The Unraveling of America: Economic Turmoil and Global Isolation

Welcome back to what's going on with Earl Ingram.

It's that time again, the one and only Sandy Williams is on the docket.

Good morning to you, Sandy.

How you doing, man?

I'm doing great.

Maybe it's summer.

We've jumped

forward.

Yeah, I mean, it's the middle of it's the middle of May, Sandy.

I mean,

I know the snow.

We've got the leaves are out.

They're ready to receive the snow shortly, I suspect.

Yeah, but we got a lot to talk about this morning as always, Sandy.

And, you know, I don't know where to begin other than I've been watching the president of the United States suck up to the president of China.

Now,

Oh, here's here's a guy who he leads everybody in this nation to believe he's the toughest guy.

That's ever, you know, walked in America, but he gets to China and he starts groveling right away.

Oh, you're the greatest guy.

What is that about, Sandy?

Wow, you know, I don't I don't I don't venture into that that part of the gray matter To try and figure it out.

It's it's all hard to ponder.

It's we all understood that we elected a TV personality who's all about stage and acting but

It's not clear.

I think what's interesting to talk about a bit in the beginning and then figure out which one we want to pick out of the bin is historians 30, 40, 50 years from now.

are definitely going to look back at this era of the United States.

And it's going to be viewed as a watershed moment.

Now, what we don't know is that 50 years in the future, what America will be like 50 years in the future.

Where will the current trajectories that have been created by the current realities, where will that take America?

But I think it's pretty clear that people are going to look back at this time and say, well,

That second administration of Donald Trump was a period in which a bunch of things changed.

We changed our alliance, our view of international alliances.

We potentially started a process of backing out of NATO.

We got very arms length with a bunch of international allies like England and Canada and the rest of the West.

We became

quite cordial and diplomatic with autocratic states, large autocratic powerful states.

We began to exercise open and notorious imperialism in terms of our international policies with smaller countries, Venezuela, Cuba.

The list is starting.

It's not over, I don't think.

And then domestically, we ended and made essentially illegal the concept of affirmative action.

And we've now got the...

Department of Justice investigations of places like Yale Law School for possibly placing a preference on admitting black candidates to their law school.

We have a tax burden that has lightened.

Well, we've made taxes lower and yet we're operating this year at an annual deficit this year is projected to be 2.1

trillion dollars.

We have a national debt of 38 trillion dollars and we're going to have 5% of that debt recreated on an annual basis if we continue to operate at the level we are.

We have a defense budget that they're talking about increasing to one and a half trillion dollars and we have an annual interest cost in our budget of a trillion dollars.

We have

annual what appears to be biennial redistricting going on so that we have open and notorious partisan planning for the district lines, which is creating a greater prospect of very few competitive congressional districts and very few districts in the state house that are competitive.

Most of them will be determined by the primary winner in their district because very few districts are actually contested between the two parties.

So we have maybe the beginning of the kind of the collapse of the two-party system.

So there's a lot of things in that basket that are happening now that are probably historic watershed moments, and probably all of them deserve to be discussed.

And you're not to mention his family profiting, the profiteering in broad daylight

that is taking place.

Yeah, I mean, the level of, they would not call it corruption, because they think it's the norm, a new norm in politics.

But this new norm in politics seems to be that those in power can take what they want for themselves and for their parties.

So we have partisan winner-take-all in the form of this redistricting process.

And we have winner-take-all from the standpoint of a presidential office that appears ready and able to

to personally profit in every conceivable way from the office of the presidency to the point where one of the people on this Chinese trip was who, but Eric Trump, the son of Donald Trump, who he says runs his family business.

You know,

Sandy, all of those things in the grab bag, but I guess you just can't leave out.

He's once again threatening the allies with more tariffs.

on the cars, on the automobile.

I mean, over and over and over, Sandy, he just, he just is the kind of person who, he got his head handed to him in China.

She didn't capitulate to any of those things.

They were asking him questions about, you know, the conversations that were had.

He was making things up again.

And then his response when he gets back on the plane, that's to show everybody how tough he is with saying, well, if our allies don't do this, I'm going to slap a 25.

Come on, Sandy.

We see it over and over and over, man.

Well, I mean, you know part of this historic grab bag is that he's broken down international trade and Rebulcanized the world or is attempting to so that what what we were in was an era of free trade moving in the direction of more free trade between countries and now we're in an era in which trade is being used as a as being weaponized for international purposes and and we have a system of tariffs which promises to

match up with a number of other policies to create what could be embedded endemic inflation going forward, things that will weaken the dollar and will potentially put the notion that the dollar is the international reserve currency at great risk.

We already have a risk associated with cryptocurrency potentially replacing the dollar, although the dollar could become itself a cryptocurrency and solve for that issue.

