The Pomp Podcast - 361: Chris Fenton on Chinese Propoganda & Censorship in Hollywood

Episode Date: August 14, 2020

Chris Fenton served as president of DMG Entertainment Motion Picture Group and GM of DMG North America for 17 years, internationally orchestrating the creative and business activities of DMG--a multi-billion dollar global media company headquartered in Beijing. He has produced or supervised twenty-one films, grossing $2 billion in worldwide box-office. In this conversation, we discuss China and US relations, how Hollywood has been complicit in spreading Chinese propaganda, why the US needs an unified approach to stand up to the CCP, how cultural diplomacy could work, what role the Federal Reserve is playing in all this, and Chris uses specific examples to illustrate the problems. You can buy the book Feeding The Dragon here: https://www.amazon.com/Feeding-Dragon-Trillion-Hollywood-American/dp/1642935867 =============================== Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link https://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. =============================== The BTSE exchange allows you to trade confidently. They are the leader in futures, which means they are pioneering Futures 2.0. With BTSE, you can trade next-level futures: freely choose and combine your margin and settlement assets and trade with up to 100x leverage. You can also sign up for a BTSE Elite membership that gives you unbeatable discounts and bonuses across the BTSE Exchange, OTC platform, and more. Go to BTSE.com/pomp to get a 10% discount on your BTSE Elite membership. =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to The Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Chris Fenton served as president of DMG Entertainment Motion Picture Group and general manager of DMG North America for 17 years, internationally orchestrating the creative and business activities of DMG, a multi-billion dollar global media company headquartered in Beijing. He has produced or supervised 21 films, grossing $2 billion in a worldwide box office. In this conversation, we discuss China and U.S. relations, how Hollywood has been complicit in spreading Chinese propaganda, why the U.S. needs a unified approach to stand up to the CCP,

how cultural diplomacy could work, what role the Federal Reserve is playing in all this, and Chris uses specific examples to illustrate the problems. I really enjoyed this conversation with Chris and I hope you do as well. Before we get into the episode though, I want to quickly talk about our sponsors. The first is Crypto.com. They're an all-in-one platform that allows you to buy, sell, store, earn, loan, or invest crypto all from one place. You can join over 1 million users currently using the Crypto.com app. Again, you can buy, sell, store, earn, loan, or invest crypto all from one place, including their slick mobile app. Crypto.com not only has the best URL, but it's the place where mass adoption is happening. Crypto.com, buy, sell, store,

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slash Pomp, 10% off a Bitsy Elite membership, where you can trade futures, buy and sell crypto, and use their OTC platform. Go check out Bitsy. Lastly, don't forget that I write a daily letter to over 50,000 investors about business technology and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at Pompletter.com. Again, Pompletter.com. All right, let's get this episode with Chris. I hope you guys enjoy this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek

Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Chris here with me.

Thanks so much for doing this, man. Oh man, so happy to be on the show. I love it. All right, so people don't know this, but Chris and I already did this one time and we screwed up the audio. So we're going to do round two, which means that now I know all the secrets

and can ask them even better questions. but you have a absolutely fascinating story that involves everything from going to Cornell to ending up at Olive Garden and then eventually being kind of one of the power players in Hollywood. Let's just start with where you grew up and how do you get to Cornell? Yeah, sure. I was born and raised in South Florida. I was a big Miami Hurricane fan as a kid. Grew up on an island called Singer Island, which was sort of a middle-class, upper middle-class Island just north of Palm Beach, although I could walk down to the end of our street and see the Kennedy compound down on the other side of the inlet. It was sort of interesting. It was like

a juxtaposed instead of the other side of the tracks, you were on the other side of the Palm Beach inlet. Grew up the son of a father who was an engineer at Pratt & Whitney. My mom had various small businesses, but we had pretty much everything we wanted or everything we needed and some of what we wanted, but they instilled really strong values in me, which actually I write about in the book, in particular, the art of networking, which my dad was extremely good at that I carried on into my adulthood. When I was in high school, he got transferred to Connecticut for Pratt & Whitney. I went to a huge sort of John Hughes-ian type of breakfast club high school called Glastonbury high school, um, graduated there and then went to Cornell actually with a, with a

scholarship. Um, although I did the, the infamous one and run, which I'm a little ashamed of, but, um, um, did get the first year for free and did a lot of really interesting stuff with the army during that year. Um, graduated with an engineering degree. Uh, it was 1993. The economy was not good. I mean, nothing like COVID crisis bad, but it just wasn't good. And I graduated in the middle my engineering class. I think I had a 2.7 GPA. So I didn't have any job offers, packed up my car, drove cross country looking for a place to settle my roots. I stayed at fraternity, my fraternity house at various college campuses across the country. I think I hit about 60 of them. Got to Boulder, thought that's where I wanted to be because I loved Big Head Todd and the Monsters

and the samples and all that great music. And I was a big skier. But ultimately, there were just a lot of PhDs with engineering degrees in that town, pouring coffee. So I moved on, visited a buddy in Los Angeles for a weekend, realized it was 72 and sunny every day here. Beautiful people, amazing things to do. You could literally surf in the morning and go skiing in the afternoon. I said, geez, I should live here. And at the time, it was really interesting because no one wanted to live here. The defense industry had all moved out. It was a pretty depressed economy. They had just survived fires in Malibu and in Laguna Beach. Just prior to me getting here, there were floods.

I got here three weeks before the earthquake, which didn't scare me away. I still stayed and got a job at Olive Garden in Westwood, just outside of UCLA's campus. And I started being able to pay my bills by having the Ultimate and Hospitaliano. And in the book, that's sort of where I start my journey for anybody that reads it. It's a colorful one, and it literally starts as I arrive at the Olive Garden in Westwood. I love that story. So I grew up in a family of five boys. My parents are both Italian.

And as kids, we thought it was like the most, you know, the best restaurant we could possibly go to was the Olive Garden because you had the free salad and free breadsticks and all this kind of stuff. And as we got older, we realized that maybe our parents had just tricked us into what good Italian food was. But the Olive Garden was a big fan favorite of my house growing up. You know, it's funny. I talk to my kids about it all the time because they have such a different palate than I had as a kid. But for us, like that once a month or once every couple months special occasion was going to a TGI Fridays or a Bennigan's.

And then that once a year special occasion was Benihana's. That was as good as it got. for eating out. I love that. All right. So you go from Olive Garden to eventually you break into William Morris, but do it in kind of a very non-traditional way. Walk us through like why did you want to get into William Morris, but specifically just the agencies and kind of the Hollywood scene? Well, it's funny. I mean, you talk about not really having a master plan, just sort of looking for opportunities as they present themselves and working your butt off and looking for opportunities as they present just by living life to its fullest and being smart

and learning every day. That's sort of, I guess, what happened to me. I had no master plan. I was just trying to make ends meet as a waiter at the Olive Garden. Met a couple guys there that were on a double date with two girls. One of them happened to be a guy that ran. He had just left an agency. It was ICM at the time and was becoming an independent producer. And he said, well, what are you going to do for the rest of your life? And I said, I don't know. I'm actually trying to figure it out now. And he said, well, why not Hollywood? Hollywood's the Wall Street of the 90s. And it was funny, in 1994, there had been a big slew of Harvard Lampoon grads that came out for the pre-existing maybe four or five years prior to my arrival.

