The Podcast of the Lotus Eaters - August 25, 2026


PREVIEW: Brokenomics | German & Japanese Decline with Firas Modad


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Length

37 minutes

Words per minute

148.8

Word count

5,509

Sentence count

209

Harmful content

Misogyny

1

sentences flagged

Toxicity

8

sentences flagged

Hate speech

51

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Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Toxicity classifications generated with s-nlp/roberta_toxicity_classifier .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 hello and welcome to brokonomics now in this episode i am delighted to be joined by faraz
00:00:27.400 for us thank you for coming on my pleasure um you quite correctly pointed out to me um that there's
00:00:33.800 something that we haven't been talking about perhaps as much as we should because we often
00:00:36.660 talk about how britain is making a long series of unwise decisions yes we also have a large
00:00:43.500 american audience we talk about the unwise decisions made there but you pointed out well
00:00:48.900 there actually are some other very large first world economies that are rather rapidly and
00:00:54.480 frantically hitting the self-destruct button yes and we probably shouldn't overlook them and i
00:01:00.460 think you're absolutely right i mean i suppose foremost amongst those you know the largest ones
00:01:04.580 would be germany and japan yes who are self-immolating for for slightly different reasons
00:01:10.160 there's a lot to talk about there so what what of the many things let me start with germany what
00:01:18.460 the many things about germany first caught your eye as to being absurd well it seems that the uh
00:01:27.100 cdu the uh christian democratic union which is one of the two historically main parties in germany 0.97
00:01:35.580 is imploding yes and this is happening because of the threat from the afd
00:01:43.900 on the political side this is supposed to be their center-right party so they're this 1.00
00:01:48.220 This is supposed to be their Tories, essentially.
00:01:49.800 Their Tories, exactly.
00:01:52.220 And their Tories are about as conservative as the Republicans or the conservatives in Britain.
00:02:01.500 And they've now led Germany into a situation in partnership with the socialist SDP, the Social Democratic Party, where the German economy is falling apart.
00:02:17.260 so volkswagen is laying off 100 000 people bmw has announced big layoffs bosch has announced
00:02:24.000 big layoff the metals industry the automotive industry the chemicals industry they're all
00:02:28.920 falling apart and they're largely falling apart because of the sanctions on russia
00:02:35.060 and because the americans blew up nordstrom yes i mean i mean the americans deserve a portion of
00:02:44.680 the blame here but even if the americans hadn't done that i mean the germans like i said were
00:02:49.920 frantically pressing that self-destruct button before they they did many things before i mean
00:02:53.420 i i put a lot of blame on angela merkel yes of course for two catastrophic decisions and both
00:02:59.800 of them emotionally made the first one of course being she saw a photo of a dead child on a beach 0.53
00:03:04.780 and immediately decided emotionally that she was going to open germans bought germany's borders
00:03:10.160 to as many immigrants as could get there and it turned out the number was actually quite a lot
00:03:14.180 the other thing is that um fukushima a nuclear power plant in japan built on the coast in 1971
00:03:23.360 so several generations behind the current generation had the severe misfortune to
00:03:29.500 suffer a earthquake immediately followed by a tsunami yes which caused severe problems
00:03:36.460 although nobody actually died
00:03:39.220 and again
00:03:43.100 Angela Merkel
00:03:44.060 who bizarrely
00:03:45.540 is actually a physicist
00:03:47.840 she was an industrial
00:03:51.340 physicist
00:03:52.200 and she looked at this
00:03:54.400 two generation or three generation old nuclear
00:03:57.240 power plant being hit by an earthquake
00:03:59.160 or tsunami on the coast
00:04:01.420 old safety tech
00:04:03.100 and made the immediate emotional decision
00:04:05.420 to start shutting down all of the nuclear power plants
00:04:08.260 when it should have been obvious to her
00:04:10.640 that inland modern German nuclear power plants
00:04:13.380 were not going to be affected in the same way.
00:04:15.760 Correct.
00:04:16.740 And so even if Nord Stream hadn't been blown up,
00:04:19.640 I mean, well, Nord Stream was the last hair, basically,