But we have

We have so many vectors of policy shifts.

ongoing at once.

And unfortunately, many of them match up with creating a system which will potentially kind of collapse the U.S.

financially and fiscally, because they match up with increasing interest costs for the national debt.

They match up currently with financing all new ventures with additional deficits.

You know, we have the president asking or talking about increasing defense expenditures by up to $750 billion.

a year, more than almost doubling them.

And we don't have any talk about increasing taxes or becoming more fiscally disciplined.

So all of that money is simply spent out of an increased deficit.

You know, Sandy, at the same time, we're watching a party that in the face of all these things refuses to open their eyes and talk about Sandy

This this this perilous situation that the American people in our nation is in It the I'm listening to Republican senators and Congress people They're still capitulating to everything that he says and and so you're watching us we're watching all of these things transpiring and not enough people have the intestinal

Fortitude occurred, Sandy, to say, OK, we've got to save the American people.

We've got to save our nation.

When is

that going

to happen?

I think the Republican Party has something akin to the Norwalk virus.

They're caught on this cruise ship by Captain Donald Trump and they all have Norwalk virus and they're weakened to, intestinally, incapable of potentially standing up to the captain.

I think it's one of those things where...

In politics, when you have someone who has such a grip like this current president does, it all happens at once.

When it unravels, it doesn't happen slowly.

People are in the grip, in the grasp, fear the repercussions until they don't.

And it's until they don't moment that they talk about jumping off the ship.

I think the term, I'm not using it necessarily directly here, but the rats jump the ship.

And I think so that this person will have a grip until he doesn't.

And that doesn't moment, it's kind of like the stock market when it falls, it teeters.

until it falls.

And right now we might have a situation where there's some teetering going on, but it hasn't yet had the effect of the fall that would be needed for the people who are... I mean, what Donald Trump has done is exhibited a great deal of strength with respect to exercising party within the power in the primary contests in which people run for office.

And so that means that if you've got a Republican party that represents

30 to 35 percent of the populace.

If you control the votes of 17 or 18 percent of the populace, all of those that are Republicans, and they represent the majority and actually are a more strident and active part of the party, then

55% or 52% of the Republican Party, if they're active, can control who the candidates are for that party.

And that number constitutes a very small minority of the United States because of the fact that...

such a small portion of the United States actually identifies as parties, right?

We have a Democratic Party that might represent 33, 34 percent of the population of Republican Party that's close to the same.

And then we have these undecideds that are almost the same size.

And so what that ends up doing is causing a party's

majority, which is a significant minority in the country, to control the candidates.

And it's that control that has been exercised, I think, by Donald Trump so effectively.

So, Sandy, you're the economist, but I keep, as I'm seeing this, you tell me if I'm painting the wrong picture.

It's not just, you know, I've been around enough recessions in my time.

in this nation to understand the pain and how when you at the time it takes to come out of it where the average person feels the relief it doesn't happen overnight but we're watching this crescendo building for a global recession Sandy which which really you know

bodes not well for the American people and a longer term suffering because of the globalness of this situation.

Am I am I seeing it wrong?

Well, no,

you're not.

No, you're not seeing it wrong.

And the other thing that's that's very concerning.

I mentioned earlier the annual deficit which we are currently operating at this 2.1 trillion dollar projected deficit this year and it's very firmly projected the the the office of budget I mean there are two different

projections.

One's 1.9 trillion.

The White House, who's who would be the ones who would be interested I would think in projecting lower, projected at 2.1 trillion.

And we've already experienced well over a trillion deficit in the months that we've already experienced this year.

That represents a 5.6% or more than 5.6% of the GDP.

Now,

We've experienced higher percentages of GDP deficits, but only during periods of emergency.

We had, during the World War, we had deficits that were in the range of 30% of GDP, or 20, and near the end of the war, they were at 21% of GDP.

In the 2009 recovery from the financial collapse of the country in 2007-08, we had a deficit that was 9.8%.

Okay.

But we've never had deficits in this range of six to seven percent, which is what's being projected as the trend we have now for deficits in periods of prosperity.

And the problem is that if we have a recession,

As I said before, the recession in 2008, which was a deep one, required that we have a deficit in almost 10% of our GDP in order to claw our way out of it.

And we did claw.

It wasn't an immediate recovery.

The Trump victory in 2016 was largely because he described a recovery which he thought was too slow.

And so we won't have the capacity to increase our deficits from the

$2 trillion level now to what would be $4 trillion or $5 trillion in the circumstance of needing to climb out of a deep financial crisis.

And so that limitation alone is causing the rest of the world to have concerns about the US dollar and the ability to invest safely in the US dollar.

And as I said before, the interest

payment alone in our annual budget is a trillion dollars.

That's what the weighted interest cost on our debt of 3%.

3% is a historic low level.

