Transcription
Welcome to World Affairs and Context, everybody. I'm very excited for the conversation we're about to have with Alex Craner, a commodities expert, market analyst, researcher, and former hedge fund manager. Alex is the founder of Craner Analytics and I System Trend Following. I will link both in the description below. He authored multiple books as well, including Mastering Uncertainty in Commodities Trading and The Grand Deception. I will link those in the description, too. Alex, thank you so much for joining us today.
>> Great pleasure to join you, Lena. I've been a follower and a fan of your work for years and so I'm very happy that you invited me.
>> Well, thank you for your kind words and it's absolutely great to have you. As I mentioned before, I've been following your work as well and I always find your opinion so valuable and so interesting. So, um, to begin, I would love to start with a big picture question just to set the tone. It appears that although Iran gave Trump an opportunity to deescalate and to save face, that opportunity was effectively wasted as Trump moved forward with blockading the Strait of Hormuz and, uh, he refused to negotiate with Iran in good faith. This week, we're back on the escalation ladder with a ceasefire to be unlikely extended. This is according to the Trump administration and Iran is saying the strait is to remain blocked after the United States struck and seized an Iranian vessel over the weekend. Then, on the other side of the world, the proxy war on Russia via Ukraine is taking a very dangerous turn as the Baltic states appear in some shape or form engaged in drone attacks directly on Russia. So, are we already in World War II and just refusing to call it that?
>> Well, okay. So, first of all, very good question, but, uh, how we call this conflict is, um, you know, we could, we could debate it. Uh, one of the military analysts that I listen to quite succinctly, well, succinctly, he put it this way to me. He said, uh, this is not a world war. This is the first to global total war. Okay? Which means that it's not just being fought in one region or on one battlefield in one country on one continent. It's practically impacting everything, the whole world, practically everybody alive on earth today. And, uh, it's, I think that what's important for us to remember for me is, um, the context, the widest context that we could put on this conflict, and that is, as George Soros warned us, u, in one of his last Davos speeches, is that this is the conflict between two systems of governance. And so I, in this, I think he was absolutely correct. And I think that this context then informs us that the, the war in the Middle East and the war in Ukraine is, are two different battlefields of this same total war. And it's being fought between, uh, different powers in the world, and it's being fought between the governing structures and the people in many countries, including the western countries in particular. And so we are already there. The war is a little bit different from what they taught us about world wars in school, but I think that it's probably, um, it's probably moving in the direction of that, uh, of the wars that we experience on, you know, in the movies, uh, great battlefields and so on. For now, I think the only place where it's like that is Ukraine, and to, in a different way, it, it is that way between Israel and Lebanon, between Israel and Gaza, but it hasn't engulfed yet the European continent. I think that this is a, this is a where it's different. However, uh, the, the people who are in charge, who are really in power in western, uh, countries, uh, they definitely and desperately want to escalate the war, uh, to unite the West. So let's call it, uh, NATO, uh, against Russia, and are trying to open the second front because they are close to running out of the last Ukrainian, and then, uh, they need a second front in their conflict against Russia. And so we know that they tried to, um, orchestrate a war in Bosnia and Herzegovina between, um, uh, between the Republic of Srpska and the Bosnian Federation, uh, which has been diffused by the Trump administration. Uh, and then, uh, the, uh, another place where they tried to do it was Georgia. Didn't work. And it seems to me that now they're trying to escalate in the Baltic, Baltic states to create that second front because they're very, very deathly afraid of the war in Ukraine dying down.
This is so tragic and, and absolutely, it appears to be just, um, spiraling out of control. When we talk about the global war, of course, global economies enable military action, right? So, energy has become central in, in, in geopolitics these days. How central is control over energy flows, especially through the Strait of Hormuz, to the broader strategic objectives of this war in Iran?