and they started taking over shows as writers like Seinfeld and so on. And it became known as Wall Street of the 90s to all the Harvard grads. And of course, I was a Cornell grad, a safety school for them. So I sort of discovered it from that double date that I happened to walk in on. And they invited me into this pickup basketball league, which was a who's who of people that no one knew back then, but turned into huge players in the business. I mean, Nazari Emanuel and Patrick Whitesell, who were big sort of super agents, Matt Damon, Ben Affleck, Matthew McConaughey, a bunch of actors no one knew of at the time, but were on the rise. So I got in there. Everybody said, get a job in a mailroom. I wasn't the niece or nephew of any famous director

or actor. So getting into a mailroom was really difficult. But I did get a temp job at a company called Career Group. I don't know if it exists anymore. But the temp job got me in the fax room of the music department at William Morris. And I was making 250 bucks a week, sending out riders for acts such as the Eagles, Nirvana, Pearl Jam, etc. And the riders were essentially the contract perks and benefits that those bands would have by performing at certain shows. And in fact, the Eagles, which was doing the Hell's Freezes Overture back then, had a rider that cost 60 grand, right? Their catering, I think, alone was $40,000 backstage. But anyway, as I was doing that and faxing out these things, I started to realize how I could meet the right people to get into the

mailroom. And it took me six months, but I met all the right people, did all the right sort of things to get there. And then eventually, boom, got promoted into the mailroom at William Morris, called up my parents. I was super excited. I'm making 300 bucks a week as a mailroom clerk in the William Morris mailroom. They said, why are you excited about working in the mailroom of a cigarette company? I said, no, no, no. It's a talent agency. This is how you start. David Geffen, blah, blah, blah, blah, blah. And that began my real career journey away from Olive Garden and into something that actually led to something career worthy. And it was a really, really wild journey. I became one of the youngest agents there for quite a while. And then it led into,

as you know from the book, a day that I got abruptly fired. Yeah. And so walk us through, while you were at William Morris, you go from the mailroom to a pretty senior position in terms of just, you got to see a lot of the industry and the inner workings. What were some of the things that you were doing before you left? Well, one of the big things that I was doing, I became a TV syndication and cable agent, which no one wanted to be. But I had this mentor, his name was Jerry Katzman. He was the vice chairman at the time. And he hired me to be his morning assistant, which meant you had to get in at 6am and work his desk for European calls and whatever until his normal assistant came in at

nine o'clock. And the reason I got that job is I went to interview for it. And he looked at my suit And he said, where'd you get that suit? And I said, why, do you like it? He's like, I guess, where's it made? And I said, I opened up the thing. I said, oh, Yugoslavia. And he goes, where would you buy a Yugoslavian suit? And I said, well, I went up to Hollywood and Vine,

you know, that shop up there. I got this suit and a couple others. He's like, how much did they cost? And I said, well, it was 99 bucks for all three. And he said, you're hired. And I think what was great about that moment is that he was so used to, we used to call them trustafarians or kids that had all these different means to get into the business. And when he heard I was working at the Olive Garden only six months

before and was a temp and all that kind of stuff, he was like, oh, this is a project I can work with. So one day he said, hey, I know you're working with motion picture agents on their night desks, but if you want to really get promoted, you should go up and see this guy, Mark Gitkin, who's running TV syndication and cable. And I said, I don't even know what that is. And he's like, just go up there and tell him that's all you want to do for your life. And I said, really? He's like, yeah, the goal is to go from being an assistant to having an assistant as quickly as possible. And that's where you're going to be able to do it. If you're in motion pictures, it's going to take you forever. So I ended up taking him up on that. Mark hired me and literally

promoted me in 14 months. And the crazy part was, is I started signing these sketch comedy writers out of shows like Politically Incorrect, Saturday Night Live, et cetera. And one of them was a guy named Michael McCullers, who was writing, he was writing jokes for the MTV Movie Awards and got to meet this actor named Mike Myers. And they came up with this idea called Austin Powers. So we went out and sold this script, Austin Powers. And the next thing you know, I came across these guys, Brian Koppelman and David Levine, who are the showrunners of Billions. But they wrote this script called Rounders, which was a poker script. And we went out and sold that. And before I knew it, the motion picture department asked me to join them. And so the rest was history. I rose

up through the ranks in the motion picture business. For sure. And so you eventually end up at DMG, which maybe just give us kind of a quick understanding of like, why is DMG important to kind of some of the understandings you have around US and China relationships? Yeah. So once again, in the book, I talk about not really having, well, I thought I had a master plan of running William Morris one day, but that came to a quick end when I politically fell out of favor with one of my bosses and I tried something to get ahead and it just didn't work. So I got thrown out of the company. And literally, it was one of those Jerry Maguire moments where it seemed like all I had was a bag with a goldfish in it. And, you know, tried to get even my assistant to come with me. And he was like, Well, I got a good job here. And I was like, God, don't worry about it, you can stay. Um, and, um, when I feverishly was making the phone calls after that moment, um, there was one client that I had signed on a whim cause I'd saw this little movie. It was called cookers. Um, that was financed out of China. Um, this company pace setter productions, um, which was formed by two Chinese citizens and one American, uh, made the movie and, you know, they directed, edited it, produced it,

financed it etc and i thought it was a really interesting little film so i signed them thinking maybe there's something that we can do together and then ultimately i got fired and they happened to be one of the only clients that i called up and i said hey you coming with me and they said well we didn't even know you got fired no one called us from william morris and i said great climb aboard and they sort of became my rod tidwell you know uh jerry mcguire's sort of um you know, client that he was able to take, but really didn't, wasn't sure, wasn't going to add up to anything or whatever. And, you know, just took it on a whim. And it was shortly thereafter that I went over to China and I saw what they were up to. I saw what was going on in that market.

The national bird was called the crane because there were cranes literally everywhere. And in fact they at the day i visited their office in beijing it was actually tarped over in the back because one night um the the zoning of the development commission came through and bulldozed half of their building away because it happened to be on one part of a of a new development region so they sort of had half a building and they were busy building another one that they're going to move into. I said, wow, this looks like a great opportunity. Do you need me to do more stuff for you rather than just looking for a director job or something? Is there other parts that I can be valuable with? They said, hey, we don't have any eyes and ears in North America. Can you help us

build business and bring them to us in China so that we can help them sell their products and services in this country? I said, all day long, happy to do it. Let's do it. That sort of kick-started that opportunity. The world was your oyster when you looked at the China market. It just felt like you could make trillions of dollars there. The problem was everybody always looked so far in the future and at how big it was. One of the great things I learned about working with them was you had to get baby steps accomplished every step of the way because you could never skip steps in that market. But you also were never able to go on the cruise control and just follow somebody else's lead because almost everything you did was historic. It had never been done before.

So the idea was to do one project that was relatively close to what the next level project would be and sell whoever you are selling to, hey, we did this and we know we have all the resources, infrastructure, and wherewithal to do this. Believe us and give us that opportunity. and then boom, you do that one. And then you go to the next climbing of the scale. Yeah. And so I think a lot of people are very uneducated or not informed at all when it comes to what this entails. And so to kind of level set, you're an American who was working with movies that want to get into China. And that seems like a pretty rudimentary or elementary exercise until you realize that the Chinese government and the Chinese culture is very

specific. And so you've got to have an understanding of, you know, kind of what they're trying to accomplish, because ultimately, you actually need approval, right. And so for the people listening to this, you're probably more familiar with like the Chinese, the Great Firewall. So companies like Facebook and Google are not in China, because they don't meet some level of standards. And so walk us through some of the examples maybe of how you being an American, but understanding the Chinese culture and kind of the government's goals, you would take a movie and work with them to actually gain that approval so that you could access this market that had over a billion people and represented a pretty material increase in the financial performance of a film?

Yeah. Well, first of all, you mentioned I'm American. I was on a plane a lot, but I was living in the US because I was really the conduit for the international business that we were doing on the ground in China and really the translator of what we needed to get done and also the salesmen of what we were accomplishing over there, et cetera. So one of the hard parts to understand is that you'll never understand China. Like even the Chinese have a hard time understanding China, but as an American, especially one that wasn't actually living there full time, there's a glass ceiling that you hit really hard. So my feeling was like, I needed to understand the most macro basics and then utilize that KISS principle, keep it simple,

stupid to try to apply the macro to whatever we were doing on the micro. So the best way I did it, and I talk about it in a book, is you got 1.4 billion people there. 92 million of them are CCP members, but there's 1.4 billion people. And the leadership there, the CCP, is just trying to keep those people just happy enough that they don't revolt. They don't want another Tiananmen Square incident. And the reason I say just happy enough is because there's so many people there. If you made them all happy, the world would be Swiss cheese. There's just not enough resources on earth for that. So they got to give them all of what they need, which is part of the big push that they have to rid themselves of extreme poverty, which they claim they've

completely accomplished. And then also push as many people into the middle class as possible, because that allows them all of what they need and some of what they want. And to date, they've say they've brought 600 million into the middle class, which is an unbelievable number, but that still leaves another 800 million that aren't there. So there's two things. One is when you're selling a product or a service there, you need to think about that bringing people into the middle class objective, because that plays into people not revolting. So part of that is when you bring a product and service in there, you want to pitch to CCP why that might actually help them accomplish that goal. It's not beneficial to them just to let the product and service in there and have their consumers consume it because that doesn't help the middle class objective. It's better, and this is why you see forced JVs and tech swaps and various other things.

