0:00Wow, that's a very big question. Okay, so effectively what's happened is there's a head of a lot more to come, just wait. And the worst worst case scenario in terms of how this can unfold would be if this drags on past a certain point, it becomes exponentially more painful for almost everyone everywhere. Michael Evry, Rainbow Banks global strategist, is known for his sharp contrarian takes on global finance. He argues the liberal world order is collapsing, reshaping the game for investors everywhere. Oil is not oil is not oil because I said if you take control of physical supply of commodities, you're doing it for two reasons. I want them cheap and I want you to have them expensive because that means but we're seeing a breakdown of one market price which is again a neoclassical or neoliberal assumed norm. What if the US tries to lock its own oil in? It doesn't send it to well then American oil prices would collapse and everyone else's would go up because what's at stake is not just the election which is huge which I'm but national security the broadest possible

1:03sense. Hey guys, I hope you've been enjoying the episodes I've been putting out as much as I do. For me it's been a great journey with less noise, more signal talking to all these experts all the time. With each and every episode I feel like I have new points to ruminate on, thanks to Ponder over and yeah I've just been learning so much so if it's the same for you I'd appreciate you subscribing to the show on YouTube also commenting with the episodes when you have something to say, like it and share with your friends and families and colleagues that would be much appreciated in that way we could reach more people with this great content and grow together. So thanks a lot for doing this much appreciated and yeah let's go. Hey guys, welcome back to less noise, more signal. Today I'm honored to have Michael every back on the show. It's probably the best person to talk things through with everything that's happening so I'm very glad to have you back, Michael. Yeah, cool for coming on. Thank you very much and thank you for the invitation.

2:07Yes and so you just told me you are a global strategist in economics and markets at Robble Research at Robble Bank or in Robble Research at Robble Bank. Yes, correct, that's my that's my title. Okay, that's amazing. Yeah, so sort of with that out of the way I guess yeah you don't need any further introduction. We had you on the show before if you want to give something anyways you can do so but then my first question would be to start off the conversation you know a lot of things that's been happening everything is unraveling so fast. So if you could kind of summarize what has happened since the end of that you know with the US Israel first attacking Iran and now yeah what is sort of the relevant sequence of things that have been happening up to this point in time. Wow, that's a very big question. Okay, so effectively what's happened is that for the past year and a bit the Trump has been in office. He has been using what I explained very clearly before he assumed of this on the day he re-won office economic state craft which is a whole of government

3:12whole of state attempt to redirect GDP for a purpose as I put it what is GDP for and he's been doing that aggressively really shaking the box on everything everywhere because he needs to change multiple things on multiple fronts all at once because they all conflate it's like trying to change a table and you have to change all four legs all at once while you're actually sitting at it. Very very hard to do and if you just change one the table topples over obviously you change two it topples over three it topples over you have to change all four simultaneously it says very hard naturally you're still going to see the crockery and the plates on the table shuddering around. So you know we went through various different iterations of that everyone fixated on tariffs and I said to people there's a hell of a lot more to come just wait. We finished off 2025 and in quite some style because I said well you know wait and see what happens with Venezuela because you know it's going to be interesting and lo and behold

4:13venevići vidi we actually saw Venezuela flip and so even though it's still run by the same regime as before it's now pro-tron problem antitron or willing to work with them so that was one dice roll he took geopolitically which could have gone very badly wrong and with that he really helped to cement his position in the Americas alongside Panama Honduras and you know others yet to be added to that list Cuba is high up on it of course in the background. What we've seen subsequently of course was a pivot to Greenland where Europe briefly thought it was going to be fighting the US which always seemed fantastical to me although we've seen headlines today the Denmark was considering blowing up the runway in Greenland because it was afraid America was going to land on it. How they thought that would actually prevent physical possession of Greenland given that the Americans have plenty of other ways to to do things you know it seemed to be rather symbolic to me but it underlines the depth of feeling and anger in Europe which is very very real but from the Trump perspective Greenland

