Glenn Beck talks about the Ukraine crisis, Rosie s recovery from a recent injury, and the latest in the Iran crisis. Glenn also talks about some of his bold predictions for the new year and what they could mean for the world.
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00:03:57.360So I just wanted to start with this because we've been going back and looking a lot of the things that I have said, um, over the past few years, because they all seem to be coming true right now.
00:04:06.540Um, but every January, I put a list out of things that I'm predicting and they're never really, um, I don't know.
00:04:17.240They're well thought out, but they're not something I'm willing to bet my life on.
00:06:07.000Uh, which is, I don't, I, I honestly, with everything else going on in the world, uh, was not following that part of.
00:06:12.180No, if, if China goes into Taiwan, I mean, for all those rich people, like, I'm just going to take my G5 and I'm going to fly to New Zealand.
00:06:21.300And hope you can speak Chinese because it's coming, uh, isn't that weird?
00:07:05.680I would love to be wrong on these again.
00:07:08.200Again, that's not something because there's some things that I feel and then sometimes I think, and, uh, when I'm telling you, I feel this, uh, that's usually something that I feel through prayer.
00:07:22.480And I bet on those ones when I think things, they're usually wrong, usually wrong.
00:09:47.780And it's not the, and the thing that's, it can be misleading to say that about Mike Lee, because it makes it sound like he's not a fighter.
00:19:59.400You know, it's going to be like, oh, there's the, there's the method in the madness, you know, because at first you look at Afghanistan, you're like, oh, there's the madness in the madness.
00:20:12.680And then, you know, you finally, at some point, maybe historians will go, ah, that's why he did that.
00:20:40.580We don't, we cannot, we're obviously, we've obviously shown that we are not as strong as we once were.
00:20:48.500We have shown a level of vulnerability that everyone around the globe seems to be willing to exploit at their earliest opportunity.
00:20:56.280I was, I, a friend of ours just had a baby and I was over looking, not to change the subject, but just looking at the baby and holding the baby so cute.
00:21:04.100And you're like, Dapa, United States, it's so weak right now.
00:21:26.160And you can sit here and say all you want, you know, and there were people who made this argument at the time.
00:21:31.240I know we pushed back against it that like, well, look, we just need to get out of there and we're never going to get out of there if we don't just leave and we need to just get out.
00:21:40.720Even if you think that's the right call to leave completely and just, you know, leave the region, which there were even conservatives, many who believe that, you can't do it like that.
00:40:45.380OK, we are next hour going to talk a little bit about a collapsing currency.
00:40:52.000What is happening with Russia and India, China, Saudi Arabia selling their oil for anything outside of a dollar outside of the petrodollar?
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00:46:29.400You're the president of Bottom Line Training and Consulting.
00:46:32.080You train CEOs and companies on how to run their business better, blah, blah, blah.
00:46:39.700It's been institutionalized in the program that you created for Columbia University, and it's now taught in every region of the world.
00:46:48.520But you understand economics like few do because you can cut through the BS.
00:46:55.080I am having a hard time getting people to understand what is happening with Russia, China, Saudi Arabia, India, and what's happening to the petrodollar and why that's important.
00:47:10.180So where should we start on this, David?
00:47:13.000It's a powerful transformation that we're watching.
00:47:15.860And unfortunately, to your point, most people are not privy to understanding a little bit of the history.
00:47:22.420So very simply, Glenn, when we started back in 1944, the desire to make sure that we went kind of from this post-World War II period, the Bretton Woods relationship or the Bretton Woods conference that led to the dollar being linked to gold was a standard by which we had a currency where we could exchange with something that was underlying.
00:47:53.780Then in 1972, when France actually started calling in our bluff and exchanging dollars for gold, which was linked at, I think, $35 the ounce at the time, that's when Nixon took us off the gold standard.
00:48:06.920So that kind of became Bretton Woods, too.
00:48:09.540That's where we took the dollar and linked it to our exchange of oil.
00:48:52.440So even if the exchanges went between currency A and currency B, it was always through the quotation of a U.S. dollar.
00:49:01.260So that linked us to that exchange, which really was no longer a hard asset like gold, but it was what we would call inside money.