We were coming out of a period the last 10 years where interest was at an all-time low level in the 0-1.

percent level.

We're now at a three percent level.

Every time we refinance the debt that matures and expires that's already in the package of our debt portfolio, our average interest rate is going up because we're refinancing at four and four and a half percent.

And as the world might lose confidence in our capacity going forward, they're going to demand even a higher interest rate on our treasuries.

So the 10-year treasury level

could well rise to five or five or six percent.

And incidentally, at five percent average interest in our debt, the annual interest cost of our current level of debt will be $1.7 trillion.

So, you know, this is not something we can ignore, except that we have a party and maybe both parties in Washington.

who aren't talking about these issues when they talk about all these additional expenditures.

So Sandy, inflation's up 3.8%.

All these different factors poured on top of it.

Again, you're an economist, inflation is difficult enough to bring down on its own when it's mixed up with all these other things.

That can't bold will

No, I mean that the mix of tariffs and the in the promise the tariffs will increase costs The the fact that Balkanized countries will reduce competition and that alone will increase costs.

We have war shortages

that are substantial ongoing now that our shortages of course always create inflationary pressures and in fact in major wars we end up rationing things to control the prices that would otherwise go sky high on short products.

Yeah we've got a bunch of things mixed together that are conspiring one to create more long-term inflation and inflation requires

has a direct result of causing people who lend money to charge a higher interest rate because the money that gets paid back on that loan is worth less than the money that was lent because of the inflation.

So if inflation is

five percent a year, you've got to charge an interest rate that gets you some kind of real interest of two or three percent above it.

So you're going to charge interest of seven or eight percent.

And there is a normalized spread to create the real interest earning above inflation for treasuries, which would say that at four percent inflation, you need to have a six or six and a half percent interest on treasuries.

So Sandy, this conversation that we're having right now,

For the average American, such as myself, we don't understand all of those numbers and all of those figures.

And we don't understand the long-term ramifications of this conversation that we're having right now.

And we don't realize that it doesn't turn around because there's a new president.

maybe in 2028 these things, 2027, they don't repair themselves that quickly, do they?

No, I mean the repair the only repair for a national debt that gets sort of out of line and gets too large as a percentage of our GDP or the interest costs on the debt the debt servicing costs that become too large compared to our annual budget and And the only solution to that really is to have the GDP grow at a faster rate than the debt grows so that the GDP which is essentially if you look at it, it's the

If you kind of try to compare this to a family kitchen table, the GDP is the family income that is used to pay the costs.

The GDP for the nation is the income of the entire nation that's used to pay taxes to then pay for government costs.

And if GDP gets large enough, then these expenditures for the government and the deficit become a smaller percentage of it, and they're tolerable, just like a mortgage, which can be a tolerable debt burden on a family, so long as it's small enough.

But we're headed in the direction of getting a national debt overhang, like a national mortgage, which is not sustainable because its annual carrying costs

eat up too much of our national budget.

And if you do just a shorthand analysis of our national budget, our national budget might be six and a half trillion dollars.

One trillion of that is defense.

A trillion of that is interest.

One point

$9 trillion of that is Medicare and Medicaid, and $1.7 trillion of that is Social Security.

You add those up, and there's not much money that's being spent on everything else so that the discretionary budget outside those sort of untouchable numbers is quite small.

You could eliminate all of them, and we would still have a budget deficit this year of more than $1 trillion.

So if you increase defense expenditures by $750 billion, and you only take care of offsetting that with either cost reductions or tax increases of $750 billion, the nation is still operating at a $2 trillion a year annual deficit.

And so the structural

That's called a structural deficit problem.

We have a budget that doesn't have much flex in it and we're operating at a deficit that is really, I would call it ginormous in terms of historic perspective for prosperity annual deficits.

And it's operating at a deficit level which is growing our debt at a rate far faster than the GDP.

So

Sandy, can you explain to those of us again who aren't economists

how it's possible that job growth can continue in the face of all of this.

And, you know, the stock market continues to escalate.

When all the signs say that this catastrophe is happening, how is it possible that those things are still happening?

Catastrophe isn't happening right now.

I know.

We're on a trajectory.

We're on some trajectories that are very troublesome that need to be rained in and modified or the sun, the moon and the stars is going to line up sometime in the future for catastrophe.

But right now we're riding some crests that are

preserving our situation.

Number one, during this period of instability internationally, and particularly this war instability, the shortages created of oil has caused people in the world who are investors to seek a safe haven for their money.

The safest haven for their money does remain the dollar right now in a world of uncertainty until something steps forward to replace it.

And of course, there are people out there in the

back rooms of international diplomacy, trying to figure out how they can replace the dollar as being this stable place for safe haven seekers to go.

But right now, the dollar is the safe haven.

And that sort of restores or holds on to the strength of our financial markets.

