Title: Major banks with $14 trillion in assets support nuclear power — AIA Weekly Report 10.5.24 Show: Actionable Intelligence Alert — AIA Weekly Market Update Guest: John Polomny Date: 2024-10-05 URL: https://youtu.be/QRkguFzTcoE Length: ~59:00 Note: fillers (um/uh/you know/I mean as tics) removed; stutters collapsed; wording otherwise verbatim; all (mm:ss) timestamps preserved.
00:02 Hey guys, John Polomny here, Actionable Intelligence. Today is Saturday, October 5th, and this is the weekly market update. The disclaimer, anything that you hear or see on this podcast or video is not to be taken as investment advice. I am not a registered financial advisor. I cannot give individual financial advice.
00:27 What is discussed on here is for informational purposes only. Please do your own due diligence. It's your money, it's your responsibility. Okay, you've heard me go on and on about how I track global central banks and whether they're raising or lowering rates, who's raising or lowering rates. And again, this is a good chart that Bank of America put together.
00:57 And it shows that September 24th was the biggest month of monetary easing since April 20th. You had 21, it was actually more what I tracked, but I think it was like 25 central banks cut rates in September. That's the most central banks cutting rates since the pandemic when everybody was cutting rates and everybody was re-liquefying the system.
01:25 You'll also note that we are getting up to levels of rate cuts that we saw during the Great Financial Crisis. So, what I'm trying to tell you, what I've been saying, and what I will continue to say is that we are in a re-liquefication cycle around the world. Liquidity is moving upwards. We're showing that.
01:48 You know that I discussed that. I firmly am in agreement with Stan Druckenmiller's view that liquidity and sentiment drives markets in the short medium term. Obviously, earnings and corporate performance over many, many years will drive a stock price in the long term. But in the short term, year, year and a half, whatever, a lot of this is just fund flows and liquidity. So, this is why I'm bullish.
02:16 We I have been tracking this. You could see it basically started picking up around August of last year as I've discussed in the past, and we've just been moving higher. And now again, we have what I had said prior, we have all the big bazookas now are firing. Some people took after me last week because I called the Chinese interest rate cuts in the programs that they instituted to increase liquidity as a rocket or a missile taking off, not a bazooka.
02:53 And the reason I said that is because it's not going to be a one-and-done. If they need more, it's kind of like when Mario Draghi, back during the financial crisis, when he was the ECB president, when he made the comment that the ECB would do whatever is required. And they really didn't have to do that much because just that statement was enough for the market to kind of take over, right? And change the sentiment.
03:19 So, I do believe that the Chinese government will do what is required. They will inject enough liquidity. Now, they have the cover now because the rest of the world's doing it. The US is cutting rates. And so, they'll be able to do more and more. And I suspect they'll do that. And I think that this, again, as I've talked about many, many times, this is going to create a huge wall of liquidity like if you had a huge amount of water being dumped into the headwaters of the Mississippi up in Minnesota. You don't
03:55 know what's going to happen downstream, how that wall of water moving its way down just because if you dropped a huge snowmelt up there, what's going to happen down in Vicksburg, Mississippi or Memphis or St. Louis, you don't know, right? Or Iowa or whatever. As that water makes its way down there, then we see where that huge amount of water, where it overflows what the levee is or wherever it's going to go.
04:22 So, it's the same thing with this liquidity. We don't even know exactly where it's going to go. We do know from prior cycles that various asset classes benefit. And I'm going to show a chart here and some work that Lynn Alden did recently that can give us some clues. It's pretty good work. So, anyway, moving on, just to reiterate I thought this was a great visualization about what we've been discussing basically for over a year now here on these videos.
04:51 So, I want to talk about these Fed cuts. Typically, as this chart shows us, sharply declining US interest rates usually mean sharply declining profits. Why? Because they usually the Fed's usually cutting rates because of economic weakness or recessions. But I've slowly come around to the view that they're not necessarily cutting because of a recession, but they're cutting because of the fiscal situation the US is in, that the debts that we have and the debts that we continue to accumulate
05:21 in the US at the federal level just are not going to be sustainable with rates where they were. So, I think with interest rates now in the debt or interest on the debt exceeding the defense budget and just continuing to skyrocket, they had no choice. And I thought, I think we may Well, I don't think.
05:45 I think we're pretty much out of the whole look at what happened during previous cycles or looking at history. We're in like uncharted territory now. Some people have made the analogy to the United States is just running its monetary policy kind of like an emerging market, right? And though that can be very volatile and you don't know what's going on, right? So, I think that they've got themselves boxed into a corner.
06:13 Again, it doesn't matter who gets elected. We're on an unsustainable path that's eventually going to come to a reckoning. I don't know when it's going to, but you basically have supposedly one of the best economies right now and we had a $1.9 trillion deficit in 2024 fiscal year. So, we didn't even have a recession.
06:34 We're running again at deficit spending levels that are at wartime levels. And so, if you do have a recession, again, what's that deficit going to go to? Four, five trillion dollars in a year or so. And it's just being added to the debt. We've talked about this before. So, this is what's happened in the past.