00:49:11.820Everybody agreed that it's going to go through a term, which is the dollar, using that as the foundation, even if I was exchanging from a euro or a ruble or a yuan.
00:49:28.600Now, and the world was hang on just a second.
00:49:31.460The world was upset at us in 72 because we had promised them that we would always in Bretton Woods one, we would always keep to the dollar, you know, standard with gold.
00:49:46.420And and then when we violated that, we did the oil thing.
00:49:51.320And then we also said, but the good news is we're going to be consumers, so we'll start shipping jobs your way because we're just going to buy.
00:50:16.000So there was, you're right, there was an anchor that even though we've gone off this mineral, this gold, we've gone to something that we can't let fail and you can't let fail.
00:50:26.520So kumbaya, we're all in this together.
00:50:29.520So even though they were upset with us, they bought that principle of trust that no one could betray each other because, well, we all need oil.
00:50:39.260So that leads us to where we are today, which is this, and I call it the thesis because it really is, it's transitioning, but we're in a vacuum where we go to Bretton Woods 3, okay, which is the next step.
00:50:51.980That next step now shifts us to something that just occurred this last week, which was sanctions on the very element that we promised would be the bedrock of exchange.
00:51:06.200When you sanction Russian oil, be it good or bad, that's a policy, that's above my pay grade.
00:51:14.400When you sanction it based upon a policy, you have just now made oil that has an R in front of it, Russian, cheap, and oil that has other in front of it, very expensive.
00:51:29.020So now you've created what we call arbitrage, the concept that you don't have stability.
00:51:36.120There's no stability like gold would have given us or even petrol would have given us before.
00:51:42.240Because gold would have held its value no matter where it was from, and you had that value there in your own home country?
00:52:00.440It's still, you still could mineral, I mean, right now China is the one that is mining more gold than any other country in the world, okay?
00:52:08.480So you still could mine that mineral and you could have it.
00:52:12.480But when we linked it to the dollar will be linked to oil in the way in which we barter and negotiate, and then we change the pricing of that oil based upon sanctions, we just threw Brenton Woods 2 or the petrodollar into the tank.
00:52:34.220Well, if sanctions were to go away today, you might be able to recover, but now you have enormous instability in the comfort level of the world saying, wait, if I buy Russian oil, it's really, really cheap, but I can't because sanctions say I can't.
00:52:52.960Or now I can buy expensive Western oil, which we shut down the pipelines and other things based upon individual policies of countries, right?
00:53:34.940So we shift into a completely different monetary system based on commodities of which the U.S. no longer has a voice.
00:53:45.280It can offer commodities, but it no longer controls the narrative.
00:53:49.660And that changes an entire monetary system whereby the dollar now either becomes incredibly worthless or the dollar could become weaponized where the dollar becomes useful to the U.S.
00:54:06.740So those that we exchange dollars with, that becomes a dollar based economy.
00:54:11.980Those that China exchanges with, that becomes a commodities based economy.
00:54:17.520You end up with two completely different monetary systems and a world disrupted without any continuity that was established in Bretton Woods 1.
00:54:28.040But I want to, I'm going to take a quick one minute break, let you catch your breath.
00:54:31.900And then I want to, I want to understand yesterday, technically, Russia went into default because they had to pay for their bonds in dollars, but they couldn't change their rubles into dollars.
00:54:45.740And, and I don't understand exactly how this works, but I do know after a 30 day waiting period, what this has made the rest of the world say is, wait, I can't trust the central banks, the Western banks, because if they will, if I have the money, but they won't let me pay for it, then they just, then my gold and everything is, my money is not safe outside of my own country.
00:57:03.300In fact, Glenn, as you stated the question about trust, right, and the idea that people can't rely upon, or even countries can't rely upon, or trust the system, the monetary system to pay.
00:57:17.560You have central banks that have always relied upon the fact, whether it was the gold or petrol in Brenton, too, they've always relied upon the fact that they could liquidate.
00:57:27.920They could liquidate and pay their bills.