>> Yes, I think it's absolutely essential because, uh, energy is the lifeblood of, lifeblood of the economy, and not just for transport and power generation, but also for food production, for all kinds of industry. You know, we take many, many things for granted. Oil energy has been strategic and central for a very, very long time. It just that we took it for granted. We didn't really notice it because everything functioned, let's say, almost smoothly under the system that has been devised by western financiers and their client corporations, the, the, you know, the Great Seven Sisters. Uh, and the, the setup of this system goes back to the beginning of the, of the, um, 20th century, um, particularly with regards to the Middle East, because that's when the British, um, understood that, uh, control of oil was extremely important and strategic to their empire, which was already dying back then, but they, they understood the, the advantage, uh, from oil over other energy forms like, like coal power, which, which is what they used to power their navy back then. And they understood that the Middle East was one of the world's richest areas in terms of, uh, energy resources. So they determined, could, to control the Middle East. And this is why they even created, uh, the state of Israel, which goes back to not 1948. It goes back much, much earlier. And then we saw 1916, there was a Sykes-Picot agreement that drew these arbitrary lines and creating arbitrary countries in the Middle East. And then creating the state of Israel, which was the ostens, the osten-sible legal foundation was the Balfour Declaration, which I like to call the Balfour Memo because that's what it was. Uh, you know, if it was done today, it might be, you know, a Truth Social post or, or something like that, which was basically a letter from a British foreign minister to Lord, uh, Arthur, to Lord Walter Rothschild. Um, this was 1917. And then we also have testimonials from about that time from, uh, the famous, Alfred Milner's Round Table Group, who were saying that if Great Britain was to remain a maritime empire, that it would be critical to seed that region, meaning, you know, Eastern Mediterranean with what they called, quote, a particularly patriotic stock. And so this is what they've done. It wasn't, you know, it wasn't, um, a generous gesture to create a homeland for the long-suffering Jewish people. It was a cynical exploitation of Jews to be their cat's paw in the region and to keep the region perpetually destabilized so that their corporations could dominate the region. And then their corporations, uh, would fund that, that development with their banking establishment, with their banking cartel, which then magically turns, uh, the resource wealth of that region into balance sheet entry, countries of Western too big to fail banks. And I think that this is at the core of the incentive to fight that war, as well as the war in Ukraine, as well as the war against Russia. And ultimately, we know that the overarching imperative is to establish hegemony over the entire Eurasian landmass.
The war in Iran appears to be a turning point in global energy markets. Um, global energy production has been concentrated in the Gulf. Investment flows have been largely concentrated there as well and tied to the US economy because the Gulf states purchase, uh, US, US, uh, dollar denominated assets. And so it, it worked really well for, for several decades. But is it fair to say that after the war in Iran ends, and hopefully it will end soon, we will see a new global economy emerge? And if, if that's the case, what do you expect that new global economy to be in terms of energy markets, in terms of, uh, currency tracom in the yuan or in the dollar? What do you expect that new paradigm to be?
>> Well, Lena, I expect that the new paradigm will be more similar to what we call the American system of political economy, you know, uh, broadly distributed, uh, development paradigm, uh, local, funded by local banks, by, uh, small and medium-sized businesses. Uh, we saw, uh, a system like this emerge and thrive many times through history in the United States, uh, under Alexander Hamilton and, and some later presidents. We saw it emerge in Germany, uh, starting from the 1870s, which was spectacularly successful, and then again after World War II. Um, we saw it emerge in Japan, in China, in South Korea, in Russia. And this model reliably generates prosperity, increases standards of living, creates a great amount of wealth, uh, that people then hopefully allocate to, uh, you know, arts and sciences, to creating a better quality of life, greater degrees of liberty, basically, you know, things that we would wish for our children to experience in the future. Whereas the British system of, uh, free trade, and remember, we're always, this is the economic foundation of those two systems that I mentioned, the whole war, the whole total war in the world is a conflict between two systems of governance. The other system is the British system of free trade, and I, you know, I think that that system should be called the British system of race to the bottom, because the British system of free trade basically, uh, removes all barriers to the flow of capital worldwide, which means that the capital always pursues, um, highest opportunities for the highest possible return. And nations