Hello, and welcome to the Gold, Goods and Guns podcast for December second, twenty twenty five.

My name is Lana Lawonga.

We have a lot to talk about its episode two thirty nine, and I have the great pleasure of having Brent Johnson back on the podcast of Santiago Capital.

Brent, how are you.

I'm good.

Just got back from Thanksgiving which was fantastic and so back at work.

Yeah, that's kind of the way I took like I don't know about I know, twelve hours off or fourteen hours off and then when right back to it.

Like my wife complains of.

Me all the times, like stop looking at your phone.

I'm like, I can't help it.

I actually took it.

I actually it's the first trip I have gone in and I don't know how many years where I did not take my lap on top with me and did not like log in during the day.

So it was it was I had.

It was four days, but it was fantastic.

Good good, good.

Get You have to recharge every once in a while, and I'm looking forward to actually, to be honest with you, I hate to admit this in public, but tomorrow Guildor's reforge drops and I think we're all just going to take two days off and play that for a couple days, which could be a lot of fun.

So I've got a small group that did I play with on a semi regular basis, So let's not talk about that stuff anymore.

Let's actually get to it.

So you I've been picking up on a thread that first started with myself and catlen along.

I saw with me and Vince and Caitlin Long and all this stuff about stable coins, and you were talking about it NonStop.

I think you actually did you present something over at New Orleans about this as well?

Or yeah?

Pretty My My entire presentation in New Orleans was on this topic and we that and that was based on a thirty or forty page research report we had put out on it shortly before that.

So we've done quite a bit of work on it over the last couple of months.

Excellent, So why don't we start there and what you're seeing and we'll sort of compare noteses to where we are.

I said to you before we hit record, which is that you know I talk about this, I talk about all these things that I kind of scattershot or on the stream of consciousness approach, and you know, it's nice to have somebody actually like settle it down, make a proper presentation out of it in order for people to kind of digest it in all one big felt swoop.

So if you go ahead, well.

I think I think the first thing I'll say is, even though I've just kind of started talking about these things, this is not new.

These have been around for ten, twelve, thirteen years now, and I have gone down the rabbit hole on them a couple different times, usually around the same time I had gone down the bitcoin rabbit hole, mainly because of Tether.

Tether is a central part of bitcoin in in my opinion, and Tether is by far the largest US dollar stable coin.

And it was because of the things I ran into and researching Tether that I kind of pushed these to the side and didn't give them much credence.

And I was of the belief that if and when they ever came into conflict with the United States government, there would be a battle.

And while I didn't know who would win that battle, I was certain that the United States could at least do some damage along the way, right, And so I never really embraced the whole stable coin concept.

But what really kind of changed it for me was the Genius Act or and when it was started to be talked about it, I started to look into these things again.

And then when the Genius Acts was passed and some of the comments that were made around it, and when you read through the bill, what you really start to realize, at least in my opinion, is that the United States, as an official entity, has co opted the innovation from the private market that the private market developed, and it seems to me, are you using it to build a parallel euro dollar system or the early stages of a parallel Euro dollar system.

Now that's that.

Now that I've made a lot of big jumps in that those few sentences, and we can dig into that.

But but that, but that's what really caught my attention.

And then also they started to get more I guess, public publicity because of the belief that this is a way to save the dollar, because there was no gonna be nobody else that would buy the debt, and so now the US wants these stable coins because that will be the buyers of last resort that nobody else will to showed up.

And I actually think that's wrong, but I do I and I think in many ways.

I don't know if anybody is a hunter or not, but to me, that's a decoy that that's that's something to get people focused on, to to to to remove eyes on what the real plan.

And the real plan, in my opinion, is to get more control over the global monetary system than they already have.

And in many ways they can then use the dollar as a weapon even more than they do now.

And it doesn't mean that they will have full control and perfect control, but I think it is a system and a method via which they can get more control than they currently have.

The US has more control than anybody, but nobody really controls the euro dollar system.

And I don't think the US likes that they don't control the euro dollar system.

I know they don't like.

They don't like that, or we would or we would still be on the liboard now exactly exactly.

That's and and that's one of the things we talked about in our papers.

I use the Libor to Sofa transfer as an example of the US wanting to get control and the steps that they took to do so, and it didn't happen right away.

Uh.

I think the I think that transfer of the library to SOFA was a five six seven year process from beginning to end, and you about five years YEA started And so I don't I don't think this is all going to happen tomorrow.

And in many ways, I could see the US just let people, let let the private market run wild with it for three, four or five more years in order to get adoption, and then kind of put their clamps on it.

But it's a fascinating topic for me because it's kind of sits at the heart of you know, capital flows and monetary system and the private market versus public market, you know, in country versus country.

Geo geopolitics gets involved here, and it's just a really, really fascinating, fascinating topic.

And I think those who are dismissing it are are doing so to their own detriment.

It's not just that I've actually run into the exact opposite of that one.

I mean, I guess there are people out here that are that are dismissing it.

It's just another way of extending dollar hegemony, which is a phrase I can't stand.

It's really done.

Oh by the way, if the dollar wasn't the best currency in the world, people wouldn't use it right, you know, I mean, this is what this is the this is the oh, by the way way, and people breathe right.

You know, it's one of those obvious facts that gets ignored while people try to shape a narrative around a particular thing.

So the the what you bring up is that the dollar is you know, I was actually had a chat with somebody yesterday about this.

I was on a different channel and they were going over, well, this is the building of the Panopticon and this is the new neo colonialism and blah blah blah Blah'm like, no, no, it's actually ringing in my mind looking at one Treasury backed you know, regulated stable coins are actually removing leverage from the system because we're now actually in control of the of that Euro dollar system and the gearing inside the euro dollar system.

Because we control the the we say how much leverage there can be.

There's going to be leverage used within the domestic markets because American banks can issue their own stable coins against the loans that they make and then they can have their own individual banks and.

Have their own leverage ratios.

But the offshore banks are not going to be able to do that to the same I don't think so.

You know, I don't know for sure, but I tend to agree with you that they that they won't be able to the question, Well, they can do it, but what what will the consequences be?

You know, and and and will they will they still have the same access to to US capital if they do it against the wishes of the United States, right, and so again it brings it just brings more control back to the US.