5:15was another strategic choke point another strategic resource which it feels it needs to add to its selection to put itself in a stronger position in this game of grand macro strategy and economic state craft and where are we now well for the past three weeks of course we've been at war with Iran which is now moving from economic state craft and political state craft are you cajoling people I'm all bribing them to military state craft so we're seeing the outright deliberate use of the broad spectrum of American military power to again try to take out a regime it doesn't like to again get controlled of key commodities again energy here primarily in a strategic location on which will if it succeeds provide a platform from which regionally conceptually politically and geopolitically Trump can then turn around and say okay I have everything I need to implement all the rest of my grand macro strategy and I believe he can succeed in doing

6:21so if he can manage to squeeze out a victory here and if he fails he won't be able to but that doesn't mean we go back to normal either where we were before the invasion or where we were pre-Trump so there you go there's hopefully a two-minute summary yes now that that certainly works great I mean in the end you know in terms of the war that's kind of unraveling now I've been hearing people say we've just entered sort of a new sequence a new face you know because in the beginning was all sort of this new warfare with drones and whatnot you know and now Trump is also thinking about sending Marines to the Strait of Hormuz you know to kind of potentially secure the pathways there and so would you agree is this in our is this in a sense a new or a new face that we're entering now or where could this go in your view when when we look at the war itself can it kind of accelerate and escalate even more okay there's a lot to unpack there let me

7:21try and do it first of all while I have to talk about you know military matters I'm not a military man lots of people are talking about that during these periods of time not everyone's only just enough to say that they're not and the ones who are by the way while they have a fascinating angle to add they don't usually understand markets or economics or even the vertical side of it so that fusion of all of them is important and that's part of what this role is about anyway resting on the shoulders of giants shall we say to get together best possible view on this we are seeing some innovations in this particular war people are talking about drones well Russia Ukraine has been the drone war Russia Ukraine Ukraine everyone thought will be a tank war and it was initially it's become a drone war and the technology there is changing weekly and Ukraine is a world leader on it and Russia is picking it up in its own way too so all of us have already seen that at play Iran of course is a huge supporter of Russia particularly in drones and suicide is a Shahid is their invention it means basically the the suicide bomber effectively or the martyr and we're

8:25continuing to see innovations on that particular front we are seeing that something very cheap can destroy something staggeringly expensive we'd already seen that in Russia Ukraine we're now seeing it in around hormones and the gcc countries too that changes warfare significantly and it means we all have to have anti drone as well as drone tactics and that involves changing military equipment military bureaucracy military tactics so that's one thing the second thing we're seeing and again it hasn't come to fruition yet but the people who are looking deeply at this say there's a far better chance of it happening then maybe some of the press would let on is we are seeing a new strategy from Israel versus Iran which is even though we're on the other side of the world to you or 2000 kilometers is a it's a long distance you know there's no soldiers that are going to be out of fight face to face over 2000 kilometers the drones again can make that journey as Ukraine has successfully done with Russia and vice versa to be clear but the attempt now by Israel with local intelligence on the ground which is deeply entrenched there is to take out the regime figure by

9:26figure by figure on a permanent basis so as a new commander or intelligence officer or government official is appointed they gone so constant permanent rolling decapitation actually very low cost now flying jets there and firing missiles is expensive but eventually it looks like that could shift over to using Ukrainian style drone attacks to do the same thing along with the local intel and that really again changes how war can be fought everywhere so that's two points specifically on the war which have implications for everyone from North America where we've had reports of drones overhead where some members of the Trump White House or the Trump cabinet actually live we suggest that maybe Iran is able to project that to America potentially and at the same time we have a very very different category which is could this escalate further well in a worst case scenario not any kind of base case yes the GCC have not actually genuinely started to attack Iran yet not

10:27really they've threatened it and were they to do so that would significantly alter things significantly at the same time Israel in some scenarios could have to escalate even further that's a very dark scenario I don't think it's likely at all but it does have more than it's used so far shall we say or is widely assumed to have but above and beyond that Iran is not friendless even if no one is helping it at the moment and the worst worst case scenario in terms of how this can unfold would be purely hypothetically were Russia to say we stand behind Iran now they're tied down in Ukraine but they can certainly help them and were the likes of China and North Korea to do the same you know with both conventional and unconventional support and also with a spectrum of economic measures to try and force this to a conclusion again no sign of that yet to be very clear except a few rumors but that would be when things really get to the endgame kind of either de-escalation or escalation imagine lowering your text bill while stacking big coin with blockware