then compete for capital by basically lowering the cost of everything, lowering the cost of labor, of, of, um, uh, you know, they, they remove environmental protections, safety standards, everything, just so that when corporations come in, the overhead is the absolute minimum. People are used as disposable, um, slave labor. And, and, and then other countries, you know, to, uh, outcompete, then they have to lower their standards to, to outcompete their rivals. They have to lower the standards even, even, even less. So the results are poverty, misery, environmental devastation, and, uh, basically non-stop wars. This is where we, this is where we are today. And so I think that maybe, you know, maybe the war in Iran doesn't change the paradigm, but I think that it catalyzes, um, it accelerates, uh, the path of development towards this multipolar, uh, model based on the American system of political economy and quicker abandonment of the British system of free trade. Um, the Trump administration even went as far as making this explicit in January of this year at Davos, when Trump brought his delegation and then people like Howard Lutnick and Scott Bessent and, um, the trade, the trade secretary Jameson Greer explicitly said to the, to the attendees at Davos, which is the who's who of the free trade globalists, that the system is broken, globalization failed, we're moving in the other direction. And then they even explicit, Jameson Greer in a presentation, even explicitly mentions Alexander Hamilton and the American system and Abraham Lincoln and so forth. So this was practically a declaration of war on the globalists. Then everything kind of got derailed with a, with a, well, you know, Trump administration derailed itself over the Iran war. But I think that the message and the, and the idea wasn't forgotten. It wasn't abandoned. I think that it's still the, it still has the momentum of becoming the dominant idea. It super, well, it transcends the silly left-right false dichotomy, you know, uh, liberals versus conservatives. And I think that, you know, many, many people have understood this now, and it's one of those things that once you see it, you can't unsee it. And then you understand how this whole left-right socialist versus capitalist, uh, dichotomy is, is actually, um, it's pointless, irrelevant. It doesn't, it doesn't change anything. And so I think that this moment in time perhaps accelerates those developments. Uh, I don't think necessarily that the yuan will become the dominant currency in the world, but it will become one of the dominant currencies in the world. And I believe that the dollar, in whatever form it survives, because it's, it's not going to survive in its current form, the American currency will be one of the dominant currencies as well. And so I, I, I think that people will be conducting business in a currency of their choice, which will be imposed to them by, how do you call it, by circumstance. If I, you know, if I'm sitting in Europe, I use Euro, but I want to trade with Russia, we'll probably settle that trade in, in euros and, and rubles. If I trade with China, it's probably going to be yuan. With the United States and maybe the whole Western Hemisphere is going to be US dollar or whatever replaces it, and so forth. So I think that there will be, um, there will be multiple currencies, but there won't, there probably won't be one absolutely dominant one that everybody will have to acquire if they want to participate in the, in the global trading system.
>> Absolutely. Um, I love that you mentioned the impact of globalization on emerging economies and that what it does, this American system of political economy creates a system of continuous poverty and health risks and, um, just poor life conditions for millions of workers in those countries. And I read this really interesting book, um, a while back. This has probably been over a year. The book is called Degrowth. And so the idea is that while the American economy has benefit, tre, benefited tremendously from outsourcing sort of low-skilled labor and jobs to countries, um, you know, to emerging economies, it also created a system where it effectively collects all the gains. It pockets the, the benefits and, and the resources, while the countries such as, you know, Indonesia and, and other countries where we see, you know, the combo, Cambodia or other countries where, you know, a lot of garments, for example, are produced or something like that, they actually have to deal with pollution. They have to deal with poor working conditions and, and so many different health risks as a result of those, um, you know, factories and plants being established not up to par, not according to Western standards, but to lower standards of those countries that, on one side, they do want to host Western businesses and they have to lower their standards or forego implementing better standards. Um, but then on the other side, they also suffer because, you know, the cost of labor is very cheap there. So they have to accommodate their Western investors and Western companies, um, and, uh, sort of attract them while absorbing all the human, human costs associated with that type of business structure. So it is really interesting and, and I think very valuable that you mentioned, uh, that aspect of, uh, the American model and the Western model of, of economy.
