We Study Billionaires - The Investor’s Podcast Network - BTC181: The US's Economic Hitman w/ John Perkins

Starting point is 00:00:00 You're listening to TIP. Hey, everyone, welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. Today's episode is a very special interview for me. For many people in the Bitcoin community, they're familiar with Alex Gladstein's work on explaining how the legacy fiat systems leverages the IMF and World Bank to bankrupt the developing nations all around the world so that developed economies like the United States can extract valuable natural resources from these various locations all around the world.

Starting point is 00:00:28 Well, today's guest is none other than Mr. John Perkins, who's a noteworthy author and the author of these books called Confessions of an Economic Hitman. For people not familiar with John, he writes in gory detail all the ways that these strategies took place all around the world because he was an economic hitman actually executing these strategies on half of government entities. This interview was so mind-blowing and something that you've just got to share with anybody that's interested in understanding how this entire Fiat scheme has been played for the past half century. During the interview, my good friend Nico Lachuga, who's a big fan of John's

Starting point is 00:01:09 work, accompanied me on asking questions and part of the discussion. So without further delay, here's my chat with Mr. John Perkins. Celebrating 10 years, you are listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey, everyone, welcome to the show. I'm here with John Perkins and Nika Lachuga and John, I have to start off. I read a lot of books. This book has to be in my top books I've read in the past five years. And anybody who's listening to this show, I'm just, I'm going to start off the show. You have to read this book because it's so profound, especially with everything that's happening in the world right now. For people that are not dialed in or haven't read your book, this is where I kind of want to start. this conversation, John, is just what is an economic hitman? How did you become one? Really just kind of start with the basics for maybe somebody that's not familiar with your work. Okay. Preston, first of all, I just want to make sure that so there's three, there's a trilogy of the economic hitman book. I presume you're talking about the latest one which deals with

Starting point is 00:02:27 China's economic hitman. Yes, sir. Okay. Yes. The new confessions of an economic hitman. Oh, that's the second in the addition. Okay. There's a third one that came out with this Nico has that covered. There's the third one, yeah. Yes, sir. Okay, so an economic hit band, my official title was chief economist of a major international consulting firm. And I had a staff of anywhere from 30 to 50 people working for me depending on the specific

Starting point is 00:02:58 time and projects. And my job really was to identify countries that have resources that corporations want, like oil. He's usually what we call lower income or developing countries. And then I would arrange a loan for that country from the World Bank for a lot of money, but the money wouldn't actually go to the country. Instead, it would be transferred from a bank in probably in Washington, D.C., or New York, to a big construction company's bank like Halliburton or Bechtel or Brown and Rood or Stone and Webster.

Starting point is 00:03:34 You probably know the names. Yes, sir. And companies then would make a lot of. of money building big infrastructure projects in the country I had identified, things like electric power systems, industrial parks, highways, ports, airports, things that we could show would help grow the economy. You measure the economy by GDP. And so originally when I took on this job, I thought, you know, like, I'm doing something really good here, helping, you know, helping these countries become more prosperous. But over time, I began to realize that really what we

Starting point is 00:04:07 doing was making the rich of those countries richer and more powerful and helping our own corporations to make a lot of money because the people that benefited were the rich who owned the big industries and the commercial establishments, the businesses that benefited tremendously from better infrastructure. And yet the majority of the people in the country who were involved in these kinds of activities ended up suffering because money was diverted from health care, education, and other social services to pay the interest on the debt. But, you know, that's not obvious. Yeah.

Starting point is 00:04:46 When you show the statistics of gross domestic product GDP growth, it looks like everybody's benefiting. The fact is, GDP is an extremely biased statistic, biased toward the rich and powerful. And, you know, the other side of this coin was that the, if the president of the country or the minister of finance or whoever I was dealing with didn't accept these loans, they were very aware that there were people in the background, we call jackals, who were usually CIA assets, who were prepared to overthrow the government or assassinate someone. And, you know, unfortunately, the United States has a long history of this, with Aende and Chile and Arbans and Guatemala and Mossadegh and Iraq.

Starting point is 00:05:27 and Lumbra and the Congo in Vietnam and most recently, there's a liar in Honduras in 2009, where we've actually instituted these practices of overthrowing our assassinating leaders. And so these presidents know this, you know. So basically what I'm saying is, hey, here in this hand, I got a whole lot of money. It's going to help you and your family and your friends. But if you choose not to take this money in this hand, I got a gun. I never actually carried a gun. but these presidents knew what I was talking about,

Starting point is 00:05:58 that there were people behind me that did carry guns. Yeah. When I was reading it, the so what, like if I had to really compress what I experienced after finishing the book, it was very simply, it was your job was to get other countries,

