase its consumption and stop bothering us, basically, with the exports. And I had a very interesting and distinct conversation with one of Japan's top economic policy makers in the mid-1990s, who was a friend and very senior, let's just say. And I said, why don't you weaken the currency? You know, your exports have completely stalled. you have a lack of growth. Japan's no longer competitive. And he looked at me and he said, Jeff, the U.S. won't let us do it.

Okay, this is clear. It's kind of obvious, but never said. What is said in the history books is Japan had a ballot sheet recession. Japan had a bursting of a bubble. But Japan faced geopolitics straight away. And because Japan was under the U.S. thumb, it never publicly complained. Recently, I was in Japan speaking with, again, one of Japan's most knowledgeable, very, very senior policy makers. And we were recounting this episode in agreement of interpretation.

And I said something about how in the economics profession, the so-called balance sheet recession view, that this was about finance and Japan's overextension and bubble had taken hold. And watching him roll his eyes at how ridiculous the normal account was, was extremely entertaining and very telling for me. So to bring us up to date, China is Japan. fine. In fact, that's a term that is being widely bandied about. Oh, China has a big debt crisis. China's no longer as competitive as it was. Big surprise. China is this. China's that all the weaknesses of the Chinese system. But what's happening in a very concerted way since around 2015

is the United States is doing everything it can to derail. China's economic growth. The same playbook. The big difference is China's not under the U.S. security thumb. Everything else is the same. So there isn't a plaza agreement where China agrees to a massive overvaluation of the Redmond B, but there was the Trump tariffs, unilateral, absolutely against world trade organization, precepts. But of course, WTO rules don't matter to the so-called rule-based order, which is whatever

the rules that the United States wants, is in fact what the rule-based order means. So the U.S. started this process of the old playbook, the Soviet containment playbook, the Japan containment playbook, now with China. And it's doing it through a mix of policies, not with Chinese agreement, but unilateral tariffs, other blockades on the markets, tax cuts and subsidies with the rules of origin for the U.S. side to say you can't produce in the U.S. or can't get the tax breaks unless it's U.S.-based, rules to stop China's inward investment into the U.S., rules to stop U.S. outward investment to China, and most tellingly now trying to break China's access to high technology. The rhetoric of all of this is, oh, we're not doing anything against China.

This is very narrow. this is a high wall on a small yard. To paraphrase Jake Sullivan, this is completely to play with fire by trying to stop China's growth. And now we see this year, China's overall growth has slowed tremendously. And the most telling,

factor, the single biggest factor is not all the things that are said about the debt markets and real estate. The biggest single factor is China's exports to the U.S. and to the European allies are way down this year because the barriers are going way up. And the barriers are the direct barriers, the warnings to U.S. companies. You better friend shore, you better reshore, You better move away from China in your supply chains. We don't want to see you dealing with China right now. And this is having an effect. What's completely fascinating, though, and this week was the mark of it, is China is not Japan.

China is not subservient to the United States. China is much bigger than the Japanese economy, both in absolute, terms and relative to the U.S. and arguably it's larger than the U.S. economy in absolute size or second to the U.S. economy. But it's got a lot of friends around the world that also don't want the U.S. hegemony in the global system. And that was the, I think, rather remarkable note of this week's Bricks Summit,

which you've been discussing at length. I think it was actually a rather remarkable summit. Not only are the existing five bricks countries, Brazil, Russia, India, China, and South Africa, already larger in size than the G7 when measured at international prices or purchasing power prices, but they added six more systemically consequential countries. And rather fascinating because Brazil took its biggest next door neighbor Argentina so that that really is solidifying the South American base of this anti-U.S. hegemonic response. They brought in very interestingly Egypt and Ethiopia, meaning that it's the northeast corner. of Africa and the Indian Ocean side. And these are two very, very interesting large countries with more than 110 million people each. And then the Gulf region, of course. And remarkably, China's absolutely stupendous diplomatic success, Iran and Saudi Arabia, as well as the

Emirates as the remaining three. So the bricks agreed to, expand by another 400 million people, another 5% or so of the world GDP. The BRICS countries in the expanded form will be significantly larger than the G7. And what was quite fascinating for me as a monetary economist is the amount of focus on really making a complete workaround from the U.S. dollar, because that's the real point that they're saying, given that the U.S. government very unwisely, self-defeatingly, completely armed and militarized the dollar in the last 10 years so that the currency is not just a, settlements account. It's an instrument of hegemony. And now there's this massive counter reaction to that

that I think is going to be extraordinarily consequential. So in short, we're seeing a replay of this deep American hegemonic impulse, but I think we're seeing it in a way that it can't succeed. and this week may be exactly that historic moment where the U.S. power essentially peaked and the anti-hegemonic group of nations, which is very large in the world, by the way. It's not just the five bricks or now the 11 with the six new members. It's dozens and dozens of countries that do not want to see one country dominant. the world system. So, Professor Sacks, lots of things there.