00:04:22.260 that German industry was being supported by.
00:04:25.160 You're absolutely right about the historical context.
00:04:27.720 The German establishment is as woke and as authoritarian
00:04:31.440 as the British establishment.
00:04:33.980 And not just the Greens, the CDU as well.
00:04:36.080 No, no, no. The Conservatives are woke in a way that is genuinely dangerous.
00:04:44.640 And they are committed to this decarbonization, removal of nuclear power,
00:04:52.320 all of that environmental stuff that has been so insanely damaging to industry.
00:04:57.560 They are fully committed to that.
00:04:59.460 now germany has had to reactivate its coal plants yes because they are in such a terrible position
00:05:07.860 now geopolitically germany can dominate europe if it keeps russia at bay and traditionally this
00:05:15.800 has always worked through a german russian understanding that leads to them divvying up
00:05:22.200 eastern and central europe between them they've had this long history of favorite they were you
00:05:28.360 know uh able to do it under stalin and hitler it was a standard policy of germany and of russia
00:05:35.180 let's not fight each other too much when that happens it ends in disaster let's figure out
00:05:41.040 some kind of joint security architecture well and indeed that what you just described was a
00:05:45.880 major concern for the british for the longest time they called it the great game it's how can
00:05:52.160 we undermine these two powers in such a way that they don't ever form too close of a unity exactly
00:05:57.100 Because for God's sakes, if those two ever got together and their cooperation was anything more than the minimum necessary to avoid open conflict, well, we're out of the game.
00:06:08.280 They dominate everything.
00:06:09.120 Which was the strategic logic behind Britain entering the war in World War I and World War II.
00:06:14.320 That was the strategic logic behind it, that if one of them ended up too dominant over the other, you would get a combined that includes German industry and Russian natural resources.
00:06:24.240 and that would be such a formidable power that would dominate all of europe and then all of
00:06:30.100 eurasia yeah likewise if they started cooperating too much same outcome that you just can't because
00:06:36.200 of that because of their strength their size where they are if if they either if one dominates the
00:06:41.180 other or they cooperate yes that's it they just they just own europe hence the american interest
00:06:45.700 in poland and in keeping poland strong as a buffer between the two but the germans rather
00:06:52.680 than recognizing their own national interest decided that no they have to fight russia
00:06:58.440 but it is interesting though because
00:07:00.940 they were increasingly if you go back to schroder he signed the deal that got the nordstrom pipeline
00:07:08.520 set up in the first place and germany understood the cheap russian energy underscored everything
00:07:15.920 that they did yes and many many times before ukraine something would happen and they'd
00:07:24.220 double down on russia yes a great example being the 2014 um um invasion or if you call it invasion
00:07:33.860 of uh crimea yes germany doubled down on russia then not quite did they not up to a point because
00:07:43.080 they kept on buying huge amounts of Russian gas, but then Merkel says that the Minsk agreements
00:07:50.060 that were, after she was out of office, and the 2022 war had broken out, Merkel says that
00:07:58.700 her thinking along with Francois Hollande, the president of France, was that they would back
00:08:06.000 the Minsk agreements intended to end the war between Russia and Ukraine in order to buy time
00:08:13.280 for Ukraine to rearm. So their logic was a lot more cynical by her words. Yes. And this is something
00:08:23.460 that has deeply antagonized the Russians now and placed them in a far less conciliatory mood towards
00:08:31.300 Europe in general. It didn't look that way at the time. It did look at the time like they were
00:08:34.560 doubling down on russia because they kept on increasing their purchases now they're saying
00:08:38.520 that it was genuine yeah military necessity that forced them in that direction now whether or not
00:08:44.500 this is a post facto explanation of what they did at the time whether when was she being honest
00:08:51.880 when she went and signed the minsk agreements or when she said that the minsk agreements were
00:08:58.260 intended as a temporary measure to help ukraine rearm we don't know that yes we don't know that
