In this episode, we talk to Captain Jim Fennell and Jim Rickards, two of the most knowledgeable people in China about the current state of the country's economy and political system. We also talk about the fall of the old regime and the rise of the new one.
00:10:59.000But one would have thought that after 10 years of being quite a hands-on kind of guy,
00:11:06.000she would have succeeded already in eliminating opposition.
00:11:10.000And I gather some of the generals that have been perched are his own appointees.
00:11:15.000Tell me, does that indicate that as time goes on,
00:11:18.000it's not just a case that he hadn't cleaned out the system in his first 10 years.
00:11:24.000Is it perhaps, Captain Fennell, the situation that the more he goes on,
00:11:29.000the more his third term in office goes on,
00:11:33.000and we'll see whether it finishes within a week or whether it goes on for longer.
00:11:36.000The resistance, the internal resistance to him within the CCP itself is actually growing.
00:11:43.000Is that where the opposition is coming from?
00:11:45.000It is a growing, spontaneous reaction to his rule.
00:11:53.000It's possible that that's part of it, but I think it's more endemic.
00:11:57.000I think Jim talked about the, you know, the thousand years of history.
00:12:00.000And there's an old saying that, you know, in the center is the rule and out in the hinterlands,
00:12:06.000there's, you know, they can't control everything.
00:12:08.000And so what I think is what Xi is running up against is thousands of years of dynastic evolution,
00:12:14.000where people make money through corruption and clinging to bits and pieces of power.
00:12:20.000We see it in our own country. It's part of human nature.
00:12:23.000And so what I think is, is that Xi is having to continue to continually find and root out corruption in the party in order to achieve his global initiatives.
00:12:33.000And so I think he has a global Marxist Leninist view of how he wants the PRC to rule the world.
00:12:39.000And he knows that he can't get there if the people under him are corrupt and not following through with pure party loyalty.
00:12:47.000Captain Fidel, stand by. I'm going to come back to you on this point in just a moment.
00:12:53.000Jim Rickards, before you go, just answer me this question, because my reading of China was basically the corruption was built in.
00:13:00.000When you see people being picked out and removed from the system because of corruption,
00:13:05.000that is simply a public presentation for domestic consumption, because everyone has their hand in the till.
00:13:14.000And it's for other reasons that they're being moved out, probably political disloyalty.
00:13:22.000I agree with that. I think I think they're all corrupt.
00:13:25.000Literally all of them, maybe one or two exceptions, but they're basically all corrupt.
00:13:29.000So when you hear corruption charges being announced, it's completely it's opportunistic and it's political.
00:13:35.000In other words, you're all corrupt, but I like you five, but you, too, I don't.
00:13:39.000So I'm going to announce an investigation or corruption charges against the two.
00:13:43.000It's a way to get rid of people. It's a way to, again, humiliate them publicly.
00:13:47.000But it's not like they're the only corrupt ones and they're rooting out corruption.
00:13:51.000What they're doing is they're using corruption as a way to root out people for other reasons.
00:13:55.000And that's political. And then, as as Captain Fanel said, you have to then look behind the curtains.
00:14:02.000OK, why you who appointed you? Why are you being kicked out? Why now?
00:14:07.000Corruption, as I say, is just an excuse.
00:14:10.000Jimmy, because I know towards the end of this show, I'm going to read out the details of where people can go to get hold of strategic intelligence.
00:14:20.000But on in terms of social media, where do people get where the folk get hold of your analysis, which is world rated?
00:14:27.000It is first rate. Where do people go on social media?
00:14:31.000Yeah, thank you. On X, I'm at Real Jim Rickards at Real Jim Rickards.
00:14:36.000I also have a website, the James Rickards project dot com, where you can find all my books and a few background details.
00:16:40.000Can you tell me a bit more about how that might move forward if she should be removed within,
00:16:48.000let's say, because we were mentioning earlier on the show, let's say within the next week.
00:16:52.000But even if it's a bit longer than that, even if it's a few months or something,
00:16:56.000will that be, will they be kicking them out to make sure that the regime itself goes on?