Starting point is 00:06:14 other businesses, individuals, and dead up to their eyeballs as much as possible to basically force feed a dollar network effect around the world. Would you say that that's properly characterized based on? Yeah, it's what's called the debt trap. And it's the new, most the convenient and successful form of imperialism, building an empire. And this empire is really a corporate empire more than an American empire. Because let's face it, Preston, and many of these corporations,

Starting point is 00:06:45 when they prosper, they don't help the United States. They don't help the citizens here. They don't pay taxes. They may be listed as U.S. corporations, but as we all know, a very large percentage of the most profitable Fortune 500 corporations don't pay taxes. And yeah, I did also want to mention that, you know, so when these countries couldn't pay the principle on the death, then I'd go back in using the guise of the International Monetary Fund and say, hey, we can help you refinance your loan. But to do that, you've got to meet certain conditionalities. You've got to sell your oil or wherever the resource was.

Starting point is 00:07:20 And today it's likely to be lithium or cobalt or some of the minerals that are used in the high tech industry. You've got to sell these to our corporations at cut rate prices without environmental or social regulations, or vote with us on the next vote against Cuba at the United Nations, for example, or let us build a military base on your soil, or privatize all your public sector businesses, your water and sewage systems and so forth and sell them to our investors at low prices, or maybe all of those things. And so, yes, we were really building this corporate empire.

Starting point is 00:07:53 And at the same time, an economic system that's really failing us, what we can call a death economy that's causing climate change. That's causing income inequality. It's causing a lot of unrest around the world. John, I have a question on that. So the economic imperialism thing, like, wrong so true of what you were constructing. My question is, at the beginning, when you're constructing these loans, would you have already modeled out the additional loans based on the country defaulting that were going to be taken and then the courses of action that you were going to take from an economic imperialism standpoint of the military base or the taking some of the production of the assets from that country, was this already kind of pre-planned four or five, six steps out?

Starting point is 00:08:36 Yeah, you know, it's a strategy. So it's defined as in the case of the minerals, they're the collateral. So you give the loan to a country like, let's say, Ecuador, it's got a lot of oil out in their very fragile Amazon area. And you give them a big loan, and you use their oil that's still in the ground as collateral. So when they can't pay their debt, you go back in and say, now, okay, so now you can let our oil companies come in and take that oil at very cheap prices

Starting point is 00:09:06 without any regulations. And when you're going forward with doing this, you're pretty aware that the country is not going to be able to pay back these debts, but they are going to be able to show this economic growth. So the president is in an interesting position because he's being handed this report that we've done that shows that if he takes on these loans, the economy will grow, and it probably will. And he can take that to the local press and to his people, and it can be a very popular thing. Oh, my goodness, you know, this president's done great things.

Starting point is 00:09:39 He's building all these highways. Look at how the roads have improved. I was just in Ecuador, one of the countries where I did this. And I just saw, you know, incredible road construction. And now most of the Chinese are playing the same game as we are. So they're doing the same thing. They're building, you know, hydroelectric plants and mines and so forth. And this can look very, very good on paper to the people.

Starting point is 00:10:02 And let's face it, you know, presidents, even under the best conditions, don't serve for more than, usually more than eight years, possibly 10 in most countries. And often it's a lot fewer than that. And then on that point, so the economic, growth. I think you hit on the electrical systems in your first book, and then you hit on the Chinese construction of like dams and roads in the third book and this economic imperialism. Can you walk us through when you're putting together these models, how much of the debt, so let's say I take out $10 in debt, how much of that debt would you expect to come back to Western countries, like through programs

Starting point is 00:10:39 with Hal Burton and Bechtel versus how much money staying in that country? The money itself all of it plus interest and plus more comes back because the construction company, you mentioned Halliburton, let's say, is making big profits off this, which theoretically some of it comes back to the United States, although Halliburton now is, I think, officially, they're in headquarters in Dubai, but notwithstanding that. And the banks are very insistent that these loans ultimately get repaid in one way or another. And at the same time, the old, the old. oil is now being ciphered off or whatever their resource is out of the country to the U.S. or international.

Starting point is 00:11:21 It's called them international oil companies. So they're not making money off that either very much. So the whole system is very, very rich. What the country does show is that it's experienced economic growth as a result. But again, most of that economic growth benefits the very wealthy and powerful in those countries. And so many of these countries in Africa and in Latin America and elsewhere, you know, very few families essentially control the economies of these countries. And these families go back to very long time ago, to colonial periods. In Latin America, for example, most of these countries

Starting point is 00:11:59 have families who were given these incredible land grants, their ancestors who were generals under the Spanish conquistadores, under Cortez of Tizarro or one of the other conquistadors who gave them huge amounts of land. And their family still has tremendous power within these countries. So they benefit significantly. John, one of the things that I think has lost on a lot of listeners of our community is just how this relationship with the IMF and the World Bank works in harmony with this U.S. agenda to push dollar dominance around the world through this indebtedness. So if you were going to explain that relationship very simply for people to kind of be able to wrap their head around it because I think people are familiar with the word IMF or World Bank and they know that they're

