All-In with Chamath, Jason, Sacks & Friedberg

Industry veterans, degenerate gamblers & besties Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.

E72: Impact of sanctions, deglobalization, food shortage risks, macroeconomic outlook and more

E72: Impact of sanctions, deglobalization, food shortage risks, macroeconomic outlook and more

Sat, 19 Mar 2022 02:02

0:00 Jason's new "family office" and Sacks' new strategy

2:39 Understanding where all sides stand in the Russia/Ukraine War three weeks in

15:21 Sanctions risking a major food shortage: possible solutions, how we got here, creating distributed manufacturing and supply chains, capitalist incentives flipping

34:59 Breaking down the second- and third-order effects of the massive sanctions on Russia; best case/worst case outcomes for this new form of economic warfare, deglobalization

49:26 US economy big picture outlook: inflation, rising rates, decreasing uncertainty potentially a bullish sign in public markets; how that flows to private markets

1:02:06 Rewriting foreign policy playbooks

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I now have a chief of staff who's pretty great. He's worked for me for a while and he's he's doing a great job, but it's actually really helped, I will say that. And then I started a family office. Wow, Congrats. What does that mean? You have a place in your home that you call an office. There's an office. Is that the family office? Yes. The family goes in there to talk about office stuff. Where does Jade put the stickies that say we're out of granola bars in the family office? You gonna let your winners? Rain Man David Sasha. We open sources to the fans and they've just gone crazy. I'm going. Hey everybody, welcome to another episode of the All in podcast, Episode 72 part Do with us today again the Prince of panic attacks, the Sultan of Science, David Friedberg. Difference of fact. Ah yes, and also zephyr of Zoloft. And also, as you're hearing, cackling. The Duke of degeneracy, the dictator himself. Chamath Polly Hypatia. And, of course, everybody's favorite, the Rain Man himself. The drunk history channel. Uncle David Sacks. I mean, David, I I follow you on Twitter. You're tweeting 50 times a day. I was thinking the same thing. When do you work? What has happened to you? You you won't meet with startups anymore. I I bring you startup, she said. You know what I'm no longer like? Stuck in your room. I just. I don't do first meetings. That is the end of your career. Huge mistake. No, it preserves, it preserves my energy. There's nothing more draining than endlessly spending your day in first meetings. No. Why didn't you just have a short first meeting? Like a 15 minute first meeting? Well, that's what you know we have a team for is they have bad. You love it. They don't because we know exactly what we're looking for. SAS investing is very metrics driven. And so the first meeting, that's. Yeah, exactly. So it's like, you know, the first meeting we just find out do they meet our basic threshold for love it for growth. Different, yeah, exactly. Yes. We run the numbers and then I I will meet with them if they look good. I love this. I would like all VC's to take the same approach and I will let everybody know my DM's are open., I will take the first meeting. Sax, I need to call you after this. One of our businesses which is not in SAS has started to sell SAS software and we've already booked $40 million of ******* ACV by complete accident from zero. You stepped in it and I need some advice. OK? Yeah, let's talk. Alright everybody, it's been a bit. Of a crazy couple of weeks here and I we have to start with the war in Ukraine and and do a bit of an update. It's been over 20 days. The death toll continues to climb. We don't know exact numbers here. It's very hard to get information. We're not experts, we don't have boots on the ground. But according to the New York Times, 7000 Russian troops have been killed. And Zelensky said on March 12, 1300, Ukrainian troops have been killed. I think we've got three or four angles we need to talk about here. One, I want to talk about food supply with Friedberg, since you ran and have a lot of expertise in that. And of course. Ukraine and Russia are the bread basket of the world. Chapati. Wanna talk about markets? Of course. But let's go to our history channel, uncle first. Sacks, you have been going down the rabbit hole. Looking at the history of this, let me just ask you just a pointed question. Is Russia losing the war? And if they are losing the war, if that is a, is that even a possibility that they're losing the war? Are they losing the war? And then what is the exit ramp here and what does it mean on a go forward basis, right, I think great question. So here's where I think we stand three weeks into the war. Is that? Putin clearly miscalculated. He thought this would be a cakewalk. Obviously has turned out not to be. The Ukrainians have put up very fierce resistance. The Russians have taken very serious casualties and losses. And so the war is very much, you know, up in the air. It's the the outcome is very much in doubt. So I think, you know, Putin was overconfident, made a political, economic and, you know, obviously humanitarian mistake. But I think three weeks in here is where I would characterize things is it feels to me like the West. Might be making a similar mistake of sort of excessive overconfidence and triumphalism, meaning that we think the rest of this war is going to be a cakewalk. And the reason I say that? Let me just give you some examples and then tell you why it may not be a cakewalk. So you've got Francis Fukuyama had a piece this week. Basically, he's