It's better to say, hey, let us bring in this product and service and we'll form joint ventures, or we'll do co-productions with you, or we'll do skillset exchanges, or we'll do various other things that allow you, and in particular in my business, the film industry, to build your film industry from a very nascent fledgling industry to one that can be world-class and provide lots of middle-class jobs. So everything we did in the movie business had to do with that idea that you let this product in, we're going to help you fulfill that middle-class objective. And even if it wasn't quite as practical or tangible of creating those jobs, if you could create the messaging that allowed them to message their populace that, hey, this is good for China because it's going to help bring people into the middle class, it's going to help showcase us as a country of the future where people want to do business, where people want to visit, spend money, etc., then that also satisfies their objectives. So the goal was always to sell the CCP on why to provide you access to their consumer, number one.

And then once you got past that, then you had to sell all over again to their consumer base. And part of that way that you sold the product and service had to be approved by the CCP. So you weren't just always focused on the consumer at that point. You were focused on the consumer, figuring out what's going to get them excited about that product and service, and then thinking how you're going to pass it through the Ministry of Propaganda and CCP. So two entities you have to sell to, but then one main entity that you always had to think of, and that's the CCP. So let's walk through a couple of these examples, right? Because maybe we could start with Looper first. And really, the idea here is to highlight or illustrate,

like, as you're creating a movie, we are talking about actually changing the content of the movie in order to fulfill some of these goals of the CCP. So tell us the Looper story and kind of how that came together. Yeah, the Looper story, it's a great case study. It's super colorful, but it also is a very applied, practical case study that handles a lot of stuff that we just talked about the previous five minutes. So with Looper, that's a movie. It's a sci-fi thriller, if anybody hasn't seen it,

that stars Bruce Willis and Joseph Gordon-Levitt and an actress named Emily Blunt. Bruce Willis plays the role of Joseph Gordon-Levitt 40 years in the future. So essentially, the movie takes place in the relative present day, and then also 40 years in the future. The original script, we thought, was a really interesting sort of mid-size, it was roughly a $30 million budget, that would work in that market with consumers. The problem was, there were a lot of censored items in it.

Number one is time travel. Time travel or telling any story in the future is pretty much banned or censored by the CCP because the CCP is so careful about what the narrative is in regards to China as they move forward into the future. So they want to dictate exactly what that messaging is. They have the same directive in regards to anything that's told in the past or in historic terms or using time travel to go in the past because they want to be very careful about how they cultivated the messaging of where they came from and how they got to where they are today. So that was a big one. The second one was we wanted to shoot the movie in China, but the script took place in France in the future. But in order to do it in China, one of the problems was there was crime on the ground in the future, which China doesn't like to showcase on their own soil. And there was drug use and various other activities that are typically censored. But we felt like if we could shoot the movie in China, move the script to China in the future, and showcase China in the way the CCP would be proud of, we could eliminate all those issues with the movie and actually get the wind to our back to release the film there at an opportune time. So we started with Rian Johnson, the director who now directs a lot of the Star Wars movies. And we said to him, hey, your movie takes place in France in the future. But France in the future, who knows where that's going to be 40 years from now. It could be bankrupt. Who wants to live there? Blah, blah, blah, blah, blah, blah. China, we know, is going to be a major behemoth 40 years from now.

So why not move it to China? Oh, that's interesting. And on top of it, obviously, we had a lot of financial incentives to it. And we added production days to the budget. And ultimately, Ryan signed off on it. So then what we did was we decided, what city do we want to showcase Bruce Willis living in in the future? And we decided on Shanghai.

So then we worked with the Shanghai municipal government. And we said, we're making this movie where we're going to showcase China in the future, where the main character, Joseph Gordon-Levitt, when he retires as a gangster, he wants to move to China because that's where everybody in the world wants to be. And they were like, oh, that's interesting. And we said, well, what do you want your city to look like 40 years in the future? Because everybody wants to be there. So let's design it with you. So we actually use CG and design teams to work with the Shanghai municipal government to create the backdrop that would be in all the scenes through CG renderings. And a big part of that was the Pudong District, which is across the river from the Bund Harborfront.

And you see photos of it with the big television spear and all the gleaming glass buildings. So we built a bunch of buildings of their future that would showcase this amazing Mecca of where everyone wanted to be. And ultimately they signed off on that. The CCP thought it was amazing. And then the CCP said, well, what are you guys doing about middle-class jobs? And we said, well, we're going to shoot a bunch of the movie over here. And we're actually not going to take all of the crews from Hollywood and the crew members that we need. We're actually going to utilize your people on the ground and anybody that's a little in over their skis, we're going to actually come in early and train them so they can get up to speed and work with us in a world

class manner. And when we leave, their skill sets are still going to be there on the ground. So you can help utilize that to make your film industry great, which by the way, now that I look back at it, we helped accelerate their film industry. So now it's a major competitor to us. But at the time they thought it was brilliant. We got the job done. The movie ended up fantastic. And because of it, this normal movie that would have never gotten into the market, we got into the market, we got access to their national holiday release a week, which is usually banned for anything from outside of China. But they designated the movie as a local production because we did so much with China. And they allowed us to release it against just their local movies, which was fantastic.

And ultimately, the movie was a top 10 movie that year. So then we went on from that looper case study, which was one step of the ladder to the next one, which was, what do we do now that we did a $35 million movie and prove this? Let's go after a $200 million movie. And that's where that movie poster behind me, Iron Man 3 and Marvel came into play. And so what's really interesting about the Looper case study, I think, is it sounds like you hit two of their main concerns, right? One is we want China to be kind of highly sought after in terms of the future view of it and then two is or aspirational is the word i was looking for and then two is uh you actually were able to uh create economic impact on the ground uh and also

skills right to kind of help people move into the middle class and then do that in exchange what you know the the movie producer the directors etc um ended up doing was changing the scene changing some of the content whatever um to kind of meet in the middle ground or a compromise if you will. When you then do that, you talked about Iron Man 3, much bigger production. Walk us through that example in terms of what the changes were made and what you guys were looking to address so that the movie would ultimately get greenlighted and allowed access into the Chinese market. Yeah. I think one of the parts that you brought up there that's really important is there's only so much you can do in regards to pulling in a bunch of people into the middle

class with any given project. But you talked about narrative and messaging, right? The CCP, if they're going to give access to anything from the outside, they want to make sure that either it's doing something tangible, like creating real jobs, or it's something that they can showcase as, hey, populace, look at what this movie is doing. It's making all of us look amazing in the future. We are the country of the future. This is where we're going. And us, the CCP, are leading you there, right? Keeps everybody happy. Iron Man 3 was sort of the same case study, yet it involved a lot more layers of convincing on my side of the Pacific, right? You had Marvel and you had Robert Downey Jr. and Disney and various other big filmmakers involved with the project. So a lot of the things that we were able to ask the Looper filmmaking crew to do, we weren't able to push through that massive sort of filmmaking village that was involved with Iron Man 3. And in the book, I give examples of some of those crazy meetings where there was even a moment, well, there was one meeting where I was actually trying to convince Marvel that there's a kid in the movie who sort of saves the day.