Starting point is 00:12:50 out there, but they just don't understand how they fit into the bigger picture. Well, those organizations are all part of what we call the Washington Consensus. Just to make it even a little bit more complicated. So it's the World Bank, the sister organizations, the Inter-American Development Bank, the Asian Development Bank, the U.S. Treasury Department. but basically this is this would be a scenario so USAID, United States Agency for International Development sets aside a small amount of money in my day it would have been several hundred thousand dollars now it's probably a couple

Starting point is 00:13:22 of million and it's a grant to a country let's stick with this case of Ecuador since we started there yeah but it could be so many different countries and that's this grant is used to hire my company the consulting firm to go in and do a study and say the World Bank is interested in giving a huge amount of money to this country, Ecuador. My job is to go in and make a study of where that money should be spent. Should it go into developing the electrical system, building hydroelectric facilities and transmission lines, or maybe it should go into highways or ports or airports? I produce a study that says the best investment would be a huge hydroelectric plant

Starting point is 00:14:03 and all the transmission lines that go along with it as an example. And that would be in that, and I'm sorry to interrupt you. So in that scenario, let's say that what they were ultimately after was oil or some type of like natural resource. And you're looking at the setup inside this country and let's say they don't have a lot of power. So step one is we've got to get power into the country so that then they can extract this raw commodity that we're actually interested in in year 10 from now or year 15 or 20 or whatever. So I'm assuming that there was like a much bigger, grander strategy with respect to the timing of like how you guys did this. Were you part of that orchestrating that or were you a little bit more granular in just the power? Like you would have been told let's go after power inside this country.

Starting point is 00:14:52 I would know. I would know. If I'm any good at my job, I know that yes, part of it is exactly what you're suggesting. And so chances are this hydroelectric plant that we're going back to the World Bank to say, give this country a large amount of money to hire our companies to build a hydroelectric plant. Chances are the hydroelectric plant is out in the Amazonian area where the waterfalls and where the rivers, what's called the headwaters of the Amazon, the sacred headwaters area. And that's where the oil happens to be.

Starting point is 00:15:25 So when you build a hydroelectric plant, you're also building big roads. to get a construction machinery in there, which is going to be a big benefit to the oil companies also. So, yeah, there is that sort of thing that often goes on, not always. Anyway, so I go back to the country with this study, and I say, so here, you know, with this study, the World Bank is willing to give you this very large loan, but you have to sign off on and use oil as your collateral.

Starting point is 00:15:55 And so the president says, well, look, let me take this to the people. and gives his report to the local newspapers and says, you know, that's what I want to do. And maybe he's even going to have a referendum. And the people are going to say, yes, my God, this shows that our economy is going to grow at 8% a year. And it's only, it hasn't been growing at all of the last few years. We've got hyperinflation. We're going to get rid of that because the report would show that. And so then the money is diverted to a big construction company in the United States, let's say,

Starting point is 00:16:25 and one of the big ones that we mentioned earlier, and they go down and build the project. And meanwhile, the country is paying the interest on the loan, and they're diverting money from social services or other programs to pay the interest. But in the end, they can't pay the principal. And so we go back and say, remember, the collateral is the loan.

Starting point is 00:16:47 Yes. So now we're going to start taking oil. Oh, and also, and now this is when we go in as the I. which is kind of the, you might call the policing force behind the World Bank or the Inter-American Development Bank. And we go in as the IMF and we say, yeah, well, and you've got to meet some of these other conditionalities. Let us build a military base on your show. And that's exactly what happened in Ecuador, for example, built this huge military, U.S. military base on the coast of Ecuador. And on and on.

Starting point is 00:17:20 So it's that kind of scenario. It starts with a grant. This country doesn't have to pay for it from the USAID. Then it moves into the loan and then it moves into the conditionality is to restructure the loan. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord,

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Starting point is 00:21:24 sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify. com slash WSB. All right. Back to the show. Can you walk us through, I think it was in the books of how the IMF kind of works as this backstop?

Starting point is 00:21:48 So I'd love to get like the listeners just to understand that if Western lenders beyond the World Bank are applying these loans or giving these loans to developing countries and they're concerned about the credit worthiest. Like this was, it seemed like a machine that you had created or that you were a part of and that you could replicate time and time again. But it seems like the IMF was that backstop that would come in, restructure those loans and make it sure that the Western lenders were always made whole on their loans. So then you could rinse repeat over and over again and keep the country up to it. it's eyeballs and death. Yeah, you've described it very well, Nico. I don't know. Is there more specific question?