back with the end of history. He predicts that, you know, imminent Russian defeat and that there's going to be a new birth of freedom for the West. It's going to be like the Bush doctrine and 20 years of failed policy in the Middle East never happened. You got David. From, you know, all that predicting mission accomplished. Just like the Iraq war, he said the springtime is going to be bad for anyone who bet on Putin his words, which in his view is anyone who isn't a basically a neo con who favors regime change. You had a piece get a lot of circulation over the last week in the US. China perception monitor by by I think a former Chinese. Observer named Hugh Way, and he basically predicted that China would be under so much pressure by what the the Russians have done, you know, in terms of humanitarian losses that they would come out basically denouncing Russia and support the West. And then, of course, I think the final example of what you might call Western triumphalism right now is that absolutely no one in Washington seems to be pushing for a ceasefire. They're all, you know, they're all paying lip service, at least to this. No flows, no fly zone idea. Biden and the squad seemed to be the last holdouts for the idea of not imposing no fly zone. So I would say right now the West seems to be very confident about the way that this war is going and not inclined to make any compromises or concessions. I just want to flag quickly why that you know why there might be some clouds on this silver lining. So you had a Washington Post article, first of all. Warning, it was very interesting that Ukrainian military progress may not be as great as their quote Stratcom, their strategic communications. You know, a K propaganda. So in other words, the Ukrainians are very effective at fighting the information war, but the the Russians are still making progress on the ground. You also had this Washington Post story about Neo Nazis flocking from all over Europe to Ukraine to fight for the cause again. That story got it's it's very troubling and it got no likes or retweets because it just doesn't fit the great narrative here. You've got the slow motion humanitarian. That's true. But let's come back to let me lay out all the issues and we can come back to you've got the slow motion. Planetarian disaster of, you know, a billion people across the world, potentially starving if the spring planting doesn't happen, which we should let Freeberg speak to more. You've got the fact that Russia can still escalate this war. I mean, they could still rubble. Cities by Belarus could enter the war. And, you know, God forbid they could even use WMD. And then we you have this idea, this dream of toppling Putin? Probably. Look, it could happen, but probably a fantasy. You had 200,000 protesters. Pro War protesters turned out in Moscow today, nationalism is still strong. In Russia, yes, there's anti war protesters there, but the Russian people at the moment seem to be still behind Putin. And then I think you had today, the Foreign Minister of China came out with a statement really throwing cold water on the idea that they support the West. They basically denounced the West for NATO expansion. So this whole idea of of the Chinese bowing to Western media pressure which they in other contexts called the buys out influence, I think that's a fantasy that is not going to happen. Well, look, I think that, you know, you know, we all support the Ukrainian cause, we all support their desire for freedom to their freedom from domination from this, this Russian war of aggression. But what I wonder about is whether this would be the opportune time to for Washington to try and push for a ceasefire instead of a no fly zone. And we should talk more about what that might look like. Can I give you a psychological assessment of I think, what's happening right now? Yes, great. Just as somebody who as as you know, you guys and I were just joking, but six days just being mostly off the grid with my notifications off. I was really like honestly like you, you, you kind of like go through this dopamine fast and what it actually helps you do is pick out better signal and you know with all respect sacks I think like a lot of what you said is not really a. Has meaningful signal as the following, which is the most important thing that happened was both sides basically said the surface area of a deal was very much insight and that they were down to three or four points. And I think that that didn't get reported nearly as much as it probably should have. And what I thought was psychologically interesting was that as soon as that was said the next few days was when the rhetoric got ratcheted up extremely aggressively on both sides. And the way that I interpret that typically is having done deals. That's typically when you're closest to a deal and you're trying to get the last few T's and C's. And in that same construct as applied to Ukraine and Russia. I suspect what's happening is they both put out the trial balloon. It was well received on both sides. The surface area is now down to a few points. I'm not saying that those are justifiable in the end, but I think that if both of these two folk parties want to come to a ceasefire, which I think it does. We're probably much, much closer than anybody thinks. And right now all of this rhetoric is meant to basically try to get the other side to budget a little bit more. And so I suspect, and you know, I could be completely wrong, is that we're much closer to ceasefire than anybody thinks. And I suspect that you could see something in the next two to three weeks. And I think that that's really hopeful because you want