06:54 You're typically cutting rates because of a recession. And in a recession, corporate profits go down, but we may be out of that scenario right now. And if you're just going to spend 7% five, seven, eight, whatever it is, percent of GDP deficit spend, then I don't really see how you're going to have a recession. How you're going to have inflation.
07:17 I think inflation's going to come back. We saw what happened last week with the longer term bonds. Rates actually went up. The market took rates up. So, on this supposed good job report. So, we're kind of in uncharted territory, but I think the path is laid out towards regardless who gets in there, spending, deficit spending, more money being spent that we don't have, and it's all going to be inflationary.
07:46 And I think that leads us again to hard assets, tangibles, assets that things that can't be inflated away. So, we've talked about this before. I think the world has now the entire zeitgeist has changed. This is nothing new if you've been listening to this channel. Everybody's on board with nuclear power. I kind of find it amusing.
08:09 I haven't seen this yet, but I'm waiting for it. But if you remember a month ago when everybody was sentiment was horrible in uranium. Everybody hated it. People were making declarations on FinTwit that they were done. Uranium sucks. You suck, John. Justin Huhn sucks. Everybody sucks that was advocating for higher uranium prices and that it's been a tremendous potential investment.
08:39 And in the meantime, the fundamentals just kept getting more and more bullish. The bullishness is the most it's the greatest I've ever seen in this industry. And yet people were again prepared to commit ritual seppuku because their crappy little Canadian junior uranium stock was down 50%. I've said this ad nauseam.
09:06 I've been a speculator in the junior resource stocks my entire life. It is nothing, even in a bull market for some of these stocks to go down 50 to 75% okay in a year. And then round trip and then double from that 50% decline. It happens all the time. This is why I've advocated I've transitioned from the juniors a long time ago into people that can actually produce uranium and cash flow because you're now in the scenario I think or the mid innings of this bull market where if you can produce uranium into a rising
09:50 uranium price market, you're going to be able to cash flow and that's where the attention and the money's going to go. Okay? And that's how the wealth is created. My portfolio is doing fine. I don't have any issues. When prices went down, I bought. I was very clear on that what people should do. And so we're back.
10:12 So I want to see as these people sneak back on the FinTwit. I didn't write the names down, but I have a mental note and they will. This is how people are. If you're going to play in these markets, guys, you have to be able to have the EQ and the stomach. When the fundamentals are tremendous and get better and the price cuts in half, you have to be a buyer.
10:36 So, we're starting to see now term price move up. We're seeing spot add now buying uranium. Selling more shares as the price went from a big discount to positive now. Which allows them to do the at the market offerings and cash up. So, again, we keep seeing more and more news like this.
11:07 All the big tech companies got together in Washington D.C. recently with the government. This is what's going to happen. We're still going to do renewables, but this is where the big push is coming because the next growth initiative for these tech companies is this data and AI.
11:27 Now, I don't know how they're going to make money on it. Just like I didn't know how people were going to make money during the internet, and pets.com and drkoop.com had these huge valuations and then went bankrupt and disappeared. You're going to have a lot of that, right? When you have a new industry. I don't know what's going to happen, but I do know that hundreds of billions of dollars, if not trillions, are going to be invested in this and that the only way that these things can be powered is with nuclear power. Now, there will be
11:53 an opportunity, I think, in the short term for natural gas generation, also, but long-term, I think you end up on nuclear. And this could be, hopefully, we see this resurgence of this US nuclear industry build operate industry where a coalition comes together, public and private. I kind of said that's what I thought would happen or I hoped would happen.
12:18 And we're starting to see maybe the initial idea around that because there's a lot of money involved here and a lot of big players. So, it says here, Google CEO eyeing electricity from nuclear plants for its data centers, just like everybody else. And then we had this, Mark Nelson put this on X, breaking in New York City, world's biggest banks pledge support for nuclear.
12:42 Banks and funds totaling 14 trillion in assets have just signed an unprecedented statement in support of nuclear power. Then I have that the Financial Times here headline, world's biggest banks pledge support for nuclear power. You see the big names here. You see where this is going. I don't know how you can be negative on this business.
13:02 Yeah. Nothing more to say on that. And then we have Japan making an announcement that they're going to keep restarting reactors. Japan to keep nuclear, boost renewables in its energy mix, new industry minister says. They have a new government there. Japan will continue safely restarting nuclear power plants and expand renewable energy usage under new Prime Minister Shigeru Ishiba.
13:28 Despite his initial opposition to nuclear power, Ishiba now supports increased use of renewables and nuclear energy. They have to. Once you get in there and you realize what's really going on, this is what has to happen. So, Japan plans to continually safely starting up nuclear power plants and use as much renewable energy as possible, which isn't that much because I lived in Japan and they don't have the open space like we had.
13:57 It's very rocky, mountainous country. I've seen projects there at 25, 30 megawatts. That's not going to get it for an industrial, energy-intensive country like Japan. They'll play around with it at the margins, but nuclear power is where they're going to end up. That's why they had a nuclear power industry because the country has no natural resources and had needed that dense power source.
14:23 They just don't have the open spaces that the US has. So, here's this mongrel cat guy or person, whoever this is, on X. I follow them. They're kind of really up and coming with a lot of good industry news around uranium and nuclear power. I suggest you follow this person in your curation of people to follow on X.