Starting point is 00:22:26 You hit it right on. You nail on the head. I was more curious of like the lenders and the, sorry, the lenders and the IMF relationship that they understand that the IMF is always going to step in or in this type of scenario and kind of how was that working relationship. It's fascinating from your seat of you're actually on the ground and we're just observing this from really your words. And in these financial institutions, I know this is going to be the case.

Starting point is 00:22:54 And before they make the loan, they'll probably check in with the IMF and make sure that the country that they're doing this with. I mean, they probably already know there's a list. But they want to make sure that where they're doing this is a country where the IMF will step in. And there may be some countries where that wouldn't happen. And they wouldn't make the loan to those countries. So there is this, it's an old boy network. they all know each other very well and at the various levels of these organizations, and they communicate with each other frequently.

Starting point is 00:23:24 John, it seems like when I look at interest rates since the early 80s, they've just continued to go down up until COVID. And I think that that continual step down in advanced economies of interest rates going lower and lower helped mask everything that was happening because as they rolled the debt, they were able to roll it at a lower interest rate, which just seemed like we're kicking this principle further and further. If you can't repay it, well, then we'll just, we'll negotiate the commodities or the military base or whatever. But I think it was almost like a tailwind for them to have these interest rates going lower and lower. I'm curious if you agree with that.

Starting point is 00:24:04 And more importantly, for where we're at right now, moving forward, it almost seems like they're not going to be able to get inflation under control in advanced economies right now. And does this cause this entire economic hitman model to really start to blow up in the face of these advanced economies? There's a couple of questions there. I think the answer to the first one is yet the lower interest rates did help. I think because suddenly the banks are in a position or the economic hitman are in a position to go to countries and say, hey, look, your interest rate's pretty low.

Starting point is 00:24:36 You can afford this loan. Maybe you couldn't afford it before in a higher interest, but now with the lower interest rates, This is the time for you to do this. And in fact, you can take out a bigger loan. You can make an analogy with a home buyer in the United States. So, you know, when the interest rates go down, the banks will tell them, well, you know, instead of a $300,000 home, you can afford a $400,000 loan because the interest rates are lower. When the interest rates go up, you got to go back to a less expensive home.

Starting point is 00:25:04 Same sort of thing. And as far as the next question was, as interest rates are increasing, do I see the system blowing up? Yeah. Does this model really start to get hard for them to control? And like we're seeing El Salvador right now, basically Bucaly, given the middle finger to the IMF and World Bank and adopted Bitcoin as a new legal tender inside of the country. Like I think that there's countries that are starting to figure this out in a very meaningful way.

Starting point is 00:25:36 And I'm just kind of curious if you would agree that it's starting to unravel itself at this point. Well, I think the biggest unraveling force for the Washington consensus is China, because China steps in and will, may offer lower interest rates or better deals in other respects. Actually, we can go to Equifers an example. When Raphael Correa was elected president, I know Correa very well. I was just recently in Mexico City on a TV program where he interviewed me. He likes my books.

Starting point is 00:26:07 He has a PhD in economics from the University of Illinois, incidentally. He knows our system extremely well. He was president of Ecuador for 10 years. And one of the first things he did was to appoint a commission to look into whether Ecuadorian people really owed the money that the World Bank and IMF said Ecuador owed. And the commission concluded that I think it was about $10 billion. I may have the number wrong, but there was a lot of money that they said, no, the Ecuadorian people don't owe this. This money was taken out as a loan by the military dictatorships. in the 70s without the consent of the people. The people didn't get any benefits. These military

Starting point is 00:26:46 dictators now are long gone. They're living in Switzerland or Miami or someplace. And maybe they owe the money. And Correa laughingly said, maybe John Perkins owes the money. He was one of those economic hitmen. It was here back then. But the Ecuadorian people don't owe it. And he refused to pay a fairly significant amount of that in the billions of dollars. And they're fought by the standard in poor is in Fitch Ratings through Ecuador into the dump. They basically said Ecuador is a worthless country. Nobody should invest to go to Ecuador to do anything. And immediately the Chinese stepped in.

Starting point is 00:27:25 And they gave Ecuador a big loan, very low interest rates that made it easy for Ecuador to pay off the interest. And maybe Colorado ratings went up. And then China made another loan. And as a result, Perea, who again has a PhD from a U.S. University in economics threw the United States out, basically. And he closed that. He did not renew the lease on this huge military base.

Starting point is 00:27:48 And the United States had to move its military base from Ecuador to Colombia. He went up against the United States and embraced China. And so now Ecuador was a lot of money to China. And China's gone in and built a huge dam. They're building big mines. They're doing the same thing that we were doing, except they've offered some better conditions where Ecuador. at least in conditions that appear to be better, not always what they appear to be.