Well again, and that's what this is.

The thing is, like what Vince Launchi and I have been talking about is the is how we have We're going to set up controls around the offshore dollar, the euro dollar, and the onshore dollar, and the onshore dollar is going to trade at a premium in terms of purchasing power versus the offshore dollar, which will trade.

If you want access to dollars, you're going to have to buy them for a dollar five.

If you want to.

Trade them for ninety cents, you go right ahead and do so.

So if you want to lever them up and trade them at ninety five or ninety eight cents, that's great, But understand that we control the access to them, and therefore we can go you know, what no, and then we can bankrupt you.

And as opposed to the years of the libor and euro dollar dominated markets, we started in the mid fifties moved all the way until very recently.

The US was never in charge of its own monetary policy.

And that was the point of the whole libor offshore shadow banking system.

So you know, you can I just wanted to just want to take out the whole what's the word I'm looking for, the negative connotation of the United States getting control over its own markets.

This is what they should do, is what sovereign nation should do.

And if you don't like the stable coin, the US dollar stable coin system that we're putting in place, and you don't want to use your use our stable coins, well then maybe you as sovereign governments, should get your act together and issue currencies that don't suck.

And then you can issue your own stable coins in Turkeys era or you know, you know, I urinary or whatever, or you know, and do it that way or you know, or you can delive with the fact that the United States is going to eat your launch.

Well, to me, that that is the key to this all, is that I think this is a way for the US to I mean, I could try to be nice about this, but i'll I'll just say, to invade a foreign country without using the military to do it, because if the local population adopts US dollar stable coins as their preferred medium of exchange, because the local currency, as you say, sucks, and I agree with you, you know, it doesn't take long before that local currency starts to fail.

And once a currency starts to fail, a government typically fails pretty closely thereafter.

And the reason, the reason those two are related is money is a form of control, and governments use money as a form of control.

So if they lose control of money in their local jurisdiction, they lose control politically in in that jurisdiction.

And it's it's in my mind, this is a way for the US to sort of quote unquote steal sovereignty from a foreign country without you know, parking aircraft carrier off their off their coast.

And the other thing about it is it's done voluntarily by their citizens, as opposed mandate from Washington or New York or.

Wherever it is.

And that and that then gives the United States plausible deniability we didn't do it.

Your own citizens did it right now?

Is it to our advantage?

Sure, it's to our advantage and you know, but but it's your jurisdiction.

If you want to stop them, try to stop them, right, well, then that has try trying to stop it has consequences as well.

Agreed and the other.

But see, and this is the interesting part about all of this is that that's kind of the first order.

That that's one path of this, right, that's one path is all the evil mustache growing United States and their banking system.

We're going to go out like the evil capitalist oligarchs that they are and do the robber barons that they are and do the thing.

Well, maybe it's always possible.

It all depends on what kind of relationships to the United States actually puts together in terms of trade and foreign policy.

With these countries.

We have always lived under you we're all right, of an age we're in in our fifties.

We've lived under the age of American imperialism, which is really just a cover for freaking British and old you know, European colonialism through the euro dollar system.

If you look at the way Trump has been dealing with the trade policy.

And this is the part that I find interesting is he's not cutting trade deals where we get the factories.

You know, we get their raw materials and the factories and they get dollars in return.

He's actually putting together plans where no, we're going to build stuff and do jvs locally.

If you even you'll get the twenty eight points peace Plan the verse, the zero point one beta peace plan for Russia Ukraine.

What's in there?

Everything about money.

In that peace plan was US and RuSHA will enter into joint partnerships to develop various assets, meaning both countries will share in the benefit of it.

Right, that's not a colonial process.

A colonial process is always use the currency as a means by which to extract wealth at pennies on the dollar and send them home to your to fill your factories, and then you get to sell the finished goods around the world.

And that's what we have to watch for.

Right.

If we start watching we start seeing that old model, well then yeah, obviously all those criticisms of the Genius Act and the stable coins will bear fruit.

But if we don't see that, if we see partnerships with these trade deal that's a different system.

Well, my guess is you'll see both with some countries you'll see it go one way, and with other countries you'll see it go the other way.

Rights as has always been the case.

And you know, and this is this is what I always always try to tell people.

And I'll say it again here in case anybody who's heard me talk before is going to say, Brent, we've heard you say this one hundred times.

So for the for the event that you know some of your audience has never heard me talk about it before, is you kind of have to set aside what you would like to see happen.

You have to set aside what you think others would like to see happen, and actually figure out what it is that others would like to see happen or what they would do right.

And the simple fact is that people around the world, in many, many countries around the world, prefer the US dollar to the local currency.

Now, you may believe that they should prefer to use gold or silver or bitcoin or whatever it is, and you may believe that the dollar is a horrible currency, but they do not, and that is born out by the market.

The market tells me that.

And if you look at the stable coins that exist so far, ninety nine percent of the stable coins are US dollar stable coins.

Now, gold stable coins exist, eurostable coins exist, other stable coins exist, but ninety nine percent are tied to the US dollar.

And the reason they're tied to the US dollar is that is the issuers trying to meet market demand.

That is not the issuers going out there and saying, oh, you want a euro stable coin, Well, too bad, We're giving you a dollar one.

No, no, no, it's it's the market demanding dollar stable coins and the issuers trying to meet that demand.

So that is the market saying, on a global basis, we prefer dollars.

We don't prefer euros or yen, or we want or ruble or whatever it is.

And so you know, I think this is the new digital expression of what the euro dollar market decided decades ago.

To reiterate the point you made to sort out with the United States.

Then gets to control what the price people pay for dollars is, and it should be that way now.

If they just hide the choose, if they decide to charge too much, well hey, then someone else will decide to come in with something else.

It's what I find really interesting about all of this is that your point about is like this, we analyze the world we've gotten out the world we want.

That's another That's why I've been saying this since I first like sort of periscoping in twenty sixteen.

It's it's a very simple idea and a very simple heuristic and framed to see the world through.

And so what we're dealing with at this point in time is we have a lot of people with an ast to grind.

That are commenting in the state.

Yeah, I mean, and I don't care if it's you know, the former version of myself who hated you and I talked about this last time we were on the show.