00:57:30.860We just froze, when we talk about that, the sanctions that have been imposed, we've frozen the reserves, and Russian reserves, now frozen, are effectively creating, as you noted, the inability for Russia to pay its bills.
00:57:50.820Well, now, if you're saying, but hold on, if central banks and the reserves can be frozen by, and I can't pay my bills because I can't resource that, now I don't even know if my resources could be frozen.
00:58:06.640So, all of a sudden, you created a sense that individual countries might be concerned that they can't trust the reserve system to allow them to have access.
00:58:18.720Okay, wait a minute, wait, wait, wait, wait.
00:58:20.540So, when we put sanctions on the money from Iran, that was just held in banks and not a central bank.
00:58:34.020Each of these are held in individual banks or, to your point on central banks, it could be in central banks if, indeed, the country has a centralized bank like China.
00:58:46.440So, where they are or where they're frozen is a matter of whether the sanctions can touch them.
00:58:54.340And we've been able to, with the sanctions that have been imposed broadly, not just by the U.S., but other countries, we've been able to freeze the reserves wherever they are by Russian reserves.
00:59:07.140So, now Russia says, hold on, I don't have the money.
00:59:21.540And then, secondly, they start to say, okay, if Russia is not going to pay me, are they going to default because they can't get access to their reserves?
00:59:30.340And then, number three, the question might be, okay, if these things are frozen, how does Russia make money?
00:59:37.380Well, if they can somehow exchange with China, and China takes their commodities, but how is China going to be able to liquidate enough where they could get liquidity to pay for it?
01:00:19.100So, the domino here is not only that trust piece that you identified of a reserve, trust of being able to get money from Russia, but even if we could get money, the method they may use to get that money to pay it could be damaging largely to certain countries when they start to dump the treasuries.
01:00:39.320And that becomes the problem, kind of the ripple effect, that the stone drops, and then you see the ripple in the water.
01:00:46.500So, David, I can't tell you how many people I talk to, and I'll talk to them about what the Treasury's own white papers and the Fed's own white papers, the Hamilton project up in Boston,
01:00:58.980what they are talking about with a digital currency, which would replace the current currency and be a reset for us, or I talk about, you know, hyperinflation, and people just say it can't happen here.
01:01:55.140They could go into other – they could either go commodity-based or – somebody could really get aggressive here and play cryptocurrency games and move completely out of the dollar, right?
01:02:06.480And then the third part is we're betting on the fact that we're strong.
01:02:12.500Well, we've had a couple of events this year that haven't manifest our ability to really rise up and be trusted in that area to where we're not being seen as that strength that they can rely upon.
01:02:26.100So those have been the three things that we're kind of going to the market with some swagger, saying, you know what?
01:02:31.520You can't afford to allow us to have hyperinflation.
01:02:48.480I don't think it's going to be immediate because they're holding too many of our dollars.
01:02:52.700But over time, you're going to start seeing them divest themselves, just like Russia and China are doing, of our treasuries to liquidate and get out of dollars.
01:03:01.940So when they do that, we're only betting on, hey, we're consumers.
01:03:15.280I saw something frightening yesterday, and perhaps I don't understand it, but they're saying if Russia defaults, there won't be enough liquidity to cover the CDOs.
01:03:27.860And that's what caused all the problem in 2008, right?
01:03:52.060Coming up in just a second, we have David Buckner on with us to explain the monetary system and what is really happening that I don't think anybody in the media is actually explaining to the average person.
01:06:05.940You know, a CEO and a founder of a billion-dollar company and hangs with all the people who he says behind the scenes are all saying, this thing is a nightmare.
01:06:59.800I keep reading that this war and everything that's going on is an anti-globalist movement.
01:07:08.620But I think that's elite talk because I think what this actually is, you know, to the average person, it's not anti-globalist.
01:07:18.300It is dividing the world into an axis and allied power where it would be the United States and Europe, and then there would be China, Russia, you know, Afghanistan, India, Pakistan, all the way to Saudi Arabia.
01:07:31.740And God forbid, Taiwan, and if we lose Taiwan, maybe we lose the Southern Pacific as well with Australia.
