Transcription
DAVID: Good morning. Good. Almost afternoon. Thank you for joining us today. For those of you who flew in, thank you for taking the time. By the way, just as a note, so Keina, our wonderful emcee today, used to be our former producer for The China Show. So there we go. Just a shout out. So I didn't prepare anything. Any questions for today. And that's not for lack of trying or just I woke up on the lazy side of bed today. Just being in the news business, this this cycle has taught me to not prepare for anything. In fact.
So, coming into this morning, well, going into the weekend, we were going into these big talks in Pakistan between the two sides. We were coming off, I think Jim and I were just having this conversation. You know, emerging market stocks had their best week last week since the pandemic. So you have to go six years back to see the type of week equity markets had last week. And you were kind of thinking, was there too much downside if people buy in? Was Nvidia trading at 20 times earnings something that you never thought you'd see, but we did see, and was that part of it? And then we came out of the weekend, talks failed, and we were preparing our rundown for shows today. And as we went into that rundown, looking to talk about failed talks, the US then came out and said they were going to do a blockade, complete blockade of the Strait of Hormuz by 10 a.m. Eastern time Monday. So from the current time, that's about 10 hours from now. So we then had to scramble and figure out what we haven't had to talk about a naval blockade in this day and age. We were just trying to figure out how to do that as well. That's just to say there are many moving parts and I think we're dealing with scenarios now. And I think on that note, let me bring in, of course, famed economist, had the pleasure of having chatted with this time last year on the same stage. Nouriel Roubini, of course. I don't know where to start. How do you think, how do you think this ends?
ROUBINI: Well, the honest truth is no one knows how it ends. As you pointed out, you can do only scenario analysis. You know, about two weeks ago, I wrote a, there are two options. One is de-escalation and the other one. And the argument for de-escalation was that Israel and Trump made two mistakes at the beginning of the war. One, to believe that the initial decapitation of the leadership of the country would lead to regime collapse. Two, the belief that, like in June of last year, Iran would be either unwilling or unable to block the Strait facilities of the GCC countries. In the given those two mistakes, people say, down, he's going to lose the midterm. He has to blink, he has to chicken out, again, TACO. And he has to de-escalate. The problem with de-escalation was, you know, the two sides are so far apart that you cannot reach a deal. And if you don't reach a deal, then and he doesn't do anything else, what happens? Iran controls the Strait of Hormuz. Yes, the market rallies because sign of relief, the war is in a ceasefire, but oil prices are going to be higher than otherwise. Iran is going to be in a permanent energy or anything else in the Gulf. They are rebuild drones that can even become a permanent threat. And the deterrence of the US to credibly support these friends and allies, whether those in the Gulf or in Europe or look in Asia, how are you going to credibly deter China? Your friends and allies like Japan, South Korea, Philippines, Taiwan and Australia and you name it. So it's this strategic disaster.
So my argument was that having done the mistake of starting the war, at this point, it's better to escalate, because if you do escalate and eventually you force the regime to surrender, you have a political win and also geostrategic win. The risk of escalation is, of course, even worse, and oil prices go to 150, 200. The Strait of Hormuz and the Iranians attacked the energy facilities of the, and then you end up like in 1970s stagflation. I'm old enough to remember 1973 Yom states, tripling of oil prices, or 1979 and two nasty stagflation with recession in '74, '75 and '80-'82. So in my view, you have no option but to eventually you win. Now, there are two ways of the of my view was that the way to make it and take over Kharg Island, send troops Strait of Hormuz, try to open the Strait and allies with more Patriot missiles in. And every day you kill more of the. In two months, maybe you win. Maybe for two months, oil is at 120, 130, 140, then they're forced to de facto surrender, you know, de facto regime collapse. Do. But that implied putting troops on. Put the US troops at risk. The problem with the blockade is that, yeah, you. That's true. Actually, you're blocking it. You're saying nobody can get in and out. But the reason I'm not going to let anybody. So it's even worse than it is right now. No, no traffic. So you get the spike in oil prices. You're strangling financially the regime. That's true. But the regime has been shown willing to suffer even for years. Look at the decade-year war within Iran and Iraq. And and if you strangle them, the other country, the GCC, their energy facilities, East-West pipeline of the Saudis, and therefore you're not resolving stuff. So if you want to escalate, you have to do it the hard way. Doing an easy way is not going to work, going to be a tit-tat between the two. Problems, the regime doesn't collapse, and then we'll see what happens next.