14:50 Had a tweet here. Data centers used 15 terawatt hours of power in 2023 and will triple in 2024. Wells Fargo sees a 550% increase by 2026 and another 1,150% increase by 2030. Beijing is the second largest data center market by total power. China has an eye-watering 260 gigawatts of nuclear power in the pipeline.
15:19 And if you want to know why Kazatomprom isn't going to be exporting to the West anymore and why Russia is going to ban exports is because again this is the geopolitical portion of what we've been talking about of the global East and South breaking away from the hegemon. They have a large majority of the resources that are needed in the world in those countries.
15:45 You don't want to do business, you want to sanction, you want to lord over all these people six billion people, they're just going to turn their back and do their own thing. And so you're still going to see more and more turmoil at Kazatomprom. I also saw the suggestion it could be renationalized.
16:02 Who knows? I don't like to I mention these things but I don't base my investment themes on that but I do know that the Russians are considering banning critical elements to the West export uranium, titanium, things like that, nickel. They're talking about that. I think they'll do it.
16:23 Why not? Why wouldn't they? They have plenty of customers for uh i.e. China and India for their nuclear power industry and so why not? And you know until the West decides to be an equal partner instead of lording over everybody else around the world then you're going to see more of that. But that's getting off track a little bit. The demand is there, the supply is not.
16:45 That's been the story since I've been having this channel for like five years now. And it's just that simple. Barring a Chernobyl or Three Mile Island or some kind of nuclear accident, Fukushima again, this thing's going to keep doing what it's doing. You just have to be patient. Buy, you're in a bull market, buy on dips.
17:08 It was kind of like I said all the activity during the summer everybody we had the sell-off and everybody was throwing the towel in and I said, "Don't do that. Everybody's on vacation. This is a very small market of traders and fuel buyers. It's not like any other commodity market.
17:26 The people are on vacation. They're not paying attention because it's summer. When they get to Labor Day, everybody's going to come back after they have the WNA, and just like we said, everything's cranking back up now. You're seeing deals being signed. You're seeing the term price move up, conversion price move up. You're seeing more activity going into the end of the year."
17:46 And so, again, the problem with trying to trade this stuff is the emotional roller coaster you put yourself on. Because if you sell, you throw the towel in, and then you see it recovering and moving against you, you're sold out. Then you notice it, and you're like, "Well, when should I buy back?" And so, you see this initial move off where you sold, and you don't want to buy above where you sold because you have these emotional blocks, okay, that keep you from doing that, and
18:18 it just keeps moving higher, and you say, "Well, I'll wait. I'll wait. I'll wait." And then it runs away from you. The best thing to do is understand you're in a bull market. Look at charts of long-term bull markets that go on for many, many years, whatever industry. There are many dips. Your goal is to start at the lower left, catch the bull market as soon as you can, start at the lower left, and end at the upper right, okay, on the chart, and ignore the pullbacks in between.
18:46 Until the fundamentals change, until I see a whole bunch of things happen, I don't see how the supply-demand deficit in uranium and the whole supply chain for nuclear power plants gets solved without much higher prices and billions and billions of dollars being invested. And we simply are not seeing that. And so, people who have existing assets, mines that are running now, or going to turn back on or close to being built, I wouldn't play with anything else. There's no reason to.
19:23 They're going to capture cash flow, okay? And yes, eventually this problem gets solved because enough money will come in. But again, is that at a $150 uranium, $200 uranium? People keep talking about building more reactors and are building more reactors, but no one's increasing the supply of uranium. So, we'll see.
19:47 Same thing in other commodities, underinvestment. BHP, which is one of the largest mining companies in the world, projects copper demand to rise by 1 million tons annually until 2035. This is an article. I'll put a link to it in the show notes. BHP projects that global copper consumption will increase by an additional 1 million ton annually on average until 2035.
20:10 This is largely due to the adoption of copper-intensive technologies, doubling the growth rate seen over the past 15 years. In a report released on Monday, the mining giant noted that global copper demand has historically grown at a compound annual rate of 3.1% over the last 75 years. However, the growth rate slowed to 1.9% in the 15 years leading up to 2021.
20:36 Quote, "As we look towards 2050, we foresee global copper demand increasing by 70% to reach 50 million tons annually. This will be driven by copper's role in both current and emerging technologies, as well as the world's decarbonization goals." Unquote, notes BHP's chief commercial officer, Rag Udd.
20:59 So, again, copper is right now around 460, I think is the last quote I saw. That's doing well. That's on the verge of breaking out if it hasn't broke out. And we're going to see moving higher. We're going to see copper moving higher over time because again, as everybody electrifies, everybody builds out, not just here, but around the entire world.
21:19 Okay? All this, the emerging markets don't stop growing. And as they grow, they need more copper inputs. They need more energy inputs. The energy that you're inputting, electricity, industrial facilities, upgrading buildings, building new buildings, upgrading housing, people needing more electricity, more copper, more transformers.
21:41 This isn't really that hard to understand. And again, the investment hasn't happened. So, we need a higher copper price. So, I wanted to point this out. I've been saying this for a while. One of the things that I think is undervalued right now is platinum. I've been on a platinum purchase plan. Every month I purchase a certain amount of platinum.