Briefly, can I just say, because I was there in the 1980s, I remember that time. Another point to say about that time with Japan was that, just as with China, an enormous amount of abuse of Japan at that time, in order to do all of these things, in order to mobilize people to carry out these policies against a particular country, You have to criticize and abuse the leadership of that country.

It's economic practices, all of those sorts of things. They say these things about China today. They said them about Japan then. People forget the extent to which it happened. And that's the first thing I wanted to say. Let's briefly. The second is that there is a third thing about China. It's much bigger.

It's more powerful. It's not under the US thumb. The third thing is that they know about what happened in Japan. If you read the articles in the Chinese media, they discuss this extensively, but they criticise the Japanese for allowing this thing to have been done to them, and they're saying to each other, we must not let it happen to us. The third thing I wanted to just touch on briefly was I was very interested about what you said, about these financial structures that have been develop as being a work around because I think this is widely misunderstood. I read Mr. O'Neill,

for example, the man who gave us the term Bricks, talking about how the Briggs countries are in the process of setting up a single currency. And they're not doing that as far as I can understand. I'm not even sure that their plan is so much to create a rival to the dollar. I think what they're trying to do is create a system so that they can trade with each other, not through the Western system. In other words, a workaround exactly as you said. So this isn't a challenge in that kind of sense. It's in some ways a more modest goal, but also a more retainable one. Now, is this correct? Is this because I think this is the last point is really very important. But as someone understands, you know, monetary things, which as an, I'm not an economist. I don't to some

extent. I don't do any great extent. Am I right in getting my feeling of this correct? I think the idea is exactly, as you say, though there have been voices saying we want a BRICs, currency and so on. Really what China, and I think now the others are looking towards is a way to do business without being vulnerable to the U.S. coming in and freezing accounts or dictating who can do what to whom. The U.S. absolutely, in my view, wrongly, even disastrously, militarized the dollar. It said, you can use the dollar, you can't use the dollar. You think those are your foreign exchange reserves? No, we locked them up. The United States, after all, started in 2022 in its sanctions against Russia by freezing $300 billion of Russia's accounts.

It also did something completely weird in my view and so lawless, I can't even, could not have imagined it, which is to say, you're a friend of Putin, you no longer have your apartment. You're a friend of Putin. You no longer have your house. Anyway, it's bizarre that this is even contemplated, much less done to a lot of people. But in any event, the U.S. froze the balances of multiple countries, the Forex balances, foreign exchange reserves. And not only Russia, Venezuela was an extraordinary case. One day, the Trump administration said, Mr. Maduro, you. You're not president.

Juan Guaido is president. Well, how do you know? Because we said so. We create our own reality. And bizarrely enough, on that basis, the United States froze Venezuela's own money. So what's happening right now is countries saying, why are we doing this? Especially countries that might have a foreign policy disagreement with the United States and don't want to see their economy tanked.

So the essence of what they're looking for is how to make settlements that don't go through U.S. banks and therefore that are not subject to the U.S. regulatory reach to freeze a payment. As a monetary economist, my view is this is not very hard. You can settle in multiple ways. And this is the point that they're all making in the bricks. summit, which is why should India and Russia or China and Brazil settle in dollars and be vulnerable to the U.S. Treasury, to Sipheus, to all of these committees that one day to the next can say that's not really your money. They want a reliable payments mechanism. And I think over the next

year, that's what they're going to devise. They will settle in Renmin B. They will settle in in rubles, they will settle in rupees, and they may make a unit of account that's based on perhaps the starting five our currencies, the rubble, the, that's the reaul, the ruble, the, that's the reaul, the ruble, the rupee, the renminbi, and the rand. So it happened that the five original BRICS countries are all our currencies. And they talk about a five-hour unit of account now. Now they've added the Rial with Saudi Arabia and with Iran, so maybe it'll be seven hours in the core basket. It won't be a currency. It may be a unit of account for denomination of contracts and so forth. They could very well create

swap lines across the central banks of the BRICS countries. I would imagine that they would do so to ensure liquidity in this system. Just like the SDR can be issued ex neelio out of nothing in the IMF, which basically means that central banks agree to swap their currencies, in essence. The same can happen within the BRICS countries. what they will do, in short, is to create alternative payments mechanisms that don't use U.S. banks. Great success for the U.S. They brought it on themselves, absolutely predictably.