With respect to jobs, the world of consumption, it continues.

the debt of the personal debt in this country has reached a rate I think of I think it's 19 trillion dollars was just announced there was 29 a very large number and it's growing right now so that we're beginning to lean on on personal debt as a way to continue the rate of consumption we've got in the country but right now

The country's economy is relatively solid, but we're doing things to it.

We've got an administration which is apparently trying to test the timber at every edge of the economy's foundation to see

whether it can withstand the assault.

And while the pronounced reason for this is to strengthen the economy in the long term by returning manufacturing to the shores of America, there's no evidence that that's happening.

But Sandy, you, because you constantly talk about this, and this is a perfect example, the catastrophe is not happening yet to those with wealth.

But to the average Joe, they're living off credit cards.

And interest rates continue to climb on those.

The catastrophe is around the corner for the average everyday Joe.

And even the stock market and all those things are going great.

Well, yeah, it's going great for a handful of people, but the masses of the people are facing some dark days.

Well, the masses of the people are continuing to consume, which is what's one of the things supporting the economy.

But they're doing it by really stretching themselves to the thinnest limit they have.

We have over 50% of Americans living paycheck to paycheck.

It's probably closer to 70%.

We have many, many Americans in the range of well over 50% who can't absorb a $500 in their terms catastrophe.

That would be a catastrophe for them because they don't have the money saved for the purpose of meeting that kind of a hiccup.

We have a country filled with people who can't absorb financial hiccups and while you'd think that gasoline isn't that bigger percentage of the annual expenditure of any household The idea that you go to the pump and if your car requires premium gasoline like mine does

you end up spending $5.60 a gallon to fill your tank, that's a financial hiccup.

And that means that if you're going to fill your car and continue to use it as you did, you're going to have to find some other things.

Some other bills you either don't pay or some things that you don't buy.

And so we do have a large portion of the economy that is

that is feeling a substantial pinch.

And while they are not in recession, they are definitely in financial shock.

So Sandy, the farmers and just reading about them, it hasn't hit yet, but it's on the horizon.

There are farmers talking about maybe next year we won't be able to afford to even plant.

They're already looking at it almost a year.

ahead, barring some unforeseen miracle happening, if the farmers and many of them are going out of business.

Well, farmers are basically required to plan ahead, right?

When you plant something, you don't harvest it for six months or five months.

and you've got to plan what you're going to plant.

You know, they are looking at a crystal ball all the time.

And so, yeah, and the current shortages, this petroleum shortage has a huge impact on the cost of almost all of the kinds of fertilizers that farmers use.

And they also are, they're heavy petroleum users in the process of farming as well.

So costs are a big problem.

And if the world balkanizes as

as the United States is sort of threatening to continue to require it to do, the international demand for their agricultural products could diminish.

And that's in large part what supports the buoyancy of the price of the goods they sell.

If they're restricted to selling goods in the United States, that's a much different.

marketplace for agricultural products than the world at large.

You know, Sandy, for those who may not know you, like I know you, you've always been an optimist.

And even in some of the darkest times, Sandy was always that guy who's the optimist.

And what's frightening to me is that optimistic Sandy that I've known and calculated guy

is now starting to say, hey, I'm not so

optimistic anymore.

Well, one of the reasons I'm optimistic is I do believe in markets.

And I believe that markets are self-healing and markets make adjustments that kind of fix things that seem almost unfixable.

But what's happening now is that we have a government that's

playing in the markets in many, many ways.

Tariffs are not natural market mechanisms.

They are unnatural market mechanisms.

They actually impede the marketplace.

Many of the policies of the country are being set from a direction of essentially autocratic control rather than letting the marketplace operate.

And so it's kind of surprising because you would think that a Republican administration would be, from a libertarian standpoint, much more market-based.

But we've got an administration now which seems to want to tinker with markets, play with markets, control markets.

And that impedes the capacity of markets to repair themselves.

So Sandy, when is the Calvary coming?

So we're waiting for the Calvary to come.

And so I wanted to ask you about just the American people, a difference in how some Americans are looking at this situation and others aren't.

I wanted to talk with you about.

the American people because we we we idealize about the American people being one people.

And so we're the Americans.

And so we're going to we're going to we're going to fight this thing together.

We're going to pull together and we're going to make it happen.

Sandy, we're as far away from that.

I think as we've ever been in my lifetime.

Well, I think where we're at right now is an eye-opening time where we're going to find out what it is, what American values are.

We've always given lip service to what American values are, and they're quite a lofty list of things that we value.

The current administration has thrown many norms to the wind, almost all of them, in fact.

And we have a political process where civility has been cast aside.