>> Okay. Yes. But, u, allow me. May I, may I have misspoken? Because I just wanted to clarify when I said American system. I, I mean to say, well, you know, it's, it's a little bit unfortunate that it's referred to as the American system. The reason why it's, it's called the American system is because it was, as far as we know, it was pioneered by Alexander Hamilton in the United States. The, the system that you describe, the, the, the, um, you know, manifestations of the system that you require describe is, is the, the system of free trade, which has been embraced by the United States since World War II. Okay? So that is, this is American influence in the world today, but it's, it stems from the, uh, free trade system. Uh, the American system is, um, the, the one which, which let's call it Alexander Hamilton pioneered. I, I mean, I say that because I'm not aware of anybody, uh, explicitly, um, promoting that system before him. And then it was described in a, in a book called The Harmony of Interests. I think it was published in 1861 by Henry Carey. But basically, this system, which again, is called American system, but alternatively, it's also called the national system of political economy, or maybe that's a better name because it's been, you know, it applies in any nation. This is where you, you create a protected domestic market in, in any nation so that you allow domestic, um, manufacturers, um, small and medium-sized businesses to thrive. And then they begin to generate wealth. They begin to generate employment. And, um, that then becomes invested into upgrading the, um, the, uh, the nation's infrastructure and so forth. Gets reinvested into education. And so you get, you have a, an endogenous wave of development that is, um, spread throughout the society. You know, everybody benefits. It's like a tide that lifts everybody's boat. Um, the open trade system, which is the, the free trade system, which is the, the, the originated by, by, by, by the British Empire, but also completely adopted by the United States since World War II, is the one that you describe, where every nation has to completely, um, de, debase itself to, down to the bones, in order to attract foreign capital. And so this is the, this is the system that we need to transcend because it only benefits the, uh, people who own and control financial capital and their, and their servants, let's say, their, uh, uh, the corporations that serve them. Uh, so I just wanted to make that clarification because I agree with everything you said, but, uh, the use of the term, American system, confuses the issues a little bit. Um, because American refers to something that was that happened a long time ago under Hamilton and, and, and Abraham Lincoln and so forth. But what happened since World War II has been that the whole world basically embraced, uh, the British system of free trade. That system completely, um, defined the economics curriculum. So that today, even people, you have a lot of people defending the free trade system who shouldn't, but the, the mindset has been so deeply entrenched that this is the best system, and, you know, Chicago School, and it's the, the justification for the free trade system have been elaborated to the point where, you know, if you don't really pay attention, they may sound very, very compelling, except that, you know, if you look at what the system actually does, then you see that it's completely different from what they're trying to sell anyhow. So that's the system that we have to transcend, and I believe that we will, because I think that the, the, the, the awareness among, uh, even among many ordinary people has gotten to the point where I think the genie doesn't get put back into the bottle.
>> Absolutely. Um, Alex, I know you're following commodities markets very, very closely and, and you're an expert. Um, this week, when you look at energy prices, when you look at crude oil prices, do you believe current oil prices reflect real supply risk, or are they still underestimating geopolitical escalation? How much more room is there for crude oil to increase per barrel? And what has to happen for, for that to, to actually transpire, given that the Strait of Hormuz is being blocked again as a result of the US striking and seizing, um, an oil tanker from Iran, and there seems to be no political will to truly negotiate in good faith with Iran? So what's happening to the oil markets and oil prices today?
>> Okay. So let me, let me cover in briefly what I understand is happening on the ground. Uh, the, the war against Iran has created the single largest, uh, uh, oil market disruption in the history of oil markets. Uh, it has taken about between 8 and 12% of global oil supply off the market. But if, if hostilities between Iran and the United States, uh, resume and escalate again, uh, then we might see much, much worse disruptions. So, you know, Trump has threatened to bomb Iran into the Stone Age where he thinks they belong, and, uh, he wants to destroy Iran's energy infrastructure. Uh, Iran's deterrent is their promise that if you do that, we're going to destroy the energy infrastructure in the whole region, meaning, you know, Saudi Arabia, Qatar, Bahrain, possibly Azerbaijan. And so if this comes to pass, that would remove an estimated 32% of oil supply off the markets. So that would be, uh, about three times as bad as the largest oil market disruption in the history of oil markets that we've already experienced. And now, um, and yes, and I also have to mention the very strange, uh, series of coincidences where energy infrastructure