11:35you can thanks to new text guidelines you can write off 100% of your mining hardware costs in a single year blockware mining as a service takes care of everything so you can start mining big coin effortlessly visit mining dot blockware solutions dot com slash lnms and get 100 dollars off for your first miner yeah exactly because that would have been one of my follow-up questions from what I've been hearing and again I'm a total layman on this but from what I'm hearing is like to some extent Russia and China has been helping the Iran with with sending weapons that's at least from what I've heard and then so my question would be is the US is the US actually fighting a proxy war here with China you know given that China is sort of supporting Iran and then yeah as you just said it yourself like there seems to be a possibility that this could turn into an outright war with China and at some point which is maybe at this point not highly likely but

12:35but it is the possibility after all no well again it's not any forecast of mine I'm merely giving scenarios I don't make normative statements and I don't make specific declarations about how the world will be I put forward matrices of how things could be and then people you know decision makers can work through that themselves that risk is there and it needs to be something people are aware of and I know they are but that doesn't mean it's an inevitability at all and in fact you can and I have made the concrete argument of what we're seeing now ironically isn't attempt to prevent that because were the US to be able to win this in the near term let's say in another three weeks or so over three or four weeks which from an economic perspective which is a separate point maybe we'll come to it's hugely disruptive hugely disruptive from a financial market perspective hugely disruptive but from a geopolitical perspective if you say in just six weeks Iran were flipped effectively that's just a blink of an eye in terms of how you know power

13:39relations great power relations go so were that to happen and that's still the goal apparently or evidently that gives the US a concrete platform to really put its imprint on primary commodities like energy on a global basis and with the right economic military and political state craft that can then say to China look we don't want this to go any further we don't want that because at this point it really would cost you too it's going to cost us no one gets out of this Scott free but we now have control over x y and z and we're a better place to therefore topple a b and c next can we be friends can we find a modus vivendi so that's actually a bright spot that I'm trying to talk to and this morning I was mentioning to somebody else let's do a counterfactual we didn't fight a war in Europe in 1938 over the Sudayland if you remember your European history you're familiar with the Sudayland yeah yes okay so instead we had a

14:45piece of paper saying peace for our time not in our time for our time and we didn't have this actually whether you do or don't like Chamberlain he'd bought time to rearm with that particular you know false promise at the expense of the Sudayland which is you know something you can discuss historians will still debate it left right and center but I would put this sliding doors scenario to you what if we had fought the war in the Sudayland hypothetically and one how many people would have been pulling their hair out saying look at the bloodshed and the loss of life over the Sudayland it's terrible and shocking et cetera not realizing that in one hypothetical scenario that may have prevented World War II so again but who knows what else could have happened but you see my point there are always possibilities in everything rather than just negativity yeah exactly and to some point I mean some even maybe the sarcastic people are saying you know in the end Iran in and of itself kind of depends on Israel and US to exist you know that way the regime

15:47itself can kind of peg this picture of its us against these outsiders you know who have a different religion and everything and at the same time we could also argue Israel needs Iran to kind of exist you know otherwise a big enemy would be gone you know and then that kind of changes things on on a on a big scheme in that sense some people at least are arguing I don't believe either of those for a moment but okay okay now that's good but I want I want to actually get to something else you know it's like because I'm still grappling with like why is the US really doing this and the confrontation with Iran you know because some people say it's because Iran has accelerated it's highly enriched uranium production you know others point to it wants to really hurt China a third group is saying yeah it's all about bombing their way to democracy and Iran you know to get this Iran regime change because it Iran the regime is opposed by roughly 80 percent and so somebody has to do something about it you know there's all these different arguments