We have a political process which is open and notoriously partisan in all ways, so that the partisan victory in a statehouse

leads to essentially the capacity of the winning party to plunder the political process in a manner by redefining boundaries of districts, both statehouse districts and congressional districts, to most favor the winning party, so that the example in Wisconsin where this has been going on for some while, we have a state which

right now appears to be somewhat a thin majority blue, definitely purple.

And yet we have a state house, which is dominated by Republican representatives.

And it's not just dominated, in some periods, we've had super majorities of Republicans in the same time that we're electing Democrats.

I was talking to a friend of mine in Georgia.

Georgia has two Democratic senators and a state house that is overwhelmingly red.

And so we've developed processes in this country that are going to slow down the capacity of the country to self-heal to the extent that we have maybe an administration in place now that is out of step with what the majority of Americans would like to see happening.

It's out of step with what the majority of Americans might describe as their values.

But the American

political system is going to present us with an array of candidates and with administrations and policies, which are going to reflect something that the rest of the world, at least, will measure as being the values of Americans.

And so I think what's interesting now in these next elections is we're going to find out what Americans value and what our values actually are.

But I think

it's going to be clouded by the fact that in at least congressional races, the gerrymandering of districts is going to is going to dilute the capacity of the majority of the American view to actually have an impact on the house.

And that's why there's all this 11-hour redistricting, because those with partisan power are measuring the wind in the political processes.

they're taking polls everywhere, and they're trying to figure out how they can redraw the district lines in a manner that will, from a mathematical standpoint, absolutely maximize the potential representation of, for instance, the Republican Party, given the numbers of Republicans who will be voting and where they vote.

And that

kind of mathematical manipulation can substantially change the

percentage of, for instance, Republicans in Congress as compared to the national view of the policies they would like to see implemented.

So I'm afraid that all of this gerrymandering is going to obscure the ability of the American public to exercise their will and describe through voting what the American values actually are.

So, Sandy, that group of Americans who buy into America first and

And they, oh yeah, America first, that's, we want to make sure you're America first and rah, rah, rah, sis, boom, bah, America first, America first.

It sounded good, right?

It sounded good.

But America first, the way it's turned out is, hey, we're going to tell everybody else we're going to take care of ourselves and the rest of the world be damned.

The rest of the world is looking at us.

And what made America first was its relationships with other nations.

And now we've got somebody who's destroyed that, Sandy.

It's not America first anymore, it's America on an island unto itself.

And so that can't be a good thing long

term.

Well, like I said, and I've said earlier, time will tell.

I think it's not a good idea.

I think I'm still here.

Yes.

Okay.

Go ahead.

I think, you know, personally, my projection in a crystal ball is that that's the wrong trajectory to be on, that America can be the most influential player in the international environment if it continues to be a player in an international environment and does not try to simply dominate.

internationally as the current trajectory would suggest is its current role.

And this notion of imperialism for resource purposes, our actions in Venezuela, we take a second rate power country.

We decapitate it.

We then forge an alliance with the number two person who's in the same regime.

And the only concession we get is that American oil companies will now have access to Venezuelan oil properties.

But we don't exact any other kind of requirements from them, including the civil liberties problems, which was the main

express concern we had with the Venezuelan regime.

So our international policy

is, like I've said in an earlier podcast, we're saying the quiet part out loud about American imperialism.

And it'll be interesting what the American public thinks of that.

But like I said, my only concern is that the way we've gerrymandered, I'm not sure that the American public is exactly what gets voiced in our voting processes after redistricting is carried out to the max.

The worst part about all this, Sandy,

And you, a year or so ago, you went through Project 2025 on

the

air.

And so the frightening part about this is some of us believe that once Donald Trump leaves, the Calvary has come, and all of that disappears with Donald Trump.

But that's not the case, is it?

This is not

one guy Well, no, I think it's not project 2025 was not hatched.

In fact, I don't think Donald Trump was he was his brainchild at all.

I think it was Russell vote.

I think it was the Heritage Foundation I think it was a bunch of it was a think tank of conservative thought and and it wasn't even libertarian conservative thought it was a it was a conservative thought that relates to a concern about

the operation of government generally.

But yeah, my concern about the cavalry is, like I said, there's some sinkholes.

The cavalry is going to have to navigate around.

Yeah, because the redistricting process is slowing down what would otherwise be a more unified kind of a cavalry response, possibly.

We'll find out how much of what we're concerned about today is the result of Donald Trump's personal intuitive gut analysis and action, impulsive action, and how much of it is actually channeled, the new version of conservatism.

I think that...

Much of what's happening vis-a-vis the government in terms of the assault on the various departments of government etc are the result of a new form of conservatism and not just Donald Trump's whim It could be that our international affairs on the other hand are the result more of a personality, but we'll find out we'll find out

so Sandy We can just I mean you just continue to look at the straight

of her moose and that just doesn't seem to be a way out of that.