My view is the role of the dollar is going to diminish tremendously. The whole economics literature is, no, this doesn't happen. This will take decades. No, this will happen quickly because of the politics. I don't mean one year to the next, but over the next few years. years. It'll happen for two fundamental reasons. One is that the U.S. militarized the dollar. And the second is that because of digital technologies, the ways to work around even the banking system in straight digital settlements is absolutely clear right now. So the mechanics of creating a non-dollar transaction system, I think, is much, much better.

technologically than even five years ago. The other thing I'm going to say, I think this needs to be said, is that none of this, you said that what's happening to the dollar is not in the interest of the United States. None of this, in my opinion, is in the interests of the United States.

The United States is subordinating the prosperity of its own people to the geopolitical objectives that it has to sustain its own hegemony. And I should say just before we did this program,

I was reading two articles that you sent us, both written by, well, I mean, there are summaries of articles of the people who are under Council for Foreign Relations. And they talk about revitalizing the US economy

in order to meet the challenge from China. And I have to say that seems to me an absolutely warped sense of priorities. You don't revitalise your economy in order to meet the challenge from China. If you're going to revitalise your economy, you do it in order to increase the prosperity, the happiness, the sense of contentment in your own country, amongst your own people. But that is the mindset that these people seem to have. They subordinate everything to their geopolitical ideas. It's so well, said Alexander, you know, the main problem in the United States is we have

become a plutocracy, massive inequality, a lot of people suffering. No one pays any attention to that, not the Republicans, not the Democrats, period. So even when they, quote, revitalize the U.S. economy in the Biden fashion, what are they doing? It's more corporate tax cuts for everything. So everything is basically, we'll give tax cuts for, okay, building semiconductors, we'll give tax cuts for renewable energy, whatever it is. But the whole modus operandi is corporate driven top to bottom. So we're just exacerbating the inequalities. And the real telltale point of all of this is not the GDP, it's life expectancy, which has been falling for a decade in the United States now. We're back to

the life expectancy of the mid-1990s. People in the United States are ill. They're not getting taken care of. They don't have access to decent nutrition. They don't have. access to health care services. That's not even on the agenda. What's on the agenda? The war in Ukraine, Taiwan weaponry, fighting China. So you put it exactly right. It's very sad. Professor Sachs, we're almost up to 30 minutes. So I just wanted to say, I think we've learned a huge amount. But can I perhaps go over to Alex? Because of course. Yeah. Great. Okay. Let's do, three questions. And then Alexander will stay on and answer the rest of the questions. But I have some really interesting questions for you, Professor Sacks, which I'm actually curious about as well.

Let me pull up the one question on Yellen. Was Yellen's visit really about asking China not to dump treasuries? How did the U.S. expected to succeed after Biden insulted Xi? What leverage does the U.S. have to make it happen? Of course. I don't know what was said in the room. I've known our Treasury Secretary for 50 years because in 1973, 50 years ago, I sat in a classroom when a wonderful young professor from Yale came and taught me macroeconomics. So I go back 50 years with Janet Yellen, and she's a very decent and wonderful person. The message that she carries comes from an administration that I am not very sympathetic to. And my advice to this administration was if you go to say we're not out to undermine your economy,

the first thing you should say is we will not impose more unilateral measures before we negotiate with you. In other words, stop the unilateralism. That was the recommendation I made. It was obviously not followed because just after Secretary Yellen's trip, Biden signed a new executive order, cutting off more technology to China. So the message that the Secretary Yellen carried, that we're not aiming to derail, we don't want to decouple and so forth, whatever it was, it was undermined immediately afterward. by the actions of the Biden administration, which took yet another step to try to undermine China. And however much they say, we're not trying to undermine China, of course they're trying to undermine China. It's plain as can be. And so they should stop that if they want to have actual normal relations with China.

The first thing you do is stop putting on unilateral measures and start, really talking, not in one trip, but an actual discussion and negotiation. And that doesn't happen till this day. The Biden administration came in, and whether it is the neocon ideology, which is pervasive with Biden, whether it was fear of Trump that he won the Midwest states with an anti-China protectionist election platform, probably both of those, Biden came out blazing, anti-China and also a point that Alexander made, and I think should be reiterated, the trash talking is nonstop about China. So Secretary Yellen goes soon after President Biden says, well, President she's a dictator. Come on. Or bad things happen to bad people. You know,

this is also Biden. He's a kind of got in a really obnoxious side. And he thinks that he's real tough when he's speaking to the donors to show how macho he is. So these are all stupid statements coming out of donor sessions. And Biden always likes to swagger an 80-year-old guy swaggering in this pathetic way is really pathetic. But it's trash talk. And so I don't know what was saying. said inside, but I can say that it cannot be successful to have any, any kind of normal relations with this kind of unilateral behavior. And it's amazing. I was just rereading one of the articles by the Council on Foreign Relations, which says, in this sense, there is no real prospect of building fundamental trust, peaceful coexistence, mutual understanding, a strategic

partnership, or a new type of major country relations between the U.S. and China. Rather, the most that can be hoped for is caution and restrain predictability. In other words, the U.S. position always is we don't want to have trust. We don't want to have anything. We don't necessarily want to have war, though sometimes they do. But it's going to be bad. You know, we're going to be tough. Even saying the idea of fundamental trust or peaceful coexistence, don't even think about it. That's the real American attitude. Don't have a real discussion with Chinese counterparts. Thank you for that question. Thank you for that answer from Anas Belat Cheheb. The West is hurting China by going belly up and no longer being able to buy Chinese exports.