The movie is about how Tony Stark feels in order to be the person he is, he has to be Iron Man. And ultimately, he loses the power to be Iron Man in the middle of the movie and almost dies. And he's dragging his Iron Man suit through the snow about to die. And this kid saves him by bringing him into this warming hut and nursing him back to life and whatever. And then later in the movie, you find out one of his pieces of armor is stuck in the shed and this kid has to open the shed up so the armor can fly out and get to Iron Man so that he can save the day. My idea was to use that kid as the perfect relevancy touchpoint to get the window back in China. And the idea was to have him be essentially the son of a CCP member who was on exchange in this country. Senior level CCP members actually do a lot of research on America by living in America for a certain amount of time.

And they don't go and live in Los Angeles or New York or San Francisco. They actually live in middle America. And Xi Jinping, who wasn't running China at the time, but we knew he was going to, actually spent a lot of time in Iowa. And that's actually how he got to know Branstad, who's now the ambassador to China. So the thought was, well, what happens if a guy like Xi Jinping was living in the middle of America and had a kid with him? And that kid, Chinese, saved the day for Tony Stark in Iron Man, and it becomes part of the plot of the movie.

I thought it was brilliant. Marvel, essentially in the meeting, said, let us think about it. I come back in the room about 20 minutes later, and they go, we're not going to use that. And I said, why? And they're like, we don't want the sidekick of Indiana Jones in this film. So that got shut down, but they ended up coming with an alternative. So what we did with that movie is, in terms of looper case study, was we shot some of it on the ground in China. We brought in a guy named Wang Kexi, who played essentially the Chinese, the vital Chinese role in the movie in order to get the wind to our back from the CCP.

And then we implemented various other technological components, because the Chinese love to be sort of at the forefront of technology, into the script so that we could actually showcase how this movie was putting China on this certain pedestal in various ways. It was much more minimal of a disruption in that particular movie than it was with Looper. And in fact, it was so minimal that the government in China was pretty unhappy with it. So we actually had to make an extended cut of footage in order to please the Ministry of Propaganda in China to give us access to the market, which is a whole nother can of worms that I talk about in the book. For sure. And so before we get to the third example, which is Point Break, one of my favorite movies, but the two examples we've talked about already, Looper and Iron Man 3, what are we talking about in terms of financial performance? getting into China versus if you hadn't gotten to China? Is this a 20% increase in revenue? Is this a 500% increase? How does the Chinese market and that access change the financial gain for our movie? Yeah. Well, it's a great question. And obviously, it's a very important one. And I will say one of the great things about working with Kevin Feige and his team at Marvel is they never

once said, hey, if we do this, how much more money are we going to make? It was always, hey, if we do this, does it make the movie better? Does it fit into the Marvel universe? Does it make our fans feel okay about putting it in there? Does it harm our brand or hurt our brand? Those are the questions they always ask, which is very different from a lot of other business leaders where it's like, okay, we're game if it makes us X amount of more money. So for one, I want to compliment them on that. But at the time they were true antagonists to me because it was making my life very difficult. Now, for the financial reward of it all, when we made that deal, Marvel's biggest grossing movie at the time was Iron Man 2. It made $20 million in the China

market. When Iron Man 3 came out, we broke every single record. In fact, we made $20 million opening day. The movie went on to gross $125 million just in the box office in China and much more elsewhere. And then to date, the last Marvel movie, which is the final Avengers movie, made $670 million in that market by itself. Marvel is now the most valuable entertainment IP on earth in the China market. So the fact that they went out of their way to try to figure out smart ways to create relevancy and satisfy certain CCP objectives had essentially teed up Marvel over the years to become that valuable. And it's only getting more valuable as time goes on. Yeah, it's absolutely fascinating. And so moving on to Point Break, this is a remake of an old

movie. You've told me that it didn't do so hot in terms of the remake. I love the movie just because of the messaging behind it and kind of living your life fullest every single day. But talk a little bit about kind of what you guys did there to be able to access the Chinese market as well. Yeah, well, I think the better story with Point Break is what we tried to do that turned out not to be great. It was sort of the reverse of a case study. But Point Break, and by the way, anybody that remembers the first one, most people critically panned the second one. So I apologize guys in advance for that. I actually thought it was a pretty cool movie. We made a lot of money with it in China, but elsewhere it didn't. And it probably would have been better that we'd never

made the movie to begin with. But when we were working on the script to get it ready for production, we were looking at ways to satisfy the CCP objectives that we talked about earlier. And we came up with this really interesting scene that would showcase Shanghai once again, and showcase the skyline and just make a really cool sort of action sequence that would also utilize their crew and everything else on the ground. So the idea was in the Pudong District, there's a 150-story building, a fictitious building, and it's gleaming glass. And at the very top of it, there happens to be a diamond dealer broker up there.

And our Robin Hood characters in Point Break ride up the freight elevator on motorcycles. it opens up everybody looks there's a bunch of guys and you know helmets black dressed and hammers in their hands and they're like what the heck and then boom they're driving straight out of there at full speed and they start knocking all the diamond display cases with the hammers breaking the glass grabbing as many diamonds as they can and everybody's going oh my god screaming the security's chasing after them and they keep driving faster and faster and faster towards the other side of the building and obviously everybody's going well obviously

they're going to stop at some point but no they don't stop they keep accelerating stealing diamonds along the way and boom they crash right out the windows of the top floor of 150 story building well game set match no not at all they had parachutes they parachute across the river over the bun harbor front over a bunch of the markets peasants below and from thousand feet up They release all the diamonds to the peasants, and the peasants, who are obviously poor, see these diamonds hit the ground, and they gather them up, and it's an amazing sort of Robin Hood action sequence. Well, the CCP did not think that. In fact, the CCP said, if you put that in the movie, you will never get this movie released in China, and we said, well, why is that? And they said, well, two reasons.

Number one is they would have been caught by the police before they even got out of the building. That's number one. And number two, even if they did get out of that building and released all those diamonds over the peasants, not a single Chinese peasant or a Chinese person would pick up those diamonds because those diamonds weren't theirs. That is just simply not Chinese. And I remember us all scratching our head going, wow, okay, we didn't think about that one. And the beauty was, is we loved the action sequence. So we kept it in the movie, we shot it in Germany instead. But it was an interesting sort of teaching moment where sometimes American hubris and what you think

is really smart, actually doesn't really translate in the Chinese CCP eyes. Yeah. And it's so crazy to kind of see almost the negotiation over some of this content. And I think that the counter argument to this, which I know that you're not blind to, is when Americans hear the office of propaganda, or they think about censorship and that type of stuff, they get very queasy and they say, wait, this is not American, right? Or this is not kind of the approach that we normally would take. Talk a little bit about kind of as you were doing this, what folks you knew were saying to you, kind of how you thought about the work that you were doing, and then maybe how your opinions changed over the last couple of years.

Well, and like we've talked about offline, I mean, one of the big issues that when I look back at the fog of war, that was really the 15 years I cover in the book, we were under this tremendous mission that we all believed in, which was globalism. And this mission that opening this market of 1.4 billion people, no matter what it took, was the smartest thing that you could do as a capitalist and somebody that was trying to create opportunity for Americans. The more products and services we got into that market, the more money there is to make. And then on top of it, you know, we're spreading soft power influence into the country. That was the mission. That's what we believed in. And that's what guided me through various chirps in my ear through those

years, including my wife, who many times said, well, what's I overheard that conversation on the phone? Well, why are you guys doing that? Like, isn't that sort of not what Americans are about? Or isn't that sort of kowtowing to their censorship or whatever it is? And I was like, Jen, Jen, Jen, you don't understand. We have to open this market. Trust me, this is the right way to go. She's like, okay, but it just doesn't seem right. Various other individuals did the same thing through that. I hit on that a couple of times in the book. What's really frustrating to me as somebody who thinks of myself as relatively intelligent is that that fog of war blurred me massively to all the pandering, kowtowing, and quite frankly, the wrongdoings we did for

overall long-term health of America in opening that country, though our products and services. And it wasn't until a couple of days after Daryl Morey tweeted out that support for Hong Kong last October, where I suddenly woke up to it. I saw that I was sitting on a soccer sideline with a couple other soccer dads watching our kids play soccer that tweet popped up on my phone I remember saying to one of the dads whoa that's going to be a huge problem for the NBA in China he said why and I said because this guy I've never heard of him before but he's the GM of Houston Rockets and Houston Rockets because of Yao Ming is one of the biggest branded teams there and the NBA is always under scrutiny in regards to anything that they're doing that's not CCP

he, you know, approved, it's going to be a problem. And I was right. That happened over the course of like six hours, you know, they went from, you know, the hero of China to the goat of China. And what I didn't see coming, which happened over the next couple of days, was this wokeness that occurred across America, red and blue, people going, wait a minute, what, why is the NBA stuttering over what their response is in regards to supporting somebody who exercised their right of free speech on our land about something that we do care about, which is the protesters and the rights and the human rights of these Hong Kong people. Why are we backtracking off of that? Why are we not backing that? Why are we staying silent? Why hasn't LeBron said anything?