DAVID: In what, in what form do you think the escalation will happen? Because the reason I ask you that is there, there's a big difference between troops on Kharg Island and troops going into Tehran. And I can only imagine markets reacting quite negatively to both, but certainly a lot more so for the latter. And do you think, in whatever escalation we will likely see, do you think that achieves a strategic objective on the part of the US? And what is that strategic objective?
ROUBINI: Well, I don't think you'll have troops on the ground, on land, Iranian soil. I think that if you want to make an argument for escalation, you need troops on the ground on Kharg Island to take it over and strangle the revenue of the regime. You need also troops on on those islands that are next to the Strait of Hormuz to try to unblock it, de-mine it. Of course, they continue to send rockets and drones. But you can try to block them and you send enough Patriots RO2, THAAD, to the Gulf to try to protect them. So that's that's troops on the ground and certainly not going into into Tehran. I think that combined strategy together with bombing day in, day out, Iran -- Israel and the US -- and killing more of the leadership in a couple of months is likely to lead to another regime collapse or the regime surrender because you strangle them economically, financially, militarily, and so on. I think that's a form of escalation that in the short run leads to oil prices being higher, stock markets being lower, bond yields being higher. But you get the job done. Maybe it was a mistake to start this war, but leaving it midway this way is a strategic disaster, not just for Israel or the Gulf or the US, but also for Europe and China and Asia, because Iran controls Hormuz, can decide forever who gets in, who gets out, and there'll be another another wars of one sort or another. They proliferate with nuclear bomb, with more missiles and more drones. It's a nightmare. So maybe it was a bad idea to start the war, but condition of having started it, you have to finish the job. And finish the job means to have regime surrender. Instead, they don't want to do it this way because they don't put any troops even on the islands. So they're trying to achieve the same result of strangling the revenues of the regime by doing a blockade. When you do a blockade, you strangle them economically, but they're not going to surrender anytime soon. And if you don't restart the war by bombing the hell out of them, military infrastructure, killing more of the leadership of the country, trying to take over the island of Hormuz to try to de-mine it and open it up, then then just the blockade by itself is a game of chicken, and it's a game of chicken that I think Iran eventually wins because they can suffer for a while. While there are political costs and economic costs of just trying to slow motion strangle of the regime, you know, it took decades for financial and trade sanctions, I don't know, in Zimbabwe, to eventually have a regime collapse. So economic financial sanctions, and blockades don't get you what you want to. Unfortunately, you have to do stuff that is more risky. If there is troops and you have people die. But if you're not willing to do it, then you're not going to succeed. So then it'll be a half-baked escalation, and then you don't achieve your results, and we'll be in a worse world because you still have higher oil prices, going to have stock markets falling, bond yields higher, consumer business confidence falling, more growth slowdown globally, more higher, inflation for longer, and you don't even achieve the results. So it's kind of like a half escalation is not the way to do it.
DAVID: How does he, President Trump, and his team, how do they deal with several fallouts? One is the the relationship between the US and its allies, not just in the Asia-Pacific but across the world, who effectively are having to foot the economic bill of this war in the form of high prices. Right. And you just have to look at like Bangladesh or the Philippines, which have no direct, even perhaps indirect involvement in the war, and that's even a stretch. How does, how does the US then come out of this, mend ties and trust with its allies across the world?