Trump went to China in hopes that he was gonna get some support.

That was the whole purpose of him going.

And he didn't get what he thought he was going to get.

And so now we're stuck.

and Abyss Sandy, if you will, because where else can he turn now?

I think when you've announced, like Donald Trump, you've basically announced that...

he was willing and interested in being a pariah and internationally.

He insulted and assaulted almost every country in the world, either economically through tariffs or personally through assaults on the personalities of their leaders or culturally through an assault on the culture of various nations.

And he basically said the United States doesn't need anybody.

In fact, he keeps repeating that we don't need your help.

We can do all of this alone.

We have this amazing military.

And I think by

by creating that kind of image for America, by through the conduct of America, not just the words coming out of the leader.

We've ended up with a situation in which there's very few people playing violins or concerned about any kind of problem that America might create for itself, including right now, for instance, Iran.

We actually, we took a...

It wasn't a pinata that we were hitting.

It was a hornet's nest.

And the hornets decide when they're going to stop stinging.

The hornets decide when the war is over.

And Iran is in the driver's seat.

And they're an old culture.

They're a smart culture.

They're actually a...

quite a refined and large economy.

They have quite a refined munitions capacity.

And we found out that, you know, it wasn't just a Patsy that we were attacking and that they found themselves, they were able to discover the strength they had with the, with the Straits of Hermuse.

They had never.

before shut down the Strait of Hormuz.

And by shutting it down, they suddenly realized, we've got a real muscle here.

We don't need a nuclear bomb necessarily, because the streets of Hormuz are an international nuclear conflagration for the economy.

You know, Sandy, the hornet's nest is a great analogy.

Unfortunately, it is kind of, it's the truth, right?

And so here's, so when we're asking for double what the Pentagon budget was, and everybody else is watching where all these expensive armaments that we've had and all of those things, and we're kind of looking at, hey, those things you almost don't need anymore.

They what they've shown is you don't need to spend all of that money Sandy On all of these great weapons like Donald Trump.

Oh, it's the most beautiful to be to bomber.

Oh, it's just wonderful It's and those things are like paper Tigers Sandy when you see that now Nations are realizing hey, we can take on the great United States of America We can withstand which is what Iran has done

All of that, and we'll send our little, you know, paper tigers.

Well, you know what, the same happened with Ukraine and Russia.

You're right.

You know, the fact is that war has changed, but it hasn't really changed because there's never been a circumstance where, and, you know, go back to Rome, I suppose, in the legions of Rome, but, you know, you have to occupy a country to control it.

You can't just bomb it.

and then walk away and think that you've necessarily made a permanent change.

We found that out in the mid-east.

And people have been finding it out in the mid-east forever.

So history was there to give us this lesson.

We didn't take it.

We seem to have a short memory.

But the process that we're in with Iran

represents a serious problem for the United States that would require for its easy resolution in international coalition, which we are no longer equipped to create.

This is part of what history is going to look back on and say, the United States used to be the leader of international coalitions.

And in a very short period of time, it became essentially the destroyer of international coalitions.

And what clearly is the new

regime's thought is that we can create hegemony of the great powers.

We can have a Chinese power.

We can have an American power.

We see Europe as being so fractured because it's a bunch of countries who have formed a very tight economic alliance called the European Union, but they aren't necessarily a homogeneous

power, and then there's Russia.

So we've got, you know, the three powers.

Someday India might well emerge to join its ranks.

But we think that we can exercise this world diplomacy and everyone in the world, all the smaller nations will have to line up and decide which

of these major nations they will ally with.

We've declared that the Western Hemisphere is ours.

Apparently we're ready to see that the land mass of Eastern Asia is China's.

And so that's a far different view of the world.

It's a view of the world that used to be held in 1800.

But

Sandy, we sit here helpless as the American people, seeing

that the landscape has changed as it relates to fighting these wars.

And we're getting ready to ramp up our industry to build even more expensive weapons of war and continue to build the latest models of all these things at a time when the American people have, and we're telling the American people to suck it up.

the president of the United States said the other day, Sandy, I'm not concerned about what the American people are feeling.

What?

How do you, how do you say that in front of the entire world?

So if you're feeling that way, shouldn't you do that in the dark where?

Well,

Yeah, I try not to get too blustered by the bluster of an individual and the words that he says.

But I think what's startling is that we're now talking about trying to create a bigger

military economy, while at the same time we have a healthcare economy that is over 20%.

So we have a healthcare is more than 20% of the US economy.

We have a military that probably is moving in the direction of 10 to 15%.

So we're beginning to have an economy that's completely dominated by things that do not really create strength internationally.

as in terms of being a vital economy.

That kind of an economy with so much devoted to defense and so much devoted to health looks a lot more like the economy of the Soviet Union a long ago.