And that was the moment where I'm going, holy cow, like everybody's complaining about this pandering and kowtowing and this sort of third rail issue problem that we have with China. And I was 100% complicit in it too. And then I started thinking about all the book content that I had written. And I was thinking, I'm going to have to address this in the book somehow. I don't want to mess around with the 15 years where I was in that fog of war, but I want to address it in the afterward. And I also want to hit some of those notes where people were chirping in my ears and I was too blinded to listen. So that's the moment where I realized it. And that's where I'm on this crusade and mission today, as literally, I was on with PEN America, this guy, James Taggart, who wrote the PEN America report about Hollywood's kowtowing to China last night on a podcast. And he's like, you're literally

the only one in Hollywood going on the record and talking about this right now. You are the squeaky wheel. And I said, I know, I get it. I'm sacrificing a lot to do it, but I believe in it. And I know from the emails of support and the different people that have called me about it in the Hollywood community who have said they can't talk about it publicly, I know I'm going to be able to get them there to be a squeaky wheel with me. And I also do see a way for us to do that step approach, engineering style, to get to a point where we do get to a rebalanced relationship with China, where we feel okay as Americans opening that country to our products and services. So a lot of people are going to hear this and be like, oh, listen to this crazy conservative guy

who's basically worried about China, China, China, China. I don't think that you're actually a conservative. So maybe talk a little bit about your political affiliations and how this book has kind of transpired the party lines. Yeah, well, obviously, I'm in Hollywood, which leans left. That wasn't the influence in my political affiliation. It was actually my parents who are pretty liberal. I've been a lifelong Democrat my whole life. No one's actually asked me on the spot what my political affiliation is, but I have no qualms about keeping it quiet. What's super frustrating about it is if you look at all the different things that are important to Democrats about China and some of the problems that we're having with this bilateral

our relationship, Democrats should be all over the case. I mean, from human rights violations to freedom of speech issues to the decimation of our middle class and labor class in this country, it is just as Democrat, if Republican, if not even more of a Democrat issue. Unfortunately, right now, mostly the right is talking about it. And for me, I'm nonpartisan on this issue. This is a red and blue issue we need to address together, both parties and all Americans. China has one message over there that they get from the CCP through the Ministry of Propaganda, 1.3 billion people, not the Politburo or the very well-off who can get around the firewall on VPN, but 1.3 billion people get one message over there. Here in the US, we get two

or plenty of others. But for the most part, you got MSNBC and CNN and Rachel Maddow, etc. And then you got the tucker carlson's and the fox news is etc on the other side we need to at least with this particular challenge we need to all come together on it we need to all be on message and we need to be ready to fight you know fight the long game because china's already on message on it and they do have 25 50 75 year election cycles or not even election cycles just mentality Whereas we have two to four year election cycles where we think very short term. So the bottom line is right now, I'm taking the platforms that are given to me to get this message out. And I am pounding on the door on the left, my side of the aisle, to allow me on those platforms too, to get this very important message out. And the fact is, the way I wrote my book is an appeal to a broad audience, like it is Michael Lewis memoir, colorful, it's actually written in a three-act structure like a movie script, so that I could hopefully appeal to as many readers as possible that just want to engage in a great story with great characters, but then also absorb some information that I think is really powerful to have

in order to try to figure out as a voice in this how we're going to address China moving forward. Yeah. And one of the things that is really, I think, unexpected as we've talked more and more is you've got this framework around a single centralized kind of cohesive message coming out of China and yet a almost competing messaging coming out of the United States. And so what that leads to is there's not a lot of collaboration, not a lot of cohesion kind of in our response, right? And we're seeing this with the potential banning of TikTok and WeChat and all this kind of stuff where essentially China has really enforced a very strict, great firewall on United States technology companies. And in response now, the United States is potentially

doing that back or reciprocating that kind of treatment of technology companies. Talk a little bit about kind of this framework and why you think the United States having this cohesive response and message, one, is important, but also two, why do you think that it can actually work? Well, number one is the cohesive message is sort of interesting because I've written a couple op-eds over the last few months where I try to address a given issue, both through the eyes of red and blue. So for instance, and Shamath on an interview with you brought this up back in April about this supply chain dependence or this massive efficiency we have in our economy, which is partially due to supply chains being overseas and some of those supply chains being in countries that we don't

necessarily have the best relationship with, especially in times of crisis. China is one of those. So one of the things that COVID brought up was this idea that we have massive supply chain issues that are tied up in China. So part of that involves national security interests, right? The pharmaceutical businesses and all of our antibiotics, quite frankly, are made outside of this country and most of them in China. If you look at red and blue and what gets them excited, gets their constituents excited, there's a way to argue that there's a come together on the supply chain issue. On the red side, the supply chain issue could easily be defined as a national security issue. And that's something that the Republican side gets very behind. Obviously,

the Democrats do too, but it's more of a Republican side. On the blue side, on the Democrat side, that supply chain issue is also part of the reason why our labor class, our middle class has been decimated. We've moved a lot of, and in the case of national security issues or pharmaceuticals, a lot of those jobs are potential middle-class jobs, right? It's not a t-shirt factory making Nike t-shirts. It's actually a real skilled position that's involved with these different manufacturing areas. So those things, combining the Venn diagrams there, you got national security, and then you got labor and middle class, you can get red and blue on the same page about trying to address that. And it's the same thing that I look even at the cultural

side of things where this pandering of China in order to get content in there, whether it's movies or television or music or Nike shoes or NBA, whatever it is, there's a real argument not to fully decouple and say, let's not do that anymore, right? Because on the left side of the aisle, the blue, you could say, hey, every time we get a kid wearing a pair of Nike shoes, every time they watch a movie, every time they are subjected to an NBA player doing something dazzling and talking about America, there's that fantastic sort of diplomatic tool that culture creates as a glue between the two superpowers. And then on the red side of it, that cultural exchange and that effect that we have on their populace can be seen as a weapon, right? That

weapon is something that creates more and more of an excitement around democratic values and principles and might draw that populace to a boiling point where they actually rise up and overtake the CCP. And it's something that you could argue we were doing in regards to injecting culture into the USSR during the Cold War or into various African states in the 50s when they were deciding whether to go communist towards the USSR or towards free market or free democracies like the United States. I mean, we used to send over black jazz musicians to some of those countries to showcase the freedom of artistic expression in order to get them to want to be more like a democracy. So weapon, democratic tool, labor middle class, national security supply chain

issues, there are ways to get red and blue together. I 100% believe in that. Yeah. And you previously mentioned to me this idea that it's basically career suicide for most people to step out and talk about this, right? So if you're an NBA executive, if you're a team owner, if you're a general manager, if you're a player, off limits conversation, right? Like you're just not going to really have a win in terms of your career. Now, there's many people who are willing to still talk about it because they see something other than their career as important, but from a career perspective, not good. Hollywood seems to be the same thing. Even at the corporation level, we see tech companies, we see all kinds of businesses. People do not want to talk about this publicly because they see it as basically no upside. Right. And so what I think we've seen is every time somebody does talk about it, they're almost alone on an island. Right. And when they talk about it, it's easy to get struck down by their peers, by the media, by the Chinese media, by just becoming unpopular with the Chinese people, all that kind of stuff. I think your argument is, wait a second, if we keep sending kind of individual people out there or individual companies on their own to stand up and kind of fight the fight by themselves, we're never going to win, right? That goes back to that lack of cohesion. But if we all get together and take a stand as a country from the no-name private citizen up to the biggest celebrity to the largest corporations to the halls of Washington, together we can take a stand and not only, one, protect each other because you've got power and unity, but also actually make a difference and force things to change, right? Yeah, I mean, so there's not a lot of people like, I mean, obviously, I can sell books off of this squeaky wheel message. But unfortunately, that doesn't replace the income I was making prior books are not that profitable. But the message that I'm super passionate about has sort of overtaken what I want to do as a person. So that's an exception right now. And what we're seeing is people that are putting their heads in the sand are doing it because they have a lot to lose by saying something. The people that are coming out and saying this is a problem actually don't have much to lose or actually have a lot to gain from it.