The problem is China has not been able to substitute U.S. demand. What do you think about that statement? Well, it's not that the West can't buy Chinese exports. It's stopped because of high tariffs and barriers and threats to U.S. companies and warnings don't go there and don't produce goods in China for resale to the U.S. market and so forth. So the idea is stop demand for Chinese products, throw China into a Chinese market, Japan kind of crisis. And indeed, China has to find other markets and the world is big. And that is what China is doing, which is saying, okay, we are not going to beg to get into a U.S. market for a

country that evidently can't even think about peaceful coexistence. We have to find our way in the world. And what China is doing is forging economic cooperation with most of the rest of the world. And most of the rest of the world means ASEAN countries in Southeast Asia. It means African countries. It means West Asia, the Gulf countries. It means Central Asian countries, the stands. It means South American countries. And China has several initiatives. The best known is the Belt and Road Initiative, which basically says we save a lot. The Chinese have a very high saving rate. We can provide finance for our partners, our counterpart countries, to really upgrade infrastructure, upgrade fast rail, for example, upgrade 5G, upgrade ports,

upgrade renewable energy, upgrade long-distance power transmission. So the Belt and Road initiative is promoting Chinese exports. But like trade, it's mutually beneficial for the other side, which builds, excuse me, infrastructure. And I think that this is the path for China that will be successful, which is if the U.S. closes itself to China's goods, export elsewhere. The world is a very large place, and it needs China's technology. It needs China's capacity to produce large-scale, low-cost infrastructure. If you ride the Maglev or Chinese fast rail or Chinese 5G, it's good stuff. And the rest of the world wants that. And the United States, by closing the U.S. market, well, it'll cost the U.S.

But China has alternatives. And I think that that's what we will see and what the BRICS enlargement is about. All right. Let's do one more for the professor from Ralph Steiner. This is an interesting one. Mike Jeffrey give us his opinion as to why Ethiopia was added. What does Ethiopia add to the BRICS? Yeah, very interesting.

Ethiopia is 120 million people. It is a very significant culture. It has actually been a very fast-growing country for the past 15 years. China and Ethiopia have pretty deep relations, actually, and China built massive hydropower for Ethiopia and also rail for Ethiopia, which is making a very big difference. The criterion for Brick's enlargement principally was systemically important countries.

And interestingly, of course, China looks ahead. We always look backward and with also tremendous disdain mixed with a strong dose of racism. We think Ethiopia, what's that? But Ethiopia in 20 years will look very, very different. different. It'll be much richer. It's dynamic. It actually has a culture that is very deep and goes back to Herodotus in the fifth century BCE and onward. And China gets it. I think it was very clever for China to focus on Egypt and on Ethiopia, two ancient civilizations, both very

sizable, both the very interesting places with deep cultures and I think strong national visions of development and therefore good partners for China and for the bricks more generally. Professor Sachs, thank you very much for another amazing 40 minutes. Wonderful. Great to be with you guys. Sparky. Why not just trade and compete with China? Exactly, Sparky. Professor Sacks, thank you very much. Take care.

See you soon. Take care. I have all of Professor Sacks' information in the description box down below. And as a pinned comment as well when the live stream is over, Alexander, I was listening to Professor Sacks. And he said that the West, the U.S. looks back in anger. And I thought about the Oasis song, don't look back in anger. The famous British fan. Anyway, let's

There's a play, by the way, which that references from the 1950s, look back in anger. It's one of our kitchen sink, angry young men plays in that time. Fantastic. Let's answer the remaining questions, and we'll let everybody get on

with their Friday and their weekend. So Sparky, why not just trade and compete with China? Exactly. Sparky. Ralph Steiner, thank you for becoming a member of the direct community. Dan says, thank you guys for all your hard work. Hopefully you will get RFK on someday. Yeah.

Yes, we will. Yes, for RFK. Thank you very much for that. Dominique says, is there a common plan between Tucker, Musk, and Trump? Ask them. How would we know? I don't think there's a common plan, but I think that they do have certain concerns and opinions in common, which they share.

And I think they have certain perceptions of what is happening in the United States, which they also share. And that brings them together. And that's why they're able to talk with each other. Now, I don't know whether this is true. Alex, perhaps you can confirm it. But I heard just before we started that, in fact, Trump is back on Twitter. Is this actually the case?