ROUBINI: Well, as I said, exactly, probably starting this war was a mistake and there were a couple of strategic miscalculations. And because of that, you know, and the spike in oil prices, growth would be lower, inflation would be higher. And the longer the war lasts, the longer the Strait of Hormuz is blocked, the more there is damage done to the oil production or exports facilities of the Gulf, the more it'll be the negative impact on growth and higher on inflation. And of course, the biggest victim is Asia, because for Asia, this is not just a price shock, but also quantity, because most of the, uh, 20% of energy from the Gulf goes to Asia. So at some point, there is really a production shock. In Europe, it's more of a price impact because that net importer of oil, less of a quantity apart from some natural gas was a significant impact in inflation and growth, less than for Asia. And of course, the US being a net energy exporter, the terms of trade effect is positive, but it's still a negative because those will consume energy. Households and firms using energy are worse off or they're going to spend less while the energy producing US is going to have a windfall gain and not going to produce or invest more. So you have some slowdown in growth even in the US and some increase in inflation. And he had already full popularity because of affordability crisis. So even if the impact on growth and inflation is more modest than Europe and in Europe, less than in Asia, still it looks unpopular and looks like a war he has not won. So if there is a damage done to friends and allies, and not just through this war, but it is overall attitudes from the Western Hemisphere to what it does in Europe to how he deals with Asia. Even if in Asia, it becomes slightly more constructive with China. Maybe because China had had him with the chokehold of critical minerals. So at least with China, there was something of a defrosting of relationship. But my point is that given the damage you have done overall to your relationship with different types of friends and allies, whether it's in Western Hemisphere or in Europe or Middle East or in Asia, one, you have to maintain your credibility and deterrence against their foes, whether it is China or Russia or North Korea or Iran. And and if you want to credibly say I'm going to support my allies, allies, once you have started the war, you have to finish the job. Even if finishing the job implies a significant economic and military and even troops dying cost. But you have to take that risk. If you don't take it, then you have you have lost. If you de-escalate or you have to escalate, but not in a way that leads to the regime surrender, and in my view, escalating the full way and trying to have regime surrender is not just good for the US or Israel or the Gulf. I said the biggest beneficiaries are going to be China and Asia because most of the oil from the Gulf goes to China and Asia. And being in a situation which right now Iran has a chokehold on that oil. And any time in the future, you know, they're going to rebuild their weapons, they're going to strangle, they're going to get tolls, and whatever not. It's something that is not acceptable, not just to Israel or the Gulf or US, should not be acceptable to China or to Hong Kong or to Japan or India or or anybody in Asia, because those are the biggest victims, actually, of having an Iran that is a rogue state, the threat. And it's not just sort of almost there. The Houthis can block also the other Strait of Bab el Mandeb like they did during the war between Israel and Hamas. So, you know, any civilized country in the world should not want a situation in which a country is a rogue, radical, extremist, fanatic regime. Who's been asked to curse his own people for the last 47 years, has a chokehold on 20% of the energy in the world. That should not be acceptable to anybody, and it should be in everybody's interest to make sure that doesn't happen.
DAVID: So let's say they, they do succeed. Where, where does this leave Iran's relationship? Assuming we do get some form of regime change, its relationship with its GCC neighbors? Because they've been just bombing each other as well.
ROUBINI: You know, I mean, I don't know if there'll be a real regime change. You know, many people in Iran would like a total regime collapse and some form of democracy. Some people like the return of the monarchy, with a crown prince and so on. They may view that that's probably unlikely, but I would say between the current regime and by the way, this current regime right now is even more radical than the one run by Khamenei father, because his son is actually more crazy. He's more of a lunatic, more of a radical. And there are factions are even more extremist, you could say, because of what Israel and the US have done. But these guys are now in power. And their view is that now their weapons are blocking Hormuz of bombing energy facilities of the Gulf. Even if Saudi said, you know, I'm neutral and they try to engage Iran in negotiation and diplomatic relationship opened by China. All that meant nothing. Once the war started, the Iranians went after Saudi, after Oman, after Kuwait, after Bahrain, after even Qatar, after anybody, after Turkey, after Cyprus and so on. And by the way, their ballistic missiles, 4,000 kilometer, can reach anywhere over the European Union as well. So these are