If you look at Senator Marco Rubio or Josh Hawley or Senator Blackburn or Bill Barr or Pompeo, etc., they're gaining either political status from it, they're getting constituents excited around this red meat idea, and that helps them win elections, whatever it is, right? They don't care that they can't get business done in China because they don't have business done in China. However, to me, that doesn't matter. To me, the fact that they're putting it out there and making people aware of this problem is just as great as what Daryl Morey did in regards to getting me aware of the problem and a lot of other people. Like, we need more of that. Whatever the agenda is, I don't care. Where the people are staying quiet, that's the part where we have to work on, right? So the more that uprising and that soapboxing gets people aware of this and want to talk about it, the more pressure it's going to put on those C-suite executives and the investors and the different shareholders of these companies.

The goal is to get to a point where it's not a whack-a-mole sacrificial lamb situation. If Bob Iger wants to make a stand, he's going to decimate the Shanghai Park in China. He's going to screw up their movie release schedule. It's going to be a real problem for Disney in one of their highest growth areas on their balance sheet. Investors, shareholders will then remove Iger from that job or it's actually Chabak and then replace them with somebody else who's willing to put their head in the sand and not pretend like this doesn't exist. So the whack-a-mole doesn't work. It just sacrifices certain individuals and then they're replaced. So the only way to deal with it is strength in numbers. And one of the things that I recommended on the podcast last night with the PEN America lead on this Hollywood kowtowing situation is you get the MPA evolved, which is the trade association for all the studios. And they essentially back the idea of, say, right now Paramount is dealing with this problem of having a Taiwanese flag on the back of Tom Cruise's jacket in the reboot of Top Gun. They have relented to CCP pressure.

They're taking the Taiwanese flag off for the China market. I'm okay with that. That's censorship within their borders. The problem is China is pushing them to remove it for the rest of the world to see. So they're essentially using that movie to impress upon the rest of the world that there is no such thing as an independent Taiwan. That's propaganda and censorship and soft power influence that we shouldn't put up with. If Paramount stands up to that, Paramount will be blackballed for a couple years in the market. They'll be replaced by Universal movies or Disney movies or whatever. So Paramount right now is going to give in and let the CCP dictate what they do with that jacket. What we need is all the Hollywood studios to say, we stand behind the freedom of artistic expression that Paramount needs to stand behind. And all of us will support them in this decision. And when they say they are going to let that cut be seen around the world that you don't want CCP, we're going to have you guarantee that you don't retaliate against them.

And if you do retaliate against them, then you will get zero Hollywood movies from us until the time that you redeem them back into your good graces. And that's the only way we're going to have the ability to push them. And the reason why I know this works, and we were talking offline about this, is that China is practical. China, in a way, is like a teenager. They will keep pushing. And the parent that says, oh, you know what, boys will be boys, girls will be girls. Let's not stop them there. That's just going to create a problem or whatever. Well, the teenager is going to push again, and it's going to push again. It's 11.15 at night. They haven't showed up. The turf is at 11. It's 11.30 the next time. It's 11.45 the next time.

It's midnight the next time. China's the same way. They see an ability to push on an area that they can get more and more influence on. They're going to keep doing it. And it's not until they get pushed back where they get practical and they go, you know what? Let's stop. That's as far as we'll go. And an example of that is this Wolf Warrior diplomacy, which they had implemented, say, six months ago. Around COVID, a lot of it, where they were trying to show that their form of government was much better in dealing with COVID, and they handled it much better than other democracies.

and then they have the Belt and Road Initiative that they've been pushing and various other things they've been pushing on various countries around the world. Well, Australia stood up against that. Many European nations stood up against that. United States stood up against that. And even though we haven't gotten an official statement out of China, that wolf warrior diplomacy push from the foreign ministry that had been going on strong for six months has disappeared over the last month. And to me, that's an example of strength in numbers caused them to pull themselves back from something they kept aggressively pushing forward on. So I know from that example and various others that I've seen over time, we can do this, but we can't do it single handedly. We

can't do it just Republicans or just Democrats. And we can't just do it all at once. We got to check boxes as we go through the process. Is it fair to say that this is something that the Hollywood production studios, the CEOs, the top eight or 10 of them could get together and decide, hey, this is what we're going to do. We're going to take a stand. If they came out together, a lot of this would go away, or do you think that's not enough? I think right now, there's still this belief that's going to go away. It has before, and I think there's that belief there. I think there's even a belief that once the November election is done and talking from Hollywood's mindset, they 100% believe

Biden's going to win, that when Biden takes over, this China thing is going to get figured out and we'll go back to a relative normal. My feeling is that no matter who wins, we've done so much damage with the relationship that it's not going to go back to normal. There's a lot of things that we woke China up to the same way they woke us up to, where they're going, wait a minute, we got to get more sufficient over here as a nation. We need to protect ourselves from this or this or from the next crazy president or whatever they want to do. They've woken up to it. We've woken up to it. So things are not going to be normal. As long as the populace keeps putting pressure on Hollywood, I think Hollywood's going to have to deal with it. And if Hollywood doesn't

deal with it on the offense and proactively, my guess is that they will get called to Washington, D.C. and put on the stand in a soapbox sort of way to actually say what they're going to do about it, which, as we know, is probably not the most constructive way to get it done. I've been dealing and working with various individuals on the China task force with Congress. In fact, I was on Congressman Mike Gallagher's podcast recently. My recommendation is that they reach out to C-suite executives in Hollywood and have private meetings essentially talking about the pressures that are causing them to be quiet, to be crickets on this issue, and allow the congressional members to talk about why they're getting pressured to actually be vocal about it

and try to figure out where the Venn diagrams coexist and where there might be interesting baby steps to get to some place where the populace calms down a little bit about this kowtowing and pandering and actually hollywood can talk more about it freely knowing that they have the weight of the nation protecting them from any sort of retaliation so i know it's possible but we have to have the dialogue like the third rail issue has to disappear we have to speak openly about it we can't pretend it's going to just go away because this time it is not I may be completely shocked, and it does, but this time it feels real, and it feels like we're going to have to do something to address it. How prevalent is this in Hollywood? If you had

to put a number on it, is this 50% of movies are dealing with this and having content change? Is this 80%, 10%? What percentage of movies do you think are being affected by this? I would say outside of Netflix, and Netflix tried to get in that market for many years, And I think they've come to the realization that A, they don't need China and B, they're never going to get in there because there's competitors that are Chinese already that the CCP is backing. So Netflix, even last year, had a documentary about the one child policy. Netflix doesn't care. Everybody else has massive business interests in China. So every piece of content by every division inside all these vertically integrated companies is thinking about China and is premeditatedly or working ahead of the script level or during the script level to avoid antagonizing the CCP in any way. Now, let's face it, 90% of all movies probably don't even tread anywhere near the kind of stuff that's going to antagonize China at all. Probably out of that other 10%, say 5%, they would have to go out of their way with certain plots to make it antagonistic and make it a problem. But that other 5% is actually truly either being proactively avoiding certain things or making sure they avoid things that they're aware of that are censored or sensitive in that market. And then the other half of that 5% is actually proactively trying to create more relevancy for that market because next year, that will be the largest market on earth.