this thing to come to an end. The thing I'm trying to parse here and I don't know if anybody here can even answer this, is how did how did we either underestimate or over estimate depending on the time? Russia's. Ability to invade another country, I think. I think The thing is, we we have, we can't even estimate correctly. So, for example, there was something that said there was 100 out of 100. Russia has 170 battalions apparently. I don't know if that's true or not, right, of which 100% did. We don't know if that's true or not, of which Ukraine apparently destroyed 50 of which we don't know if that's true or not. So we're left to guess. And unfortunately, what that does is it people psychologically, then fit as David is used in the passenger priors. What are your biases? Right. What narrative fallacy do you want to believe? And then you're going to fit. So the Pro Russian factions will say that's entirely not true. The Pro Ukrainian factions will say actually, it's even greater than that had huge sustained military losses. The truth is somewhere in the middle that will only get accounted for after a ceasefire is in place. So I think we almost need to again. We can get caught in this fog of war and and talk about this stuff in ways which we don't accurately know. Or we can level up and say the thing that we both know is there was on the record statements by the Foreign Minister of Russia and the President of Ukraine that a ceasefire and the surface area of that ceasefire is within sight. And unless something is materially changed and then in in the last three days, which it hasn't. It means we are really, really close to this being done. So I, I agree with a lot of what Thomas said, I don't think contracts, anything I said before, I I agree that there was a big piece of news this week that caused markets to rally for three days, which is the announcement of a proposed 15 point peace deal. And the we do know sort of the key features of that deal. It means that the three big features are you Ukrainian neutrality so they don't become members of NATO. You had Zelinsky saying that NATO membership was off the table. Ukraine can't host foreign troops, bases or weaponry. There be limits on Ukraine's military, but they would get security guarantees from the allies so it wouldn't be a complete demilitarization. And then the the other pieces of it were Ukraine recognizing Russia's control of Crimea, recognizing that's not coming back, and then some sort of independence recognized for the disputed territories in the Donbass. So I think you're right chamath that. Everybody now knows the broad contours of what a peace deal would look like. And the markets are starting to price in the them getting to that peace deal. But I'm worried that if you look at it from the point of view of what people in Washington say that there's no pressure here coming from Washington for Zelinsky arc, who's basically our client, he's an American client to make a deal. You know, if you compare this to, say, the 1973 Yom Kippur War, where the US was on the side of Israel but still acted as a peacemaker and got a ceasefire done, you know, Kissinger got that deal done. Even though we were on the Israeli side, you don't really hear anyone in Washington saying let's get a deal done. So I hope you're right, but because you're not, we're not talking about the elephant in the room, which is that in the Yom Kippur War, the unitary resolve and the military dominance of America was undisputed. And so as a result. Its ability to be the mediator was also undisputed. We've already talked about this when Biden called the UAE. In Saudi, they wouldn't even pick up the phone. The people that are negotiating this priest, priest peace treaty right now are Naftali Bennett and Emmanuel Macron. So we're not at the table. So I think a lot of what we're hearing as well is just a lot of the rejection and the psychological, you know, kind of anger that we have to not being even part of the process. I think the world doesn't want us to have such an outsized role. Point is it's we've, we've moved past that, whether you wanted us to be involved in it or not. We're not involved and we are not the principal mediators in this. And we, I hope to God that Israel and France and whoever else is at the table gets this done. Yeah. Yeah, I agree with that. But here's my concern is that I think everyone knows the broad contours of the deal, but if you're Russia or you're Ukraine, you're getting daily reports of what's happening on the battlefield. And if you think you're winning, you have an incentive to stall. The peace process to cement greater gains and get more leverage for those remaining details and negotiating points. And so if Zilinsky thinks that the Ukrainians are making progress on the battlefield, he's going to wait. And so neither one of them, I think, left to their own devices can be fully trusted to make it deal. I think you need the US applying some pressure or acting in a pot in a constructive way towards the process. And I think it's a huge problem that the US is not viewed as a peacemaker. We're basically viewed as so partisan and on the side of Ukraine that no one wants us involved. David, we've talked on this pod about us not being the global police officer of the world and that other people need to stand up. So maybe the lesson here is, you know, maybe strategically. It's not like we were called on and we didn't stand up. We weren't called on. Well, OK, that's what we assume that. I mean, we we don't have perfect information either, but let's let's get to Freeburg here. I think the other wrinkle in all of this, and I think it's quite positive, is