is going up in flames all over the world. Suddenly, um, you know, refineries are, uh, being set on fire, Ukrainians are hitting, uh, Russian oil facilities with drones. Um, United States is seizing tankers. Estonia is seizing tankers. There seems to be a lot of concerted attacks on the energy markets. So it could be, it could be even worse than just the war in Iran. But so far, um, the oil markets have, okay, well, let's, let's go back to October. I think the prices were somewhere in the 60s, maybe low 60s per barrel. And so now they are at around 100. I'm talking about Brent crude oil, which is probably, uh, not even a good benchmark anymore. But oil prices are very high. I don't think that they're, uh, that this is it, because, you know, if we go back to 2022, Brent crude oil was, uh, hit $120 a barrel, and that was without this big giant disruption that we had, and which might possibly escalate. And then, if we rewind the clock to 2008, we reached $140 per barrel. So the current prices, even though they are high relative to, uh, recent months, they're not high in the absolute and might go much, much higher. Um, I remember that in 2022, JP Morgan was predicting that the barrel of oil will go to $380. And then I also remember reading a, uh, a report written by, uh, British Ministry of Defense in 2012, which, you know, in broad brush strokes predicted some of the events that are happening today, and they predicted that the oil price would go to $500 a barrel. But, you know, my experience in commodities markets has been that markets take a long time to adjust to new facts, because everything I covered, you know, the Trump seizing an Iranian oil tanker, Estonians boarding a Russian tanker, um, war in, in Ukraine, uh, wars in the Middle East, Um, closure of the Gate of Hormuz, Straits of Hormuz, possible closure of the Bab el-Mandeb, straight. All of these events are going to impact the market somehow. But market participants, uh, don't all make up their mind at the same time and reach the same conclusion. Uh, market functions more like an inert blob, and then it mo, it, the price does readjust, but that readjustment spends an extended period of time, which might be a few months, or it might even be, uh, a year or two or three. To give you a concrete example, uh, about three years ago, uh, an ounce of gold was trading at about $2,000. Today, it's close to $5,000. And then if you look at the progression of that, um, it wasn't overnight. It just turned into a trend, which once it took direction, gradually went higher and higher and higher. And the, the climb from 2,000 to 5,000 took a little over two years. That's basically how the blob moves in general, you know. So what we saw so far, I think was a jolt that the, that the oil markets registered, but it's not the end of the story. And I, I believe that unless, um, the United States and Iran, uh, rapidly deescalate this conflict, I think that we might see much higher oil prices. I wouldn't dare to predict the price, but it could go to 200. It could go to JP Morgan, 380. It could go to British Ministry of Defense, 500. Who knows? We'll find out. Um, we've seen over the last, I would say 10 to 15 years, many, many markets stage, um, what they call a hockey stick progression. You know, it goes, it goes slowly, and then it accelerates almost into a vertical climb. We just saw that with gold, gold and silver. But in the past, we saw that with, um, other types of assets like Bitcoin and, you know, Nvidia and Tesla and cobalt and other, other securities like that. And I don't know what the reason is exactly, but it seems to me that, uh, over these decades of quantitative easing, the markets got flooded with a lot of liquidity, about $220 trillion of that liquidity sloshing around in the shadow banking system, which is, um, financial shadow banks are financial institutions that have a large investment capital at their disposal. So liquid investable assets, but unlike banks, they cannot create loans, they cannot create money. Nevertheless, they have a lot of assets to invest. And then whenever some market starts to take off, then I, I think you have a lot of these money managers, you know, we're talking about hedge funds, pension funds, endowments, um, insurance and reinsurance companies, and so forth. They think like, ooh, maybe we need to have, um, a bit more allocated to gold, or to silver, or to Tesla, or to Bitcoin. And so with $220 trillion that are available, even if a very small percentage of all these managers starts to make this decision, it puts tremendous upward pressure on the market. And so that could happen to energy markets as well. You know, that could happen to the oil market, to natural gas, and so forth. And if that happens, then there is no predicting where oil price might go. But, you know, if, once it goes vertical, it could hit any number.
>> Of course, and it just depends on the level of escalation, I'm sure too, because if, you know, in the worst-case scenario, if, let's say, I don't know, nuclear-armed Israel decides to, you know, do something that's completely irrational, then of course, there's no telling just how bad the situation may be in terms of energy markets and the flow of energy. Um, so it's completely understandable. Um, one of the questions that I see in the comments very, very frequently is, is this, and it has to do with markets. Of course, the markets have been very, equities markets have been very volatile, but in general, they, they do appear to be relatively calm. They're hitting new highs. So what are they missing, Alex? Please explain.