threats to not just to Israel or the Gulf, but also to to all of the European kind of Union. So you have a regime that is even more radical than before. And now they've effectively taken over a major source. A key source of something is the legacy of a rogue regime, totally rogue, where they were to take over the Strait of Malacca and say, hey, China, anything that is your import or exports cannot pass from there anymore. I mean, would that be acceptable? Is equivalent of something of that sort? So my point is one extreme, you have pure democracy and freedom, but, you know, there are many regimes that are autocratic. I mean, these people are being a curse to their own people because by following Islamic fundamentalists for the last 47 years, having sanction, have foregone a trillion dollars of oil revenues. I mean, Iran is a country that has more oil reserves than Saudi Arabia, is a country that has scientists, engineers, doctors, and you name it, is a country that would even follow its own national interest and would have an autocrat. I'm not speaking about the Democrat. Like El Sisi in Egypt or any other benevolent autocrat, a strong man or woman. For all the matters that says my national interest is not to antagonize the world, stop saying after 47 years death to America, death to Israel, my national interest is to engage with the world and open up to the world and eliminate the sanctions. I can be still nationalistic, I can still defend my interests. But these anti-Western policy has been a curse and is a benefit only to a small clique of an elite of fanatic Islamists and Revolutionary Guards where economically and financially, like the narcotrafficker of Venezuela, benefiting from here has been a curse to 90 million Iranians. And they're exporting, you know, revolutions of imperialism around the Middle East. I mean, look at the Middle East. You have a bunch of failed states. You know, Lebanon is a failed state. Libya is a failed state. Syria is a failed state. Iraq is a failed state. Yemen is a failed state. Sudan, Somalia, Afghanistan. And most of them is because the Iranians and through their proxies have tried to expand Shia and fanaticism throughout the Middle East. There is no other region the world with a dozen of failed states, and that's a threat. The situation to everybody is not just an Iran issue. You're in a situation which major countries, some of them are actually major producer even of energy. Some of them are like Libya, Iran, Iraq have tons of energy and because they're run by a bunch of fundamentalists, have not even be able to do bad... good for their own sake. So it should be in the global interest to make sure that this particular regime is neutralized. And I don't care whether the Democrats or whether is a autocrats but benevolent. There are plenty of benevolent autocrats in Asia and in the Middle East. They are caring about national interests of their own country and having civilized relationship with the rest of the world. This regime has to be either collapse or surrender because the alternative is a nightmare for the world, for the long run. Market, yes, they rallied once there was a ceasefire. Ah, stock market went up in 7-8%. All over Asia, oil fell below a hundred. Bond yields rally and so on. But it didn't last because we knew, or at least I knew, that the negotiations are going to lead to a deal and that Iran at this point knows that as leverage. And this fanatic they're gonna use all that leverage for the long run, and that should not be acceptable to anybody. So even if we didn't like what the US and Israel has done, should be ever the interest to finish the job and lead them to de facto surrender. And then if an autocrat is in power, so be it. Certainly is much better than the current situation for the Iranians and for the Middle East and for the world.
DAVID: I think there's no way to segue inflation now, but I'll do it anyway. If, so, assuming we do get that off ramp. Assuming the objectives are met, we still have to deal with the what is increasingly now looking like a very long tail of economic fallout on the back of this. Several questions. I think the US economy. What is your, what is your assessment of how, how and when this shows up in the US economy in the coming months? And what does the Fed do about that?
ROUBINI: Well, I would say, you know, the impact both on growth and inflation is the least for the United States and for net energy exporters. I was just a week ago in Brazil, for example. It's bigger for regions like Europe where we are net energy importers. So the terms of trade impact is significantly negative. So the impact on higher inflation, lower growth in Europe and the eurozone is going to be bigger. And the biggest impact in terms of both inflation and growth is going to be on Asia. But even in the United States, I would say there'll be some slowdown of growth, some pickup in inflation. Now, how much of a slowdown of growth and how much inflation depends on whether you either fully de-escalate and accept this ceasefire. And with the ceasefire, all prices will never go back to what they were before the war because there'll be a risk premium because Iran effectively has a chokehold on their on the Gulf. So all will be more like in the eighties.
DAVID: What's the, what's what's the floor, do you think, on oil? And what, where do you think we will see the average floor for oil?