sanctions are seeming to have. A profound impact here and people are looking at them as potentially maybe cyber warfare and just, you know, actual tactical warfare on battlefields is less important than economic warfare. And Russia has been essentially canceled from the global economy, from Visa to McDonald's to exports. And these sanctions are not just government sanctions, these are people opting into them, whether it's corporations and other entities saying. We're just not going to do commerce with Russia. Unfortunately, and this is something you have great expertise on, and so we're lucky to have you here to talk about it. People may or may not know this. I'm happy to be here. This is the bread basket of the world. They export more wheat than anybody, and they also export fertilizer, soybeans and some other inputs. Which we've talked about previously. That provide meat for the world. So what can you tell us about the downstream effects of? They're not being potentially or half as much crops coming out next year and what would happen in places that are the beneficiaries or dependent on wheat and fertilizer from Russia? So there's a number of first order and then second order effects. That are not just about sanctions, but also about export controls by Russia that are creating swings in food markets like we've never seen and will almost certainly lead to widespread famine by the end of this year at this point. So the first important point to note is about 15% of the world's calories come from wheat. About 1/3 of that wheat comes from Russia, Ukraine. Russia has banned export of wheat. And the the wheat spring planting season is like now this week, and there's not a lot of planting going on. You know, a lot of commodity folks are in the field trying to figure out who's actually going to go to field and plant, but no one's making. You know the concerted effort that they normally would under normal circumstances. So not only is the current wheat supply in Russia, Ukraine blocked up and cannot make its way to countries like Africa or countries in Africa and elsewhere, but the future planting season is now significantly at risk. And again, that's 15% of global calories. And I just to take a step back, the whole planet Earth operates on a 90 day food supply. So once we stop making food, humans run out of food in 90 days. So another way to think about that. Is our food supply excess? Our capacity in excess is about 25% of our global production. So if our global production goes down by 12%, we've lost half of our global food supply. And that's not just linearly across all nations. What happens is the most vulnerable nations lose their food supply 1st and the richer nations buy that food supply to secure their population calories. And so you very quickly see a bifurcation happen when you have a shortage and a food supply like this of just a few points where suddenly. Salmon is a real risk and we already have about 800 million people on Earth that are subsisting on below 1200 calories a day, so this very quickly tips the bucket in a significant way in a number of countries. That's going to be really awful. And that's just on the wheat supply and wheat planting problem. The bigger problem is the energy price plot problem and the phosphorus and potassium problem. All fertilizer is made-up of nitrogen, phosphorus or potassium. Those are the three major types of fertilizer that farmers around the world have to use every year in order to grow that crop. Without fertilizer, plants don't grow. Nitrogen is made from natural gas. 98% of the world's ammonia is made from natural gas. Natural gas prices, as you guys know, have doubled and the and the futures. Like it looks like in some places natural gas prices going up like 4X. As a result, the price of ammonia fertilizer, nitrogen based fertilizer has gone from $200.00 a ton to $1000 a ton. So it's five times as expensive to buy basic ammonia fertilizer today than it was a few weeks ago or a few months ago. And so this is now leading a lot of farmers. And then the other big problem is phosphorus, so. Phosphorus. You know, by some estimates, I mean, you know, there's a little variation around here, but about 10% of the world's phosphate comes out of Russia and about, you know, call it 25% of the world's potassium comes out of Russia potash. Both of those markets are blocked up. They they are, they are sanctioned and they, they have banned exports Russia have through the rest of 2022. So around the world the cost to make nitrogen fertilizer has skyrocketed because they're natural gas prices because of the Russia problem and Russia is not exporting potassium and phosphorus. And as a result, the price of Nitrogen's gone from 200 to 1000, the price of potassium's gone from 200 to 700, and the price of phosphorus has gone from 250 to 700. So now it's so expensive to grow a crop that a lot of farmers around the world are pulling acres out of production, and they're actually going to grow less this year than they would have otherwise because it is so expensive and they cannot access fertilizer locally to plant crops. So not only do we have the the wheat problem, we now also have the fertilizer problem. And the acres coming out of production problem. And so food supplies are gonna go down even further and this is going to become even more catastrophic. And so there's a scrambling going on right now. You know, food prices around the world as a result, everyone starts buying up all the commodities. They buy up all the corn, they buy up the soybeans, they buy up the wheat. And the price for corn has nearly doubled. Whereas, you know, from where it was in July of 2020, the pot price