Yes, it is. He tweeted his mugshot image. And he said, never surrender underneath. So he timed. it perfectly. I mean, obviously, this was planned. It's a planned to post on Twitter with the mugshot, but it was, it broke the internet, Alexander, I mean, it's something at like 60 or 70 million views or something like that, maybe even more by now. Yeah. Maybe much more. Okay, from Sparky, make Ukraine Russia again. Don't even leave a patch called Ukraine, let's it be a NATO playground. Yeah.

Yeah. And Sparky says, build a better world with Britain. Yeah. Two boomers says that Duran is like the temple of Delphi with the three oracles, Alex Alexander and Jeffrey. Thank you. Thank you. Thank you. Clearly, I would say the Delphic Oracle could sometimes speak in a very complicated way, which

you didn't always understand. We try to speak clear. Good point. Sparky says, Pergoshin didn't kill himself. No, I don't think so. He's not that, he wasn't that sort of a person. I'm sure it wasn't. I'm sure he didn't kill him. Yo, thank you for that. Super chat.

Kite wins. Welcome to the Duran community. Ciam, welcome to the Duran community. Let's see here. Jack, welcome to the Duran community. Irina, thank you for that super sticker. Salt thrower. Thank you for a super chat. Jeffrey, thank you for a super sticker. A different perspective asks, will the U.S.

Autonomous F-16s in Ukraine, a training sham? Will the US use, sorry, will the US use autonomous F-16s in Ukraine, a training sham? I'm not quite sure what an autonomous F-16 is exactly, but if you're suggesting that these can be used automatically. I don't know how technology exists. I don't think you can convert them into drones. What about NATO? NATO pilots, then. What about NATO pilots? Well, I think that's possible. I think that is possible. I think eventually, that might be where we are.

But that doesn't seem to be the plan at the moment. They're going to start training a Ukrainian pilots in October. And so far the word is that it'll only be Ukrainian pilots. But then we've seen how they say one thing and they do something completely different later. Whatever it is, the general consensus right across the board in the U.S., in Russia as well, by the way, is that they're not going to make much difference. Pathetic Albion says, how do you think the BRICS plus dominance of world energy will impact the price cap situation? Well, we've done a program about the price gap. The price gap is collapsing.

And the BRICS plus will render the price cap all these kinds of sanctions absolutely meaningless. Because if you have an international system of trade, bigger than the one that the Western powers control, and that alternative system of trade disregards Western imposed price caps, well, then those Western imposed price caps lose all purpose and all meaning. All that it will mean is that you'll have one trading system where the price cap does not apply and where there is an abundance of oil, and you will have another trading system where they try to impose price caps and things of that kind and where there are energy shortages. Tom somebody says it was the five R's versus the five eyes, more R's for the eyes to see.

What an interesting point about the R's for the currencies. I never thought of that. I never thought of that. No. Very interesting. Arthur, thank you for that super sticker, different perspective. Thank you for that super sticker. Sparky says, why not trade and compete with China?

Yes, Sparky. Arthur, thank you for that super sticker. Tom, somebody says the U.S. still has huge opportunity to join the world multipolar community about how long before that window closes to the U.S. then having an economic disaster that will affect the world as well. I don't know. I can't answer that question. I hope that the United States has quite a lot of time. I mean, it's a big country. It's got a tremendous heartland in terms of its industrial and technological resources. but you're quite right. I mean, this window will not remain open indefinitely.

And the risk the United States runs is that it could go through a kind of process like that of 17th century Spain or 20th century Britain, where it's divested of its empire, but the imperial structures remain in place. The country is increasingly marginalised from the major economic

forces in the world and it gradually becomes marginal and stagnates and declines. It happened to Spain. It's still happening to Britain. It could happen to the United States. I don't think we're there, but the risks grow with every day. Bifftin says folks like Peter Zayhan alleged that the SMO is an attempt to close off geographic vulnerabilities before their democracy. graphic collapse. What do you think? He says the same for Georgia and Crimea. No, I don't think so.

