Transcription
Ray, it's always wonderful to see you. Um, I have to ask, you've talked so much about trade wars. Is this a time when we're entering capital wars?
Yeah, the other side of c of trade is capital and there are big imbalances. That means there are big interdependencies. The United States needs a lot of capital, right? Uh countries are worried that the capital that they're owning could be cut off and there's a natural dynamic that's playing an important role and that's also showing up now already in the form of central banks shifting to gold. We're seeing the central banks build up gold reserves as is traditional when great conflicts emerge. And so we also could see that related to Greenland that you could see the not making the purchases um of the American capital and then that would have a dynamic for the capital markets which would be um probably more significant in its impact than the trade wars.
Yeah. In your mind is this the beginning of the end for the precience of the US dollar?
Um it's the beginning of the end of um the monetary system as we know it. It's not just the US dollar, it's the fiat monetary currencies. So the UK, the euro, Japan, China all have similar debt problems and so on and are dealing with the same inter relationships which is the reason you're seeing gold being chosen by the central banks. They want a a currency. Gold has always been the main currency and it's the only non fiat currency. In other words, not the currency that can't be printed that they want. And so that's why you're seeing central banks move and sovereign wealth funds move to gold. And that's the nature of the shift of the monetary system.
Yesterday I had a chance to ask US Treasury Secretary Scott Bessant about this. I asked him, "Are you worried at all that we're going to see retaliatory measures from the EU, from the UK, over Greenland, of their financial instruments that they had used against the United States?" And he said, "No." Is he right?
We'll see.
We'll see. Tell me.
I I I time is not history is not on his side regarding that position.
Yeah. Tell me this. Given the fact that you've had a long while to watch these things, you've called this, you said this was going to break down. How do you see this moving forward?
Well, there are five major forces. There's the monetary system which from money comes credit comes markets comes economic activity. And that cycle is we're reaching the point that there's not enough there's too much debt. And so all the major countries are having to deal with that. They have to deal with essentially the writing down of that debt which is normally done through the creation of printing of money. And when they do that that devalues money. So we're going through that cycle. Interrelated to that cycle is the domestic political cycle. In other words, the state of the economy and what large wealth gaps and large values gaps cause conflicts that cause populism to be each extreme and u the breaking down of orders that like the breaking down of democracy. Democracy does not work as well when you have need two sides to be able to compromise. We're beyond compromising. So that's what we're seeing. And then there's the breakdown of the international world order from a lawbased with a strong power kind of to um now a powerbased u self-interested um amount of where there's also comparable powers between the United States and China in particular and so that's natural. This is these things have always happened. Um, there's also acts through history acts of nature droughts, floods and pandemics that certainly are more important. And then always technology is important. So we're having these revolutionary technology which can have great productivity benefits. It can be terrific in many ways. Um, and but it's also can be used for wars and it also uh will produce greater wealth gaps. And so I think in this year you're going to see much more looking at wealth taxes and that is going to cause people to move from place to place than it's going to have impacts. So that's what it looks like to me. While so a lot more to argue about and a lot more to for when they disagree to push each other around to determine because it'll be power that will determine how things go.
Tell me this. Um, how are we accelerating in the process in the sense that you called this a while ago that this was going to be the series events, but are we seeing that accelerate rapidly?
This is normally accelerating. This reaches the point you reach a brink.
Are we at the brink?
We're at the brink. We haven't crossed the brink. Okay. But we're at the brink.
What would tip us over? what would tip us over a um like a for example a a Greenland um could conceivably be dealt with by um US military actions in and in in Greenland. Um, uh then and and so as we see these types of things then there is the strength of the retaliation to those things. Usually they're economic uh in the beginning. So we're seeing economic battle and then if it becomes military battle, the line is really broken when a significant number of people die, you know. So if you reach that point, you know, that's then clearly over the brink. Uh, but we are the it's not like there's a sharp break. it. A lot of things that are happening now are moving over the brink such as the end of money as we're knowing it. In other words, it used to be hold uh debt instruments of other countries particularly the dollar and so on um dollar denominated debt interests. Now we're seeing the move to gold. So we're seeing that transition that is a breaking down of the monetary system, the monetary order. All orders in history have broken down. In other words, you just have to read history. There's always a breakdown in a new monetary order, always a domestic political order breakdown and change, and always an international breakdown.
In your mind, did the president get it wrong in pushing this far in terms of his allies?
Uh, this is very this is an existential question. This is um I think the uh order as we've had it is a naive order. Um, and uh so I can't answer that question. Uh, it depends how you look at it. It was a naive order that everybody's going to get together like in the United Nations or the World Trade Organization or the World Court and they would make their decisions in that agreed upon way. That was naive particularly since the enforcement they don't have. So you every system the governance system needs a means of enforcement which is then the military. So what you had is these organizations making their opinions and the enforcement was the United States not liking those opinions. So that system that naive system is work is breaking down. And so one might say based on history that this powerbased system is more the norm and and that the United States in doing that is moving along to to besides not being as naive in doing that it's um also in its self-interest. Is there any situation
you are losing the most important thing always is how we deal with each other as people. Um, in other words, how much of it is self or how much can you make compromises for the purpose also of helping other win-win. It's like all religions have a system in which there are sort of rules written into their system in which how each party should behave to have a more harmonious working system. And uh so mankind has the um, there's more wealth, there's more technology, there's longer living standards, there's more a better set of circumstances. We've never had more. And um, but how to deal with that in a smart agreed way is the path forward. However, that's almost like saying people you have to be spiritual in terms of um seeing the the whole and optimizing from the whole where we are still largely animals in a sense who are fighting and killing in a sense for our own selfish interest. So that's the normal way, right? In other words, so that's that's where we are. That's where we are, right?
Tell me this. What are you hoping to hear from the president today here in Davos?
Well, um uh an accurate um portrayal of um the world order so everybody understands what it really is. I'm not hoping that we're going to go back to where we're I know we're not going back to.
Yeah, Ray, it's great to see you. Thank you so much for again. Thank you.