So to not pay attention to it as a movie maker, as a television maker, as any sort of content maker in Hollywood is a fool's errand. It has to be done. That is where the growth prospects are. And now that COVID has disrupted a lot of the economics involved with how you monetize content, China has become even more important. Yeah. And then how does the Federal Reserve play into this, right? You previously said that there's a risk that they're lulling us into a war with China. Elaborate on that a little bit or explain kind of how you think about the Federal Reserve and some of the actions there. well so there's and you and you've talked about this in interviews where you you realize like there's certain things that happen to you in life and you're going oh my god I better learn all I can about this or it's going to happen to me again and in the book I talk about a very low point in my life in 2008 where my family my wife and I had lost everything um after Lehman Brothers went bankrupt and and that was a point where I decided I'm going to try to learn as much as I can from sort of a spectator level about Wall Street and how the financial system works. And

of course, you learn a lot about central banks and how that's all governed. And one thing that I think has happened drastically over the last year, and COVID's a big part of it, and I'm not saying the Fed is doing wrong things, but I think the amount of duct tape that they've wrapped around the U.S. economy right now in order to save it from a COVID depression has created this massive Prozac effect from anything affecting U.S. markets, U.S. stock markets. And for bad or good, we've looked at U.S. stock markets, especially President Trump, as the ultimate scoreboard in the game of how is America doing. And if you go back to last summer, and I was actually on the ground in China with three congressional members on this delegation trip where we were

in Hong Kong and also in China, every day there was a tweet, more of a barking kind of tweet from President Trump about what he was planning to do in order to fix the trade imbalance between the U.S. and China. And in fact, one time he tweeted out, I hereby command all U.S. businesses to remove their business from China. And the markets tanked like 800 points literally within 30 minutes of that tweet. And then over that weekend, they were all in Spain talking about at the G8 summit or whatever, talking about whether he meant that or not. And then the market sort of came back. But that type of market reaction for just a tweet that was barking, not biting, barking, created a massive downswing in the Dow and the S&P and the NASDAQ. And those type of downswings

wake everybody up to, whoa, that might have been pushing it too far. And by the way, I would argue it's not pushing it too far, but it wakes everybody up. It's that canary in the coal mine where, okay, are we sure we want to go down this path? Because that's going to keep happening if we do. Now we're in a position where we're not just barking, we're actually biting against China. We are creating major plays against China that affect journalism, that affect rights, that affect banking sector, that affect tech companies, that affect supply chain issues, like real actions that cause real ramifications, both negative and positive. The markets have not reacted to any of them, none. And to me, that's a real problem because that lack of any sort of scoreboard

change due to what we are doing with China right now is prozacking us into a more and more extreme approach to China, where we don't even notice that we're getting more extreme. And eventually, that extreme approach is going to get to a point where we do actually enter a Cold War, which is something my book is very, very proactive about us avoiding. And even worse, we could move into a kinetic war. So I feel like the Fed is creating a situation where we're not even able to understand how serious this is getting. Yeah. Well, they're definitely pushing us that way, I think. The last thing I want to finish up talking about is recently Trump and the administration came out with two executive orders that essentially ban American businesses

from doing business transactions with both ByteDance, which owns TikTok, and then Tencent, which owns WeChat and a few others. And while we've been recording this, actually, it looks like Apple has removed Fortnite from the App Store, which I think is kind of related to this. And so any thoughts around kind of those executive orders, and those seem to be more bite than bark, right? And people are kind of starting to respond and really take this a little bit more seriously. Maybe that is because they fully agree with, hey, we need to stand up and kind of do the quote unquote right thing. Or maybe it's literally just out of kind of self-preservation and I'm not going to go against the U.S. government because I don't want to fight my

own government while also having to deal with this issue. But for whatever reason, it looks like maybe business leaders are taking this seriously. So kind of what were your thoughts when you saw those executive orders? And do you think that kind of moves the needle in any way? Yeah. Well, ByteDance is an interesting one or TikTok because in a way, if you're looking at election coming up and President Trump's looking to get reelected and he's looking for sort of red meat angles, TikTok is something that a lot of people use or a lot of people's kids use. So it's one of those things where it really can create a lot of attention grabbing in regards to how hardcore he's getting on China. So I can see exactly why he's going after it in a political

sense. In a technology sense, I mean, let's face it, there is a lot of potential big data that is being stored from TikTok, primarily from teenagers that will eventually be influential voters or people of influence in the United States at some point. And I would argue that there probably is a real potential for that big data to be mined by AI at some point and be used against us somehow. I would also argue there's probably other companies that might be even better places to look in regards to activating big data against us in a much quicker fashion. But TikTok, I could say, and you guys, the tech companies probably know way better than I do about the reality of that threat. WeChat to me is actually a real threat on Chinese in general, because WeChat, even though it's not used as much by US citizens, almost all the expat Chinese use it for everything from purchasing power to sending money back home to various other things. very communicative ways to deal with all the different people around the world that they

have. A lot of companies utilize it with their expats over here. So I feel like it's very punishing on the Chinese people, both on the ground in China, in Hong Kong, and elsewhere around the world, particularly in the US. And it's also got a lot of really sensitive material on it, too. So it seems like there's a security issue there, but it also feels like there's a vengeful type of action in regards to WeChat itself. And I'd also argue that there's a real opportunity in both of these to create a more balanced or actually even an unfair pro-America sort of action that occurs that we've seen in China. For instance, China saying Google or Facebook, you can't come in here and allowing its own companies to sort of grow and blossom

from that prohibition. I could see the same thing happening here where you're essentially taking what TikTok built and forcing them to sell it to an American company and allowing that American company, whether it's Microsoft or somebody else, to benefit from it. The same thing with taking WeChat out of here and allowing its competitors to take off in a much better way. I mean, it's a tactic China has used against us. And it seems like many could argue that it's rightful for us to take the same tactic against China. Yeah, I think you nailed it when it was kind of there's a mantra and a belief of globalism. And it feels like now you're getting a nationalism type approach. And that is an approach that China has used very effectively and really changed the

trajectory of their country in many ways by using that strategy. And so now we're getting this kind of yin and yang or almost negotiation between nationalism and globalism here in the United States. And it feels like that's kind of the main show, if you will, in terms of how a lot of this will play out. It's just which one of those mindsets or approaches ends up actually kind of reigning supreme, if you will. Well, it's interesting because Shamath on an interview with you was talking about the efficiencies of this supply chain and how it's it's sort of prone to deflation right and and if we want to inflate ourselves out of some of these problems you know moving supply chains back here making those supply chains more expensive for the companies that are

creating those goods and services and then thusly more expensive for the consumers yet also creating jobs that hopefully allow for a thriving job market that allow people to raise wages through competition of their services. It's an interesting sort of positive feedback loop because in a way you're addressing some of the issues of deflation by dealing with national security interests or various other labor middle class problems. And then at the same time, you're going to create a more thriving middle class and a more middle layer of our economy, which will ultimately make the economy much healthier in the long run. And China seems to be at the center of both of those issues. So it's why I'm out there being that squeaky wheel. But then on top of it, I refuse

to be just a squeaky wheel, just a person that's out there calling people out. I have real solutions. I'm not saying they're all right, but there are baby steps approaches, which we've talked about offline before, whether it's getting the WTO designation from developing to developed to getting the SEC to apply standard accounting practice rules to these state secret hiding behind SOEs that are trying to get access to our capital markets, to simple things like turning over and changing the quota on movies getting into the country from 34 to an unlimited sort of capital, capitalistic version of whatever that market dictates to their return of box office, which presently is at 25% of every dollar, get it up to the global norm of 50%. And that's just one industry microcosm. There are a bunch of boxes we can check in every industry. There are big macro issues where we can check boxes. And over the course of time, just like how we made things worse over 40 years and didn't really notice it, we can do the same thing in a positive sense where over the course of time, we're just checking all these boxes. And soon before we know it, we're actually at this utopian rainbow version of a bilateral relationship with China. I get it. That's pie in the sky, but we can make progress. 100% we can make progress and we can do