Both we've both gone through a similar like the psychological process with you know how with our relationship to our home country, right, And I mean, and so I just find it so for anybody who's listening that you should go listen to the last time that Brenton was on the show, and we chatted about that at length as a matter of fact.

And so for me, it's it's it's it's very obvious that the market wants this.

I can also I can also say I think and this is one of the things that Vince and I talked about in the last episode of the podcast, that there's also something else going on here where this entire system has to be recollateralized.

It can't just.

Be the US treasuries, US issuing more debt, US, you know, and all of that stuff.

It has to be there's gonna have to be a hard collateral at at the bottom of all of this, because if we don't do it the United States, then someone else could and then make their stable coins better.

So and I'm getting at and when I'm getting out obviously is at some point that's why everybody's all the central.

Banks are rushing for gold, right, the treasuries are all rushing for gold.

Yeah, yeah, And I and I think I think many people when they see the central banks have been buying gold, and when they see what the price of gold has done, they automatically assume that means the death of the US dollar and the US control of the monetary system.

And it doesn't necessarily mean that.

Now.

Clearly, when the when gold does what it has done, that is a sign that the market, the people of the world are saying, hey, something is not quite right.

But people in China are not buying gold because they fear the dollar losing purchasing power.

They're buying gold because that you want is a horrible currency, and they know that it's going to lose more value.

And it's the same thing you go through other countries and and US people are buying gold because we are losing purchasing power here as well.

But the point of my whole you know, milkshake theory has always been you can have gold going up dramatically, and as long as the dollar is not falling versus the foreign peers, it's not going anywhere, right, right, right.

And you're and and that's and that's born itself out.

The dollars been trading.

And I mean even in a year where the where the Treasury Department and the President and have purposefully devalued the dollar in order to force trade deals onto their opponent, to their trade partners, you know, even then, the US dollar index has not really moved.

Yeah, it hasn't really gone anywhere since April, right, I mean it fell kind of into April.

Now it's just kind of gone sideways.

You touched on.

Something earlier that I think is important because one of the problems for the US with the euro dollar market is the fact that the rest of the world has issued dollars in a currency that they cannot control and that they are not ultimately responsible for, and as a result, that does hurt the rest of the world when a credit crunch comes.

But it also does eventually come back to the United States.

And I've always made the argument it starts in the periphery, but it does eventually reach the core.

So I don't think the US gets hurt first, but it does eventually come back and hit the US.

Part of the reason that that is the case is because right now a dollar and a Euro dollar, or a US domestic dollar and an offshore dollar trade at par.

They are convertible, they are fungible.

There is no difference other than geography between a dollar sitting in Dallas and a dollar sitting in Dubai.

They trade one for one.

But and as a result, that's why it can pyramid back down onto the US because the foreigners can can can can can claim that they can make a claim to the base money that only exists in the US as you go down the daisy chain at par.

And so I think, as you have alluded to, that this new system is a way to potentially change that right to make it to where it is no longer at par.

And if and if it doesn't trade at par it is no longer, it doesn't mean that it still can't come back and cause problems for the US, but not to the same extent that it currently does, especially if that, you know, let's say that let's say we eventually get to an onshore dollar and an offshore dollar in it, and under your example, one trades at a dollar, another one trades at a dollar five or whatever it is.

Right, even at a dollar five, it's not that big a deal.

But in some kind of a crisis where now the euro dollar is trading at one thirty instead of one oh five, and it's losing value versus the dollar, that becomes a much bigger deal, and the consequences of it start to hurt the rest of the world more than it hurts the United States.

And it gives the US more control over who they help and who they don't.

And the US already kind of does this through the swap lines, right yes, And people will tell me, well, the US the reason that the US gives swap lines is because if they didn't, then the foreigners would sell all the US dollar assets and that would be bad for the US.

And yes, that is true, but again, the problem is starting on the periphery.

It's it's it doesn't.

When someone in Brazil sells their US dollar assets, they're selling them because they are in dire straits and need the liquidity.

Yep.

So you can't say that the US giving a swap line to Brazil starts in the US and then goes to Brazil.

And I know it's starting in Brazil on the perimeter and then it's coming into the core.

And this new system is a and I haven't quite figured out exactly how they'll do it, and I don't know if I'm smart enough to figure that out exactly.

But I do agree with you that that is one of the issues that they would like to solve.

I think it's it's it's very much what's I think that's I don't have a clear answer to that.

What they're going to do thing either.

I've been talking about it kind of.

In the in the you know, the the the bubble framework, like the you know, you put the flow chart up on the board with using Microsoft PowerPoint or project.

Or whatever you've got.

Well, we need to create a federal reserve that enforces the international the domestic par versus you know, international park.

How they do that, I don't know, do they?

Is it how they price swop lines?

Is that how they how they set up various facilities?

Do do American banks get preferential treatment to the quote unquote the FED discount window or even better?

Noting also that the stable the whole stable point infrastructure ecosystem is an end run around the Federal Reserve because now it's direct Treasury money and that's now a digital form of greenback more than it is a Federal Reserve note right, because these stable coins aren't being issued by the Federal Reserve, so so is the FED than just the firewall, meaning foreign actors have to go to the Fed to get dollars because we're not running the same kind of budget deficits that we have in the past.

If we if we fix the fiscal side, this is my argue for a long time, you fixed the fiscal side of the situation.

Now you're not issuing as many Treasury bonds on a regular basis.

Yeah, you're issuing bills to fund the stable coin to growth of the stable coin market, but that's that's a different that's a different thing.

That's a those are you know, those are going to be created and destroyed.

They don't affect the long term credit rating of the you know, the of the US in that respect.

But if you do that and then you have the FED is the one where everybody has to go to to get dollars offshore when they need them, then the service or denominated liabilities, well then we have a we have a we have a different scenario.

And that's how you can kind of separate the Fed's roll from the Treasury's roll.

And that's how you in the long run get to an onshore dollar and an offshore dollar.

That's what That's the way Vince and I have been thinking about this for a while now, and I know that I haven't talked to Caitlin along in a couple of months actually a few months now to get her latest thoughts on this as well.

So just throwing it out.

There, Well, well what you're touching on though, listen, I don't have the answer either, but what and I have not written about this, yes, but we're planning to write about this, so stay tuned.