Starting point is 00:28:17 And I will say one other thing here, that China has an incredible marketing tool, and that is if they had about 10% economic growth to 30 years, they brought about 800 million people out of poverty. They increased the middle class tremendously. at the same time since the early 70s, the United States has not in any real increase in average minimum wage. Yeah, yeah. If you take into inflation since the 70s, we've gone from 60% middle class down to 50%.

Starting point is 00:28:53 If you're the president of a poor country and you're looking for an economic model, you're probably very, very tempted to look at the Chinese model, not necessarily the political system, but the economic model is a very important. impressive one. John, on that, do you see China running the same playbook as the United States and other Western developed economies have run to date that have the backing of the World Bank and the IMF, or do you see China in this type of scenario running kind of an economic proxy war against the United States? It's both, Nico. You know, I was asked to teach at an MBA program in Shanghai, which is mainly Chinese students who had been single out to be the future leaders

Starting point is 00:29:36 of the economy of China. And very quickly, I learned the reason I'd been invited was because these students wanted to pick my brain as to what I had done that was successful, why I was successful and what I'd done that were failures. And they've done an amazing job. They've been much more efficient in some respects. They really have learned from our mistakes and our successes. And I talk in this latest book about the four pillars of the economic hitman strategy. And one of those is fear. You know, fear, we talk about fear of Russia, or fear of China or whatever, and they talk about fear of us or fear of your neighbors. And another one is debt, which we've been discussing.

Starting point is 00:30:15 And the third one is anxiety over insufficiency. Oh, you're a really, really poor country, and we're going to help you leave that anxiety. We're going to help you rise out of poverty. And the last one is divide and conquer. And China's made alterations in the way all of those are our approach. But especially they've made a huge, alteration in the last one, divide and conquer. So for example, when the United States would go into a country, like let's move from Peru to Peru, like Peru, and for no particular reason, but just because,

Starting point is 00:30:48 yeah, anyway, so, and they would say to Peru, hey, you know, let's, we'll do this deal and we'll give you most favorite nation in our trading agreement. So bilateral trade between Peru and the United States will be, will be really good. China, on the other hand, goes and it says, we're not interested in bilateral trade. We're interested in connecting you with the world, the new Silk Road, the Belt and Road initiative. And so Peru, we're going to build you these power plants.

Starting point is 00:31:17 We're going to do basically the same thing the United States would do, but we're also going to build you a big port. So you're going to be connected with Africa and Asia and Europe. And it's not just about China and Peru. It's about we're going to help Peru become a world, integrated with the world on a commercial basis. And that's huge. Countries really like that.

Starting point is 00:31:38 Oh, and incidentally, we're not going to ever try to influence your policies, your government policies. We're not going to build a military base. And China hasn't built military bases in very many places other than in its own sphere of influence with a couple of exceptions like Djibouti where it refuel its ships that go around African horn and so forth. But it doesn't have a military presence. And they say, we're not going to build a military base. you, we're not going to ask you to privatize your industries and sell them to our people. We're not going to ask you to vote with us in the United Nations votes, which isn't entirely true

Starting point is 00:32:14 because they do expect these countries to side with them on the Taiwan issue. But they seem less draconian. And let's face it, there's a tremendous amount of resentment against the United States and our European allies and the World Bank because of the way we've imposed our will on countries. and, you know, we've been willing to overthrow democratically elected presidents like Aende and Maribans. And we've, you know, we've backed terrible dictatorships like Kenoshae in Chile and many others.

Starting point is 00:32:48 One of the stories that really stuck out to me in the book, it was somewhat early on you were talking about you were just implementing a lot of these field reports and coming up with the various models. And there was a person that, I forget which country it was, but There was a person who was working on a report that was estimating that the growth would be like 10%. And your boss was like, that's not enough. Like it needs to be juicier than that. And you were like, oh, well, I could come up with a model that does 20% or basically double what the other person was doing. And the other person was very hesitant to adjust their model.

Starting point is 00:33:24 And because you were able to not only expand it, but do it in a way that was really backed up with what appeared to be a lot of evidence, it's like you were promoted immediately. And this behavior of trying to get the country in as much debt as possible by sensationalizing a lot of the reporting and the numbers was just somewhat mind-blowing to me that this was the incentive structure that you were dealing with. Can you talk about just some of the mechanics of this and how other people that were doing similar jobs as yourself really kind of talk to the incentive structure? that was behind all of this.

Starting point is 00:34:05 Yes, that's a really good point, Preston. Yeah, you're talking about my relationship with the guy named Howard Parker, who's Yes. And, you know, he was very old school, and we're looking at electrical growth. And, you know, if you could show that the economy was going to grow by, let's say, 12 percent, if the electrical growth went up by 9 or 10 percent. And Howard would say, well, and he'd work. for the utility industry all of his life, retired as very high-upic executive of a major U.S.