ROUBINI: If you have de-escalation without a deal and they are in control of the Strait of Hormuz, and given the damage and of everything else, I think we oil can go towards 80, 80 plus. It's not going to go back to 60. So there is some impact on global inflation, some impact on global growth. You don't get a global recession, you don't get a sustained increase in inflation because it becomes a price level effect with temporary increase in inflation for a while. So he's in economic damage and is a medium long term essentially negative impact on on the world. But we avoid, we avoid a recession and significant the anchoring of inflation and inflation expectation, even if the impact as I said stronger in Asia, middle in Europe and the least in the United States. You know, the US actually before this war last year when there was the April second tariff, I said we are not going to have a U.S. and global recession even if everybody on the sell side said so because they knew that the market will force him to chicken out. You know that if tariff went from 3 to 30%, but today they are 14 because, you know, two weeks into April 2nd, S&P was down 15%. NASDAQ, 20. Bond yields were up 80 basis points, high-yield spreads were up 150. And dollar started free fall. And that's when Scott Bessent went to Mar-a-Lago to tell the president, 'I told you, if you do this, the market gonna punish you, you are going to have a recession, are going to lose the midterm and my guy is dead on arrival. Mr. President, you want to double down or you want to blink and go chicken out?' And the president, who is impulsive and not totally rational, decided to blink. And now, you know, you see that you have to have a averaging tariff of 14% rather than three. Of course not. But does it lead to a global recession? Of course not. That's why I said we're not going to a U.S. and global recession. The impact would be some slowdown in growth, some increase in inflation, but moderate. And this year before the war actually, there were more tailwinds than headwinds to US and global growth because the U.S. you had monetary easing. It's still fiscal stimulus in the pipeline because the cuts were after the midterm. You had the Fed cutting having cut rates, you had the easing of financial condition because stock market went higher last year, bond yields fell, credit spreads narrowed and the weakening of the dollar benefited net exports and consumer business confidence was strong. And you got this massive secular tailwind from the AI boom. In my view is not the bubble is really a long term secular boom is going to lead to much higher potential growth. U.S. potential growth can go from 2 to 4% by the end of this decade. So, you know, those stronger fundamentals were there and therefore the war becomes a bit of a hiccup as long it doesn't last too long. But if it were to be severe, kind of a worsening of it for many more months, then of course, the economic damage for a while could be more significant even for the United States. But my baseline is not the U.S. or a global recession, nor a very massive surge of inflation. So the US, among all advanced economies or even among them, is a much more better fundamental condition because of the strength of the AI and the technology boom and increase in productivity growth and all the other things that are coming out of it.
DAVID: The, the first... The US president's trip to Beijing got postponed several weeks because of obviously events in the war in the Middle East. There is one that's scheduled to come up mid-May between Donald Trump is coming to meet President Xi Jinping. Can we look at that date on the calendar as almost a deadline for Trump to finish, finish the job? Does he... I guess in some ways, is that incentive enough to make sure things are orderly ahead of arguably a more crucial conversation between those two?