it if we're unified. Absolutely. Before we get into the rapid fire questions to end it, where can people find your book, Feeding the Dragon? Yeah. Feeding the Dragon, you can see it in bookstores or on Amazon. I also have a website called feedingthedragonbook.com. Then I'm on Twitter at the Dragon Feeder. And I love having that exchange. I just got on there a couple months ago, but I'm having a blast with it. Yeah. And I think for those that are interested, a lot of what Chris and I've talked about today is obviously in the book. He touches on a number of these issues, but it's not written in what I'll call kind of an academic sense. He described earlier, kind of say much more entertaining, kind of sit on the edge of

your seat type read that's filled with stories. And he won't say this, but I will. He's a very good storyteller. So I think that people will just generally enjoy the book, but also really unpack a lot of these ideas and kind of see the real world examples of how this stuff has played out. And frankly, I think one of the takeaways from the book is just, it is so much more prevalent than people realize. And when they see the examples, they, you know, similar to what your wife said, wait a minute, that sounds weird, right? Or that isn't something that I would have thought happened in America. So definitely go check that out. And it's feedingthedragonbook.com. All right, two questions. Then you get asked me one to finish up. First question,

what is the most important book you've ever read other than your own? Well, it's a little bit academic, but I read Liar's Poker back when I was just getting out of college. And then I read it like another 15 times before I embarked on this book. And I combined that with reading Phil Knight's book, Shoe Dog, a couple of times, because I really wanted to get an idea of how, like, for instance, Michael Lewis took a subject that a lot of people didn't know much about Wall Street, and he made it into something that I really loved page turning in. And it was a really exciting sort of first person account of it. And then Phil Knight also did a great job of teaching lessons through his journey in Shoe Dog. So those were very

influential to me, especially at this point in my career. Second question's more fun. Aliens, believer or non-believer? Well, I went to Cornell University and I had the pleasure of seeing Carl Sagan talk there. And obviously I grew up watching all those Cosmos shows on PBS. I find it very difficult knowing that there's billions and billions of universes out there in our, in this amazing sort of, or galaxies out there in this amazing universe of ours. So I give it 100% belief that there's extraterrestrial life out there. I have no doubt about it. A hundred percent. I love it. You could ask me one question to finish up. What's the, what's the one question you got for me? Well, I, I just, I'm, I love your, your conviction

on Bitcoin. In fact, when you go up against the Shark Tank guys or Andrew Ross Sorkin, and they're just like such naysayers about it, you still stick to your guns on it. And I wonder, with COVID, and we talked about the Fed and central bank policy right now, and it's sort of just been amplified from what it already was doing. Do you feel like this bet you made going back to whatever 2016 is even more strong of a convicted you know conviction bet that you have now going forward like is everything the fed doing just making you feel like oh my god bitcoin why didn't i get into this in 2012 yeah i think it's um it's one of these interesting uh kind of perspectives where uh you got to be careful that when you put such a large portion

of your net worth into an asset. You don't want to just become so biased that the only data you find is the data that confirms how smart you are. And so I spent a lot of time trying to think about what's the data that disproves it. Unsurprisingly, I don't find much. And last year, I went through this big exercise in May, June, and into July, really just thinking about what was going to happen in the global macro environment and how would that play out for Bitcoin. And so a couple of times I literally wrote saying, look, we're in the late cycles of this bull market. I don't know when it ends. I don't have a magic eight ball or anything like that. But there's just a lot of warning signs. You could see it with even into Q3, Q4, the repo markets had a lot of

structural issues. There was inverted yield curves. There was a high level of CEOs leaving their jobs. It just felt like it's getting frothy. And so when that happened, I said, look, the only thing that the central banks have is they've got two tools. They can manipulate interest rates or they can print money. I think they're going to do both. They're going to manipulate the rates down. I had no clue they would go to zero, but I just thought they would go down. And I figured they would print money because we're just a country that in an economy that's addicted now to that monetary stimulus would have never guessed that they would print multiple trillions of dollars in, you know, three or four months, right. And so what I think really

kind of played out in that thesis was, if they're going to drop rates, they're going to print money. And timing wise, that's all going to hit around 90 days, give or take of the Bitcoin having or that supply shock, like, that should serve as rocket fuel for Bitcoin over the coming, you know, 18 to 24 months. So that was really the thesis. Obviously, you know, fast forward today, we have the benefit of hindsight. They dropped rates much more aggressively. They printed money much more aggressively, and that Bitcoin halving occurred. And so if you kind of look at just data points, year-to-date performance, stocks are flat. Gold's up about 25%, 30%. Bitcoin's up about 60%. And so it's kind of like Paul Tudor Jones recently called the fastest horse. So they're

going to print all this money. You're going to get a bunch of investors run into the inflation hedge assets. It's just a question then of which one goes up the most in US dollar value. And so his belief was that Bitcoin is probably going to be that. I tend to agree with him. But I think it's also one of these things where you start to look at the macro trend definitely is kind of wind at your back and frankly should carry the Bitcoin price much higher, in my opinion. But then there's these like more micro events. So today, as we're recording this, there was an announcement that a number of federal agencies, FBI and a couple of others, basically broke down, identified, and shut down a number of terrorist kind of, I think they called

it cyber-enabled money networks, which essentially was people had put up websites, whether it was ISIS or Al-Qaeda or whatever they were, and saying, hey, we're going to go and commit violence in the world, and it falls along our thought process, so send us Bitcoin in order to be able to do that, right? And I think in some cases, they even said it's untrackable with instructions on how to do it and all this kind of stuff so like in those situations like that's not good right in the sense of um now you get headlines where people are talking about bitcoin and terrorism financing of course the article has never mentioned like the you know two trillion dollars a year that's laundered in u.s dollars or all of the cash that's used for you know terrorist financing but i do

think like those micro uh events are worth one paying attention to and and those are actually the ones i spend more time kind of just thinking through like what is the ramifications of this because the macro stuff like if you know i i would bet everything i have that the federal reserve and the u.s government's going to have to come up with another stimulus package and they're in a deadlock today but like they're gonna have to figure it out because if they don't the kind of impact on tens of millions of americans will literally cause a revolt right And so you kind of get in these world of like, the macro stuff is pretty easy, I think, to call out, like, here's what they're going to do. Now investors have to navigate what are the impact on asset prices, when, how, you know, how severely, what should you protect versus capitalize on, like, those are the harder decisions. and then the ones that obviously kind of change a lot of this analysis is the unforeseen things

like today with this Bitcoin and terrorism stuff. So generally, I think conviction is much higher today than it was six months ago. But I've learned over the years, don't be too confident because things can literally change overnight. And I think we've seen that with TikTok and WeChat for one executive order and next thing you know, completely different ballgame. So I think that's kind of the way to look at it. Yeah, I agree. I mean, the news cycle and just the events seem to be on a dog years, like multiple level of frequency nowadays. So I even think of the November election that, you know, in the old days that you could probably pick who's going to win today and feel really solid about it. But knowing how fast everything changes,

it's almost like impossible to even know. I saw a meme on the internet. So before people freak out, this was somebody trying to be funny and I don't remember who posted it, but basically they were like, who would have guessed that in the United States, our presidential candidates would both be over the age of 70, both be accused of sexual assault. And they just went down the line and they were like, this is the best that we have. And regardless of what side of the aisle you're on, et cetera. I think there's a lot of people just saying, you know, look, I have no clue who's going to win, right? Because it is somewhat of a toss up. You've got a lot of uncertainty economically with the public health crisis, you know, things like with the relationship

with China. So, you know, again, I'm not betting on who's going to win that one. I'll just kind of wait to see how it plays out. It's going to be an interesting few months for sure. All right, guys, that is Mr. Chris Fenton. Please go get the book, feeding the dragon book.com. Fantastic read. And thank you so much for your time. We'll have to do this again, Chris. Yeah. Thanks for having me back. It was a real pleasure. Humbled.