Starting point is 00:34:37 utility company, then gone to work for our consulting firm. He'd say, well, the United States has never been electrical growth of more than 6% a year anywhere. And I would say, yes, but if you, you know, you've got to suppress demand. In other words, if you build these facilities and you have the electricity available, people will buy it. They just can't get it now. That's why the growth is so low. So I believe that what I was saying was correct. And my boss very hardly was pushing me to make these much higher forecasts than how it would make. And I thought it was correct. And I think, you know, and I also, I'd come out of the Peace Corps.

Starting point is 00:35:15 And I was steeped in this idea that we could really help poor countries rise out of poverty. And, you know, I've been to business school where I saw these econometric models that show this relationship between infrastructure growth and GDP growth. I thought GDP growth was a good measure at that time. It took me quite a long time to realize that GDP growth is basically a tool of the rich. It's a poor statistic if you want to measure true prosperity. Yes. We have a friend Alan Farrington, and this is like one of his favorite talking points, is bashing how terrible GDP is.

Starting point is 00:35:54 It's amazing, like listening to him, go down that path is amazing. Sorry, keep going, sir. I'll leave it in that, but yes, it's a lot. as far as measuring overall prosperity is concerned. And, you know, I think there's a tremendous number of people in this industry today working for the World Bank or whoever that really believe they're doing the right thing. And at the top, they've got to know the truth behind it. I believe for a long time that I was doing the right thing.

Starting point is 00:36:24 And I have to tell you that once I started to understand I wasn't, and I was helped in this very much by the head of state of Panama, Oman Torrijos, who understood the system and told me, John, don't you understand that what you're, you're lying to yourself and you're selling all the rest of us a lie? Once I really understood that, I didn't want to believe it. Yeah. Because I was making a lot of money. I came from, you know, relatively poor teachers.

Starting point is 00:36:48 I was a poor teacher's son in New Hampshire. We, you know, we weren't starving or impoverished, but I'd never left New England until I joined the Peace Corps. And now I'm traveling first class all over the world. whining and dining in the best restaurants, staying in the finest hotels, and, you know, hanging out with presidents. I didn't want to give that up. So once I began to understand the fallacy of the system, I didn't want to understand it.

Starting point is 00:37:16 I wanted to fall for the line that everybody was out there promoting. And I think there's an awful lot of people in that situation today. You know, we all lie to ourselves at one level of another. Yes. You know, I can just, I don't drive that much. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up, and customers now expect proof of security just to do business.

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Starting point is 00:41:03 And you talk about this so well in the book. And I love the way that you show this struggle as you're discovering this and you're having these conversations with other people when you are trying to understand the other side of the impact of what's happening. And I just find it so profound to speak to your character to then. have the courage to write and explain your point of view to the world. Whether people want to side with you or not, I just think it's so profound and I think it's just so courageous of you. And I think Nico's got the next question. So go ahead, Nico.

Starting point is 00:41:40 John, I had a real big question on this. And I feel like it was, I think there's a seminal moment in U.S. economic imperialism that you hit in all the books. And this is the the Saudi, the deal with Saudi Arabia and the transition to a petro dollar and Saudi buying U.S. treasuries. I would love if you can just simply walk through for all of the listeners that deal and the petro dollar post that. Yeah, that was quite, yeah. So the context is the early seven days when Saudi, so OPEC, which was led by Saudi Arabia,

Starting point is 00:42:15 and Saudi Arabia was the biggest oil producer in the world, had a lot of clout. and did not like what was going on with Israel and our support of Israel and Israel defeating their world in many respects. And so there was an oil embargo imposed against the United States, and you guys are probably too young to remember it in person, but I do very well. And, you know, long lines at the gas stations and our economy was in a nosedive, and it looked very, very serious. Without oil, what are we going to do?

Starting point is 00:42:47 And we were very, very dependent on imported oil. So the Treasury Department comes to me and others at my company, and they said, you know, we can't let this happen again. Do something. I go off to Saudi Arabia with several of my assistants, people work for me and set up an office there. And the State Department, I mean, the Treasury Department signed a very large contract with my company to develop the electrical system in that country also.

Starting point is 00:43:13 But we had to work out a deal with the Saudis on this whole thing. And this wasn't about debt because Saudi Arabia. didn't need to borrow money from anybody. They had the money. We wanted them, we wanted their money, and we also wanted to have them beholden to us, so they couldn't put us, they couldn't blackmail us again like they had, basically, with the oil embargo. So we worked out this deal, basically, whereby, as you said, Saudi Arabia would have to reinvest most of their petro dollars in U.S. treasuries. And the interest from those treasuries of bonds would be used to pay U.S. corporations to essentially westernize Saudi Arabia to build big cities that were western type of cities

Starting point is 00:43:56 to build petrochemical plants and other industries in Saudi Arabia. And at the same time, part of the deal was that Saudi Arabia would never sell oil for anything other than dollars. So, as you also mentioned, Nixon had just taken us off the gold standard in the, in 1971, I think. And the dollar was floating out there. It was by the nerve-wracking time. And so now it's suddenly on the gold standard. It truly is a petrodollar. And so the agreement was that Saudi Arabia wouldn't sell oil for anything other than dollars.