16:47and I guess what is the real reason how do you you this I guess you have a different perspective altogether well I think the one we can discard immediately is bombing our way to democracy the US evidently doesn't care about that and by the way with for good reason because one is wonderful to go around the world saying we'll bomb people into being like us the track record of that is just catastrophic failure so I think we can comfortably dismiss that because they openly say it and they don't show any signs of doing it they would like a regime shift i.e. a faction of the uranium regime of which fragments may already exist agreeing to work with them all of Venezuela and were Iran to become you know something slightly more secular and slightly more western etc and more democratic they'd be delighted with that but that's not something that they think they can impose and the uranium people are expected to do it they are trying to clear the path for that by getting rid of everything in their way so that they're they're not going to be shot down or moaned down in the streets as they were in January when anywhere between six and 32,000 people were killed according you know to a variety of different estimates so I think we can dismiss that the others

17:52this room for debate you can ask the question why now I think there is healthy skepticism about whether it was or wasn't to do with the nuclear issue but certainly I have heard from very good sources that Iran did boast openly to US negotiators during the negotiation process we have enough uranium for 10 nukes and we intend to make them so whether they were just attempting to try and force the US to back off and boasting or not that's not the kind of thing you say in a negotiation and then expect you know someone like Donald Trump to just walk away from because for all the taco memes that we see all the time I don't actually see that many of them in markets or the best a tactical retreat to then advance on another front so that one strikes me as question mark but certainly something the US couldn't afford to take a risk with so then logically it either comes down to hubris or not having a plan which again you can put forward an argument for but everyone tends to line up on ideological grounds there whether they are on seeing that or you say it's about China which in my view is the case because everything that the US is doing even sometimes

18:58when it goes backwards in order to go sideways and then forwards again so far to me has explained what the US is doing and it's done so ahead of time so and let me use this as a methodology because it's very easy to come on podcasts or on the news in general just write a report and just pontificate I try not to do that I try to have a logical framework on what's going on and to test it and say if I'm right in my hypothesis that this is the motivation for these players this is what they're trying to achieve I would expect them to do x y or z and for example ahead of your own war I was asked what do you think they'll do and I said I think they'll try and topple the regime so that someone emerges they can work with and get rid of the nuclear weapon threat and get rid of the ballistic missiles and get rid of the drones and smash the military industrial complex and then try and rearrange them at least afterwards so it suits them and so far all of those are what's been done but that's just one small example and I put it to you to your viewers and to everyone can you construct an overarching thesis which explains everything you're seeing flawlessly or

20:01you know with an 80% track record and if you can't then maybe it's just a comfort blanket that you're clinging to like blame them blame him whatever whatever and if not just revise your opinion read other things read other disciplines read other sources question yourself again and again and try to get to a healthier view and if you do that you're much better placed than I have to navigate the real world and financial markets hey guys I'm thrilled to share my new book the Bitcoin Enlightenment co-author with Mexican billionaire Ricardo Salinas make sure you grab your copy now and learn about how one of the richest people in all of Latin America thinks about Bitcoin you'll find the link in the show notes no but but you're exactly right it's so interdisciplinary and it's so not monocausal in that sense as well there's like so many different factors that you have to kind of factor in here to to really understand the situation but coming back to China maybe because you hinted at it as well I mean if somebody can really not wrap their head around like how is it that the US is now kind of trying to rebalance the balance of power with China by going against

21:07Iran like what can be point to you know what are there after it in that sense you know well again it's a good question I'm glad I have the opportunity to unpack it it is generally asked by people no offense who don't understand what's going on because if you do everyone who does they may disagree whether it all work but they all understand that would be a logical strategy let me put it as simple as possible terms because of the status quo anti the US has it to a large degree deindustrialized while it has a fantastic military stock the flow is very low and we see that in the headlines all the day all the time China now dominates global industry and sector after sector upstream very much midstream and downstream vanilla everything that's needed including with a US military machine and China has the whip hand in particular over rare earths now I'm sure you're familiar with what rare earths are and if you're not you know one really should be because without them you can't make anything and so China literally can determine and dictate

22:07to other people can you or can't you build X that's what you call the real ability to put your foot on the hose so what the US is going to do I predicted long before they did it I said it at this point last year that the strategy would be where do we have our remaining strength military power for now for now global military power not just around our borders but internationally what does China as a massive manufacturer rely on commodities food and fuel at the base level food of fuel which it hasn't got okay what can we use our military power for to take control of to make sure they're priced in dollars that we can put our foot on the hose if we have to as a quick pro quo you don't do it I don't do it we're all okay and which by keeping them priced in dollars we can then turn to others who are on the fence and say will you invest in the US here here and here to help us build a factory faster and cheaper