00:09:04.560 But the behavior of the European observers that were deployed to Ukraine after the Luhansk and Donetsk republics sort of broke off wasn't completely fair to the Russians.
00:09:20.020 Because the Ukrainians were shelling central Donetsk for an extended period of time, and the Europeans seemed to be fine with that, hoping to keep the conflict managed.
00:09:31.020 Well, it's only keeping it alive, though. 0.82
00:09:33.760 Alive and managed.
00:09:34.920 Yes.
00:09:35.320 Alive and managed.
00:09:36.480 Rather than breaking out into all-out conflict
00:09:38.680 with the aim of helping Ukraine prepare for a much bigger war.
00:09:43.200 So when was she being honest?
00:09:45.460 We don't know.
00:09:46.840 But now the chickens are coming home to roost. 0.73
00:09:50.340 And the German industries, 0.86
00:09:52.400 which absolutely correctly, as you point out,
00:09:55.720 are entirely dependent on cheap energy
00:09:58.640 because you can't have advanced manufacturing without cheap energy.
00:10:02.800 they seem to be falling apart i mean the whole deal with germany is it was a five five trillion
00:10:09.100 um euro economy yes and the and and the leg that was holding the whole thing up was was
00:10:16.040 five 50 billion of cheap russian energy yes so there is the 50 billion in russian energy but
00:10:22.340 that translates into a many many multiples of exports that come from germany and that not only
00:10:30.040 allow big players like Volkswagen to function. It is the demand from these large companies that
00:10:36.760 underpins the Mittelstadt, which are the small and mid-sized German manufacturers,
00:10:42.900 very often family-owned, very often having been in the same family for generations,
00:10:47.960 which are also some of the biggest employers in Germany.
00:10:50.520 And very specialist at a particular thing.
00:10:54.480 So they might make just one type of screws or some kind of valve or what have you.
00:11:00.600 Something like that. 0.98
00:11:01.080 And being German, of course, what they've done is they've got this system 1.00
00:11:05.420 and they've perfected it over several generations.
00:11:10.000 And it's world class.
00:11:11.220 Yes.
00:11:12.460 But quite often what's happening now is technology is coming along,
00:11:15.720 such as EVs, simply don't require these parts.
00:11:20.000 That is very true.
00:11:21.280 and the Germans have really struggled
00:11:23.460 to transition to EVs 1.00
00:11:24.800 because the Chinese are so dominant in that market
00:11:27.000 and the Germans encouraged a lot of investment in China
00:11:30.380 and obviously with China when you invest there
00:11:32.400 you lose your IP one way or another
00:11:35.060 and now what we're seeing is that in 2025
00:11:38.580 and in the second quarter of 2026
00:11:42.380 the number of bankruptcies in German industry
00:11:45.860 is at a record.
00:11:47.400 The level of industrial decline in Germany
00:11:49.920 is quite astonishing.
00:11:50.660 So between, I think, 2021 and 2025, they managed to lose 18% of their energy-dependent industry.
00:11:59.720 Now, it is very difficult for me to find an example in history of an economic decline that looks like that outside of late stages of war.
00:12:09.820 And actually, if you look at the early stages of even something like the First and Second World War,
00:12:14.460 manufacturing in Germany, Britain, and other countries actually went up, not down.
00:12:17.900 It's only at the late stages of a war that you're losing.
00:12:21.000 Do you have anything comparable to the type of decline
00:12:24.420 that German industry has been seeing?
00:12:26.400 Hundreds of thousands have dropped up and been going.
00:12:28.120 And in a real way, they are at the end of the war.
00:12:30.320 It's just that the war isn't being fought on their territory.
00:12:32.580 Yes.
00:12:34.100 And the cost of participating in this war
00:12:37.900 has been absolutely disastrous.
00:12:40.380 And the German political establishment is absolutely adamant
00:12:43.600 that they must maintain the cordeau sanitaire
00:12:46.840 against the Alternative for Germany,
00:12:50.000 which is leading in the opinion polls
00:12:52.480 in the mid-30s or in the low to mid-30s,
00:12:56.320 significantly above all of the others,
00:12:58.860 but they aren't polling high enough
00:13:01.300 for the 2029 German general parliamentary election
00:13:06.100 for them to be the majority.
00:13:10.920 No, but they do have to form a coalition against them,
00:13:15.220 and the higher that AFD goes,
00:13:17.800 the broader that coalition has to get.
00:13:20.440 Yes.
00:13:20.820 And the greater the set