There is in addition to the US, let's say, going to war with the rest of the world over the monetary system, they may be going to war internally.

And what I mean by that is the rise of stable coins.

It makes it easier.

It doesn't necessarily rule out the necessity for the FED, but it makes it easier for the Treasury to take over monetary policy.

And I've said for a long time that we are headed for a battle between the Treasury and the FED, and that I think the Treasury will ultimately win.

Now, whether that whether the FED ends up getting absorbed by the Treasury, or whether they just take orders from the Treasury, or whether they put get somebody into the FED that works hand in glove, you know, because it's their lackey or whatever it is.

But but once you have a US dollars stable coin that is done by the Treasury and can be done digitally, and each individual can open the wallet and receive and make payments back and receive payments from the government, make payments back to the government.

Because you got to remember, the FED is the Treasury's bank, right, If you no longer need the bank to transact between the individuals and the Treasury, you no longer need their distribution arm right, right, And so that's but this is going to be a huge battle.

Like the banking system is one of the biggest lobbies that there is, right, it's one of the biggest allocators of capital there is.

They are not going to go quietly into that good night, right, They're going to fight to keep control of monetary policy.

The FED is not going to want to give that up.

But you know, that doesn't mean that they're going to win just because they don't want to lose, right, and so, but but all these different little battle battle grounds are opening up now, and this is you know, this is the you know, it's just another hallmark of the fourth turning, right, you know, where these institutions that once seemed mighty and impossible to fall end up going by the wayside because things change, change, and and and I think I think we've talked about this, and I'm pretty sure you agree, but feel free to push back if you don't sure.

Is that, you know, I think for a couple of years now we have been and we're moving into more of an environment that requires people to think not just from an economics perspective when evaluating economic projects, but thinking from a politics and a power perspective, because you know, for you know, I've been doing this for twenty five years now, and for for basically all of that time.

If I was evaluating an investment opportunity, I could, you know, look at the economic aspects of it and pencil it out on a spreadsheet, and if it made sense, you do it.

But you know, you can no longer just say something is going to work or fail based on the spreadsheet because power and politics will trump that.

And I think I think the pendulum is now swinging back that direction, and I think it's going to be very hard to stop that pendulum from going further in that direction.

So and I think this could last ten, fifteen to twenty years where this is the case.

I think I know where you're going with this, which is that you know, our government has made some very controversial choices from a free market perspective to take strategic positions in companies like Intel and others, and it's the and officer's strategic capital.

I think it's the name of the thing that no one's that's the thing that no one's talking about that you brought up before we sort of recording today, and we want to move back, and you want to move the conversation into that and to that realm.

And I think that this is a very very important thing to consider.

Like we've outlined here, with the euro dollar system, the euro dollar system, inder libor, we were not in control of our own monetary policy.

You cannot be a country worth a salt if you don't control your own monetary policy, or at least you can't be the core.

You can't be like the United States, right, the core economy of the world, not being control of your own monetary policy.

Same thing with your military, same thing with your domestic policy, same thing with your industrial policy.

So I find I, I, you know, normally I would like look at this and be anathema of that.

We would take, you know, a a government position in a company like Intel or any of these other these other firms.

And but I remember what Putin had to do back in Russia in two thousand in order to stop the globalist from destroying and taking over all of these state assets that were really publicly there were.

These were public goods companies like Yukos and gas Prom and not Rosenef the one.

These are public goods, These are the birthright of the of the Russian people, and they were being stolen by the City of London and Wall Street assets left in right, guy like Bill Browner and Evan Safferin and all, I mean all that stuff.

And you know that that that's a big story that you and I need to talk about sometimes much.

I know, Yeah, I know you did that story.

And I've gotten out of that story.

I've had that story in my back pocket for ten years now.

Yeah.

It's fascinating.

It's really fascinating.

So that's that's the way I see this.

I don't know that you know.

So this is something I think we need to discuss it that in a sense that this what we're talking about.

All the things that Brent and I are talking about now are really the hahollmark of a transition period.

We almost have to do this from a national security perspective first before we can, you know, go back to any kind of well.

And here's here's the here's the part that I and we we've talked about this before.

And here's the part that I struggle with because I am a free market guy.

I'm a capitalist.

I don't like the marriage of government and state, right, I don't like the government lean into the free market dynamics.

But the truth is we've never truly had a free market.

We have perhaps had a more of a free market than other places, but we've never had a truly free market.

And even if I don't like the government taking a more active role as someone who manages other people's capital, doesn't matter what I like.

I just have to analyze the world as it is and figure out what the hell they're going to do.

And just because I don't like it doesn't mean they're going to stop, right, And so I have to take that into account when I am making a decision and when I'm analyzing things.

And so I think the people that do a free market analysis on a project and come to a conclusion, and then when the government interferes them they said, well, they say that, well that's manipulation.

Well, to me, they've only done half the analysis.

Yeah, I agree, it's only happening because of the government.

But listen, the government's a real thing.

You know, as much as you and I might not like it, they're a real player, and they're in the market, and you have to take their their actions account.

And so I don't well, I don't necessarily like from a free market perspective, what is happening If I look at this as the big game, which I have often described what's going on in the world, the big geopolitical tensions as the big game.

Right, it's it's it's it's the global hedgemon trying to stay on top, and it's the up and comers trying to usurp their position, and the US is going to do everything it can to stay on top of the mountain, and then the usapers are going to do everything they can to knock us off.

And so from that perspective, you know, there are some things we have to do in order to stay there.

And if I'm trying to win that game, then it completely makes sense what the government is now doing, especially when you realize, which COVID put on perfect display, the dependence on some critical inputs that the United States needs coming from advers aerial countries.

Right, And so at a minimum, we need to be either self sufficient or move more towards self sufficiency.

And if and when it ever becomes kinetic between US and our adversaries, then it becomes an even bigger, bigger deal.

And I think it was himing Away.

There's a great quote, and I'm pretty sure it's by him Away.

It says something about once war is declared, the only thing that matters is winning, because nothing is worse than losing a war or something to that effect.

And you know, I've got a son that's seventeen years old, and the last thing I want is the war, and so I will do everything I can to keep that from happening.