01:07:41.160But that is – there's a group that will have their own economic system and their own way of doing business, and then there will be the West.
01:08:54.560Cryptocurrencies have circumvented monetary systems to where we don't have systems that have to be relied upon for people to make exchanges.
01:09:03.120You're getting a barter market where they no longer – I mean, Facebook marketplace.
01:09:10.380Systems are being blown up to where either that lends itself to a natural system of chaos, okay, which some would love to have, I'm sure, or a system where a pure market overtakes the old structure of planning.
01:09:25.740And you're starting to see with some of the commentaries coming out of leadership in Russia that they don't want to lose their – I mean, even that the leader has suggested he doesn't want to lose his position.
01:09:38.380He wants to go back to the old Soviet Union in some ways.
01:09:41.580But I don't know if he's seeing that you can't un-market something.
01:09:46.500It becomes a black market, perhaps, but you can't un-market it.
01:09:54.720I think that's why we're talking about, you know, a digital programmable dollar from the Fed, because they think they can kill the black market.
01:10:06.840They can control it all the way down to the very bottom level.
01:10:30.940So they may be being wooed into a system that could be monitored, but I dare venture that I'm not sure that they're being wooed into a system that – and it could be manipulated as well, to be fair.
01:10:43.460But I'm not sure – as soon as they were to find that that system is being managed, they might adapt to a different system.
01:10:50.940You're finding more pure market movement that you would have to adopt a digital currency.
01:10:57.380And people would have to assume that that's the only mechanism by way we would exchange for that to be truly as viable and productive as many of those, you know, that are building it would say.
01:11:08.940So you're seeing movement in this market, which is really quite fascinating, and it's disconcerting for those who want control.
01:11:17.680It's heartening for those who think they're going to be controlled, and it's enabling for those who think, oh, my gosh, if this doesn't work, I can try something else.
01:11:27.000I mean, you go from – if you go to social media, it used to be Facebook, and then it went to – now you're getting Snap, and now you're getting – everybody moves.
01:11:35.580They keep moving, moving, moving away from less control to more individual control.
01:11:41.680So that may be the one redeeming component of all this.
01:11:44.300David, do you agree that we are operating now in the United States under modern monetary theory?
01:11:51.560We are moving away from traditional structured monetary components.
01:11:57.800That's the way I identify it because while the monetary structures are in place, they're less relevant today than they've ever been, and that changes the whole dynamic and the conversation.
01:12:13.300When you say liquidity, the youth of today, there's just no mindset around, I've got to go to a bank.
01:12:47.340So it will remove – it will remove the formality unless the nations decide they want that control, and they're moving that way through ESG, whether they can actually pull it off before people rise up and go, whoa, whoa, whoa, whoa, whoa, wait, what?
01:13:05.640But, you know, that remains to be seen.
01:13:10.820I accept that, Glenn, with this exception.
01:13:13.960In many countries that are highly planned, where I've been – I mean, you know, we've been friends for a long time, and the number of countries I've traveled in that are supposed to be planned.
01:13:25.540They're supposed to be very closed and structured.
01:13:27.280And to be fair, I've not been to places that are closed, okay?
01:13:31.240But the ones that are highly planned are more market internally than you'd ever imagine.
01:13:36.620Now, we would call it a black market, and they might even call it an observed market because as long as they don't disrupt the governance, they allow them to occur.
01:13:46.440But they're highly market-driven by barter systems.
01:13:51.020So even with this, can they control us, I think the box is open, and you can't un-market a place.
01:14:01.840It will be a black market, but we don't have the controls that we once had or the closed borders or the boundaries or the walls.
01:14:08.820You can't even build a wall anymore around a marketplace when you have a mindset of a Venmo use of today that can exchange in 15 seconds,
01:14:17.460something that we used to have to transfer through transactions and a bank.
01:14:22.740They're using these clearinghouse mechanisms that are so fluid that they don't understand, really, that you actually have to have one centralized look.
01:14:32.980That's why some of these crypto conversations are so fascinating is because they've overtaken the structure.
01:14:41.220And to your point, can we re-box that?
01:15:06.700Your thoughts on inflation and where we're headed?