00:17:02.000Or will they be kicking them out because actually it's revolution time and time for the whole thing to be overthrown?
00:17:10.000Well, that's a great question. And I would say that the party itself, if it's in this kind of turmoil to the extent that they remove Xi,
00:17:21.000you know, it'll be very hard for us to predict exactly who will replace him.
00:17:26.000There are the, there are speculations that this General Zhang, who's the other vice minister of, or vice chair of the Central Military Commission,
00:17:35.000if he's the one that's really moving the chess pieces around and he's a strong proponent of the PLA
00:17:40.000and all these PLA activities that we've seen ramp up, especially towards Taiwan in the last three years,
00:17:46.000if he's the degenerator of all this, then we should be standing by for some very serious potential for an invasion of Taiwan.
00:17:55.000On the other hand, there's the factions that may say, hey, we've gone too far.
00:17:59.000The economy is, is being destroyed and we need to pull back our, you know, pull back a bit in terms of our aggressiveness.
00:18:08.000And let's get, keep our economy going and let's try to repair the damage that Xi did economically.
00:18:13.000So it's kind of two pronged. I would say those are the two major prongs on where it could go.
00:18:18.000Again, I still believe that Xi's in power and that to me suggests that there's a longer continuity between Mao all the way to Xi.
00:18:29.000That is, they've all had the same agenda, which is to restore in their minds China to this global Marxist world power.
00:18:40.000The other leaders couldn't do it because they didn't have the economy.
00:18:50.000Mao didn't have it, but he was so, you know, he was kind of a different kind of a person.
00:18:55.000So Xi's adopted Mao's kind of aggressiveness, but he now has the tools to do it.
00:19:00.000So again, it's really a matter of what will, what will we see in this next week?
00:19:05.000I think we'll get a really clear signal.
00:19:07.000I mean, if he's not, if he's not mentioned or talked about, or he is diminished in any way, I don't think the party can, I don't think he, if he, if he's under struggle for power, he's not going to accept some kind of partial agreement.
00:19:22.000He's either going to say, I'm the leader or I'm not.
00:19:24.000And that's my assessment of what we would see in the next week.
00:19:27.000So if we see him, we're going to see this continuity towards his agenda of this global domination.
00:19:38.000And she, he's, he, as I understand it, he, he very much sees it as his vocation, let me use that word as his vocation to restore the, the communist party as the cultural heart of China, the one party system.
00:19:57.000He's very loyal to that system, even though it sort of, it didn't, you know, it didn't do, didn't do very much good to his father when he was a kid growing up, right?
00:20:06.000His father fell out of favor in, in a big way.
00:20:10.000Um, but she himself is very keen on his, his beliefs that the, the, the, the, the glue that holds China together is, is the, is the, is the party, is the communist party.
00:20:21.000So you have that on the one hand, but on the other hand, the actual ideology, the communism behind the ology, I don't know how much that permeates his thinking.
00:20:30.600I think he is more communist than say someone like Hu Jintao, um, because the party sort of, the party's strength had very much been waning up until Xi Jinping.
00:20:41.440Well, just give me two minutes on that dynamic, um, and what it might mean for the future of the, the CCP as a one party state moving forward without, without Xi Jinping, they're pushing that with the force of his personality.
00:20:58.460I mean, clearly, as you described it, Xi is, is more red than any other, uh, paramount leader that China's had in its history since Mao.
00:21:06.820And, uh, he has pushed through, uh, you know, uh, uh, uh, uh, uh, kind of a top down again control of the economy, uh, that, you know, dang, uh, and who didn't have.
00:21:18.980I mean, he has been pushing for the state-owned enterprises and the control of the economy, centralized control and the importance of these five-year plans.
00:21:27.720And he is now in a position to where he's also in charge of the PLA and he's been in charge of the PLA and he's inclined to use the PLA much more often.
00:21:37.600I mean, as we, we talk about in military, in the military arena, the Chinese military aircraft, jet aircraft never crossed the center line between the mainland and Taiwan.