23:10so that we can then re-arm re-industrialize and be in a position to say to China look you're not going to eclipse us you're not we're going to still be here where we are relative to you in five years 10 years 20 years 30 years you're not going to overtake us whereas now on the glide path you will they will have more aircraft carriers than the US in 10 years in some scenarios they can build them faster and cheaper so therefore the logical strategy from a grand macro strategy perspective my stick would be to say use what you've got where you can while you can to try and reorder the global financial system trading system trading flows and the geopolitical system and again at any point this can fall fall flat and my hypothesis is wrong so far it's been absolutely correct I believe and a great many others do too I think so as well it makes sense to me again as a layman you know and from what I hear it's really that the US tries to build up this levers as well you know that it then kind of can use against China in in terms of the rare earth discussion because

24:12that's been brought up quite a many times now what is the US doing about it like in an actual sense to get the hands on these you know is there a way they can also go to regions where they can secure these or is it that these are mostly just in the region of China or in Africa where China probably also has a grand great control over or like is there an actual thing they can do on that front as well they have done already while others are merely talking about it and most Western countries are just talking about it America has released a huge amount of capital directly from the government taking shares in firms already to make sure they do what they want when they want them to where they want them to has set up a public private partnership that can leverage itself up enormously in the way we traditionally only see in exotic derivatives and financial instruments but this is for the physical economy it's gone around the world shaking hands and making very very interesting deals with a whole sway the different partners from developed economies to emerging ones and in emerging ones in some cases literally saying to

25:15them we'll go and kill those guys over there for you if you let us have access to your minerals they're literally doing that rather than you know sending out the bureaucrats with telephone book sized contracts to sign it's like you know we get rid of them you give us stuff good good and also ripping off environmental regulations because most of these other resources are not hard to find they are very very very polluting to process which is why we haven't done it for a long time and China said we'll take that knowing how important they were very clever move from that very foolish geostrategically from us unless you presume everyone is your friend forever which is the kind of naivety that's built into modern economics and markets but not into global history but the other thing they're going to have to do now is of course put tariffs on the China equivalent because China sells so much more cheaply and possibly also then price flaws which that which they're saying to people that will always buy at this price so that you can produce and know that is guaranteed but then because that's so much higher than China you'll have to have a subsidy for the firm otherwise everything gets more expensive so you have a tariff price control

26:18and a subsidy and these are all elements of the economic state craft that I was talking about and none of them are allowed none of them are okay under traditional economic neoliberal neoclassical theory all of them are essential alongside more industrial policy and realignment in order to get them back into an industrial complex and a military industrial complex you can't build scale and competitiveness which is what China has using current market mechanisms and the US is doing it on steroids right now Europe's talking about it the UK is talking about it some of them are now joining with America to do it in some areas but it will be on the American dollar on on the American system and the flow through from that by the way is okay effectively an America will have the coercion power because you will be part of a flow from either China where they can coerce you or America and they can coerce you and I'm just being a realist and I'm not saying they will do that but that's how it can work so yeah tick for what they're doing but it's not instant it will still take time that's why they need to buy time by controlling upstream commodities energy

27:25probably food next to make sure that they are not coerced in the interim that's why yeah make make sense make sense to me I want to shift gear slightly you know and talk about markets because I know you have some spices things to say there as well and I mean one overarching question that I hear from fellow portfolio managers and people talking about this they're like are oil markets still sort of underestimating this conflict or what's happening you know because oil has been going up and then I came back down but now it's kind of stairwaying up itself again so yeah what is your take you know and and maybe maybe could we even compare this situation to COVID you know which was brushed away for a meaningful a long time as well until panic suddenly broke out or yeah any any parallels there again let me unpack that first of all what we're seeing at the moment at the time of speaking is something that I had previously flagged again as part of this