01:15:09.620Well, we're dealing with a debt that is frightening.
01:15:16.360The $30 trillion with the debt ceiling that continues to increase, we're double spending every year.
01:15:23.220And anytime you hear leaders suggesting that they're going to reduce our deficit by a trillion, they don't explain the fact that we're spending $4 trillion more than we're taking in.
01:15:33.540So reducing that down to only spending $3 trillion.
01:15:36.440The expenditures, the inordinate amount of expenditure into the economy in the name of what we've gone through, which is COVID.
01:15:43.480And the reality of that is organically setting us up for a significant hit on inflation.
01:15:53.480It's not just a checkmark for 15 seconds.
01:15:56.960We're dealing with significant inflationary pressures.
01:16:00.500And now you're going to start seeing that that will increase, especially with interest rates and other things dominoing.
01:16:06.660I worry for the next period of time that the disparity between rich and poor will become even greater.
01:16:12.480Because those who hold property where real estate goes up in an inflationary time and those who are renters where rent goes up and they can't pay for it.
01:16:20.040That disparity gap is going to be enormous, creating even greater problems and discomfort on this inflation.
01:27:14.040Yeah, boy, I've got a long list for you, too.
01:27:17.100So let's let's start with what happened yesterday and why people should care.
01:27:21.740So I want to take a step back and talk about, you know, why the Fed did what it did in terms
01:27:28.800of raising interest rates, what we call twenty five basis points or a quarter of a percent.
01:27:34.840One hundred basis points is one percent.
01:27:36.920And basically they were undoing the at least attempting to start to undo the effects of what they in part cost their monetary policy, zero interest rate policy, printing trillions of dollars.
01:27:53.180The government spending trillions of dollars in terms of fiscal stimulus, turning parts of the economy off and wrecking the labor market and the supply chain.
01:28:04.220All of those things are the reasons we have inflation today exacerbated by decisions that the Biden administration made around oil and gas dependence and whatnot.
01:28:15.780So basically we had inflation, which we've all been talking about and seeing as we go to the grocery store and certainly at the fuel pump and whatnot.
01:28:25.240And so finally they said we have to do something.
01:28:28.860Now, I'm going to tell you, this is a little bit of window dressing because they were doing accommodation.
01:28:34.220They were in the market purchasing securities last week.
01:28:38.820So last week they were being accommodative.
01:28:41.820But this week we have to maintain our credibility and we need to do something.
01:28:46.500So they decided to raise what is called the Fed funds rate.
01:28:50.840It's a rate where banks lend to each other overnight in terms of their reserves.
01:28:55.460And that reverberates through the market.
01:28:58.040So they had brought that down to a target of zero to a quarter of a percent.
01:29:03.940And they had held it there for the last couple of years.
01:29:06.740And they said, OK, well, you know, inflation is getting away.
01:29:09.900We better raise some interest rates, one of our tools in order to do that.
01:29:13.440And they took the huge step of a whole quarter of a point increase to do.
01:29:19.180Yeah, very, very, very meaningful because they need to be credible.
01:29:22.180Right. The last time we had this problem of this size, it took an interest rate of about 19 or 20 percent, if I'm not mistaken.
01:29:32.800Raising it a quarter is is really is is a joke.
01:29:37.280Where do you think these interest rates should be?
01:29:42.300Not not considering killing the economy, I just where it should be.
01:29:46.800Should it if we were in a healthy country still, would it be 20 percent or more?
01:29:53.020So there are a couple of things to unpack there.
01:29:55.800First of all, this is an unprecedented situation.
01:29:58.400We don't have a benchmark because we've never had central banks, not just in the U.S., but around the world, printing trillions upon trillions of dollars.
01:30:24.020I've always been a fan of normalized interest rates.
01:30:27.980I think it's a horrible idea to have the Fed meddling and trying to direct things.
01:30:33.200I want you know, I want the market to set it.
01:30:34.940And so before all of this nonsense started, before the financial crisis, the Great Recession financial crisis in 07, 08, which was really the first time we we went totally off the rails with the zero interest rate policy and the purchase of securities.