00:13:22.600 of completely incompatible governing principles
00:13:25.260 get bundled into that coalition.
00:13:27.200 Yes.
00:13:27.800 Which then makes it contradictory.
00:13:31.180 Yes.
00:13:31.860 Unable to function.
00:13:33.160 And that's been the problem since 2021.
00:13:35.880 So in 2021, you have Olaf Scholz
00:13:38.020 with his, I think, traffic light coalition,
00:13:40.920 which included the greens the um the cdu as well as the uh spd and the greens being the extremist
00:13:51.460 lunatics that they are obviously that whole thing didn't go well he did manage to govern
00:13:56.160 a little bit less than a full term but he was forced to call for an early election by a few
00:14:01.920 months and that was because the coalition was unworkable and schultz is unusual in that he
00:14:09.360 only served one term, what you've had generally with German chancellors is that they stay
00:14:15.940 there for a very long time.
00:14:17.340 Yes.
00:14:18.080 And ministers stay there for a very long time.
00:14:21.080 And now his successor, Mertz, is facing the same exact problem.
00:14:27.260 His coalition is unwieldy, even though it's just two parties, and they can't fix basic
00:14:35.840 things like pensions and welfare and so on and so forth.
00:14:39.360 And what everybody is very late to realize is that the entire edifice of the post-war
00:14:45.080 welfare state is no longer sustainable because although Germany has on paper, a low debt
00:14:53.420 to GDP ratio by modern standards, when you include the pension liabilities, that goes
00:15:00.200 up to 400% of GDP, 500% of GDP.
00:15:03.300 And that's true across the modern OECD welfare state.
00:15:08.500 Yeah, I mean, any private company would have to record those as a present-day liability.
00:15:12.820 For whatever reason, governments can push them off as a future liability.
00:15:16.080 Exactly.
00:15:17.700 So the edifice is crumbling, but you can't win a vote in an aging society by saying,
00:15:26.580 I'm going to slash pensions because I've now realized that pensions are a destructive force towards birth rates
00:15:34.100 because it separates, it breaks up the generational pact.
00:15:38.980 The generational pact is you take care of your children,
00:15:41.760 you help them set up themselves as best as you can,
00:15:45.880 you give them a good start in life,
00:15:47.600 they take care of you in your old age.
00:15:49.680 Well, if the taking care of the old age part
00:15:53.580 is actually now the responsibility of the state,
00:15:56.920 why should I spend all of these endless nights
00:15:59.220 with a crying baby when I could just be drinking
00:16:02.360 and enjoying myself?
00:16:03.380 Yes. And of course, by disempowering the... I mean, another thing I'll say on the industry front is they closed down the last two nuclear power stations after they already knew that they had cut off the Russian gas.
00:16:17.200 Yes. Which is just insane.
00:16:19.020 Yes. Truly insane. I mean, they had potentially walked themselves into a situation where the only viable option was Russian energy. And even after they know that that's gone, they still turn off the last nuclear. And they're doing this in pursuit of lower carbon emissions.
00:16:39.780 Yes. And like you say, they're having to power up coal and gas. So oddly, their emissions have actually remained flat. They haven't seen an improvement.
00:16:49.040 Of course.
00:16:49.560 But that's solely because industry has declined so much that it's offset the amount of coal and gas that they're now using.
00:16:55.380 Well, there's two points here. First, you can't have a prosperous economy without high energy consumption. I mean, that's definitional.
00:17:05.880 You transition from hunter-gatherers by cutting off forests
00:17:08.960 and building houses made of wood or whatever.
00:17:12.360 I would make the argument.
00:17:13.220 And by burning wood to warm yourself, and, and, and.
00:17:16.220 I would make the argument that China is already a bigger economy than the US.
00:17:20.840 Just by energy consumption. 0.78
00:17:22.120 Well, by looking at energy consumption, exactly right,
00:17:24.700 rather than measuring it in dollars,
00:17:26.660 which, of course, favours the people who produce the dollars.
00:17:29.500 um but yeah so so so the the matters of the of the of the you know german energy solid but what
00:17:36.020 i what i was coming to is that imagine you are a large german company yes anything energy intensive
00:17:43.940 steel well that's all gone now but chemicals they're still germany is a big dominant player