28:25particular grand macro strategy because I said if you take control of physical supply of commodities you're doing it for two reasons I want them cheap and I want you to have them expensive because that means you're not as competitive as me energy is a good one cheap energy expensive energy factories no factories that's basically the way it works so that's part of what we're seeing play out now in the energy price what we are seeing is those with energy have the whip hand over those who don't and as always going to be true but we're seeing a breakdown of one market price which is again a neoclassical neoliberal assumed norm that give a take a mile differentiation the geography and regulation we have one price for everything because you can shift it anywhere else you want in the world well right now partly because of geography in terms of where energy is trapped and where it is and where it isn't and where energy is demanded and where it isn't and the kinds of energy that's needed because oil is not oil is not oil you have different grades

29:27of oil which are used to make different things so some of it is used to make diesel which is used in the industrial economy for example or the agricultural economy or logistics and other parts of course make gasoline for driving which is a you know very different beast now there's a use to make plastics you need all of them in your economy but where refineries are located and where energy is located is very scattered and presumes a one-world system to cuddle long story sure right now even though prices are very volatile what you're seeing is a you know a trading price today of say Brent oil is a global benchmark of say around 106 but what you're then seeing is things like diesel and distillates and jet fuel trading at a premium of well 50 60 dollars a barrel on top of that which basically means you have a differentiation by product type and you have another one by geography so let's say you need diesel in Asia which is energy short that's the worst possible position to be in let's say you need a different form of easily

30:27available gasoline in a country that produces lots of it you're not going to see the same kind of price effect you'll still see prices go up because they're going up everywhere because a lot of energy is trapped in hormones and some of it can seal flow to different locations but it's a sharp differentiation and it's something markets are not used to seeing and briefly we also saw a big emerging gap between Brent and WTI West Texas where markets were starting to ponder what if the U.S. tries to lock its own oil in and doesn't send it to anyone with an American oil prices would collapse and everyone else's would go up so that is very important to stress the second thing to stress is while again I'm not an energy analyst those who want to read two excellent energy analysts should look at Joe Delaura and Florence Schmidt on oil and LNG respectively working for other research but what I would say is that everyone agrees the longer this crisis goes on the more exponential the damage becomes right now it's very difficult for some areas of energy in some locations in others it's painful but manageable if this drags on

31:29past a certain point it becomes exponentially more painful for almost everyone everywhere which is why we have such a focus on it and why there is a geopolitical incentive from both sides to escalate the U.S. and Israel need to make Iran give up and be defeated or defeat it and Iran needs to escalate to make sure they're scared off by market prices and go home ago it has to get much worse before it gets better but that getting worse can just make things worse or go harder or go home in that sense but I mean you can it can kind of also then get out of hand but I mean war is a losing game for everyone you mentioned it as well you know it's no is it why well I mean the end of World War II well yeah the allies yeah the U.S. one the U.S. one World War II who ended up you know Global Hegemon after World War II the U.S. now the U.S. did it pay for it did it suffer a great deal yeah well would you know would it have made that

32:31choice knowing it would get afterwards I mean ordinary people wouldn't have yet to make that choice but the plan is possibly so the only reason I'm pushing back is it's a very comforting mean to say like there are no winners in war there are that the winners yeah and sometimes you with you but you win exactly what I was going to say is exactly this I mean war like there is pain involved obviously but in the end somebody is doing it on because it with a goal in mind and as you said it yourself there's always winners to everything you know and so I mean but or you could also say some lose more than others or whatever but I mean is it true then that the US in a sort is in a pole position you know because you said it yourself I mean the energy picture is so complicated but still they're framed as the net energy producer which they are you know which is probably down to fracking I guess which is natural gas I mean I don't have that many insights there but like is that also that they they really have a lever to pull here as you kind of already established right is that true yes and no not as many as one would like if you were

33:36in their shoes because they also need diesel they also need some elements of the fuel spectrum which they don't have domestically and which it's still traded internationally and they don't have the refineries for it so everything is set up for a one world system rather than the US centric system for now and it's very expensive set up refineries it takes years to do it so you can't just do it overnight okay years of work and tens of billions of dollars so no they will still hurt from this don't get me wrong and you know possibly some sectors more than people would think particularly in a worst case scenario which is not what I'm forecasting to be clear right but importantly your question hits the nail on the head in one aspect which is number one in relative terms they come out of this looking fairly in relative terms so other geographies which have no energy or and or are much more dependent on international trade i.e. they are net exporters and their energy importers Asia and Europe for example yeah which should be