It's not a vibrant economy from the standpoint of having sustainability.

It's kind of what destroyed the Soviet Union.

Yes.

I mean the Soviet Union got to the point where it didn't really have its own economy and yet it was isolated from the rest of the world and it was teetering.

We need to make sure that we develop policies that cause enduring financial stability, enduring financial success.

And we're in financial sustainability.

And I'm afraid that the people in Washington are blind to all of those kind of things because their planning horizon is so short.

We talked about that on an earlier podcast as well.

This foreshortened planning horizon has caused Washington to become really unresponsive to all of the problems of the future.

And the one thing you can say about China, it does have an autocratic regime, which does have a long-term future in its perspective, is that they are operating and have been operating.

moving in the direction of a resilient and prosperous long-term future.

And just in the 10 years from Donald Trump's first visit to China to this one, China's position in the world has become even more powerful.

And we were talking about how powerful it was in 2016.

So, Sandy,

how is it possible, you know,

China over the last several years has kind of been in recession, been in a tough situation economically.

And yet, we're not seeing it or maybe, you know, maybe we are seeing it and we just don't get a chance to see it.

But have they dug themselves out of that or are they still in that?

And they look at it or they handle it differently than we

do?

Well, number one, I don't think they were ever in serious recession where they had a declining GDP quarter after quarter.

We were identifying their slower growth rate.

I mean, they were coming down from double digit annual growth rates of their GDP into the 5% and 6% range, and their growth rate became...

quite small for a couple of years as they develop some problems internally associated with the hyperextension in the real estate market and some other things.

But no, China's been very capable in terms of the way it's managed its economy.

It doesn't really have a centralized economy, but it has a government which seems to understand how to allocate government resources in a manner which

protect and the resilience of their of their national marketplace and their international position.

And of course, the United States has done a lot of things which have probably in the long run helped China in terms of that.

You know, Sandy, I often hear you talking about the power of the American dollar and the world currency and how

And how endangered is that?

And if we possibly lose that, the long-term ramifications, will it be easy to get it back?

Or once we've lost something like that, is it going forever?

I think when you lose that, you've lost it forever.

No one talks about the British pound coming back to the international reserve currency.

And the dollar will be replaced by something if it is.

And I fear that all of the current policies are really all vectored in the direction of causing us to have the dollar lose its reserve status.

And there are some other pressures out there.

I mean, this whole notion of cryptocurrency and the use of cryptocurrency internationally.

Could become not meant and by cryptocurrency.

I do not mean the stuff that Bitcoin Yeah, the stuff that you that you invest in as a as itself a commodity I'm talking about stable currencies stable coin and a stable coin could be for instance I mean the dollar could be converted to a cryptocurrency and and I suspect Futurist would look at things and say yeah, the dollar will ultimately be handled in a crypto manner such that it's transactions

are done through computers using blockchain as dollars.

But what we need to do is reflect on the situation and the things that make the dollar so attractive as a reserve currency.

And they can't just be the artificial things.

They can't be the petrol current, the petrol dollar agreement that Nixon forged that has supported the dollar since 1973 by having all

Petrol, international petrol petroleum.

transactions done in dollars.

But it needs to be the situations that create the stability for the dollar, the reliability of the dollar, the reliability of its value that make it the thing that people want to have their money rest in when it's not being used as a transaction, and the predictability of its value for the purpose of the transaction itself.

When you enter into a transaction, the parties want to know what they're selling.

their widgets for six months in the future, the widgets are going to be delivered six months in the future.

What is the price that we're going to receive for them?

What's the real value of the price we're going to receive for them is what the buyer wants to know, and the seller wants to know the same thing.

The dollar provides that stability.

It doesn't fluctuate very much in that six month period, vis-a-vis other currencies.

If the dollar begins to fluctuate dramatically vis-a-vis other currencies,

it's not a very attractive thing to use it for.

So

Sandy, 2,500 cargo ships and tankers are waiting in the Gulf of Hormuz and they continue to pile up.

And even if they opened it up tomorrow, you can't just, it's not like you're going to open it up and 500 can get through in a day.

So long term, the way this continues to back up, even if there was

a remote chance that they would open this up inside of a few weeks.

The pain is only going to get worse, right?

I mean, that's the

part of this.

Yes.

Not only is the pain going to be worse, but if the solution is not a reliable

predictably reliable solution, the risk of transit through hormones will begin to get baked into the cost of the oil that goes through.

or moves.

And so, you know... You mean even if it's reopened?

You mean even if it's reopened?

Yeah, sure.

The risk of loss, the risk of stoppage is something that if it's a material risk, it will get priced into the product because, you know, it's a problem.

And it's a problem that needs to be addressed and financially people who buy and sell things will bake that.

that risk into the price.