00:17:48.460 in chemicals um manufacturing of various sorts you might be looking at your large conglomeration
00:17:56.100 and seeing that 60% of your business is physically located in Germany.
00:18:02.720 Yes.
00:18:03.480 And that 60% is generating 5% of your profits.
00:18:07.100 Yes.
00:18:07.600 Because you've also got a plant in Gonjaro,
00:18:10.660 I can't pronounce it, but in China.
00:18:14.260 You've got plants in India,
00:18:15.800 you've got plants in various different places.
00:18:17.620 Or in Poland and in the Czech Republic and Hungary, whatever.
00:18:21.700 and and that that 40 is generating 95 of your profits yes so naturally what you do unless
00:18:29.960 you're insane as a german company what you do is you start relocating capital and um well at least
00:18:37.140 capital sometimes people into those things your all of your investment is going to go into another 0.88
00:18:42.340 chinese plant yes so you're now you know you're hydric you're 53 years old you've worked at a
00:18:48.740 a German chemical plant or manufacturing plant for your entire life.
00:18:52.340 You're too young to retire, but you're too old to retrain.
00:18:56.940 Yes. 1.00
00:18:57.300 Or to relocate to China and upheave your life there.
00:19:00.800 You've got two children in university.
00:19:03.020 You've just been made redundant.
00:19:04.380 Well, you were told that you can either have, I don't know,
00:19:06.940 60,000 euros redundancy package,
00:19:11.220 or you can relocate to Gongjiao province in China.
00:19:15.920 you know you you you took you took the redundancy package uh but now you can't find work yeah because
00:19:21.420 all of industry is is collapsing now at that point politically you're either going to double down on 0.83
00:19:28.340 the welfare provisions if you can convince yourself that the cdu is going to make good on those
00:19:32.880 or you flip to the afd yes absolutely absolutely and you know if you're in any way economically
00:19:41.460 you know that the cdu cannot make good on these provisions uh but the afd isn't really promising
00:19:49.140 to cut welfare spending dramatically for germans because you can't win elections that way and then 0.58
00:19:55.660 you have this political and moral and financial albatross which is the immigrants because the 0.99
00:20:03.140 immigrants take about half of the direct cash welfare payments in germany about half of them 1.00
00:20:09.900 go to people who aren't German. 0.95
00:20:12.380 And they could really do that half. 0.99
00:20:14.560 Yes.
00:20:15.380 And they, as a share of the population,
00:20:17.140 are just rapidly growing.
00:20:19.460 And I know for a fact that, for example,
00:20:22.160 if one brother is going to make the trip to Germany
00:20:25.300 and he's actually going to take a family with him
00:20:27.980 from somewhere in the Middle East,
00:20:30.760 what's he going to do?
00:20:31.640 He's going to take a couple of his siblings' children with him
00:20:35.340 because that means that in a few years
00:20:37.880 they can apply for family reunification.
00:20:39.900 And so this is a whole, basically, the impact of Merkel's opening of the border
00:20:45.620 is going to be felt for years to come because of the family reunification provisions.
00:20:53.360 And if you're going to withdraw from that, I mean, let's sort of think about what happens here in the German election.
00:21:00.460 If the AFD can't win an outright majority in the Bundestag,
00:21:05.080 you will have this completely incoherent coalition of everybody else who have nothing in common
00:21:13.580 getting together just to keep the AFD out. The second possibility is that it's a CDU-AFD
00:21:22.160 coalition. But the CDU, given its insanity, and that insanity has been demonstrated since before
00:21:30.180 the days of merkel these guys will do everything that they can to sabotage the afd because they
00:21:36.140 don't want to help what is labeled the far right the far right in this case is literally led by a
00:21:42.520 lesbian in a partnership with a sri lankan woman yes so this is this is the modern like they're
00:21:49.480 not wearing hugo boss no you know they're not wearing hugo boss and actually they're actually
00:21:55.160 surprisingly moderate i mean they're extremely so yeah i mean i mean even more so than reform
00:22:01.040 if you can believe it yes exactly and so this is the german far right and they're considering
00:22:08.140 banning the afd they're genuinely considering banning the party leading the polls in germany
00:22:14.360 to safeguard our democracy which brings up a question that must be applied to all of the west 0.87