But I also, you know, don't want to be living under communism.

Quite honestly, I'm a capitalist, right.

If you're fram yeah, if you frame him from the Chinese, I think you're framing us from the Chinese perspective.

I'm actually yeah, on my side of it, I would I say that's a great game.

But the great game is different.

I just I have the different frame, which is that the real empire never ended, and they're the ones don't want to watch anybody actually get their independence.

And that means and those independent actors are America, Russian, and China.

That the British and the old Anglo Dutch, British, Venetian whatever you want to call it, the Davos, the High Table.

I don't get it.

Damn could pick a pick a pick.

A metaphor that works for you, and you know, sprinkle with with oh my god, all the evil.

Jews that you want, I don't care.

That is the actual game, and everybody else is trying to get out from underneath that system.

And what you're actually watching today is not China in the United States at Loggerheads, but China and the United States trying to define and the Russians as well, trying to define where they agree, where they disagree, and how they can work together to get rid of the ship bags in Europe.

Who are you know, who are literally trying to start World War three amongst every everybody and then come to a Dayton later on.

I've been I think there's a Yaulta too in the future that has America, Russian in China, and we're seeing the beginning of that with how everyone has now said, yep, Europe, you get to stay out of the negotiations over Ukraine.

We don't want you here.

The Russians have said it, the Americans are saying it, the Chinese are saying it.

And that's a very very very big tell.

I mean, I don't think Europe could have played this any worse if they had tried.

I mean they I mean, it's just it's just incredible.

It's just incredible.

But you know something you said.

It made me think of something that I think is equally important.

And I think I think a lot of people are of the belief that the United States wants to divorce itself from China, and that listen, that is true.

But China wants to divorce itself from the United States as well.

And if you look at some of the moves they've been doing over the last ten years, that's pretty clear.

It's not like the United States arted this right.

This is kind of a mutual divorce.

Both sides agree that we are going our separate ways.

The question is is it going to be amicable or is it going to be confrontational.

And each side is trying to get all their ducks in a row to where if it does get confrontational, they come out on top.

But I don't think anybody wants a war, most of all Trump.

And here's the thing, and I may have said this on the last episode, but I'm going to say it because I think this is important to understand.

If you put yourself in Trumps, what does Trump want more than anything in the world.

Is he wants his face on the front of the New York Times saying what a great job he is doing.

Lording over a global economy that's booming.

That's number one.

And the second thing he wants is his face on Mount Rushmore.

Those are his two biggest goals, right, And you can't get your head on Mount Rushmore if China usurps you while you are the president, and you can to get your face on the front page of the Wall Street Journal in New York Times saying what a great business guy you are and what a great deal maker you are if we're in the middle of a global financial crisis, because those two things don't square.

So his challenge is, how do you create a booming economy while you keep China in a box?

That is really really hard to do.

It's really hard to do.

If he just wanted to crush China, probably could have already done it, but that would have had huge blowback on the United States and we would have been in a recession that probably would have led to some kind of military conflict in its own right.

So it's not as simple as just wanting to beat China.

It's wanting China not because if China collapses, that's going to be a nightmare for the whole world.

That will be a.

Nightmare for the whole world, just like if the United States collapses, it will be a nightmare for the whole world.

The idea that the US is going to go into this big recession and the rest of the world is going to be just fine and trade amongst themselves is amongst the dumbest ideas I've ever heard.

In my life.

It's it's just that's not how it works.

But similarly, China is not gonna you know, we're not gonna have a crap.

We're not gonna have a collapse in China and the rest of the world goes along.

It's merriway.

Either, that's going to be a disaster as well.

So so so when you when you think about it from that perspective, you've got these big guys in the sandbox trying to knock the other guy out of the sandbox, or at least control most of the sandbox.

And you know, I think it's in this I'm bringing this back to my belief that the dollar is going to remain dominant.

That doesn't mean that the rest of the world will always continue to use dollars at the same level they currently are.

It would not surprise me at all, if we go from a globalized world to a very regionalized world, and within those regions, maybe there's a currency that's the dominant currency in that region other than the dollar.

But I do not believe there will be any currency on a global basis that comes anywhere close to the United States dollar.

But it doesn't mean that we will become a completely dollarized world either.

I do think that the rise of these stable coins will make it more difficult for the rest of the world to dedollarize, and in fact, I think much of it will become dollarized, especially the small and developing countries.

But the bigger countries, the stronger countries, the countries that have more of their own resources, whether it's Russia or China or you know, Japan or some of them that are more developed and perhaps are more authoritarian and can better control their own citizens, will be able to fight against the US dollar stable coins than other countries will be able to.

But I think we're going to a more fractured world, not a more centralized world.

So I think so.

In other words, I think the world on a whole becomes decentralized, but within those pockets, I think it becomes more centralized because I think think authoritarianism will rise in each of those pockets.

Now that's a that's a fair assessment.

It almost has to uh, we we're gonna the world is going tribal, like in a big in a big sense, the world is going tribal.

And the I the way I prefer to look at it, there's somebody still trying to like control the sandbox.

And I'm telling you it's still your It's Europe in the in City London, the Russians, the Chinese, the Russians to a westper ecent.

But the Chinese and the Americans are literally saying, look, okay, this is our part of the sandbox, this is your part of the sandbox, and you know, let's let's leave it.

Let's leave it at that.

And this is when you start really thinking about there's a there's a multi variant problem here is that this isn't a two player game.

This isn't you know, one team versus the other.

This is a five to sixty seven player game, or at least a a two player game or three player game being played in seven or eight different dimensions.

This is the biggest problem.

And of course, now people will say there's a long ago playing twenty four chess again like he always does.

Well.

Unfortunately, folks, it's a twenty four d fucking world.

And that's just the way it works.

Whether you like it.

That doesn't matter whether you like it or not, whether you think it's it should be simple or not, it doesn't work.

It doesn't work that way.

So you have Trump fighting multiple wars here when you're your point about no one wants a war, Well, you're in a war.

That war's financial, that wars cultural, that wars political, That war is geopolitical.

It's in the intelligence agencies versus civilian government.

We have.