of soybeans, the price of wheat are all skyrocketing. And in a lot of countries they cannot afford to acquire an. Individuals cannot afford to to buy food. With the skyrocketing commodity prices that can I ask you a question. I think it's estimated that the US food supply. If you could X out, the waste would actually feed most of the developing world because I think 30 to 40% of all of our food is wasted. Can you do something with that? Yeah, that that is actually true. A lot of that happens at the point of consumption. So it's in people's homes. So it's a reverse supply chain problem where you know, we throw away a lot of like stale bread and cereal that goes bad or or whatever. There's some in the fresh vegetables market, but generally the core calorie producing commodities are rice. Eat potatoes and corn. Those commodities don't go bad in the supply chain. They end up getting tossed out at the end of the supply chain, which is at the point of consumption at home. So, you know, I'm not sure there's a real solution there right now. The the, the bigger issue is like how do you get bulk commodities to the places that are going to need them over the next 12 months. So look, right now we're reducing food supplies, stocks around the world. There are strategic reserves that are getting opened up and being released. As that starts to get the planished diminished and as the production kind of numbers start to come out, it looks like less acres are in production. You know, and God willing, we have a good weather. You're everywhere this year because, you know, bad weather you're in some markets could completely decimate the remaining supply that's coming out this year. Regardless, it is going to be a humanitarian disaster within a year and we will see hundreds of millions of people go starving and there will be potentially, I think you said, hundreds of millions of people, hundreds of millions of people will go. Never happened. In the history of human million people already live on below 1200 calories a year. Right now you're predicting that 100 / 100. Million people will die because of this. I don't know about death. Famine, like famine is this, like, you know, short of calories, you know, within the within a market. It's not like, hey, there's no food. Like you know, there will be strategic reserves release, there will be stuff, but it won't be enough. We just don't have enough in the way supply chains are set up. There just isn't enough. And so once again, we found another supply chain weakness like we did in COVID over and over again and freebies will be released. But then hoarding is starting. So David, you take it after this. But the one question I had was maybe talk to me about this concept of hoarding because there seems to be a cascading effect and you, you kind of, well, yeah, it's not just turning out a little bit as with any market guys, as you know when there's scarcity, people come in and buy at A at a faster pace, you know, everyone. And so this is a market dynamic. It's not like people are physically hoarding loaves of bread, but commodity traders, countries, strategic reserves, they start buying up what they can get. To prepare for the famine that's coming. Then prices go even higher, and then it kicks other people out of the market that couldn't afford to buy it. And the whole thing gets really ugly. Really. And there's no off ramp here. There's no way to solve this. Well, what freeberg. Yeah. Thing I want to ask you is, if we had a peace deal right now, a ceasefire, would we avoid this outcome? I mean, like, how long? How long do we have to avoid? We need Russia to reopen fertilizer export markets now. We need natural gas prices to come down now, and we need them to plant the spring wheat. Those are three things that need to happen to solve this problem. If those three things don't happen, we're going into spring right now. So round the world in the northern hemisphere, farmers are making plans, they're planting, they're deciding how much fertilizer to use. And so as this market starts to kind of work itself out over the next few months, a lot of the commodity traders and the the AG departments, they publish these planting reports and they talk about how many acres of what were planted and then everyone forecast how much the supply will be. And we're going to start to see these uglier numbers come out over the next few weeks and months. Meanwhile, we're seeing supplies dwindle. Russia's holding all this stuff, so you know they're holding hostage phosphorus. Potassium and the natural gas pricing is just what it is. Remember there there are ammonia plants everywhere. There ammonia plants and I and all ammonia plants use natural gas to to, you know, to create this nitrogen based ammonia. Let me make a statement and I'd love your reaction. We're finding out all of these externalities that was made with underlying poor scientific reasoning that has caused these issues to be exacerbated. So we know, for example, that our overreliance on Russian hydrocarbons could have been mitigated with nuclear, but we fell for shoddy science, and we fell for a bunch of uninformed people who ran this banner of, like, you know, Environmental Protection, right? So they screwed us, OK? And those people now have meaningfully. That's credibility. Let me give you another cohort, freeberg, and you tell me, all the people that pushed back on GMO's and said GMO was unacceptable. It could never happen. It has to be XY and Z way. And there are ways where we could have been working on plants that had different mechanisms of action in order to actually absorb and retain nutrients from the soil in different ways that would