ROUBINI: No, I don't think this conflicts is going to be over by mid-May when they're said to to meet up, certainly these half-baked escalation with the blockade could last for many months. And then the Iranians are going to respond by lots of other things they're going to do to hurt, hurt the Gulf producers and so on and so on. And then maybe they start attacking Israel again and then maybe the US, the ceasefire completely collapses. So I think the ones who create a blockade that they're the others just have a blockade and the ceasefire remains, I think is highly unlikely than the military escalation across the border is becoming more likely. And and if you fully escalate the way I would have done it, it would have still taken maybe two or three months of really heavy escalation until the regime surrenders. We would have big escalation. There's no way you achieve your goals by mid-May. So either you postpone again the meeting with Xi Jinping or you go there. But then, you know, it's not going to be a very productive meeting because before the war he knew, you know, that the Chinese had the threat of critical minerals and therefore he decided, okay, I'm going to reengage them and try to tighten some strategic understanding that reduces for the time being, the tensions and so on. Now, all of this is off rail and the Chinese might actually think of the US having created this war as a way of strangling them. And if you look, by the way, the blockades, pretty much all of the oil that comes from Iran, not all of the oil goes to Asia, but certainly actually most of the Iranian oil goes to China, while most of their oil and energy from the Gulf goes through to Asia. And therefore, if you do a blockade until now, even during the war, the US was not preventing the Iranian ships to get out of Hormuz and bring their oil to China. Now, with the blockade, you don't allow that anymore, you actually creating something. There's further economic damage to China. Pisses of the Chinese and the Chinese are going to say what the hell? So it's not a very constructive way to go to Beijing and try to engage if you're doing that. So might as well postpone further a summit, rather make it a failure. And the Chinese on one side are happy because they're saying the cover of The Economist this week saying, you know, never interrupt your enemy while he's making a strategic mistake. So that's one of the ironies of the Chinese. US have made their own self goal. So let them rot and so on. And they've lost their credibility. They have lost the deterrence. Their weapons are going the Middle East rather than being deployed in Asia and this and that. But on the other side, a US and a Trump is a wildcard. There is also something that the Chinese are not very comfortable either. So they must have mixed feelings about him. And I mean, some people in Beijing think that, you know, that actually a weakened Trump is bad for them because Trump was more willing than some of the hawks, because a whole bunch of hawks in the administration were really China hawks. And he has put them aside because they decided, okay, I'm going to try to reengage with China. So if if, if Trump becomes too weak, they're worried that the Marco Rubios of the world or others that are hawkish, like even J.D. Vance on China may have the upper hand. So a very weak Trump is not actually in their benefit either. So it's a mixed bag for for the Chinese. What's going on with the U.S.
DAVID: The, the quiet and peaceful days of global tariffs of last year. The, let me rephrase that, is Donald Trump the best thing to happen to China recently?
ROUBINI: Uh... I don't know. Some people say probably have a view in China. They said your strategic competitor is shooting itself in the foot, is pissing off allies all over the world. Is trying, starting trade wars. It looks like a actually hot water warrior and is destroying both the soft power of the US and even some of the hard power of the United States. So let them do it. And we're going to engage the world with trade agreements by showing that we're actually responsible stakeholder. We don't start war, we're not imperialists then and and whatever not. So that's the argument of why. Why, you know, it's good for them. But but this is also a Trump that actually compared to even the Biden administration that cared about human rights and other things happening all over Asia and China and so on, is ignoring that stuff. And yeah, he imposed the tariff, but then he chickened out. And now being a dealer, he wants to do a deal with China. While within the U.S., there are many, both in Congress and even among his advisers, that are much more hawkish, that are believer that, you know, you have to credibly deter China. You have to have a much more muscular approach. You have to impose more restrictions on technology and other stuff, more support of your friends and allies, and much more how to say containment approach to China. And and therefore, you know, if if Trump is weak, as I said, the hawks may actually raise their heads. So but, you know, the US has also shown that in spite of not winning this war, that from a military point of view, it's a very, very powerful country with very, very powerful weapons and being able to you know, the whole approach of China was, you know, we can go and by using missiles, we can destroy their navy, their aircraft carriers. And these and that if they get too close to us, while what the US has successfully done is that by having aircraft carriers that are in the Indian Ocean but having very precision missiles, being able to really damage in a very, very precise way lots of military targets. When was there in Desert Storm against Iraq 20 years ago, 90% of the missiles were not precision guided and would end up either killing lots of civilians or not even hitting their own targets. In this case, almost 90% of all these Israeli and US missiles, because we have now the drone technology and we have the, you know, the information coming from satellites, the intelligence and the ballistic missiles and the drone, whatever. So much more targeted in the successful way. So and they Iranians are not being able to attack any of the Navy weapons of the United States. So if there was a confrontation, say in Asia, US can keep these aircraft carriers and has 11 groups of them faraway from China and still launch lots of stuff that can damage China or can protect and defend Taiwan. And these are what is is one of the first one. I mean, the first one was, of course, the Ukraine Russia war that suggested that now defense tech is the way of doing war. And who stacks by the defense that Ukrainians because they learned the Russian because they learned Israel and now the United States. United States is more advanced than anybody else. And I don't think the defense tech they, the Chinese are as far as the US. So they have to rethink what a confrontation over Taiwan becomes. And U.S. has shown that they can do a lot while protecting their own assets. So that's another dimension that could be.