01:30:49.900The interest rates were around, you know, that seems to be a healthy place where things should be.
01:30:59.320We should not be in a place where we're saying, you know, when you take risk, you shouldn't be getting rewarded for it.
01:31:07.020So in reality, I mean, we're still at very historically low interest rates and in a healthy economy, you know, to have three, four or five percent would be completely acceptable.
01:31:19.700We just have been so addicted to this easy money and this free money for so long.
01:32:00.220This is the dilemma that the Fed has gotten themselves into by keeping down interest rates.
01:32:06.280They've basically given the government a free pass to just spend and spend and to rack up more and more debt.
01:32:12.580And we're at a point where the debt is completely out of control and has exceeded our level of GDP.
01:32:19.500So if you think about 30 trillion of debts and obviously the Fed funds rates and the interest rate on the debt isn't a one to one correlation.
01:32:28.660But we know that as one moves up, the other moves up.
01:32:31.440So in terms of the interest on our national debt, I want everyone to pay very close attention because this is staggering.
01:32:38.380For every one percent increase, that is another three hundred billion dollars that we have to pay in interest on the national debt.
01:32:49.860That is our tax dollars that are going to pay more for things that we have already purchased.
01:32:58.940It's literally a finance charge, a almost like credit card interest rate on stuff we have already bought.
01:33:05.400And this is the dilemma the Fed has because they know as they raise interest rates, this is going to get out of control.
01:33:13.320The CBO had made a projection that saying that this is going to get out of control.
01:33:18.640But in their projection, they said, well, you know, we think the yield on the 10 year treasury note gets to about two point one percent in 2025.
01:33:27.900So, you know, we're going to have to really be concerned maybe in 2029.
01:33:33.200The yield on the 10 year treasury note is at that two point one percent today.
01:33:59.300And obviously, you know, if there is a lot of demand for treasury securities, the prices that go up, then the yield or the interest that you demand is lower because there's a lot of demand.
01:34:26.680What we are paying currently on our national debt in terms of a combined interest rate is somewhere in the neighborhood.
01:34:34.320I've seen projections of, you know, one point four percent to one point six percent.
01:34:38.740So they've been able to finance that at a very low rate, but that number is starting to creep up.
01:34:45.560And with the Fed increasing interest rates, it will further creep up.
01:34:50.060And every one percent is three hundred billion dollars.
01:34:53.720So if we have an interest rate of five or five or six percent, we're talking like between two and three trillion dollars more than the entire budget.
01:35:05.720Exactly. It's just completely untenable at that point in time.
01:35:10.360So I would I would imagine other things happen in the interim.
01:35:16.240But, you know, this is why when we talk about things like MMT, modern monetary theory or why I call it magic money trade that says, well, you can just print into infinity because we can just print more.
01:35:28.620Well, we are now living through that real time experiment.
01:35:41.380So the best thing you can do is get out of credit cards.
01:35:46.380You should cut those up if you can and pay them off if you can get a refi right now, because you're probably paying about 16 percent for your credit cards.
01:35:56.040Yeah, I mean, and it could be going up and anything that has that adjustable interest rate associated with some people may have something called an arm and adjustable rate mortgage where it's, you know, it adjusts over time.
01:36:12.100Maybe it's fixed for a certain number of years, but then it starts to float anything that is adjustable rate debt is going to increase in price.
01:36:19.600And if you if you need financing, let's say you have a business and you haven't taken advantage of low rates yet, you're going to want to lock that in on a fixed basis now because it's not going to get cheaper anytime soon.
01:36:32.360Now, the other problem, the problem with raising interest rates is let's say you have a business and you need a loan.
01:36:38.800If if if the interest rates start to go up, that kills that business, they can't afford that loan, just like we can't afford our national debt or you want to buy a house.
01:36:51.220Yesterday, mortgages, the new mortgages fell immediately or just on the the whisper that it was coming.
01:36:59.600We are seeing a slowdown in mortgages, which means that people are going to buy fewer houses.
01:37:05.760The the scary thing about this is you don't know where that switch is.
01:37:11.120You just kind of have to guess and it might shut everything down.