00:21:49.540And after 2020, they're doing it hundreds of times a year.
00:21:53.300So there's a, there's a, a party unity that he's bringing where it's very much, you know, centrally controlled, going to achieve the great rejuvenation of China, which is his phrase.
00:22:07.180We're going to have the great rejuvenation of China.
00:22:09.400We're going to make China this global power and we're going to replace the United States.
00:22:14.200So we're going to attack on all fronts.
00:22:16.080They call it comprehensive national power.
00:22:18.100We're going to go after economic reforms or economic power through the way we run the Belt and Road Initiative.
00:22:25.540We're going to do what they just did with this tariffs on rare earth elements.
00:22:29.840It doesn't seem to have any fear of the United States, maybe that they had when Deng was in power.
00:22:51.440And it seems to be taking on a kind of a populist patriotism inside China, not as the ancient Chinese civilization per se, but he's even embraced religion in certain areas and brought religion back in.
00:23:04.800That's something that Mao didn't do during the Cultural Revolution.
00:23:12.780Can you just tell me, because we've not spoken about Ukraine right now as a dynamic of what's going on, and you can see that Xi is trying to wear down on every metric possible of the United States from being an opposition and a restraining force on him and his ambitions.
00:23:29.160Tell me just what would happen to this friendship without limits between China and Russia, should Xi be replaced?
00:23:37.840Well, that's been the greatest strategic failure of the Biden administration.
00:23:44.380It was this rabid obsession with Colin Trump, an agent of Russia.
00:23:48.920And we drove, in a way, China or Russia into China's arms.
00:23:53.800Now, there's a natural economic relationship there, but there is a larger, and we talk, I mean, people talk about this as historic animosity or distrust between China and Russia.
00:24:04.700So the idea that we could get Putin and Russia to kind of pull back a bit from China and not be so reliant upon them, if we could do that, that would be great.
00:24:16.000But I think China has very well entrenched themselves economically, militarily, into the Russian sphere, and I don't see it happening right now.
00:24:26.700And that's my biggest fear, is that Russia and China continue to stay linked together, and their military operations have only increased over the last two decades.
00:24:37.260If you go back to 2005, when they first started the Shanghai Cooperation Organization, and they would do some of these military exercises, the Russians would come back and laugh about the Chinese military.
00:24:50.380They work closely together, and it's the Chinese that are setting some of the standards in certain areas, in certain fields.
00:24:56.780And so, and now China has been supplying, obviously, funding to Russia through the purchase of oil, but also we're getting the reports of sending in drones and all kinds of other kinds of munitions that we probably don't know about.
00:25:11.680And their relationship with North Korea and bringing North Korea into that dynamic has also been China's doing, in my opinion.
00:25:22.000Is it possible that the international community, inverted commas, might try and persuade a new leader of China to enter the international community and not be a stranger?
00:25:37.660Or is China in and of itself such a threat to the rest of the world that that wouldn't really be feasible?
00:25:47.920I think living here in Europe, I see the EU enamored with the PRC and trying to make a deal with them, as opposed to holding them to account, like I think President Trump is doing.
00:25:59.660So you think, actually, if the regime were to replace Xi Jinping, that might actually be a step closer, the normalization, let's call it that, the normalization might actually be something easier for the evil regimes here in Europe to confect?
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00:41:33.200That's where the legitimacy and that's where the bloodline legacy comes from.
00:41:38.580So who will pose the most threat to Xi Jinping right now?
00:41:42.280If you are older, cadre, you were thinking all those Princeland could potentially replace, right?
00:41:49.060If Xi stepped down, if they forced Xi to lose the power, and another Princeland would step in.
00:41:54.600So that is why Xi Jinping, after he took power, he understood that.
00:41:58.740That's why he made the enemy of that second generation, second cadre generation, his political rivalry.
00:42:06.440So that's why we saw Liu Yazhou, the other general, was purged in 2022, was given a death sentence with two years of reprave.