I mean, we're doing this on December second, and I'm literally sitting here watching our CIA going to open revolt against the civilian government to try and undermine the military because because the civilian government and the military are trying to take out their base in Venezuela, of their base of operations with the drug trade in Venezuela, which everybody with five brain cells are up together to make a spark knows that.

That's what's been going on since the nineteen eighties.

Yeah, and now we're watching CIA assets literally call for insurrection against the against the government.

And it's pretty crazy, right, It's it's pretty fast, it's it's it's fascinating on so many levels.

I mean, it's just great.

But you know, you just touched on something.

And again, it doesn't matter really who's well for the point I'm going to make, it doesn't matter who is running the drugs.

One thing I would say is for people who think that the United States can no longer do anything and no longer accomplish anything, and they're run by a bunch of idiots who couldn't manage their way out of a paper bag.

The US knows where every narco lives.

They know where their moms and dads live, they know where their girlfriends live.

They know the airports in the jungle, the runways that the planes take off from, they know the marinas that the boats leave from.

They have it all mapped out.

And anybody who thinks that they don't is be night.

Now, that doesn't mean that the US knows everything, and it doesn't mean that the narcos and the you know, the groups running those can't have some success.

But the idea that this is just a random thing and the the US is just blowing up random boats and they really have no idea who's in them?

I mean, you're you're, you're, you're being crazy, I used to say.

I used to say, during the during the during the Rise of Isis back in twenty fifteen.

Ran Paul, by the Way used to used to like, like, go into this, these flights of fantasy.

We can't stop Isis.

I'm like, are you kidding me?

We can read the icense plates from space.

And we can't find a bunch of a bunch of guys running around the desert and Toyota highlexes with thirty millimeters cannons on the back of the Yeah, thirty milimeters like bull bullshit, Like you're like, that's nonsense.

Of course we can see them.

Of course, now you have to ask yourself why they're being allowed to run around out there.

And then, and that's a question no one wants answered.

And that's a totally different question.

But the idea that that that the US.

Is just.

Blind here and doesn't really know what they're doing.

I mean, good real ship.

In one hand, wishing the other which one fills up first?

Right, you know, I gotta get it to them.

Well, this is what's funny to me about it is on the one hand.

People on the one hand, people will tell me that the people in charge of a bunch of idiots that have no idea what they're doing.

And on the other hand, they'll say they created a system that enslaved the entire world and nobody even realizes they're doing it.

Well, now, which is it?

Right?

Right?

Take you take your pick, because it doesn't go both ways.

Right well, And yeah, you will see that.

You will see that on on Twitter, like literally in the same tweet.

Yeah, I mean you'll see the cognitive this in the same tweet.

This is what's interesting is one of the things that I want to bring up here is that, you know, one of the things that we have to realize is that.

We live in and this.

Is not just an It's obviously it's an informational war.

And now we're fighting at the generational war.

That's purely this film is purely informational.

And the question you have to ask yourself now is are you falling for the myth of the omnipotent law or omnipotent ass I've been like making this point for a while now, and that's the myth that you know, these people are all powerful.

It doesn't matter, if it doesn't matter who it is.

Right in my case it's the all powerful city of London, and somebody else's case it's the all powerful Jews, or the or the tech bros or this or then none.

Of that is true.

It's all the omnipotent in anything other than possibly God, depending on your your cosmology, is pretty much energetically unsustainable.

Well not only that, but within those groups, whichever group it is that you think is running things within that group, there are battles, right, Yes, there's two sides to the deep State.

There's two sides to the High Table.

There's two sides to the US government.

There's two sides to the Chinese government, Like there are factions within factions within factions.

Yes, And so when people say this is what the Chinese are thinking, I was just kind of laughed to myself.

I was like, well, okay, right now, now, now, now, yesterday you were an expert on weather, and now you're an expert on what the Chinese are thinking.

Good, good for you.

Right, Well they sided that everybody stayed at a holiday and expressed last night, right, So yeah, right, is that a classic?

And this is the classic thing?

And what you what you what you find.

Is, of course they seed into the zeitgeist the information that they want you to to parrot and to come back to so that they can newly mint virologists and and geopolitical analysts and all the rest of it.

And it's like, oh, really, how about No, the world is a lot more complicated than anybody wants to admit.

I was doing this for example in you know, it's like Israel's on a monolith, the Ron's on a model.

So during the during the Twelve Day War, I kept like the guys, you have to realize that there's multiple factions within the Israeli government, or they wouldn't be changing governments every eighteen months.

And then there's there are factions, you know, within the power structure in Iran that mapped a different two different influences, some of some of which are French, some of which are British, some of which are native Iranian, some of which are you know, you know, some that we've some of which I can't even I can't even map.

And so once you realize that none of these things are monoliths, then you realize that the world is.

It becomes a question not of is Iran going to do ex It's more a question of which faction within Iran is dominant or which faction within Iran just got their assets handed to them.

And that's the questions you should be asking yourself.

Well, and I want to make this point too, because I think this is also important to understand that for anybody who is listening to this and thinking what does this have to do with finance, you know, ten or fifteen years ago, I may have agreed with you this is all like secondary stuff that isn't as important.

Let's get back to the hardcore numbers.

But because of that pendulum that I talked about earlier, this stuff is important, and this stuff is going to increasingly not only impact markets, it is going to make hardcore decisions within those markets of what happens.

And as much as I would like to ignore this nonsense, I don't have that luxury, and I think if you are an investor allocating your capital, I would suggest that you don't have that luxury either, and so you do have to think about these kind of things.

I agree.

It's like I got into this, you know, as as an amateur, right as an amateur gold bug, and so I would get up every morning and I watch the price of gold, and I get and I get up in the morning and they drop bomb at twenty bucks, and I get angry, and then my whole day was ruined and blah blah, blah blah.

And I realized after a while that I was watching the most politicized market in the world.

And so certainly twenty certainly twenty years ago.

Whether it is still is or not is a different story, right, But certainly twenty years ago, the gold market was the lynchpin to the all of the things that we were dealing with.

And once you have that realization, you're like, well, now you have to take pay attention to politics, what's driving people to do X, Y and z.

And so slowly I didn't.

Become this version of me today that exists because I always wanted to be this guy.

I became like you, it's a journey.