DAVID: Well, a lot of the accuracy that these military weapons have gained since Desert Storm was down to, and here's the segue, was because of semiconductors. And to see the advancements in chip technology literally in those missiles. That's a final question. And we're barely getting to, we're at the end. But just your thoughts on something that's managed to happen silently but steadily and consistently. While this war of the last seven weeks was taking place is AI has continued to drive markets. An example of that today, as I speak, I haven't checked my phone in about 30 minutes, but the Taiwan markets are at all-time highs as we speak. What are your thoughts and and how is also this AI story of the Asia-Pacific resonating where you are based in the US?
ROUBINI: You know, I used to be on, quote, Dr. Doom worried about the financial crisis. (David speaks) And some people say you become Dr. Boom, because I do believe that actually that is not just AI. There are about 15 different technologies: the AI, semiconductors, robotic automation, humanoid robots, defense tech, quantum fusion, green tech, fintech, agtech, new material science, commercial space exploration, commercialization, you name it. These are a Cambrian explosion of new technologies of the future, like we are not seen in human history. And the two big innovators are on one side U.S. and then China. And then there are pockets of innovation in Asia, like Japan, South Korea, Taiwan, India, Israel, some things in Europe. Uh, but my view is that U.S. potential growth is already above 2% closer to 3 by the end of the decade, regardless of this war, regardless of those in power in Washington. Doesn't matter. The dynamism over the US private sector is such that potential growth in the U.S. is going to be 4% and then after that by 2040, 6% and then by 2050 10%. And the other big beneficiary of this innovation is going to be China. And it's not the zero sum game we win, they lose or vice versa, because many of these technologies are general purpose technologies and you learn from each other. So those who innovate get most of the benefits. Those are adopting technologies still benefit by adoption and those who don't adopt, then they don't survive. So that fundamental story, regardless of geopolitics, regardless of climate change, regardless of populism, it is the driver for the next ten, 20 years is a positive for the world at large, certainly positive for both US and China. And that remains true. And that's why even at the peak of the war, the S&P was down 4%. And now markets are rallying and the AI story is not a fad, is not a bubble, is going to last. And is that's the AI, I mean, these 15 industries of the future, you can debate as much as you want whether US ahead or China and which one of them. The reality is both of them are doing well in most of them. Some of them are behind in some, some ahead in the other. But both of them are going to benefit and everybody else is going to follow up. So that's a big story that there is a stronger positive aggregate supply shock that increases growth, reduces inflation. There's a secular boom driven by technology, and then you have all the shocks that are negative aggregate supply shocks that stagflationary: a war, oil shocks, Middle East, the ageing of population, populism, pandemics, climate change, you name it. But since April 2nd, I've said take Trump's tariffs because the impact of tech is 200 basis points increase in potential growth, while the impact of all day trade, the migration and other things, only 50 basis points. So the ratio's four to one. They also said tech trumps Trump's temper tantrums too, because there's a wide range of things. It doesn't look like crazy. But one market discipline to technological innovation make sure that these are second order ones. During a speech I made a joke. I said, It doesn't matter what President of the United States. You could have Mickey Mouse as the president of the United States, and the damn enemies of the US private sector. As such, US is going to do great. Even if Mickey Mouse was president, let alone Donald Trump. Was a joke. People made the headlines for an article saying Nouriel says that even if Mickey Mouse was president, US will do well. But I think that's true. And same thing for China. The US and China gonna do well. So we're on the verge of a secular boom with massive positive aggregate supply shocks for the long term. And then in the short run, those in different types of stagflation re shocks that are the opposite negative aggregate supply shocks reduce growth and cause inflation. So it's a tug of war between the two. I think eventually technology dominates over the medium term. We can cause a lot of damage in the short run by doing lots of stupid things. We started out with somewhat Dr. Doom. I think we got a version of Dr. Boom at the end there. Yes. Thank you so much, Dr. Roubini. That's all. Have time to. Thank you.