22:06 Don't at me about how to do it. I have people I buy it from, okay? I don't want to recommend them because I'm having some issues. They have great prices, but their customer service isn't the best, okay? But you can buy platinum. There's plenty of places to buy it, okay? And you can buy it in gram bars, you can buy it in rounds.
22:31 There's 1/10 oz rounds. There's all kinds of different ways to do it with all kinds of different markups. You have to do your own work. But a lot of people on FinTwit were very bullish on platinum also, but they kept wanting to buy this miner in South Africa, okay? That I think has just went keeps going down.
22:50 Platinum is so cheap relative to gold. Platinum, guys, is something like 15 to 17 times more scarce in the Earth's crust than gold, yet it's selling at basically almost a third of gold's price, okay? And so, it's been in a bear market for a long time, and the production of platinum is in deficit or projected to be in deficit, and it comes from places that are not politically aligned with the
23:24 US, i.e. South Africa, Russia, places like that, okay? And so, I've been buying it. I don't need to go out and buy a platinum miner right now. Maybe down the road, but I just accumulate the metal, okay? Relative to gold, it's cheap. And now, they're selling it at Costco. So, the people that are buying gold at Costco can say, "Well, I can buy almost 3 oz of platinum for every ounce of gold I was buying."
23:50 So, you're limited Here's the headline. It says, "Costco is now selling platinum bars that are like gold, the Swiss-made platinum bars being offered for sale at $1,089 only to Costco members who are limited to five units." So, there you are. You can just take a small amount and buy, you know, so much a month, whatever your budget, and just accumulate it. And buy the metal.
24:18 There's no reason to go out and try to speculate in various platinum stocks. I don't understand why you do that. This is so cheap relative to where it's been, relative to gold. You just buy the metal. Is it going to go up next week? I don't know. Is it going to go up next year? I don't know.
24:35 Is it going to go up eventually? Yes. It's a store of value. They are not making a whole lot more of it, and the places they are making it are not politically stable. So, or are in conflict with the West. And I don't think internal combustion engines, the death of the internal combustion engine has been over exaggerated.
25:02 So, here we have an announcer from the Russian government. They're going to start buying palladium, platinum, and silver. Russian Minister of Finance proposes to keep spending on precious metals at 51.5 billion rubles in 2025 and to start buying palladium. This is from Bloomberg. The Russian Finance Ministry proposes to allocate 51.
25:24 5 billion rubles in 2025 to buy precious metals and gemstones according to the draft federal budget and the planning period of 2026 to 2027. The list of metals that are planned to be purchased includes platinum and palladium. The state precious metals repository which built palladium reserves during the Soviet period sold all of them by 2012 has not started buying the metal again until recently.
25:48 The plans for budget allocations in 2025 correspond to the limit for precious metals and gemstone purchases in 2023 and 2024. The same amount will be allocated for these purposes in 2026 and 2027. Although the previous plan was to allocate 38.9 billion rubles. The plan is to acquire refined gold, silver, platinum, and palladium to increase share of highly liquid assets in the state fund.
26:13 So, there you go. That's what the United States should be doing. It should be like to stimulate its domestic uranium industry. It should be buying large sums of uranium at higher than market prices. Okay? And then, it can only be mined uranium. So, say uranium is like say the current term price is 80. The United States government should say, "Okay, we'll buy it at $100 a pound.
26:40 We'll buy it at 25% premium to whatever the three-month rolling average or six-month rolling average of the term price or something like that, okay? But you can't go off and buy uranium from Kazatomprom and then sell it. You have to produce it here. So, produced uranium, do you think that would incentivize price? So, even as the price moved up, you would have this incentive pricing because you're going to need it here.
27:03 You know, this country used to produce 40 million pounds of uranium a year at its peak back in the late '70s, early '80s. And last year we barely produced hardly any uranium. Now, it's coming back as these brownfield operations come back that are getting cranked up again, but you need significant billions and billions of dollars of investment to get back to significant uranium production.
27:28 It's the same thing they should do with the conversion price and all these UF6 pricing. They should pay above market rates, but you can't bring in foreign material. You have to produce it right here. That would incentivize people to do it. But that's just me thinking out loud.
27:52 This was a slide from BlackRock. I follow this guy, Willem Middelkoop. I like following him on X. This is a slide, I believe, from iShares. This is a BlackRock deal. This Willem is a golden Bitcoin bug. They're talking about they're showing this chart. This chart gets shown and people poopoo it.
28:11 This is basically the value of the dollar if you would have taken it back to 1913 when it was still gold-backed before we had the Federal Reserve, before we had all this trickery going on and inflation that they stole your basically turned working people into slaves. So, assume that the value of a dollar was a dollar in 1913 and now it's in 2023 it's 3 cents, the equivalent.
28:37 And so, over the course of a century this thing's down 97%. This is BlackRock saying that, not a conspiracy, not Peter Schiff, not some blogger. This is BlackRock. And it's talking about Bitcoin possesses similar characteristics to that of other global monetary alternatives, and they show US Treasuries, gold, and Bitcoin.