have made us less reliant in exactly the way in which fertilizer works. True or false? The GMO technology, as a former Monsanto executive, so you can call me a Monsanto shill here, but yeah, GMO technology has been hindered globally by a challenge to adopt it, and there are techniques and technologies that have not been aggressively developed because of the concern on approvals. Just to get a single GMO trait approved in the United States today and get it to market can take 7 to 13 years. And even then you have to still go get. China to approve it because they're the biggest importer and you have to, you know, get all these other market participants to approve it. And there are multiple agencies to get to approve it. Europe is finally, the EU is finally coming back to the GMO problem and saying, you know what, precision gene editing can actually be beneficial to growing better, more stuff. Now, would it have solved this particular crisis? Sorry, can I just say what's so ridiculous about this? Yeah, the fact that we have a modern agrarian economy is because we actually did figure out a way to do GMO, except we used the Punnett square and we used successive iterations. But the minute that you try to scientifically scale it in a lab, all of a sudden that same process is not does not make any sense to me. That's it's just intellectually so inconsistent. Yeah. The thing that really scares people about GMO. Look, I mean, I've spent a lot of time on. And and the reason people are upset, I, I have a broader philosophical point. Believe in that. Do you believe in that inconsistency, that intellectual inconsistency, like how do you think somebody from you know pre BC to today, I think that agriculture iterated on our wheat. No, I think agriculture itself is technology. Think about it. Humans, humans used to go out and just eat whatever was lying around what nature gave us. Then we started making rows in the ground and putting seeds in the ground and putting water on the ground. We engineered the earth to make stuff, started to breathe and we just played breathing and traditional plant breeding. Normal, normal, normal. Save the world from medically modifying things. It is. And then what we did with GMO's, which is the distinction, just to be really clear about the definitional distinction between GM and traditional plant breeding, GMO is when you take DNA from another Organism and you put it in the plants DNA to get that plant to do something very specific. And Jason, you came with me to Monsanto. I mean, you took the tour. You're cautious. We should be cautious about any time we're doing stuff like that, right. But and then there's generally like a very visceral reaction when I make that statement and people are like, wait, you're taking the DNA? Bacteria and putting it in plants. And how do I know that's gonna work? And so there's these layers of concern which, you know, are deeply psychological layers, but we can, you know, scientifically resolve this over time. But look, at the end of the day, humans today, you guys remember last year how much I was talking about that starch synthesis paper and how important it was. We don't need to grow plants to make the stuff we need to consume. If every city around the world had a starch synthesizer and it took CO2 from the atmosphere and water from the ocean and had this technique. Developed out, it could synthesize its own calories in a physical device without needing to rely on the ammonia supply chain and the phosphate supply chain. And all of the systems that we rely on that are super outdated, that are all a scaled up, industrialized version of old school agrarian techniques. Humans today, I think have the ability to synthesize and print food. And over the next couple of decades, particularly catalyzed by what's going on in Russia, Ukraine today, we're going to see these technologies accelerate. It's obviously where I spend a lot of my time, but I'm super excited about it. I think we suffer from a very insidious kind of plague in the world, which is the plague of overeducated dumb people. And it's it's almost as if, you know, because of their degree in the school, you give them inordinate power to make value judgments that that really put the world in a very difficult position. And so when you have something like a war in Ukraine, it just lays everything bare and you find, you find all these things like, you know another, another version of this example, how did an entire continent and specifically I mean Europe. Abdicate their entire energy security to the group of a group of environmentalists and to, you know, to a 16 year old girl. Without even thinking about what the right answer was for themselves from first principles, that's really crazy that that happened and you need a war, you know, where 10s of thousands of people have to die to realize that that was a really bad set of decisions that have been compounding for decades. Here's another example where food security is yet another one where, you know, we weren't able to think cleanly from first principles. And so depending on who had more money or who was able to create more psychological guilt or fear was able to get an outcome that fundamentally puts the world. Had 100 million person plus famine. So somehow we need to rethink how our institutions work because we are giving folks. Who haven't proved that they can handle power, the ability to influence outcomes for the wrong sets of reasons? Well, it's even worse. Trump. These people you talk about who are smart, dumb people, they're so privileged that they're living in some bubble, making decisions for people who have food insecurity or energy and