Starting point is 00:44:33 And also, they would never charge more for oil than the oil companies, but ultimately be in agreement with. And our part of the deal was that we would protect Saudi Arabia. As long as they kept their part of the deal, we would always stand behind them, as we did during the Gulf War, or both Gulf War's under both Presidents' Bush, and as we did after 9-11,

Starting point is 00:44:56 when we hustled some of their family members out of the country, and on and on. And this deal has been extremely significant. We called it the Saudi Arabia money laundering affair. Sammy, kind of wasn't a money laundering affair, oil laundering affair. You know, it's beginning to fall apart now. Yeah. And partly because China is now, you know, becoming such a strong entity.

Starting point is 00:45:21 And Saudi Arabia does not want to lose that customer and that ally. And so they're, you know, they're wavering a little bit. And the other thing is that the Arab world has been very unhappy with the way we've treated the Muslims and our stance on in Israel. And despite Saudi Arabia's fairly good relationship with Israel, despite all these other things, what happened in Iraq and Afghanistan and so on, you know, it's been a thorn in the side of the Islamic world. And so there's a lot of factors here at play. We in the United States hear about how poorly China treats its Uyghur people of the Muslim groups.

Starting point is 00:46:03 But in the Muslim world, yeah, they're concerned about that, of course. But they also know that China has an army isn't any Muslim countries, as we have in Afghanistan and Iraq and elsewhere. So this old deal that's lasted since the early 70s until now, and it's still in effect, it's losing some of its teeth. You know what I find really fascinating right now, John, is if you would take all the countries in the world and list the net producers on one, side and the net consumers on the other side. What you'll find is all the net producers are the enemies or have been in the media the enemies of the United States. I just find that really quite fascinating. And like when we look at, well, why are, why is the U.S. at odds with anybody that has excess production out of their country? And I think it kind of holds a key to understanding what's

Starting point is 00:47:06 playing out right now with the breakdown of the petrodollary system. And I think that also when we're looking at interest rates and how they were literally compared, I think we got to, what was it, Nika, maybe 18 trillion of negative yielding debt in the world of all these advanced economies. It was somewhere in that ballpark. So we basically compressed the yields to nothing. The prices were sky high on all debt leading up to COVID in 2020. And now it seems like all of this mathematically is starting to unravel itself with the Treasury and the Saudi. he's pricing everything in dollars, it seems like this entire agreement is falling apart. And it's like, well, where does this go next?

Starting point is 00:47:45 I'm curious if you have any just thoughts on this idea of the net producers versus the net consumers at odds with each other in the world and maybe what the root cause of a lot of this is. I was one of the co-authors of a book called The Game As Old as Empire. And that's what this is, really, you know, where it's building empires. And one of the biggest net producers, I think you'd say, is China. Yeah. And, of course, China definitely is threatening U.S. hegemony. Is China an enemy?

Starting point is 00:48:19 I would really like to think of China as a competitor, but not an enemy. You know, we're all suffering from climate change. We can't afford to have enemies. Let's face it. Wars are part of the destruction of the environment. part of our problem today. We don't need to define China as an enemy. It is a competitor, but competition can be good if it drives you to be better. And I would like to think that we look at it that way, but we don't. We now, anybody that comes along that seems that to possibly

Starting point is 00:48:53 be better than us at doing anything, we object to. Back in the 70s, we went through something a little bit similar with Japan, where Japan was threatening us. They were so efficient and they worked so hard and they put in so many hours and they were moving out of a period where we said they produced junk products into one where they produced quality products. They were leaders in quality. That was concerning to us, but Japan was a fairly small country. It didn't have much of a military or no military. It wasn't a real threat. China now, they come along and it's got this amazing economy. And it's also militarily very, very imposing, is impressive. And so, and there's no question, I think, that China wants to take over. They would like to replace the

Starting point is 00:49:40 dollar with the UN or something. They don't want to do it too quickly because we owe them a lot of money, so they don't want to see the dollar collapse. Yeah. Because that'd be very harmful to them. Plus, there's such an interrelationship between China and the United States and Europe, our NATO allies, the European Union, in terms of trade, in terms of finance, in terms of so many things that China's being has to be relatively careful. And yet, clearly, they want to be the main superpower. And they're headed in that direction. And so the United States is strongly opposing it. And, you know, I think that's probably a smart move on the problem. But I think the idea of demonizing them or seeing them as an enemy in some sort of a war or defining it as even even even even