I think that undoubtedly the Russians have problems with birth rates and all that. But so do we in Europe. I was just reading, you know, I think it was the guardian of all places, an article about how there's been a collapse of birth rates in Europe and pretty much everywhere else. So this is now becoming a global problem. And I think that if anything, the Russians are probably, in a better position long term to deal with this kind of problem than we are in Europe. I mean, they're in a stronger position to introduce family-friendly policies, you know, with their cultural ideas, their incentives, their ability to provide homes and jobs in these vast territories that they have. I don't think this is, and I don't think this is, and I don't

this is an insuperable problem for them. And beyond that, of course, it's never, as far as I can see, played any part in the decision making at all. I mean, what he's saying is pure guesswork, because no Russian official has ever suggested anything like the reasons that he's given. They've given lots of reasons for the SMO, and they're completely different ones. Russia is working to address these problems, and they actually have programs in place for families

and for couples that have children. The West, outside of Hungary, I can't think of an EU country that is doing that. I could be wrong, but I know Hungary has tax breaks for families, but I don't know. Do you know another country? No, I don't know of another country, and I can tell you the situation in Britain, you know, somebody who's just had children, for anybody who wants to have children in Britain, and who doesn't have a certain level of resources is absolutely terrible now. I mean, there's no childcare assistance to speak or anything other than, you know,

prohibitive levels of cost. The attack system does not help you in any kind of way. And I gather this is a problem that reproduces itself right across Europe now. Sparky says Nigeria's puppet leader may not have control over its military who aren't keen on invading Nigerian leader sounds like he's Nigerian leader sounds like he's bluffing at the behest of the West with his D-Day rhetoric. Yes, I know and I've heard this. Now, I can't tell, I can't say what the situation is here because, you know, this isn't a part of the world that I know a huge amount. But I've heard a lot of people say this, that this is a bluff

and that the bluff is being called and that Marley and Bukina Faso are, coming into play here, and that, in fact, this idea of an ECOWAS intervention in Niger, that the Nigerians themselves are not afraid of it, and that they don't really believe it will happen, and that in the region people do not believe it will happen. So quite plausibly, you are right that they're threatening to do something, which ultimately they can never do. Now, can I just say one going slightly off the track there, it turns out that the one, that the African country that Pregojin visited just before he returned to Moscow was Mali. So he went to the Central Africa Republic.

He met with the president of the Central African Republic. He met with some people from Sudan. He then traveled on to Mali. He had some consultations with people. in Mali and then he returned to Russia. So, you know, Wagner is present in Mali. Who's to say? And Mali is sending troops to Nijam.

Interesting. Robin R. Thank you for that super chat. Stefan Hayes says Biden is just corrupt to extent that can maybe only be compared to LBJ, who seems participated in assassinating another U.S. president. Well, can I just say this? LBJ was utterly corrupt. I don't think he was quite as sordidly corrupt

as in some of the things we've been hearing about. I remember LBJ very well, and I'm going to say it straight away, he would have had Biden for breakfast. I mean, whatever one thinks of LBJ, he was coarse, he was brutal, he was a bully, he was ruthless,

he was deeply manipulative, and as you said, he was utterly corrupt, but he was a strong personality. He knew what he was about. He was in some ways a very effective president, a dangerous man in some ways. But as I said, he would have had Biden for breakfast. Biden is a bad copy, a very bad copy of LBJ. Doc Holliday says the children used to get into the pool and rub my hairy legs, so I know about roaches and I know about children jump.

into my lap potato Joe. Dennis Klein says, many say that Smoot-Hawley tariffs of the 1930s precipitated the Great Depression and World War II. Do you see any parallels that signal danger today? Yes, it's a short answer. I mean, one can see those parallels. If this thing gets out of control, if the trajectory follows the trajectory that Professor Sachs spoke about.

We're no longer talking about economic policies intended to strengthen one's own domestic economy. One is we are talking about the economic battle lines being created, economic battle lines being created between states that could very easily destroy the global economic trading system. Now, I want to stress, I'm using my words very clear. carefully because I'm not talking about globalisation, which is something completely different. I mean, the ability of states trade properly with each other. That could be undermined, but that is being undermined. And as we also know from the 1930s, when economic battle lines

are drawn, that can in ways that's not always well understood, but it can also lead to actual battle lines being created as well. 456T1-2-3G says only by cooperation can the world survive. Thank you for your effort to encourage and educate this idea of the Prophet's wife. Thank you for that. Sticky Mark says, can Germany recover from being de-industrialized? Can Poland extend its borders to Kiev? Are they serious about World War II reparations from Germany?

Right. three interesting questions, slightly different questions. Can Germany turn things round? Well, the answer is, surprisingly enough, yes, if they made the correct political decisions. That's the problem. It's a question of political will. If you look at Germany today, that political will is not there. On the contrary, the political class in Germany is united on a course that will lead

to Germany's deindustrialization and eventual economic crisis. And unless that changes, and there is no sign of that changing, then that's where we're going to end up. And, you know, I've been listening to Chancellor of Schultz. I've been listening to Christian Lindner, the finance minister.

I'm not going to even start with Robert Harbeck and Anna Lina Berbaud. But even people like, you know, Merz, the leader of the CDU, none of them are prepared to change course. So if you're not going to change course, if you're just going to go driving towards the cliff edge, you will eventually get to the cliff edge, and you will drive over.