You started here and I wanted to worry the journey X and then you go and you keep going until you get to the and you know, as a you know, I'm a former scientist, and at the end of the day, I'm a former I'm a former research and process chemist.

And like you do root cause analysis, and you know, once you're doing art, once you're doing root cause analysis, and you have to actually, you know, write cars, you have to write corrective.

Action reports, you have to do all this stuff.

You have to find the variable that is going to, you know, be the most the biggest driver of change.

And once you understand that model, you can apply it anywhere.

And this is where, this is why I am where I am today.

I hear from now I maybe in a different place.

Overall, my overall framework for looking at the world hasn't really changed in six or seven years.

The framework that I've used has really kind of hel to me to understand what's going on.

It doesn't mean I've gotten everything right.

I'm not sitting here saying that.

But for the most part, it's it's it's been accurate, and it's helped me navigate all the ins and outs.

But it doesn't mean that new things don't develop.

Like you know, like I said, three or four years ago, or really two or three times of the last ten years, I took a look at these stable coins and kind of dismissed them.

But this last time I looked at them, my mind kind of changed, right, Because as things change, you kind of have to take these changes.

And I think the world is going to change a lot over the next five or ten years, right, I mean I think that that.

I don't think that's a crazy statement to make, and I think most people would agree.

But and it doesn't mean that just because every time you see a new headline, you need to change your whole framework.

You know, it's good to have a framework.

It's good to have a roadmap because then it helps you keep on track and not get distracted by every headline.

But sometimes when a material change takes place, you have to at least in or brate that into your your framework.

Right.

You can't ignore it just just for the sake of staying on your lane or following your map, or.

Just being on autopilot.

And this is and and I will be I will be honest with you.

I remember, you know, I've told the story before when I first went to work for Newsmax writing a goldstock advisor and and then we rebranded or whatever.

But I was sitting there with a version of the world in my head, and I was analyzing the world that way, and it wasn't working.

It was in the middle of the gold bear market.

It was twenty thirteen, twenty fourteen, twenty fifteen, and it wasn't what.

I was kind of going through the same thing.

So, right, we were all kind of going to the right.

And then one day but I was, but I was moving into the geopolitics.

Right.

I had already done that.

I mean, I already covered the Russian the Russian ruble crisis and all that stuff that was happening.

But so I was moving in that right in the in the right direction.

But at some point I went, this is not working.

My dollar bear theory, my this theory, all of that that stuff working, and you're eventually just going to have to look in the mirror and go, well, do you want to be right or do you want.

To have a job?

Oh?

Exactly?

And I went, I kind of want to have a job.

Already did the two years of grinding unemployment, trying to change careers.

Don't want to do that again.

So yeah, So I mean this is one of those things where you have to be willing to you know, the goal with all of our frameworks is to get to a point where that frame, where the core of it is so strong that you can that you're you're only shifting for you know, you're only moving the focus four or five degrees, it's both a thirty or forty or fifty degrees, you know, looking at different directions, and you're you're you're trying to just nail it down, and then the world becomes a lot more predictable.

That's not to say that it's not also going to change in ways that are to surprise you, because it will, right and when it does, that's when you look up and you go, WHOA, that one's new, and you can but you can see them a lot easier if you have a really strong I think if you have a really strong framework, and this one that's a little flexible, but still you know, if you know who the bad guys are, you know who the good guys are, and you understand you've mapped everybody's incentive as well, and you've done it honestly from their perspective, and you've been honest about their incentives, then it's pretty easy to figure out what their next moves are going to be and then we see if they if they act in accordance to that or not.

Well, so one of the things you know somewhat related to what we're talking about, and I actually think this is a material development, I guess is the right way to say.

It doesn't change my overall thesis and it does not change my framework, but it is something that I think is important to understand, and that is, you know, related towards you know, no longer just penciling things out on a spreadsheet.

Understanding that politics and geopolitics and national interests are going to trump part in the pun, you know, the economics of a project.

The United States.

I think there is a lot of people.

First of all, I know there are because I hear from them all the time on social media, and when I go to conferences, everybody's always telling me that I need to kind of wake up and realize that the United States best days are behind it.

And it's just, you know, it's a slow spiral now, but it's going to pick up into a fast spiral into you know, a heap of ashes.

And what I've always tried to say is listen, that may eventually happen.

I cannot rule that out, and I have to be open to that possibility.

But despite all its flaws and despite all the mistakes it's made, it still owns the best piece of real estate in the world.

It still has incredible resources and assets that the rest of the world just doesn't have.

It has.

The system that currently exists was set up to favor the United States.

You could even go so far as to say it is rigged in favor of the United States.

Now, that doesn't guarantee that the US will always quote unquote when, and it doesn't mean that things will always go well.

But the point is that if you're going to bet against them, just really understand what it is you're betting against, and who it is you're betting against, and the challenge that you are up against.

In other words, if you're going to storm the castle walls and have a revolution, at least know how high they are and how thick they are.

Right, don't delude yourself that it's made of paper and you can just run through them.

And along these lines, I think if we go back to the you know, the point we were making about when COVID hit and it showed in starking, stark clarity the dependence that the United States had on China for certain needs, inputs, commodities, whatever you want to call them, and then that prompted the US to do a bigger analysis from a national security perspective, and you realize how much of our needed inputs come from China or you know, countries that are quote unquote adversarial to the United States.

It showed again in glaring detail what a problem we have.

And one of the most bipartisan things in Washington.

Listen, Washington has probably never been more divided than it is now.

But one of the very few things that they agree on is that the US needs to be self sufficient, or at least much more self sufficient than they are now.

And Trump's Big Beautiful Bill is part of that.

That is, for lack of a better way of saying, that the American manufacturing and industrial renaissance, where he wants to bring industry back to United States, higher paying jobs, become more self sufficient, produce things here, buy things here, and export things.

You know.

That's all part of the Big Beautiful Bill.

But part of the.

Funding of that, and that Big Beautiful Bill is like four billion dollars four trillion dollars over a ten year period or something.

Part of the funding of that Big Beautiful Bill went to a somewhat unknown department in the Pentagon, which is now known as the Department of War, and by the way, the fact that they changed it to the Department of War should give you a little bit of hint as to how seriously they are taking this.

And I say that jokingly, but like, seriously, why do you think they changed it just for the hell of it.