Starting point is 00:50:32 defining as an economic war to me is a big mistake it isn't it's a wrong competition we are extremely competitive with China they're competitive with us that can be a good thing though competition you know I like to think of when I was in school I was a I was a pretty good tennis player and I was always vying for the number one spot on our team I was usually number two but I was trying to take over number one. And number one and number two, the way you took it over is to beat number one. And so we played these hard games. We were, and I think every time we played each other, we improved. But we, you know, but we were highly competitive. And then we came together as a doubles team in big matches with other schools. We were the number one doubles team. And so now the skills

Starting point is 00:51:18 that we've developed competing with each other are serving us as a team. Yes. And I, that's a, I think, that's a great example of how competition can make you stronger. And we all need to unify now to create the, you know, to transform this death economy, this economic system that's polluting and consuming itself towards self-destruction into a life economy that pays people to clean up pollution, develop new technologies that don't ravage the earth. John, I have a question on that. I'm curious, so two-part question. One is if the ability for the U.S. to continually print more money enabled really this entire economic hitman, economic imperialism model over the past 50 years. And then second part of that is you talk about bringing

Starting point is 00:52:03 the world together. There's something like Bitcoin that is unable to be controlled by any country can't be printed. There's no more that it can be created. Do you think that that takes away the teeth of all this economic imperialism? I think that possibility is there. However, if you look historically at the powerful empires, they usually are able to overcome those kinds of obstacles. And we know that China now is implementing its own sort of form of cryptocurrency. So I suspect that maybe what will happen is that the smart, you know, countries like China, maybe the United States will somehow co-opt the crypto movement. I don't know. I mean, I think that we are going to move away from the central

Starting point is 00:52:51 banking system because it's just plain not working well. And basically everybody knows that, whether they want to admit it or not's another question. And cryptocurrency is here. And we all use it, you know, to a certain degree. Like even if you've never bought it, bought anything, you use a credit card. You know, we're all, we're all dealing in digitized forms of currency on big scale. A lot of places don't take money anymore. You know, I can't, all of, put in so many places are where I shop. You can't buy anything with, you know, with currency. Again, you're putting on the airlines. We're definitely moving in that direction.

Starting point is 00:53:27 How that plays out, though, remains to be seen. And it's hard to believe that the big, powerful economies like China and the United States and the European Union won't somehow worm their way into having control over these systems. It almost seems like co-opting is the specialty of a lot of the government models. just co-opped everything with enough time and duration. John, I know you've got to go real soon here. If there's one thing that you want to leave our audience with, maybe a very short, compressed, like, so what of the book

Starting point is 00:54:07 and what you were trying to accomplish with this? What would that message be for the audience? Well, I think the message is one of, well, I not think. I know the message is one of hope that we, We are in a time of extreme crisis and challenge and also incredible opportunity. Yes. You know, as I travel around the world, speaking at various events or as they do lots of podcasts in many countries, I'm just about to do one after this with a podcast in South Africa.

Starting point is 00:54:37 And people around the world are, there's a consciousness revolution. People are really understanding that we cannot continue with this economic system we have, which we call the death economy, that we have to move into a system where we pay people to mine the plastic in the oceans, you know, and recycle it, to plant trees and to reforest areas and to fill a whole mine pits

Starting point is 00:55:02 and to create new technologies for energy and other things that we haven't even dreamed of yet. Solar and wind are improving rapidly, but they're still in their infancy. So we've got this incredible opportunity, so I'd like to leave people with the idea that we should all feel very blessed to be alive at this time when we're facing big crises, but we have incredible opportunities to move the human experience to a new level of consciousness

Starting point is 00:55:29 and action that takes us to a completely new understanding of what it means to be successful human beings, being human on this amazing planet where we live. God, I love that. I love this book. I'm serious, like one of the top books I've read in the past five years. If you're listening to this and you have not read this book, you have got to go out and check this thing out. It is unreal. John, thank you for your time.

Starting point is 00:55:58 We'll have links to that in the show notes. We'll have links to anything else that you want us to highlight there if people want to check it out. But thank you for your time, sir. This has just been such a pleasure. My pleasure, indeed. Keep up your great work. And yeah, please connect to johnperkins. And the new book is on there too.

Starting point is 00:56:17 Yeah. Yes, sir. We'll have that. Thank you guys so much. I've really enjoyed it. Keep up your great work. Thank you, sir. Have a blessing.

Starting point is 00:56:23 Thank you, John. Thank you. If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for We Study Billionaires. The Bitcoin specific shows come out every Wednesday, and I'd love to have you as a regular listener. If you enjoyed the show or you learned something new or you found it valuable,

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We Study Billionaires - The Investor’s Podcast Network - BTC181: The US's Economic Hitman w/ John Perkins

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