00:22:22.320 if you were genuinely governed by enemies of western civilization what would be different
00:22:31.060 um i can't think of anything nothing you would destroy the family you would destroy industry
00:22:41.240 you would destroy the economy yes and you would flood flood the nations of the west 0.97
00:22:46.280 with migrants who absolutely hate it. 1.00
00:22:50.700 This is what an enemy would do 1.00
00:22:53.400 if they were dominating you by non-military means. 0.79
00:23:00.280 You could imagine a situation where China governs Britain, 0.92
00:23:04.780 but then treats it as a sort of theme park 0.61
00:23:07.060 that is to be preserved and kept pristine and used for holidays.
00:23:11.500 Now, funnily enough, I think that the future for a lot of Europe 1.00
00:23:14.120 is going to be as a destination for Chinese sex tourists. 1.00
00:23:18.380 And that is genuinely a disgusting but very plausible thought. 1.00
00:23:23.720 It's the path that we seem to have chosen.
00:23:27.260 It is right now a destination for, you know, 1.00
00:23:30.820 rather rapey migrants who are on a form of rape tourism, 1.00
00:23:37.000 essentially, funded by the taxpayer. 1.00
00:23:39.340 And this is seen as acceptable for the majority of the German political class and for the majority of the European political class.
00:23:51.620 So words cannot describe how unhinged that worldview is.
00:24:01.200 And it's gone too far for it to just be a mistake or an error in judgment.
00:24:09.340 yes the the example that you use decommissioning nuclear power plants after russian gas had been
00:24:18.960 cut off the cdu has subsequently called that a colossal mistake well so what but they have to
00:24:26.100 call it a mistake for political purposes that doesn't mean i mean the thing about modern
00:24:31.740 politicians is that they are non-entities and it isn't obvious that they are making the decisions
00:24:39.020 hence the policy continuity, if they were making the decisions, you would constantly see changes in policy and adaptations reflecting what has worked and what has not worked.
00:24:52.620 You would say, well, actually, this idea was a bad one, so we're going to have a 180-degree switch.
00:24:59.260 So I can make an argument, I don't know if it's a good argument, but I can make an argument that some of this is a result of external influences.
00:25:07.320 So Germans are, as you can imagine, a lot of them are fanatically anti-nuclear. 0.96
00:25:14.720 That's how they were able to, I mean, because all of these things that they have done
00:25:17.900 were incredibly popular at the time.
00:25:20.280 Opening the borders was popular at the time.
00:25:21.920 They were popular at the time because of a media class that fed them certain beliefs.
00:25:27.940 So there is an analyst.
00:25:29.340 Europeans aren't, Westerners in general, aren't forming opinions independently.
00:25:33.900 and certainly were not doing so before the advent of the independent media age for decades you had
00:25:43.480 state-linked or uh media companies with highly concentrated ownership pumping propaganda and
00:25:53.680 that propaganda was widely disseminated bbc you know yes it's not called the bb i can't remember
00:25:59.860 is called but yes there's a bunch of these but no i can make an argument there is external influences
00:26:04.480 because there is an energy analyst um dunberg i think it is who often talks about how he believes
00:26:10.740 russian influence propagated the anti-nuclear sentiment in germany plausible and and it
00:26:18.660 particularly hit german boomers because whenever there's a hint of a nuclear power station or when
00:26:23.660 the nuclear power stations will open you always have the german boomers outside campaigning against
00:26:28.060 it so so that you could make an argument was a was a a foreign op and you could absolutely see 0.65
00:26:34.940 why the russians would want to do that because then they get a customer because then it would
00:26:38.640 become so insane to cut off russia but they would never do it yeah although actually what happened
00:26:43.420 is it it was so insane and they did it anyway yes but but likewise if i think about who i
00:26:50.720 who's winning the ukraine war because you could say well okay neither russia or ukraine appear
00:26:57.000 to be particularly winning.
00:26:58.140 I mean, they're trading ground here and there,
00:27:01.020 but it's difficult to clearly point to a winner.
00:27:03.700 One clear winner is the United States.
00:27:06.820 So on the Russia-Ukraine war, there are a couple of things. 0.82
00:27:11.340 The first thing is that the territorial advances