And so one of the things that maybe Donald Trump doesn't recognize is that stability is a very important factor for long-term stability is the oil that lubricates the international system and allows it to operate smoothly.

Instability creates friction, which slows things down and increases prices because it creates risk.

Risk might be fun for people who like to speculate, but risk is not fun for people who are simply in the business of commerce, moving things from here to there and buying and selling.

You know, the worst part about it, Sandy, is you're talking about a guy who doesn't even, because he's so wealthy now, he and his family, he doesn't even see any of those issues, those things as issues that,

impact and effect the area that he's involved in.

He can't even feel what the average guy is feeling, because now he's what?

He's double tripled his wealth.

Well, I think a problem, and I'm not necessarily knowledgeable about this, but to the extent that crony capitalism is what's going on in terms of the notion that people who are close to the current president are entitled to have information that allows them to profit substantially.

What is true, what I said before about volatility, volatility isn't good for smooth operations, but volatility is very good for profiteering, particularly in the circumstance, if you have a better understanding of what direction the volatile market is going to move in advance of when it moves.

And so there are cynics who would suggest that much of the volatility of today is creating

massive profit potential for people who are trading it.

There are investigations begun already to try and figure out whether there is advanced knowledge on a crony basis that would permit unfair advantage and vast profit making out of it.

But the bitter irony is that this kind of volatility, while it might be profitable for some, is very destructive to the prosperity of the masses.

damaging to the prosperity of the world at large.

So last thing, Sandy, where's the bright light?

I think what's interesting to try and fathom is what happens next and what happens after that, you know, tomorrow and the day after tomorrow.

How does this unfold?

Does it unfold and unravel or does it

I don't know if this is a word.

Does it re-ravel?

You know, things can unravel and they can maybe re-ravel.

And there are those who, I hope, I think that re-ravelling might be a potential going forward.

But nothing ever would re-ravel to be exactly what it was in the past, because the knowledge of what has happened changes the future and it changes the view of the past.

I think the re-ravelling of America, maybe that's a book title.

I think the re-ravelling of America is going to be a very interesting process.

So that wasn't the last thing.

This is the last thing.

And it's completely different from the subject we've been talking about.

Taiwan.

All this time we've been talking about America's relationship with Taiwan.

And we're not going to let anything happen.

And if Taiwan is we're going to protect them and we're going to do that.

And the president, she said, Taiwan is ours.

It belongs to us.

He said this openly to the president of the United States, Sandy, presidents over and over again have been reassuring Taiwan.

that they're going to remain independent.

We're going to do everything that we can.

And now President Xi, before the entire world said Taiwan is ours, and if you get involved in it, basically it's going to get ugly.

Well, you know, I think the realists and in the United States Congress was quite realistic about this in 1979 and they you know, they passed a legislation that basically recognized that the one China, you know the China policy recognition which was that Taiwan was part of China the only caveat there was that they said that the United States would consider a physical assault on Taiwan as something which they might need to support Taiwan with

potential defensive support.

And so I think the art has been so far that we've just never taken this to the point of forcing China to assault Taiwan in order to assert its control.

But I think everyone with knowledge, particularly in the Pentagon, understands that

Taiwan is an indefensible island from the United States standpoint, and that an effort by the United States to intervene to defend Taiwan against a takeover by China would be doomed, and it would be doomed in a massive kind of a failure way.

It would make Iran look like a simple problem.

The bluster of American politics is what's created this.

We have had domestic bluster to talk about Taiwan.

probably supported in large part by the weapons industry because the weapons industry has profited mightily because the United States government has approved the sale of massive amounts of weaponry to Taiwan, not enough to defend Taiwan adequately.

I mean, it would make China have suffered losses in the circumstance of a physical assault on Taiwan, but it would not be enough to sustain Taiwan against that assault.

But all of that has gone together to create a domestic situation in which we've, and by bluster, talked about how Taiwan is an independent nation.

Incidentally, Taiwan was never asserting that until the late 20 teens.

They have not.

been active about asserting their right to absolute independence and recognition internationally as a nation from China.

And the business leaders of Taiwan, particularly the one who heads the Taiwanese chip manufacturer, doesn't want to be liberated from China, doesn't want to be separated from China, because many of their chip manufacturing plants are located in China proper as well.

So I think

Well, I don't necessarily agree with the current administration of many policies.

I think that it would be better if the United States worked out a process with China that that resolved the question of Taiwan and made it clear that China was never going to have to invaded Taiwan to assert its relationship with Taiwan, whatever it is.

All right,

my friend, we got to leave it there.

Always great talking to you.

Another great what's going on with their lingual with none other than my good friend.

Sandy William, Sandy, we'll see you on the other side.

Okay, see you.

All right.

Have a good weekend.

You too.

All right, that's a wrap for what's going on with Earl Ingram.

See you next time.