And then, of course, there is no stopping. So that's unfortunately the truth about Germany. Will Poland get reparations from Germany? I cannot imagine that will happen. I think there would be huge resistance in Germany to anything of that kind. And I think for Poland to try to extend its sway

all the way to Kiev, we've discussed this with Anya, it would be the end of Poland. If they tried to do that, whatever emerged out of it, it would not be the Poland we know if it succeeded and if it failed,

which is almost certain than what would happen, it would be a crisis for Poland, the like of which one. can't see. So that, the last, is an extremely dangerous and extremely reckless fantasy, a very bad idea for Poland, and more and more people in Poland understand that. And that may be one reason why the support for the Law and Justice Party in Poland is falling. Philippina Traveler TV. Thank you for that super sticker. Red Z says everything's tied to

Obama era, Ukrainian covert ops. Yes. And can look at? I'll just say, one of the things that I've been informed about through one of these people who sends me emails, but somebody who clearly does know what they're talking about, is that even as Obama was implementing a policy, was announcing a policy whereby the United States would not arm Ukraine. That was what the official policy under Obama was. Remember, one of the Russiagate stories is that Trump wanted to, he changed the Republican platform to prevent arms deliveries to Ukraine. That was actually, in fact, existing official U.S. policy at the time as announced by Obama.

But in reality, exactly as always happens with Obama, he was covertly arming Ukraine already. apparently javelin missile transfers started to Ukraine under Obama. So he was acting contrary to his own policy. Sparky says, KitchenSink plays like Monty Python's working class playwright. Absolutely. That parody is it. That's a brilliant parody of the angry young men, so called,

the working class playwrights of the 1950s. Cursayer says, as a Mexican, I'm in fear that Russia will invade Mexico very soon. Well, I think you're every right to be after all. I mean, we all know that Putin's appetite is, you know, unappeasable. He will certainly move on to Mexico as soon as he's finished from Ukraine. Elza says, may it already, maybe it was already mentioned, but next year, Bricks will have six of the nine biggest oil-producing countries. All-priced ceiling is crying somewhere.

Absolutely. Somebody actually wrote to me and said that bricks will control 80% of the world's exported oil. Think of that. Zareel says F-16s have been built that fly as drones already. Oh, well, there you go. Okay. Thank you, Zaraia. Kev Jones, thank you for that super sticker.

A different perspective says, I asked because they have tested and converted F-16s. There you go. Zaryl answered a different perspective. Question on autonomous F-16s. Maximilian says, Alexander, if you were POTIS, how would you end the war in Ukraine?

And is there still time for the West to remain stronger than bricks and how? It's very easy to do. You pick up the telephone to Putin. At least you arrange a telephone call with Putin. You say, look, I'm stopping all arms deliveries to Ukraine. Let's have a discussion. about the security situation in Europe. And in the meantime, as part of some kind of a ceasefire deal,

I'm prepared to agree that Ukraine is not joining NATO. Then, you know, we have a meeting, we sit down, we hammer it all out. And I'm sure Putin at that point would agree. Now, it would not be the end of the discussion. There would be an awful lot of other things that would have to be discussed. I mean, there would have to be territorial changes. that's even the US now seems to understand that. But if you're asking about how to end the war,

that's how you should do it. That's the first step to take. Van Hock, thank you for that super sticker. Danielle says, did I see that Greece was on the list of bricks plus nominees? How would Greece joining work with Ursula and Jungle Joseph? And there was another question about Greece, Alexander, from locals, which is Greece is on the list of, from law of attraction, Greece is on the list of countries requesting to enter bricks.

Could you comment on that? Going the other way than the rest of the collective West, have a great weekend. Well, I wasn't aware of this, but I get to say straight away, that there is any chance of us joining, the Greece joining bricks anytime soon. I mean, it does not go to happen. Greece is doing the opposite. I read that some of the missile defense systems that they purchased from Russia, they're now preparing to send them to Ukraine.

so I think they're going the opposite way. That's for sure. They already are on the opposite way. Blue Bomb says, how do Brick's nations control the price of a brick if each country can print as much of its own currency as it likes? Well, you would have to agree arrangements and regulate them through whatever financial institutions you create.