00:27:16.180 are incredibly slow, extremely slow. 1.00
00:27:19.940 The Russians are making the vast majority 0.98
00:27:22.440 of the territorial advances,
00:27:23.580 and they are slowly breaking up the main Ukrainian defensive line.
00:27:29.800 Incidentally, why do you think it's so slow?
00:27:32.060 Because it's not like Russia lacks resources or manpower. 0.78
00:27:34.760 Because the Russians are extremely casualty averse.
00:27:38.020 They don't want to have to mobilize.
00:27:40.520 Putin is trying to fight this war in a way that maintains normality
00:27:45.320 for the Russian economy and the Russian public.
00:27:48.120 And so they don't want to have to mobilize people multiple times and suffer the consequences of that on domestic stability.
00:27:59.220 Their defense spending, war spending is 7% of GDP, which isn't a full-on war economy by any means.
00:28:10.060 It's high, but it's nowhere near a genuine war economy.
00:28:14.240 Putin wants to keep it that way.
00:28:15.540 The second reason is the changing nature of warfare, the presence of drones everywhere, means that you can only advance in very small groups, which means that until you've defeated the enemy, you can't make rapid advances.
00:28:31.960 And the third reason is that most of the fighting is happening in extremely well-fortified Ukrainian areas, as opposed to unfortified areas where you would have rapid advances.
00:28:42.860 but these fortified areas are slowly being taken over and the main ones are in the uh three city
00:28:52.320 belt uh slovians kramatorsk and konstantinivka these are being outflanked and dismantled slowly
00:29:02.720 okay and in zaporozhia they're making decent advances on the verge of getting to the city
00:29:09.680 itself after the last defensive outpost in Orchiv is taken. The issue, however, is that if the
00:29:17.740 Russians do break through these, they still end up facing potentially, if the Ukrainians still have
00:29:23.480 the will to fight and still have the money and equipment to fight, they still could end up facing 0.85
00:29:29.500 a wall of maybe seven or eight cities, which are much bigger than any of the cities that they've
00:29:35.740 taken so far, or at least since Mariupol, in March 2022.
00:29:42.420 Okay.
00:29:43.120 And if the Russian army has to run into that wall of cities, they don't have the manpower
00:29:49.420 to do that.
00:29:51.440 So you're saying there's good structural reasons for it being slow?
00:29:53.660 There are good structural reasons for it being slow.
00:29:55.300 Okay, so thank you for that.
00:29:57.140 But that was a bit of an aside, so best turn to the central thing there.
00:30:03.100 But regardless of who's not winning, the U.S. is definitely a winner from the Ukraine war.
00:30:10.980 Completely. 0.62
00:30:11.360 Because before that... 0.98
00:30:12.200 As it's China. 0.71
00:30:13.840 Okay, I might get you to give a sentence or two on that in a second, but I'll make my case for the U.S.
00:30:20.420 So before the Ukraine war, dollar hegemony is, of course, vital for the U.S.
00:30:25.000 Yes.
00:30:25.740 And the proportion of global trade being done in euro, it was still the minority, but it was starting to get uncomfortable.
00:30:31.640 We're starting to get into the upper 20s.
00:30:36.340 Dollar is, of course, still dominant.
00:30:38.680 But nevertheless, if that is the core for your empire,
00:30:42.540 you want to make sure that the number two is properly stamped on.
00:30:46.220 Yes. 0.97
00:30:46.840 And the effective economic destruction of Europe via Germany
00:30:53.620 has pushed that down into the teens.
00:30:56.420 Yes.
00:30:56.860 The dollar is now just undisputed.
00:31:00.460 Yes.
00:31:00.740 and US energy exports have faced an enormous boom.
00:31:07.320 Yes.
00:31:07.920 Especially with what's going on in the Middle East as well.
00:31:09.740 That helps as well.
00:31:10.640 Of course.
00:31:11.020 So for me, clearly, the winner of the Ukraine war is the Americans. 0.54
00:31:15.220 Yes. 0.91
00:31:15.880 So I can make an argument that not all of Germany's misfortunes
00:31:22.440 are self-inflicted, although had they had a little bit more metal
00:31:26.300 on both fronts, resisting the anti-nuclear propaganda
00:31:29.100 and avoiding the sort of US-led coalition in Ukraine.
00:31:33.820 They could have avoided both.
00:31:35.600 Yes, exactly. 1.00
00:31:37.380 But weak-willed Germans, you could say,
00:31:39.300 were steered into both situations by external powers. 0.55
00:31:42.340 Yes, absolutely.
00:31:43.680 Absolutely. 1.00
00:31:44.300 I mean, the US is being destroyed by immigration in the same way 1.00