29:03 If you thought that the purchasing power of the US dollar has declined over the last 100 years drastically, wait for the next 10 years what's going to happen. It doesn't matter who is the president or who's in the Congress. This is set in stone. Okay? And so, you have to own things because they're going to inflate this they're going to cause inflation's not going away.
29:35 They have no other alternatives. Inflate or die at this point. And so, you have to own things that they can't just make out of thin air like they make these currency units, i.e., the US dollar and basically these other currencies around the world. I thought this was interesting. Again, this is BlackRock saying this, not some nut.
30:02 So, here's the GMO forward return forecast. Again, emerging stocks are projected to return the best relative to US stocks because they're so overvalued historically, they're projected to actually underperform for the next 7 years. So, this continues to be an area that I'm interested in, which is emerging markets because I think that that's where the opportunity is.
30:30 And here we have a chart Jesse Felder put on X another Bank of America chart. EM equities emerging market equities at lowest valuation versus US equities since 1969. I don't know how to bang the drum any louder. People ask me, "Well, what's cheap now?" Emerging market equities. Okay? What do I like? I already said I like platinum.
30:57 I like emerging markets. What emerging markets do I like? Latin America, certain countries in Latin America. Okay? I'm tiptoeing back into Argentina. I'm Colombia, I like it. Okay? There's places there I own some stocks at, an energy stock in Peru, largest oil producer in Peru.
31:20 It's paying a 12% dividend. There's opportunity there. I like certain Central Asian countries because of what's happening there. The populations are actually growing in some of those countries, not shrinking. Okay? Economic reforms are happening. This is why I like the Republic of Georgia. They have a two-decade history of economic reforms that are pro-market and it's reflected in a growing economy, a dynamic economy, and there I have a vehicle to take advantage of that that's trading at about 50% of its net asset value.
31:55 These are where the opportunities are. So, yes, I think the US, it's Again, if they're going to print money and we're in a liquidity cycle, stocks can get even more in the US can get even more overvalued. That's certainly possible. But if we come back, if there's all this money printing that we're seeing, and we have a 5, 6, 7% inflation in a year, 18 months, they're going to have to raise rates again.
32:27 See, the problem is this, if the unemployment rate goes up a percent, okay? And your workforce is Let's say 100 million people in the US. I don't know what the exact I'm just using this as an example. If you have 100 million people working and the unemployment rate goes up 1%, that affects 1 million people.
32:48 But if the inflation rate goes up 7 8 9 10%, that affects everybody living in America. And that's why inflation they're so scared of inflation. Okay? But the Federal Reserve is politicized. Okay? And so they're enabling this deficit spending. They should let the bond market vigilantes if they weren't buying debt if they weren't monetizing the debt like they were doing over the last 10 15 years, the lesson would have been learned by the Congress because
33:22 rates would have went up and crushed the US economy and forced them not to deficit spend like that to get things under control. So the whole thing is rigged now. And it's not going to change. You're either going to get an 80-year-old egomaniac as your president who yesterday said that Israel should bomb the Iranian nuclear facilities.
33:48 So much for anti-war. Or you're going to get a complete boob in charge that's being controlled by the bureaucracy, the mandarins, the pointy shoes. It doesn't matter. They're all going to spend money trying to build chip plants in Arizona and all these other boondoggles. And the boondoggles are going to get worse.
34:09 So nobody's talking about fiscal restraint. Nobody's talking about taking spending from 7% of GDP to maybe even three. How about no deficit spending? You want to see what happens when real economic pain comes? Like Milei in Argentina when he cut all spending all deficit spending was cut.
34:31 Okay? And the economy declined and 50% of the people there live in poverty. How do you think that would fly here with the people here in the US? Yeah, there will be social unrest. There will be a real insurrection. Okay? And so they're going to print or die. That's it. And it'll be somebody else's problem down the line when the inflation hits.
34:55 Right now, to keep the game going and we'll spin it. So, I think you have to again look for things. So, that means that we've seen previous inflations in other countries and the stock markets can go up. But there's such a thing as real returns and nominal returns. And I don't have time to get into that right now.
35:21 So, this was an excellent chart. This would be like Rick Rule has talked about, if you would have combined all of the Canadian junior mining stocks, if you merge them into junior explore co, one mining company, you would have had losses every year. And like in 2018, you would have had like not over $9 billion in losses.
35:51 In 2019, you would have had $6 billion. Goes on and on. You would have had billions and billions of dollars losses. So, these junior resource companies in general, as a whole, are net destroyers of capital because it's very speculative, very slippery, greasy industry where only there are real players that are actually developing things and are legitimate and there's a lot of posers and magicians and lifestyle CEOs.
36:23 And so, if you're going to be in these resource companies, you're going to be playing around with junior mining stocks, you have to be a stock picker extraordinaire. You have to know who the people are, the projects, do they have the financing, have they done this before? All these things go into it, and that's just not what people do, and this is why they're not successful monkeying around with the junior resource sector.
36:45 But I thought this was interesting. This should tell you everything you need to know right here. If you took all the junior mining companies, merged them into one company, it'd be Look at this destruction of capital that would go on. That doesn't mean that it's not a place where tremendous wealth can be created.