security. And it's only when COVID showed, hey, oh, semiconductors, I can't get my car that I want because it doesn't have the chip in it, or I can't get drugs, or I can't get P then all of a sudden. We see the value in redundancy and supply chain, but when they were living high on the hog and had nothing to worry about in 20 different flavours of Captain Crunch that you know they can't even think about people in Africa, Jacob, I think it's really important to speak to the capitalist incentive and how you get there. So you know, we've globalized supply chains because as a business it doesn't make sense for me to do every step of the thing that I want to do because you can get better utilization out of CapEx if a system is running all the time to make stuff. So if one step of the system. Doesn't need the other system running 24/7. It's going to outsource that. And that's kind of think about like semiconductors, think about food manufacturing, right. Doesn't make sense for a farmer today to make his own ammonia. So there's an ammonia plant that centrally makes that stuff 24/7, distributes it out to a bunch of farmers that brings the cost down per unit of production. And so these systems have existed because we've had less capital with a higher ROI on capital invested at every point in the system by, you know, distributing and having having a kind of, you know, centralized supply chain. Something like this now? What we're looking at today is what happens when one part of that system fails. And now I think the big trend for the next decade or two, everyone's going to have like a institutional memory of this. And you're going to see companies that are going to start to vertically integrate supply chains, they're going to vertically integrate their, their manufacturing. We're going to see a lot of businesses make what traditionally would have been really, quote UN quote, bad CapEx decisions and bad investment decisions. And they're going to say, you know what, we need to have redundancy because we cannot face the cataclysmic kind of circumstance that we faced in the past. I also think those should, by the way, the easy decisions. I also think that there are some more complicated ones of morality that we may have also misappropriated. I'll give you one example. So if you think about energy independence of America, I think there's, there's not going to be, there's not going to be many who think that it's not critically important. Well, then you go and say we have a short term bridge with hydrocarbons and the long term solution is renewables. But underneath renewables is the idea that you have to store these things, right? You have to store the energy you make, whether it's from wind or solar, even if it's from nuclear. OK. And all of that results in us needing batteries. While batteries need lithium, there's enormous lithium deposits in the United States that today can never get accessed because we've decided that the, you know, the upper land grouse of the state is more important than America's energy independence, right? So when push comes to shove, a small rat like creature is prioritized. More importantly than America's energy independence. The downstream implications of that are now obvious rising cost, inflation, unemployment, potential recession. War, death, famine. Is the upper land growth that fundamentally more important than all of these systemic risks to humankind? And The thing is, for a long time we would never even think about the tradeoffs to actually think about why that decision should be made that way. And now we actually have the ability to remake these decisions. So it's going to be really interesting to see whether we upend all of these existing frameworks, you know, and there's there's enormous environmental lobbies that have been created that have crazed hundreds of 1,000,000 billions of dollars to fight these battles systematically wherever they come up. And in some ways, now what people will say, well, you've really prevented progress and you've actually done more damage. That's gonna be a really interesting point in our intent evolution, good intent, save the environment and then there are downstream impacts. Let's go to sacks about the. Sanctions we saw a level of sanctions we didn't expect. They were ferocious, they were unilateral. They, they they're, you know, undeniably having an impact. Do you think Putin would be at the table? Do you think these sanctions are? Really having a dramatic impact and do you think that there will be a tool that we should use in the future or do you think maybe we need to be more thoughtful about them? In other words, cancel culture comes up as a an analogy here. People are saying, oh, it's like cancel culture for a country. I think it's pretty great that a country that is murdering their neighbors doesn't get to participate. But obviously you could have some serious concerns if fertilizer and supply chain issues, as we just discussed, are going to cause famine. So what's the balance here? Yeah, I think it's a great, another great example of, you know, we're not thinking through the 2nd and 3rd order consequences of what we're doing. We're just reacting and so to to freeberg's point, so. You know, first of all, we have to realize this was more than just sanctions. This was a complete severing of economic ties. I mean, basically every Western country pulled up stakes out of Russia. They and they did it on their own too. I mean they did it because for the reasons you said, because they wanted to make a statement that what Putin did was wrong. So every Russian who is working for one of these companies basically got fired and all the stores closed and