00:31:47.640 and by DEI and by all of that nonsense. 0.65
00:31:51.240 But they've got a good dollar and they're exporting lots of energy.
00:31:53.640 But they've got a good dollar and they're exporting lots of energy.
00:31:55.640 And the war in the Middle East, which, if you assume, as I do, that it's going to continue for some time, and the closure reform is going to continue for some time, does give American oligarchs a huge opportunity to develop energy exports in the United States, but also in Latin America, which has largely shifted right wing in the past couple of years, with only Brazil still holding out.
00:32:21.120 so there has been this transformation in latin america that very much favors the united states
00:32:27.380 which also immensely helps the don row doctrine of dominating that hemisphere and its resources
00:32:35.960 we haven't seen them separate themselves from china we haven't seen latin america start causing
00:32:41.700 trouble for china but evidently part of the play is to develop resources in latin america
00:32:47.040 to feed the american industrial machine and if the german industrial machine is broken
00:32:52.040 it breaks the rest of the european industrial machine with it because if you are a manufacturing
00:32:59.360 plant in hungary or in poland odds are that you are linked to the german economy quite deeply
00:33:06.900 and your clients are in germany odds are you're making components for german manufacturing
00:33:13.000 and so you bring down germany you bring down the whole of europe
00:33:17.880 and the europeans as well as the eu directly because they're funding most of it
00:33:22.780 as well as the eu because the the the the germans are funding the eu
00:33:27.700 and basically you're just making it a lot easier for the americans to dominate europe
00:33:32.960 and if you're heading into a multipolar multipolar world what do you want you want to make sure that
00:33:41.900 the United States is the dominant power over Latin America and Europe. Well, the whole point
00:33:49.140 of the EU is supposed to be a block that can rival the US and China. Well, it was also
00:33:55.400 sponsored by the Americans as a way of making it easier to manage Europe, except the EU went
00:34:03.600 high on its own supply and got too crazy and too protectionist and therefore stopped serving
00:34:10.460 american interest in the way that it was intended to so the americans now are basically
00:34:18.860 in a stronger position vis-a-vis latin america and vis-a-vis europe which are critical parts
00:34:25.600 of their empire and you know although they're not achieving very much in the in in the war
00:34:32.900 against iran the big achievement of the war against iran has been to force the sunni states
00:34:40.180 to prepare to fight iran which is why you saw which which is manifested in the turkish saudi
00:34:49.960 pakistani alliance these are the sunni countries getting together and saying
00:34:54.780 we need to stop the iranians from attacking saudi arabia because if they keep on doing it and they 0.97
00:35:01.460 defeat the americans on the saudis they take mecca and medina they become the real muslims 0.98
00:35:06.200 so that that's i mean i'm not familiar enough with that world but presumably that that's quite
00:35:14.420 a big thing and yes that is an enormous thing right so the the fact that you have this sunni
00:35:19.740 alliance it is in some ways a disaster for the west especially europe but it's a big problem
00:35:25.940 for the israelis and really for the iranians yes i saw your recent real politic was very good on this
00:35:33.320 you were saying that it is as much an anti-Iran pact as it is an anti-Israel pact yes yes very
00:35:41.840 much Iran and Israel are natural geopolitical allies because they need to constrain the 0.86
00:35:49.060 Sunnis between them and their key geopolitical spheres aside from South Lebanon 0.72
00:35:54.680 don't conflict the Iranian interests kind of end in Iraq unless and what does it do for the
00:36:02.700 United States over time, if that pact and military integration continues to the point where the three
00:36:10.140 of them essentially decide, well, look, no, we are going to be the hegemon of this area.
00:36:16.160 That does force the United States out of the region. But then if the United States wants to
00:36:21.140 stay in the region, the Iranians will be desperate for an external ally. You're proposing that if
00:36:31.320 if saudi pakistan and turkey cooperate sufficiently against iran they turn iran into an ally of the
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