37:03 It is, but you have to really know what you're doing. And that's the trick, right? Nothing's easy. So, we see escalations continue in the Middle East between Iran and Israel and Hezbollah and all of these things. And I think it's interesting to note here that one of the major importers of Iranian crude is China, and you could see the increase in crude oil exports basically from a little bit more than a half million barrels a day in 2022 to close to 2 million barrels, 1.
37:41 5 million barrels a day. And so, I think that if Israel hits the oil facilities, export facilities, or what have you, I don't know how they're going to retaliate. I do think that Israel's got a big problem here. If they're going to keep escalating and escalating, there's no indication I think they figured in their mind they're just going to go for it because this is their chance, and I don't think it's going to work.
38:13 I think they're way out over their skis, and depending, I think that if this continues to escalate, the Israelis will be pushing into a position where in their minds going to justify the use of what they're going to consider limited nuclear response because they're not going to have another option and that's when they're going to become a pariah state.
38:36 I think we have a good chance of ending up there. I've listened to a lot of commentary by people who think everything's going swell. There's going to be all this regime change. This is their chance to just take out everybody in the Middle East once and for all. This is crazy talk. Israel's a very tiny country basically on the dole from the US.
38:55 Without the US state right behind it, it can't do anything against these countries. And people advocating for this nonsense are advocating for nuclear weapons to be used. And if Israel uses nuclear weapons, I would not want to be a Jewish person anywhere in the world. It's going to get really ugly for these people.
39:17 Okay, the tenor has changed. They need to sit down. They need to understand the reality of the situation. They're a small country with a lot of people around them that hate them. They got to come up with a better plan than this tit-for-tat. I understand that there's this tit-for-tat blood libel back and forth.
39:36 It's just not going to end well for them because there's a lot more Arabs and people against them than for them. And as the baby boomers die off in the West, I'm seeing more no one in the younger generations cares about all these legacy things that the boomers cared about to stand behind Israel. No one cares about it. And yes, you have the AIPAC lobby and all this this going to become less and less effective.
40:02 People are just not going to want to support this. And if God forbid these people get to the point where they rationalize, well, we can use some small nuclear weapons or whatever to try to destroy Iran's capabilities. It's going to like I said, it's going to become a pariah state. There's no way anybody in the world can stand behind that, even in the United States.
40:24 And this thing is going to continue to escalate if they allow it. I don't see an off-ramp. I don't see anybody talking about an off-ramp. The United States should tell Israel today get it wrapped up ASAP. Sit down, negotiate, start having negotiations for a Palestinian state and or shutting off all support.
40:52 And this thing, that's it. But again, the lobby here is very strong, AIPAC and things like that. I'm not going to get into that, but how's China going to react if and Russia and all these other places. The world's had enough of this. And if we go down that path it's just not going to and most people around the world don't care about this.
41:16 They don't live there. That's the problem, right? There's civil war going on in Myanmar right now. No one's upset about it because they're not living there and living in the middle of it and it's not on CNN constantly because there's no Myanmar Rohingya and these various other ethnic groups lobbying in the US Congress. There's been ongoing ethnic cleansing and cannibalism and mass rapes in Congo, Rwanda border areas for two decades or going back to the '60s.
41:52 Nobody cares. Now, I'm not saying these are good things or we shouldn't care about them, but we don't have the ability to fix this stuff. We're in a different world now. And I don't think China's going to take very good not going to be very happy if we see supposedly Monday is the anniversary of that attack by Hamas where all those Israeli citizens were killed. I don't know.
42:21 It seems like a lot of people in the Middle East on both sides like dates. And I wouldn't be surprised to see if they have this retaliatory strike, if that happens on the 7th. And I think it's another holiday for a Jewish holiday. I'm not sure. But regardless, you start getting into this tit-for-tat escalation.
42:44 If they knock out the oil facilities, oil's fungible. It has to be bought somewhere. What does Iran do then? What do the Arab states do? Does somebody finally say, "You know what? The West needs to really clamp down on its support on Israel. We need to have another embargo." Anything's possible.
43:01 And does the Biden administration, Kamala Harris really want oil prices spiking 4 weeks, if you have an attack on these oil facilities and the price of oil goes to 100, 120, 130 dollars Who knows where, how high it could go, okay? Right before the election? And gas is five, 556 dollars a gallon? That would not be good.
43:30 And so yes, these are considerations. So, again, I don't know what's going to happen. I just look at what the possibilities are and probabilities. There's not a zero chance that nothing happens. There's some chance and it's one of these events as this thing escalates, I think that the leadership, the new president of Iran didn't really want to retaliate and that military, the IRGC had to go to the Ayatollah, the supreme leader, and lobby him to allow for that retaliatory strike. And so, you
44:07 know, a lot is involved going on behind the scenes even in Israel we have no idea about. But I think that again we're on this escalation escalator. Tit-for-tat. I don't see anybody saying, "Okay, that's enough. We need to like that's enough. Everybody did their tit-for-tat. Let's de-escalate this."
44:33 I don't see that. So, there's potential for a lot of bad things to happen. So, this is a George Orwell quote. I learned this a long time ago. Most people don't agree with me that I think this whole thing's a scam. It's just a way to get money. The Cold War was over 1991. I was naive and the Scorpions sang that song when the Berlin Wall came down.