00:42:16.780He was the summing law of Li Xianian, which is the top general of the PLA, which had bloody hands on the Tiananmen Square student massacre.
00:42:25.380So this is brutal, and Xi Jinping understood it.
00:42:46.880I'm going to, Forrest, I'm going to come to you in just a quick moment, because I want to, I want more information on what Ava was just saying about this being a failed coup.
00:42:56.860Especially about the point that basically Xi himself assumed the mantle of dictator destroying the constitutional two-term norms.
00:43:06.760And now he has, he doesn't have an off-ramp now.
00:43:09.180Now, he's stuck in that, and being stuck in a position, that means ever more fighting to maintain control.
00:43:14.880I'm going to come back to one of those points in a minute, Forrest.
00:43:17.220But first, what if you had one of the brightest geostrategic minds in the world, here on the war room all the time, delivering critical financial research every month?
00:43:29.500Well, Jim Rickards is our wise man, and he was on the show earlier.
00:43:33.700You might have heard him breaking down for us the form of this, the story about the Chinese plenary slippage of power for Xi Jinping.
00:43:48.900Well, Jim is a former CIA, Pentagon and White House advisor with an unmatched grasp of geopolitics and capital markets.
00:43:57.060Jim predicted Trump's electoral college victory, for example, exactly 312 to 226.
00:44:05.620Now he's issuing a dire warning about a moment that could define Trump's presidency and your financial future.
00:44:12.820His latest book, Money GPT, exposes how AI is setting the stage for financial chaos, bank runs at lightning speed, algorithm-driven crashes, and even threats to national security.
00:44:26.000Right now, war room members get a free copy of Money GPT when they sign up for Strategic Intelligence, Jim's flagship financial newsletter.
00:44:49.140Forrest, tell me a bit more, if you wouldn't mind, about, because we've got like five minutes to the end of the show now.
00:44:54.980Tell me a bit more about what the purge being the result of a failed coup.
00:45:02.320Is that what people are actually talking about in China right now?
00:45:06.400I don't think that most people will know this coup happening because this is just underground.
00:45:11.980But this high-profile purge, again, it's the message President Xi wants to send to the internal people, as well as U.S., because he's going to meet President Trump very soon, talking about the deals regarding minerals.
00:45:58.060Now we are at a point where we are forced to buy those minerals from the CCP, which they had planned, a dedicated plan, and a strategic plan for five years, 10 years, 15 years, as we talked about before.
00:47:09.900I think for us, the immediate danger is really within this own country.
00:47:16.340The CCP only becomes so efficient and so strong just because all the enemies, the enablers and collaborators within our institution,
00:47:26.200whether it's Wall Street, the schools, even including our own governments, we have to clean those traders out in order to save this country.
00:47:40.640Because they are not only provide the technology, the money, and also they even provide the strategy to the Chinese Communist Party.
00:47:53.360That's why they are so effective attacking and counter-attacking U.S. movements.
00:47:58.280Forrest, I just want to go back to something that you said.
00:48:03.260Sadly, there's not enough time to go over everything.
00:48:07.160But one thing that you said was that in his favor within the system, Xi can say,
00:48:14.240look, I've got the balls to tackle the United States head on, because he has been doing so.
00:48:20.540How much, I guess, I guess that resonates with the party, but how much does it actually resonate with the Chinese people themselves?
00:51:51.940A former CIA, Pentagon, and White House advisor with an unmatched grasp of geopolitics and capital markets.
00:51:58.540Jim predicted Trump's Electoral College victory exactly 312 to 226, down to the actual number itself.
00:52:07.240Now he's issuing a dire warning about April 11th, a moment that could define Trump's presidency in your financial future.
00:52:15.440His latest book, Money GPT, exposes how AI is setting the stage for financial chaos, bank runs at lightning speeds, algorithm-driven crashes, and even threats to national security.
00:52:27.020Right now, War Room members get a free copy of Money GPT when they sign up for Strategic Intelligence.
00:52:33.780This is Jim's flagship financial newsletter, Strategic Intelligence.