Probably not, So that's how serious they're taking this.

And so there's an out there there.

There's a department in the Pentagon called the Office of Strategic Capital.

Now this was actually created under Biden.

I can't remember if it was late twenty one or early twenty two that this was created.

And it's an office that is supposed to kind of spearhead the US solution to being too dependent on other countries from a national security perspective.

There's more to it in that, but in essence, that's what it is about.

Now Trump has not only embraced that, he has accelerated it and gave it additional funding through the Big Beautiful Bill.

The person he put in charge of it is named Jeff Feinberg is I always forget his first I don't know if it's Jeff or it's Keith, but his last name is Feinberg.

And the reason that's important is this is not a typical government bureaucrat.

It's not a you know, career military leader who has never set foot in a you know, Wall Street boardroom or has never done a business deal.

Feinberg is the founder and chairman of Cerberus Group, which is one of the biggest and most successful private equity firms in history.

And he has made billions and billions of dollars for not only himself but all of his clients.

And he has he has himself sat on many different presidential advisory boards and think tanks, and he's been involved in numerous you know, infrastructure products or projects and you know defense contractors.

So this is a guy who knows his way around not only washing Hington, but American industry and global industry.

I should say this guy hates losing money.

The last thing he wants to do is just you know, hand a billion dollars to somebody and let it go to their you know, uncle or aunt or something.

And I think that's important because most government run projects are run by career bureaucrats, not business people.

The Office of Strategic Capital is a hybrid model public and private.

So he put a very Trump put a very successful private industry guy into headit.

So when you've seen these things about the United States buying a stake in Intel, or when they made a one hundred and fifty one hundred and fifty million dollar investment in MP Materials, which is a rare earth company in California.

That is the Office of Strategic Capital coordinating that.

Now they're probably not listed in the papers, and Feineberg's probably not going to have his picture there because he's kind of notoriously private.

But that's who's behind this so again, and in his job, they have the Office of Strategic Capital has identified a number of industries and specific sectors and critical minerals that they have specifically targeted for the government to help develop and innovate in those industries, because developing those industries will make the United States at least more independent than they currently are.

And I can't tell you that this is going to be perfectly successful.

I am sure something will go wrong along the way, but they are going to throw several hundred billion dollars at this.

The Office of Strategic Capital has Feinberg running, and he is able to coordinate resources from the Department of Energy, the US Treasury, the Small Business Administration, the Commerce Department, and the list goes on and on and on.

So again, if you think the US is going to just automatically fail, realize who you are up against.

You are up against the Pentagon, You're up against the US Treasury Department, You're against the Commerce Department, the Department of Energy.

These are the biggest players in the world, and they are going to do whatever.

They are viewing this as the twenty first century Manhattan Project.

This is solving this problem.

Is a race.

It's a race against China, and China is trying to solve this as well.

They're trying to be independent of everybody else as well.

And it is a race, and whoever wins the race will probably dominate the world for the next thirty, forty, fifty sixty years.

So I don't know for sure who's gonna win this race.

But what I do know is the United States isn't gonna decide not to run.

They are gonna run, and they are going to run to win.

And the other thing is the money is then gonna go to the small and medium sized businesses that are trying to develop.

So if you're betting against the United States and this endeavor, you're not a betting against you know a career senator, You know in d C, you're betting against the people working in those factories and in those jobs and in those startups.

Those are your average Americans that are doing that.

So those are the people you're betting against.

And again, I don't know for sure who's going to win, but to say that they're automatically going to lose, I think is crazy.

And I think anybody that sits in my position and is looking at a play how to allocate capital, allocating capital in the United States to these industries that are going to have this huge tailwind behind them.

Whether it's critical minerals, whether it's natural resources, whether it's important technology, whether it's defense contractors.

There is a wave coming of liquidity to those sectors.

And I think it's an a to me.

It's one of the biggest opportunities investment opportunities I've seen in twenty five years of doing this.

Now again, I don't necessarily like that the government is getting involved here, but I do like that it's not just coming from government bureaucrats.

I like it that that they're part Oh I didn't say Feinberg is running it, but he is going to partner with private investment managers who are going to put up their own capital, and their own capital is going to get invested in these arenas, and then the government is going to match it.

So again it's kind of a hybrid between government funding and private market funding.

But you know, when I when I look at this, I just think about, you know, what's the likelihood that none of it succeeds.

I think that's pretty low, right, And so when you're when when when the US sees something as an existential issue and they are going to throw all of their resources behind it, even if they are slightly successful, it has the potential to provide enormous opportunity.

And so from that perspective, that kind of stays with my overall thesis.

If I want to be invested in the US versus the rest of the world, and and that's going to kind of roll out.

We have a way to access that.

It's only available to accredited investors.

But it's kind of exciting, and you know, it's it's going to be interesting to see how this goes.

But the point the point of this is this goes back to the not everything is going to pencil out perfectly on a spreadsheet anymore.

Uh, and there's going to be bigger forces at play that are going to determine whether or not something succeeds or fails, and I think this is a perfect example of that.

I kind of went off on a long tangent there, but that's that's just something I'm seeing right now.

No, you didn't.

That's a perfect way to end the podcast.

As a matter of fact, mister Johnson, I really do appreciate that one because that was important, and I don't really think I have anything to add to other than I can see some historical residents do it, but I've already kind of mentioned them.

So with that said, Brent, I mean you've got a hard stop.

Let's do it.

Tell people thanks for having all about I'm all happy.

Yeah.

So you can go to our web if you want to contact us.

We have a website to Santiagocapital dot com.

It's got a lot of information on there.

If you go to research dot santiagocapital dot com, that is our our research offering.

We've got a couple different levels there that you can sign up.

We typically write about the intersection of capital markets, geopolitics, and the madness of crowds, and then I'm pretty active on x as you know, ex or Twitter just Santiago Capital.

It's the White Seashell and I love mixing it up on there.

So anyway, I appreciate you, hav It, I appreciate you having me on.

It's always fun talking to you.

Absolutely, Thank you, Brent as always on TfL seventeen twenty eight.

Uh patron sbash gold ghats guns, which is how we pay the bills.

So you guys be well, you take care, we'll talk soon.

You stick on the ice.

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