44:59 And everybody was excited we were going to beat the swords into plowshares and people were writing columns in investment about look at all this defense money that we can spend. We don't have to waste on defense anymore. It's a racket, man. It's just another racket, a con. Okay? They have to invent these boogeymen to keep the money flowing.
45:19 And the Congress is behind it because it's the military-industrial-congressional complex, right? The Congress appropriates money to the defense budget. Money goes to the defense contractors. The defense contractors take a certain amount of that money and recycle it into campaign contributions. That's why I call it the military-industrial-congressional complex.
45:46 Because they're all in on it. And vote harder. People are like, "Well, we need to stop this. We need to vote the right people We need to vote these people out." Good luck. Bobby Kennedy couldn't even get on any You saw what happened. The whole system is rigged. That's not the way forward. Okay, I don't have time to get into I've mentioned it before a couple times.
46:11 What I think is the way forward, but people want instantaneous results. They think they can vote their way out of this. You're not going to vote your way out. You're in a declining Empire. Okay, it's going to get uglier and uglier and harder and harder and people are going to become poorer and poorer.
46:27 And you're going to see just continue strip mining of the working people and middle class of this country for the benefit of the wealthy. The poor will be given enough bread so they don't riot and the middle class, the working people, the people that keep everything going are going to get more put into the Star Wars trash compactor with the walls closing in on them year after year wondering, why is this happening? Let's vote for this guy.
46:53 He'll fix it. It's not how it's going to work. So what does Orwell say? The war is not meant to be won. It is meant to be continuous. That's right, because that's where the grift is. That's where the grift is. 300 billion dollars to Ukraine and they're losing the war. They're going to lose the war. Then what? What's NATO going to do? Do we need NATO? What's the EU going to do? I've said this before, the EU's not going to exist in 10 to 20 years as a political entity.
47:30 It's going to fly apart. You already see what's happening, the rise of left-wing and right-wing parties that are challenging this liberal center this neocon center. People have had enough. The United States won't exist as a political entity and it won't be because people vote for it. It'll be because it's not financially viable anymore and it'll fly apart at the seams.
47:53 It's a Rube Goldberg operation that's just going to collapse on itself, like the Soviet Union. The Soviet Union collapsed because of all of the internal contradictions of a system that made no economic or logical sense. It's the same thing that the EU and the US have become. And so war is there for several things.
48:17 Distract the population, to get the nationalism and jingoism going up. To get people aligned, war is the defining organizing principle of societies, somebody said that. So, it's kind of all like Orwell wrote about, wasn't it Oceania and whatever the two factions You should see it right now.
48:39 You see the BRICS countries, the global south and east that have had enough of this. And again, I'm not saying that that's a better system or those are better countries or what have you. I'm just telling you what's happening. Their economic strength is increasing. Everything's moving. The gold, the money, the power is moving from west to east.
49:00 I would acknowledge that and deal with that decline rather than trying to hold on with my fingertips and doing the whole thing, I think Doug Casey said you can either have a controlled demolition or you can just let the building fall over and that creates more damage. So, that's it.
49:26 So, this is a tweet. For many years I didn't really care for Elon Musk. I thought he was a charlatan. I definitely think he's a great marketer. He's kind of a P.T. Barnum type guy as far as, but I have to give the guy credit. He built several companies that are worth billions of dollars.
49:45 Do I agree with him on everything? No, but there's something there. And then when he took over Twitter, it's not 100% where everybody wants it, but there's a lot of stuff on there that wasn't on that you couldn't talk about a couple years ago. And so, he's been very good about this, and I think that he's looked at it and a lot of other tech billionaire people can see what's happening now, and the sands are shifting, but it may be too late.
50:15 I can tell you right now that if the Democrats win this election, you can forget about They're going to shut this whole thing down, and they're going to be able to do it. They're going to have the mandate. We have to save democracy. We have to get rid of misinformation. You heard AOC the other day.
50:31 Well, who's going to be the arbiter of what's misinformation? Well, whoever's in power. As Lenin said, would you rather be the hammer or the anvil? I'd rather be the hammer. The hammer gets to beat on the anvil. And that's what's going to happen. They're going to clamp down on Twitter and all these things are going to get clamped down on, Rumble, the whole shebang.
50:50 There's going to be nowhere to go. There's nowhere to run anymore, folks. All the gazelles are getting eaten. There's only a few of us left. Your strategy of being the last gazelle at the watering hole that the crocodiles are going to eat, you're coming to a decision point very quickly.
51:09 And again, it doesn't matter who gets elected because this is you're in a declining empire. So, the best thing that could happen is that we financially collapse in this United States as a political entity, and then we have several countries or many countries on this continent. That would be the best, but that's probably not what's going to happen immediately.
51:30 There's going to be a lot of crackdowns as they try to hold this thing together. They're certainly not going to let people They just passed a law in Great in the UK, for example, I saw the other day, or proposing to pass it, because they were debating it on one of the talk shows there, that if you even discuss about how bad the financial conditions are in the UK, that could be considered disinformation.