>> Uh, okay. So I think that what they're missing is what I've been missing all my life, and it took me pretty much my whole life to work it out. It's a very simple thing that they consistently conceal from us, and that is that the one force, uh, that has far and away the greatest impact on, um, equity prices is, uh, um, central bank, uh, monetary inflation. Meaning central banks putting more and more money into the market, which we call quantitative easing today. And it's been, you know, it's an empirical fact that has been shown, uh, time and again, that people, uh, sitting at the highest echelons of the, of the financial period perfectly well understand, but they don't want us to understand it. So for as long as the Federal Reserve or any other bank are, uh, flooding the markets with liquidity, most of this liquidity is going to tend to gravitate into the equity markets. If they start quantitative tightening, the markets will start coming off. So we're on the verge of World War II, you know, if we, if we choose to call it that. We have a massive energy disruption. Uh, there's all kinds of things going wrong. We're in the middle of a probably technology bubble, you know, with with AI and all this.
>> So you would think that maybe at some point the markets would correct a little bit, but they don't. Why? Because, um, the, the, the central banks in the West are now obliged to, um, to keep, uh, flooding the markets with liquidity. The reason is because there are too many bad debts, uh, in the banking industry, and a lot of these debts will never get repaid, and this could lead to bank failures. And if you get back, bad, I'm sorry, if you get bank failures, you might get a financial collapse like we had in 2008, only, uh, it would be much worse now because everything has been inflated, much more than than back then. And so, uh, to avoid that, uh, the bankers have kind of staged a coup where they have completely taken, uh, over control over the financial system. You know, back in the day, they, you know, Hank Paulson had to come to the Congress, and he had to beg for a $700 billion bailout of the banking system. They don't have to do that anymore. You know, now, uh, all the levers of powers are in their hands, and they can, they can create any kind of liquidity that they need. This is exactly why the socialist world, you know, the world on the other side of the Iron Curtain didn't really have very many bank failures, because the whole system, you know, if, if there were bad debts, they were backstopped by the central bank. Nobody went bankrupt, nobody lost their jobs. The central bank was simply printing up all the money that was needed to cover, uh, all the debts, and the system continued, except that the, um, the predictable outcome of that system is that you will, by, you know, by, uh, creating so much liquidity, you, you are going to dilute the purchasing power of the currency. What you're going to get is galloping inflation, and then you get a similar unraveling like the Soviet Union or Weimar, Weimar Republic in, in, uh, in 1922, which means that the currency goes bust, stock markets go vertical, because, you know, people, when they get money, they want to be rid of the currency as soon as they can. So most of them choose to exchange it for real assets, which is companies and businesses. So money floods into, into the equity markets. But, uh, bonds, bonds collapse, and interest rates go up. Uh, we've, we've, you know, the reason why this is predictable is because we have seen it so many times, not, you know, not in major Western economies, but in places like Venezuela, like Argentina, like Zimbabwe, you know, which all had this, you know, the currency fell apart, stock markets went vertical. It wasn't because the economy is doing great, it was because that's just how the system works. And so this is what the investors are missing. This is why stock markets are going to, uh, continue rising, and not necessarily in a straight line. You know, there, there are going to be corrections. So, it's not, it's not something that, you know, they can, uh, throw all caution to the wind and, and max out their leverage. But I think that, um, expecting a stock market collapse, and maybe even shorting the markets because you think, of course, of course it's going to collapse, could be a very risky bet, because I think that it, the nominal equity prices are going to continue going up.
>> When you look at the commodities market beyond oil, what secondary commodities, maybe fertilizers or metals or food-related items, what are the most exposed commodities to the Iran conflict? And where do you see the biggest red flags at this moment?
>> Well, it's very difficult to say. You know, if, you know, if you wanted to make a prediction, uh, agricultural commodities are obviously going to respond, but so far, we haven't seen, uh, much impact. Uh, prices of, uh, wheat and corn and soybeans and oats did, uh, rally over the last couple of months, but not massively, you know, not, I think that it's going to be a few months before, you know, we start seeing shortages, maybe, uh, maybe, uh, lesser yields in, in the crops of all these commodities there, that, that the market is going to register and finally realize, oh, you know, uh, the situation is serious, and then the blob will, uh, the blob will move accordingly. But for the moment, I don't see a whole lot of action there. Um, metals are responding. I think they're going to continue responding. You know, Europe is throwing hundreds of millions, hundreds of billions of dollars into rearmament, which will, you know, necessitate a lot of steel and copper and other kinds of metals. Again, you know, the market doesn't necessarily recognize this in real time, but it will with a delay, and that's basically it. You know, energy is going to be, agricultural commodities, and, um, and metals. I don't know. Uh, artificial fertilizers obviously should be part of that story, but I'm not sure that there's a tradable contract for that. Maybe, maybe there is, but it's, um, um, it's probably going to be a niche, low liquidity market. So I don't know to what extent it's, um, it's, um, how do you call it, a representative benchmark for, for that market.