01:37:15.700That's the needle that the Fed is trying to thread.
01:37:19.240In addition to dealing with the consequences of the national debt, what happens is as they raise interest rates,
01:37:26.600their intention is to slow down the economy.
01:37:31.900They want to slow down consumer demand.
01:37:34.280But the question is, you know, how do you do that without creating a recession or without creating reverberations for the economics of the average American?
01:38:13.600Wouldn't one way to slow the economy for the consumer but not slow the economy for the big corporations, would a war do that?
01:38:28.380I think that would completely change the tenor of the economy.
01:38:36.440But I think that raising the interest rates does that because kind of like we saw over the last couple of years, if you are a big corporation, you take an advantage of that debt.
01:38:52.160So in terms of the transfer of wealth, you know, that is one way to do that.
01:38:57.720But the war, you know, that would completely change the tenor of, you know, who benefits.
01:39:04.520And certainly it would be the bigger guys versus the smaller guys, but it would probably be folks in defense rather than the financial services industry, for example.
01:40:39.140So I want to talk to you about the dollar being the world's reserve currency, because I'm watching the sanctions that are being put on.
01:40:51.540And I'm seeing things happen to where if I'm another country, especially Russia, I'm going to China immediately saying, I want to partner with you because they just made my money worthless.
01:41:04.000I can't get my money out of the central bank, the Federal Reserve.
01:41:30.820It potentially means the end of the U.S. dollar as a reserve currency.
01:41:39.600Explain what that means, because to the average person, forget about, you know, the central banks and everything else.
01:41:47.080What does it mean to the average person to have half the world get off our dollar, ship them back?
01:41:52.300So this is why I love you, Glenn, is because we take the most complicated concepts in the world and try to explain them as if, you know, it's Elmo and Big Bird here.
01:42:03.180The idea of being the reserve currency, it's something that has sort of long history.
01:42:11.060And it means particularly in the case of goods and services, but also in the case of oil, that everyone in the world pretty much agreed to use dollars for settlement.
01:42:22.780And that puts some responsibility on the United States.
01:42:26.820There's something that is called the Triffin Dilemma, and it's an economist back in the 1960s who basically said, there's a conflict.
01:42:36.080If you are going to be the world reserve currency, you're going to have to make tough choices, and you're not always going to be able to do what's right at home in order to make sure you're doing what's right in the national sphere.
01:42:50.440Yeah. And unfortunately, this has been an issue that's been going on for a long time, but in recent times, as we've been talking about with the Fed and the decisions that they've made, they actually haven't done right by either party.
01:43:06.160They've been screwing over the average American with their policy and transferring wealth, but they've been doing the same thing in the national sphere.
01:43:14.120And frankly, a lot of countries are getting sick of it.
01:43:18.080And so there have been predictions for quite some time that there was going to be an event.
01:43:24.100An advisor actually to the OECD said that it's probably not an economic event.
01:43:29.300It's a geopolitical event that's going to expose this system, you know, wink, wink, nudge, nudge.
01:43:35.500And so a lot of folks feel like the sanctions that were made against Russia were potentially a cover story that we know we are potentially going to lose this reserve currency status.
01:43:50.060So we're going to say, well, we did it because we had to take a stand.
01:43:55.500But the reality is, you know, as we've now shown the world, you can put your money in our central bank and you can buy treasuries and U.S. dollars and hold them.
01:44:05.720But you might not be able to access them, which is not a really good thing if you're going to be the world reserve currency.
01:44:12.000So there are a couple of potential outcomes.
01:44:15.360I know that you've been talking about this, Glenn.
01:44:19.120But, you know, one thing that folks have been talking about is, you know, does China potentially step into the reserve currency position?
01:44:27.780There is an issue around that, because usually if you have the reserve currency, you run a trade deficit.
01:44:35.640And we know that China is a nation of exporters.
01:44:38.680So are they really going to step into that?
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02:01:55.980I didn't understand why the world, why America didn't get involved and why the world let Germany march right into the Sudetenland and take it.
02:02:08.760And then, surprise, when he took Poland.
02:02:14.560I didn't understand how important a Churchill was.