34:36it is exactly like Japan Korea and it's very it's very bad for them relatively so if you were about to get in a fight with someone and I said to you beforehand and this is hypothetical of course I don't like fighting right and I said okay you're gonna fight that guy and it's take it when it takes all you get everything everything you ever want forever but I'm gonna cut three fingers off of your left hand they're gone but I'm gonna cut off his right arm and one leg do you want to take that now if you need to win that fight I think any rational person if it's a kind of a permanent win kind of thing you know we live forever afterwards yeah okay fine I'm always gonna have that wound but I know I'm going to win whereas otherwise you could win you could lose and you can't afford to lose so that's the kind of scenario but not everyone is one arm in the leg some people might be either arm up to the elbow etc etc etc you get the point I'm making and of course one other aspect of this because you have to look at the motivations the US even if it is worried by this and let's not pretend they're not every time energy price is really hard to explode they try and talk them down and temporarily they're going back down again today

35:39on the promise that we won't allow any more escalation even our escalation is naturally baked into the cake in order to get de-escalation so the point being here is that Trump actually has the potential strategy of day on sorry week on week off day on day off depending about when he talks it down then talks you back up again oil of saying you know I'm either nodding control of this or stirring the pop so for example if people won't come to your side and help you I'm not going to go to hormones I'm not listening to you you started this war for example you know which is a very common and understandable piece of rhetoric a risk scenario is that the US can say well okay let's stir the pot at which point oil goes up another daily you know $10-$15 a barrel at which point people suddenly wake up pay attention and think okay right what can we do to stop this and then discussions start being had so it's what we use to call madman theory you know if you have a nuclear weapon and you're completely predictable about where you wouldn't won't use it it's not quite the same weapon as if no one knows if you'll use it or not if someone you know

36:42the on meeting in a bar is a is regarded as a lunatic and you never know whether they'll buy you a drink or smash a glass over your head you tend to do everything that they want or avoid them completely depending on the situation right and I don't think we can dismiss the risk that an element of that may be already present or emerge in this particular scenario at which point we will have even more volatility and again more escalation hopefully to de-escalate yeah that's that's so interesting and I mean as you said it yourself again you know there are these risks for the US you know diesel being won and I mean there are in this midterm year you know that Trump needs to win some election as well so maybe on the sideline you know but then I mean what I'm wondering because like if we entertain this thought of economic statecraft you know that you so eloquently elaborate you know it seems very realistic that we could see the US implement price controls on diesel for example you know something like this to kind of make sure prices don't get out of hand

37:43or use other tools of economic statecraft which just kind of interfere with markets which I feel like some people of my sort of realm now get get comfortable with you know they have never thought about this a year ago felt like oh no no this is all out of scope but now like oh the US could finally do something like this you know and so you've been saying you've been saying this for for for years I guess now and so but yeah do you see this as a realistic scenario obviously I guess yes and then what other tools could they be using potentially you know if we try to entertain please entertain the thought because it's the correct one again I'm not going to make a specific point forecast here okay that's not the point of the exercise the point of the exercise is as you said to change the thought pattern so that people do their own thinking in this particular way I would say you can't rule anything out because what's at stake is not just the election which is huge Richard but national security in the broadest possible sense were the US to be defeated here

38:49because it can't stand stay the course because energy prices go up voters get unhappy industry stars wobbling you know you you can draw the scenario yourself and the US to say right let's do a taco which I hear all the time and as I said I'm very very tired of hearing because I think it's wrong most of the time and word Trump just say right let's just go home Iran survives Iran rebuilds Iran would rapidly say to everyone else in the region US has gone now we still have lots of missiles and drones left to take out your energy and this you do what we want and Iran has been doing that for years up until recently attempting to exert influence and control over the region if it does that all of the energy which is enough to bring the rest of the world to his knees as we can see would be an Iranian hands who's a big friend of Iran Russia which has a lot of energy of its own what might the two of them want to do well look you can start drawing up scenarios and you can say well the US could steal with a conservation of other countries just say well we'll have north of South America and we're happy there fine where does