One of the things that we have been discussing for a long time now is the transition to a more multipolar, to a multipolar world structure, and I think we're seeing that, certainly. But a true transition, of course, takes a considerable amount of investments, time, and also political alignment among all actors who are very, very different politically, economically, socially, culturally. So, it does take a tremendous effort for that to happen. You know, regardless of how much we actually want that to happen, of how much we want a, a fairer and, and more equal global structure to emerge, it takes a long time. And then some people say, well, the BRICS is not happening, that's not going anywhere. But actually, they're making, it does appear that they're making a really, um, you know, consistent progress. It might be a slower one, on the slower side, but they're making progress toward developing alternative trading systems, you know, creating a multipolar currency framework, implementing a variety of technological solutions to make that actually happen. So with that, and with the United States waging sanctions, uh, left and right, you know, I think Besson just said we're going to sanction Chinese banks because they host IRGC bank accounts. So it, it does appear that the United States is not going to give up on its, on its power to sanction unaligned states. So with that, are we seeing the rise of a parallel financial system and a parallel commodity system that is outside Western control yet, or we haven't reached that point yet?
>> Uh, no, I think it is emerging. I think that that system is emerging, and I think that it's been in preparation for a very long time, because I think that the leading people in Russia and in China and maybe in some other places have understood that they are in, um, how do you call it, in a subservient position if they participate in the Western-defined system of trade. And, um, I remember that, you know, a few years ago, I think maybe it was '22 or '23, maybe even 2021, when there was a summit of African countries in, um, Moscow or St. Petersburg, there was a lot of talk about transacting business in local currencies, that is, you know, in domestic currencies. And, um, uh, there was a lot of talk that Russia and China were working on on an alternative trade currencies that they could use. Um, and, uh, I know that Russian diplomats have, uh, reached out to African, uh, governments and they have told them that, well, you know, if you, you know, if you abandon the dollar system and you, um, um, how do you call it, adopt our system, then, you know, we will not penalize you, uh, if you nationalize your, uh, resources, your industries, your natural wealth, uh, resources. And also, we will not penalize you if you default on your debt obligations to, to Western financial institutions. So, you know, that was a, that was a very significant carrot that was put in front of these African leaders, which, you know, they cannot accept just like that, willy-nilly, because for some reason that I don't exactly understand, practically all the governments in the Global South, South are deathly afraid of the IMF. So they don't dare defy the IMF or just say, well, you know, your terms are not fair, so goodbye, go away, you know. We see people like, like Traoré do that, but the, you know, these are, these are such serious things that, just to give you an example, in 2015, I think it was, or 2014, the, the Ansar Allah government in Yemen declined an IMF rescue package, and then the next thing you know, the war against Yemen started through, where, you know, Saudi Arabia was the proxy, but it wasn't Saudi Arabia's war, it was a Western war, it was, it was largely a British war, but also American, against Yemen, trying to eliminate the government that dared to say no to, you know, to, to the IMF. And then also there was an overthrow of, uh, the government in Bolivia, uh, around the same time. I forget the name of the president. It's, it's a household name, but I, I can't come up with it, but he was overthrown in a coup, uh, after his government declined an IMF rescue package. So, you know, however that works, it's not something that can be, apparently, it's not something that can be changed from one day to the next, you know, like, like canceling your subscription to Netflix or something. But it, it is going to happen nevertheless, because the Western system has been, um, has been very unfair and unjust to, to the Global South, because it's been keeping these countries in poverty deliberately by design. You know, if you look at which countries, um, prospered by following IMF's structural adjustments, and, and their, and their economic development measures, the answer is zero. One of the countries that followed it, uh, was, was Ukraine, and they had the worst economic performance of all countries in the world between independence and 2014. Their independence was in 1991, for so 25 years, almost, they were far and away the worst performing country in the whole world. So that, that system cannot stay, that system is not sustainable. Uh, the reason why they're deliberately keeping countries in poverty is because they don't want the local economies to compete with Western corporations and Western financial institutions in the exploitation of the resources. Because, you know, I don't know if you have Burkina Faso, who, um, who develops their own, uh, resources, and, and industries, they might start to absorb their own product in their own economic development. So, Western corporations will now have to compete with Burkina Faso's own, uh, domestic economy for those resources. They will have to bid for those resources. They're going to have to pay higher prices. But if the economy is completely devastated and doesn't use any of its resources, well, then you can buy it from them for nothing, particularly if you have a gun to the president's head or president's head, or if you, uh, have large bank balances, uh, in their name somewhere. This is how, you know, Niger was selling uranium, uh, yellowcake, uranium, uh, ore to France for $1 per kilo when the market price was between $100 and $200 a kilo. Well, if you start to, if you build your own, uh, nuclear power plant and you start using your own uranium, well, then, you know, that's competition for, for the French buyers. This is why we in the West like our colonies to be poor, dirt poor, so that they don't interfere with our business of extracting their own resources and providing, as a bonus, employment to their, to their population, which is usually, um, slave labor levels.