And to me, again, I've said this before, this this largely resembles a return to the Bretton Wood system, but one operated by the BRIC states between each other. So there would have to be a set of rules, and there would have to be some mechanisms for enforcing those rules. I would say that the problem of printing money and inflating your economies in that kind of way is something that all the BRIC states need to get, you know,

it seemed to me to want to get away from anyway. And most of the key brick states, actually, not all of them, but they've run pretty responsible fiscal policies. Ralph Steiner says the U.S. is still buying Russia enriched uranium. How did the neocons rationalize these hypocritical actions to others? Example, the Europeans. USA, number one, do as we say, not as we do. the neocons never rationalize anything that's not what they do if you bring that bring up a topic like that

what they will immediately do is they'll say that you're an agent of Putin's they'll say that you know bringing up a topic like that means that you are making a Putin talking point and they will use that to basically shut up or discussion that is how the Neocons Khan's work. If you sit down and deconstruct their arguments, you find that there are massive contradictions. But that's not something that they care about at all themselves. G-Dog 2K2 says, if you don't think the U.S. is there yet, I've got a bridge to sell you, complete with its own tent city. You may be right. I hope you're wrong, but you may be right. Sparky says Wagner as a stopgap in Africa is why the West had progosian and his colleagues killed.

It's not impossible. Tim Gibson, thank you for that super sticker. Sticky Mark says, thanks. I love you all. Callas, I've got her mono recording and, oh, meo, babino caro. I cry every time I play her Madam Butterfly, Friessange. Well, Freya Sange indeed. And can I just say, I'm glad you're doing that? I mean, the EMI recordings of Kallas are amazing. And the mono ones from the 50s are better. Tavernak says the only demand that matters is the one backed by money,

as long as there isn't a strong block of commodity suppliers backed by nuclear and industrial deterrence. Currency wars are here, hyperinflation. Well, you may be right. You may be right. We'll see. Elza says, I've heard about India that the U.S. and France refused to share technology, but Russia did, planes, tanks, airspace. Yeah, it's true.

Vivian Martin says 10. 10. Thank you for that. Harry C. Smith says, imagine how different history could have turned out if the Russian Empire had never sold Alaska to the US. Could you speculate? Well, that's a long time ago. One can speculate that, anyway,

that was a very, very long time ago. It was the 1860s. When it happened, by the way, It wasn't entirely popular in the United States. And the Secretary of State who negotiated it, who was Seward, by the way, who was also Lincoln's Secretary of State. Anyway, they called it Seward's Folly that he bought Alaska. W.R.1. Dexter, thank you for that super chat.

Red Z says, I don't think Trump and General Flynn knew regarding Ukraine ops. I think you're probably right in terms of Trump. I think Flynn knew a fair amount. Remember, he was a former intelligence officer and head of the Defense Intelligence Agency. But I get the clear impression that Flynn was somebody who strongly disapproved for the whole policy. Nishanth says Ray Dalio has predicted a war between China and the U.S.

Many people, though. It could even happen. W.R.1. Dexter says, What can a regular person in a country like Honduras? I'm a lawyer and get payments from abroad. through U.S. banks due to save off the harm from de-dollarization. This is going to be a question we're all going to be asking, every one of us, because I don't know how it's going to work out. I think things will eventually develop. We'll see new payment

systems, new financial structures. We will adapt, and we will find ways as the world adapts and finds ways around us. But I can't answer that question because I can't anticipate how those structures will function in five, ten years' time. Ralph Steiner says, did Alexander's heart swell with pride

when Zelensky visited Greece this weekend? Zelensky's photo ops are becoming pretty sad of late. He's lost his mojo. Yes, he has. I agree with that. I agree with that. Well, I have to say, I made a decision about Zelensky's trips to Greece to shock my eyes and close my ears and pretend that they weren't even happening. I don't know what you feel about it, Alex.

There were some interesting photos of Zelensky with the president of Greece that made the routes. Pretty fun to look at. Sparky says, conventional wisdom says to hire a local law firm, but high end local law firms in Atlanta are. all hardcore globalists and anti-Trump. Trump et al are better taking their chances with public defenders. Well, I can't speak to that. I mean, I would have thought that what Trump needs is some very talented lawyers,

Robert Barnes, Alan Dershowitz, that kind of caliber of person. Public defenders, by the way, can be very, very good indeed. But I think you need somebody who not only has an ability to conduct, defend in a normal court, but a tremendous understanding of constitutional law and an ability to argue cases in the Supreme Court of the United States, which is where all of these cases are going to go. All right. Those are the questions. Thank you once again to Professor Jeffrey Sachs. Thank you to Alexander McCurs. Thank you to our moderators. Thank you to everyone that joined us on the durand dot locals.com,

Rakfin, Odyssey, Rumble, YouTube, as well as Telegram. Alexander, any final thoughts before we sign off for the weekend? This is the biggest story of the world. I mean, I'm not going to,

I mean, the other big, I mean, there's three big stories. There is China, the US. That's the biggest story. The second biggest story is Ukraine and what happens there. And the third biggest story is the legal crisis,

the legal, constitutional, political crisis in the United States. Those three, everything we see in the world revolves around those three, and all three are connected with each other. Yeah, they are. Good point. Huge stories. One story is big enough. We've got three of these stories working at the same time. All right. Let's call it a day. Let's call it a live stream. Take care, everybody.