51:56 You how dare you talk about an alternative to money printing and strip mining by the elites. Yeah, this is where it's heading. They're just not going to allow any dissent. I've said it before, the West is going to have it's like the reverse of turning a pillowcase inside out where the Soviet Union and the Eastern Bloc countries had this Iron Curtain and there was all this information they couldn't have there.
52:23 You had secret police, people were put in gulags. And now we're going to flip the script and the West is going to be that way as these people try to hold on to power. And in a system that has no foundation. And so what's Elon say? He says, yes, they are literally using your tax dollars to import voters and disenfranchise you.
52:47 It is happening right in front of your eyes. And FEMA used up its budget ferrying illegals into the country instead of saving American lives. Treason. He's responding to this person, Jason DeBolt. The Democrats are literally charging Americans billions of dollars to completely disenfranchise us and create single-party authoritarian rule like in California.
53:07 That's exactly what's happening. But if you say it, you're a racist, you're a conspiracy theorist. I was listening to Harmeet Dhillon the other day and I already knew this, but she explained it very simply. There's no reason to do election fraud in New York State or California because they're one-party states already, okay? There's only a few states, Michigan, Wisconsin, Pennsylvania, Florida, okay, that decide the election.
53:33 And in those states, there's only a few counties that decide the election, okay? That's what we're down to now. That's how close it is. That's how divided the country is. We're maybe a dozen or 15 counties literally decide the election, okay? And so, what you see is somebody did this I wish I would have saved it.
53:57 That's where they're taking all the illegals to these places so they can So, once they become once Kamala gets in there and she has a Congress, you more than likely will have a Congress eventually that's predominantly Democrat. They're going to legalize all these people. Then they can vote. Then it's over. That's what they did in California.
54:15 It's over. Okay? And you can put a nail in it. And even if you get Trump in there, you just stave it off for 4 years because again, I'm going to deport all these people. I'm going to do this. I'm going to do that. Okay, they'll get It's easy to get rid of the Venezuelan gang members. Nobody's opposed to that.
54:36 You're not going to deport 15 million people. Again, the American people won't put up with the violence required to do that. It can be done. It'll be very ugly. And people won't put up with it because the news media will just have it in your face all day long. Little 3-year-old Guatemalan girl clinging to her father as they're dragging him to the Border Patrol van.
55:01 It's just not going to happen. It's over. It's not black pill. It's reality. And so, you need to look for another way forward instead of thinking you can sit on your butt and do absolutely nothing and live your life for your pleasure. And just go vote every 4 years and it'll all be great. And somebody will come down and kiss your life and make it all good again.
55:25 This is how little children think, not how real men think. So, Elon, he's invested heavily in making sure that Mr. Trump gets elected because if he doesn't, that's it for him. Remember when he was the darling of the left? SpaceX, all I see a lot of people turning against him now because he's an advocate for free speech now. He sees the light.
55:47 He sees what's going on. And he also sees that it's curtains for him and that or he's going to have to flip back over to that side. I don't know. But this is what they're doing and people don't want to acknowledge it, right? It's a conspiracy. It's not a conspiracy. This is a well-thought-out excellent plan.
56:06 I give them This is exactly what I would do if I was on that side. I would find out all the counties that are right on the verge of turning. I would import third world people there, set them up. In your face. I don't care because you're not going to do anything about it anyways. And then once I get a Congress and a president, I would have a comprehensive immigration bill and naturalize all of them.
56:26 And then they can vote. Then it's done. You're cooked. It's over. It's an excellent plan. It's well-thought-out. It's devious. It's diabolical. It's evil. But it's well-thought-out and it's probably going to work. And there's nothing anybody can do about it. This was set in motion decades ago and nobody did anything.
56:48 I remember Tom Tancredo, who was a congressman from Colorado. He talked about this. This was his issue. Illegal immigration, the changing demography, what it would lead to. He was called every name in the book. Neo-Nazi, racist, xenophobe, blah blah blah blah. So there you go. Now we're at that critical point.
57:13 This is what's happening. But I'm going to go out and vote. They'll just cheat. That's what they did last time. It doesn't take much. Again, it's only a few counties they need to flip and it's over. All right. That's it. This is why I say, if you are and believe me there's people listening to this that are fine with this. That's great.
57:39 I'm not going to change your mind, but I'm telling everybody that if you think your life is going to be the same, it's not. Your life is going to descend into you're going to have inflation. You're going to have things breaking down. It's not going to be the same.
57:56 These people are coming from places that never had civilization. Doesn't that tell you something? That's not racist. That's an observation. If I wanted to live in Haiti, I'd move to Haiti. No one wants to live there because it's a mess. Why? Because it's full of Haitians. That's the reality. And so, you bring them here.
58:18 You give them money. You get them naturalized. They'll vote Democratic. You just flip that county. It's all over. Next, rinse and repeat, and nobody's going to do anything about it. It's past the point of no return. So, there you go. All right. That's it for this week. We'll talk to you next week. Appreciate it.
58:39 Hard assets, tangible assets, that's where you got to go. If you have the ability, look for a bolt hole outside of the West. You got to start thinking about that if you're younger. You got to get out of here. You got to get out of the West. It's not going to be tenable long-term. All right. Talk to you next week.