The Pomp Podcast - #794 Competition Instead Of Conflict

Starting point is 00:00:00 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. Now let's kick this thing off. Today's episode is a breakdown of some of my personal thoughts around the United States, China, and the ideas of competition and conflict. I hope that you enjoyed this episode. But before we get started, I want to first talk about our sponsors. First up is LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by a 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra-low

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Starting point is 00:03:03 Venture to the forefront of crypto innovation and connect with OKEx DeFi today. Again, go check them out at OKEx. That's where you can find OKEx DeFi. All right, let's get into this episode. I hope you guys enjoy this one. Master, a retired United States Army Lieutenant General who served as the 26th United States National Security Advisor from 2017 to 2018. The discussion was quite wide-ranging, but a specific comment from General McMaster caught my attention. About 30 minutes into the conversation, the

Starting point is 00:04:00 General was speaking about the United States and China. He described the difference between confrontation and competition. This excerpt highlights his main point. He said, quote, what I would often hear from friends in Southeast Asia and beyond. These are my counterparts when I was engaging as the National Security Advisor. They would say, don't force us to choose. Don't force us to choose between Washington and Beijing. And what I would tell them is, hey, that's not the choice you face. The choice you face is between sovereignty and servitude. The United States is on the side of sovereignty. China wants servitude because what Xi Jinping wants to do, and the party is clear about this, is they want to establish exclusionary areas of primacy across the Indo-Pacific

Starting point is 00:04:42 region, and excluding who? Us. As the first step in being able to rewrite some of the rules of international commerce and political discourse, and to isolate the regional rival Japan. So I think we are at a critical moment where we have to compete effectively. This does not mean that we are on a path to confrontation. Because we vacated these competitive spaces, China became more and more emboldened, and we were actually on a path to confrontation. Now I think this idea of transparent competition is what we ought to really pursue with China, end quote. So this idea of competition rather than confrontation is a nuanced concept that is important to understand. The United States and China are the two superpowers of the world. They have competing ideologies and political

Starting point is 00:05:26 systems. The two countries are optimizing for the same end result, but they are choosing to take very different paths. Violent conflict was the default way of dealing with countries that are at odds with each other historically. That solution appears antiquated in today's environment. Modern weapons have evolved to the point where they're almost too lethal. Either country could wipe out entire cities and wide swaths of the other country's population with lightning fast speed. The collateral damage is unknowable. And frankly, the battlefield has shifted from atoms to bits. Cyber warfare is a bigger focus for both countries compared to military operations that would require invasions, the dropping of bombs, and potential loss of human life.

Starting point is 00:06:05 Regardless of the military tactics that are pursued, there is no denying that the United States and China are in a global competition. They are competing for resources, technology, talent, and ultimately economic prosperity. The United States' pursuit of efficiency over resilience was well documented by the COVID-19 pandemic. We were exposed to have little domestic manufacturing capabilities and a heavy reliance on international partners for the production and distribution of various goods. This realization has rekindled a concentrated effort to onshore manufacturing and supply chains while treating these important functions as national security issues. As we look forward to other areas of competition, it is hard not to identify the

Starting point is 00:06:46 intersection of money and technology as an important area of focus. The Chinese Communist Party has created and is testing a central bank digital currency that gives them immense control over their citizens. This new currency carries the exact same monetary policy as the existing renminbi, but the technology upgrade empowers the centralized government to more easily confiscate wealth, censor transactions, punish citizens, and exert complete financial control over all users. You could argue that this won't be a problem for the global population if China is merely going to hand this technology to their own citizens, but that is not their plan. Just as China has scoured the world for opportunities to lend capital and exert more influence or

Starting point is 00:07:26 control, they are looking for opportunities to increase adoption of the digital renminbi by citizens outside of China. As I have written about before, this pursuit of the Chinese digital currency is all about accessibility. If you are a citizen in Venezuela, Zimbabwe, or other faltering countries, you are frantically seeking for an asset that you can convert your fiat currency into. Your domestic currency is failing. Historically, gold and other analog assets were options, but there are too many horror stories of confiscation at borders, etc. The first option for many of these people is to seek U.S. dollars. There's safety and stability that comes with holding the world's reserve currency. The issue is that it may be dangerous to purchase physical

Starting point is 00:08:07 dollars on the black market. Your bank is likely to collude with your government to confiscate money from your account, and it can be incredibly expensive to purchase dollars due to unofficial currency conversion rates. The ideal scenario is that you can use an internet connection to access a new currency. If you don't have access to a digital dollar, but you have access to a digital renminbi, there's a high likelihood that you will simply pick the best of what is available. Now, many people will say, no, they will convert their assets to Bitcoin. Maybe this is true, but the reality is that the volatility of the asset and the newness of a decentralized currency still scares a good amount of people in these countries. Regardless of the popularity of

Starting point is 00:08:46 Bitcoin. The United States can't sit on the sidelines in these scenarios. The global competition for digital currency adoption is already underway. China, the most important competition that we have today, has already created and distributed their digital currency. They are going to push the pace of adoption outside their borders, which is essentially a move to gain market share. The United States must act with speed and conviction. We must decide whether our central bank and the U.S. Treasury are capable of creating their own digital dollar in a timely manner, or we must go with the technical solution that has already received market adoption from one of the private U.S. dollar stablecoin enterprises. Additionally, just as General McMaster's pointed out, the United

Starting point is 00:09:26 States should heavily consider advocating for and facilitating the use of technologies that give the average citizen more sovereignty. China wants servitude. America was built on sovereignty. If America was to continue to pursue our ethos, there is a national security argument to be made for the United States to work aggressively to see Bitcoin succeed on a global stage. This may seem counterintuitive to most people, but the United States of America should pursue a dual strategy, drive global adoption of digital dollars and Bitcoin. Bitcoin prevents the centralized authoritarian governments of the world from sinking their fingers into every corner of an individual's financial life. It makes it impossible for a dictatorship to censor citizens

Starting point is 00:10:03 or coerce them via financial controls. The digital dollar extends the U.S. dollar dominance and increases the likelihood that the world's reserve currency is the number one choice whenever someone wants to make a transaction. Bitcoin is defense. The U.S. dollar is offense. These two assets working in tandem

Starting point is 00:10:20 can help the United States become the dominant player on a global stage while simultaneously wreaking havoc on our largest competitor. We have to recognize that we are in competition. Conflict is not the intended goal. The united states can win in the free market. We have the intellectual horsepower the technical Capabilities and now we must ensure we have the political will to compete

Starting point is 00:10:41 If we are willing to play the game, I like our chances of winning I hope that you enjoyed some thoughts here on the united states china confrontation and conflict Please make sure that you subscribe to the podcast feed and I won't be mad if you share this with a couple of friends Thanks so much for listening to today's episode. I really hope you guys enjoyed this one Make sure you're subscribed on apple spotify or your favorite podcast player And if you're looking to try to transition to get a new job in the bitcoin or crypto industry, we've got you covered Head over to palmscryptocourse.com We've developed a curriculum with the top teams across the industry

Starting point is 00:11:17 It's a three-week intensive training program with over 50 events packed into that three-week time period Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.

The Pomp Podcast - #794 Competition Instead Of Conflict

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