>> Alex, and maybe the last question for, for today. In the context of the conflict in Iran, do you see any realistic path to deescalation, or are we looking at a, a long-term confrontation with substantial impact on energy markets?
>> Unfortunately, Elena, I see a long-term confrontation with substantial impact on energy markets because, you know, again, we're going back to that idea that it's a, it's a clash between two systems of governance that the Western, you know, imperialistic, neo-colonialist system of governance requires ever greater access to collateral. And Iran is one of the top five nations in terms of natural resource wealth, which is estimated at close to $30 trillion. And so taking control of Iran has been, uh, the, the desire and the ambition of Western financiers for a very, very long time. In fact, you know, if you go back to, when was it, 2006? I think we, we had that video from General Wesley Clark talking about seven countries in five years. And the time that, you know, when he heard that, that was in 2001, which means that Iran was due for a regime change in, uh, 2006. They never gave up. 20, 20 years later, here we are. They're fighting to take control over Iran. You know, if that fails, then they want to Balkanize Iran, to split it up into a number of smaller entities that they could dominate and make them, you know, weak rivals, you know, kind of like colonies. They have exactly the same ambition for Russia. You know, they want to, they impose, they provoke Russia into the war in Ukraine because they want to, um, break up Russia, regime change it, and then, uh, turn it into, um, a Balkanized collection of small, weaker client states, which would all again be colonies of Western financial capital. They will not, they will not give up on this, you know, until, until the Western system of governance, and, and I, I don't mean the, you know, the legitimate democratically elected governance, governments, what I mean is the, is the top layer that sits above elected governments, meaning the, um, you know, the, the international banking cartel, until that system is reformed and, and maybe raised to the ground, um, it's going to continue to, uh, maneuver to take down Iran, to take down Russia, to take down China, and to dominate, because this is in its nature. And, you know, this is not something that happened, uh, in the last few years. This is what's been going on for a very, very long time, for a few centuries. And so I think that this, u, global total war is going to continue until one side has been completely defeated. And I think that the happy news for everybody else living on this planet is that I believe that the, it's going to be the Western side that is going to be defeated. And it's going to be good news not just for Iran, and for China, and for Russia, and Belarus, and so forth. It's going to be good news for everybody, because we all are being, um, exploited, manipulated, lied to, uh, deceived by this system as well. And I think this system is why we have come to this dystopian moment of forever war, escalating censorship, escalating repression, everything that we're seeing in, in the Western, in the Western world today. You know, it's not, it's not random, not, it's not coming out of nowhere. It's all, uh, manifestations of this conflict. And, and as I said, you know, it's a total war, so it's impacting everywhere. It's, it's, it's even, you know, um, organizations like Black Lives Matter, Black Lives Matter, the LGBT, uh, ideology, um, everything that we are experiencing is related to this. And so the fall of this system, the fall of the cabal, is going to be good news for everybody.
>> Absolutely. Alex Kraer, thank you so much for such a fascinating conversation. I really appreciate your insights and thank you for joining us today, and I look forward to having you on the program again so that we can continue this conversation.
>> With pleasure, Lena. Thank you for having me, and my warm greetings to all your viewers. Thank you.