39:50it leave Africa where does that leave the rest of your Asia where does that leave the Asia Pacific not in a particularly pretty place and that starts up at like the 1930s so this is a very worrying scenario and if that's not going to be the case that the US thinks about doing that and they really do say right well we're going to say the course we're not going to become purely isolationist that's what's at stake and if that is at stake above and beyond the midterms to say oh we're not allowed to do that because it's like an it's an unwritten rule that is naughty or that's slightly opposed to the ideology of how we normally do things who cares who cares I mean during COVID during the during the GFC we did some of the most incredible things we had negative interest rates in some countries for goodness sakes right what what kind of world will we live in to think we could have negative interest rates but we did and we normalize that so anything is possible within the sphere of economic state craft if the stakes are high enough and I happen to believe they are

40:52if people don't fine you draw your own over-ten window where you think it works and you prepare for that I'm suggesting you should do otherwise if people want to do their own thinking you know and and kind of entertain this thought of what could be happening I mean the best way would probably be to look into history and look at similar periods or periods that could be kind of a role model for what's to come so any periods that you can point people to that they have to study if they want to kind of figure out what could potentially happen you know yeah everything has ever happened in history up until the stuff that people look at now which is on their Bloomberg screens which is irrelevant I mean particularly of course the 17th 18th 19th and early to mid 20th century and even the Cold War in the 20th century so that's a lot of material to draw from there and I'm not being flippant even though it sounds like I am the only area that's largely irrelevant apart from a few exceptions to the norm is the period that everyone thinks is normal which is the 1980s onwards in the Bloomberg world or financial market financialized world which is a historical aberration from a

41:57world where everyone thinks I have X you don't therefore I have power over you you have X I don't how can I get it from you rather than let's be friends and you know we can still be friends in that environment but it's always much more historically on I don't really trust you but let's see how we can collaborate here for you know for as far as we can go and very regrettably that is much of the global backdrop not for everyone you know there are alliances and there are constellations and and coalitions that can come together and I expect to see more of that which is great but it's not a one world system anymore and I think we should see that's absolutely the way it is and we all should be thinking about the possibilities again the spectrum of possible outcomes and the spectrum of possible responses that one would need to prepare and that's that's the best lens to look at the world from yes and no interesting last question you know I mean you've already given a bunch of practical advice obviously but I want to maybe summarize this again you know you can summarize it for us you know in this ever more complicated world of hours with people feel like it's getting more uncertain more complicated how do you need to think as a portfolio

43:01manages so you can really try to kind of understand what's happening here and then potentially yeah make the right decisions for you for your clients or yeah right so you start from again not telling people what to do but giving you a thought process if you're managing money okay which I don't do by the way so again not investment advice but conceptually start by trying to understand what do I think's going on in the world and why who is trying to achieve what where and how and I don't mean in markets I mean in the bigger picture that's actually not that hard to do even if it is contentious to a certain degree once you've done that then take a step back and think okay who's aware of that and who isn't so like who knows they're playing the game and who doesn't that changes things a bit and lastly turn around and say to yourself where would they want me to be within this and what would they want me not just to do but what would they want my outcomes to be within that and the whole point being if you're going to do something that is completely

44:06opposed to what you think they would want you to be doing during that it may not work out too well and if they think well I'd absolutely they would want me to be doing X great what return would they want me to be making doing that and I know that sounds really weird but it's one way of looking at it so keep doing what you're doing everybody but just try on a different hat put a different baseball cap on and just think for a while what would that mean and it's not just about the US by the way it's everywhere and it can give you early warning signals in terms of hang on if they want to achieve that that might mean I had to do this instead of that and you know the dominoes should knock themselves over for you yes no great yeah Michael thanks a lot for doing this I think I have to let you run you you're a song after men obviously nowadays and so you have another call to attend so thanks a lot for doing this and hope to get you back on the call at some point in the future so thanks a lot thank you take care bye bye