and so on. So I think, I think it is the repercussions of it are going to be severe. However, these things the economics of it take time to play out and so do I think it creates pressure on Putin to make it deal, yes. But you know if the if this is going to be determined on the battlefield one way or another in the next month. Do I think it has time to operate in that time frame? Probably not. And I think what's likely to happen here is that in the same way that the real repercussions of this war are going to be felt in grain production in six months. You know, there is an economic tsunami headed for our own economy as a result of the blowback from basically severing, you know, 144 million Russians from the global economy. There's also going to be geopolitical blowback, I mean. You know, I think it's very likely that the way this is going to play out geopolitically is that Russia will become a Chinese client and you know all of those natural resources that China produces the the the gas. You know, all the the mineral wealth that those resources are going to flow on a conveyor belt, on a belt and Rd conveyor belt from Moscow to Beijing and they're going to fuel the Chinese economy. Yeah yes and no. Because the reality is the the the the thing we have to remember is China's still a fundamentally export driven economy of which 35% just alone goes to the United States. When you add in Europe and other OACD countries, it's almost 60%. So I think the idea that all of a sudden you. But Russia will be able to backdoor all of these things through China into the rest of the world, I think is not really realistic. And this is actually why I think the rhetoric is so high, because those two countries specifically are put in a very difficult situation. Like what do you think the China calculus on Taiwan is looking? What's happening to Russia hasn't completely exposed to them because it's completely off the table, completely off the table. They would never consider invading Taiwan, Taiwan knowing that it would put Apple in a position or other companies that are entwined in the Chinese. But I mean I think they would have to again, I've pulled before everybody has was always, you know sort of like lambasting economic sanctions. You know even on this pod people it's never gonna work. It doesn't do anything. And it turns out it's just not true. To be clear, I think sanctions are an appropriate way to create economic pressure so that we can get a ceasefire and a peace deal made. OK. So I do believe in the same way that I believe we should arm the Ukrainians so they can defend themselves while I'm against a no fly zone. The the issue is just are we actually using the leverage that we're creating to drive this process to a success? I'm talking the ceasefire process to a successful resolution because if we just make this the new normal. Which is, you know, a. Basically an insurrection in Ukraine that drags on forever and the the China and Russia cut off from the global economy and becomes a client of China. I think there is a parade of horribles that flow from that, and freeberg just outlined one of them, which is hundreds of millions of people across the world potentially starving. So my point about sanctions is not that. We should not have done them, but they are going to be big repercussions for our economy if we don't resolve this situation in Ukraine. Let's do best case, worst case with these new, this new economic order here, an economic sanction ability that the West has now demonstrated, you know, quite effectively. For me, the best case scenario here is if you want to participate in the global economy and global isn't too global, globalization 2.0 means you're going to have to be hit some base behavior level of being a good actor in the world if you want to participate in the wider economy. Therefore, as chamath just pointed out Ivan, quite correctly, Taiwan's off the table. I mean, China does already is having massive economic downturn and and headwinds. The the idea that they would face what? Russia is facing right now in terms of sanctions globally would be cataclysmic for them. So do we think, what's the what's the best case in your mind? Freedberg, the worst case of this new economic sanctions that we've just outlined? Best case, worst case. Much of this is driven by. Russian decision making, not just our decision making. And so, you know, there there's a lot of question marks around what they're gonna they've said definitively. We are banning all fertilizer exports through 2022, OK. So like does changing a sanction model at this point get enough resolved for them to kind of come back to the table? Do we need to kind of weave that in to some? Discussion piece, discussion that they're having with Ukraine. I think there's gonna need to be this multilateral, like global either support or or partnership model that's going to have to kind of emerge for this to all get resolved positively. I don't think that it's just about Russia and Ukraine agreeing to a bunch of terms. We're all going to be affected by what's going on and what Russia has chosen to do back to us. And we all think we're in the power and we've blocked them and destroyed the ruble and, you know, knocked them back to the Stone Age, yadda yadda. But like, we're hurting ourselves. Far more than we realize. And we have to go get something back from Russia in order to resolve this. So nuanced. I'm not sure I totally agree with that. I actually think that, you know, necessity, what is it? Necessity is the mother of invention. I think that this has the ability, just circling back to what we said before, for us to rewrite all of these other decisions that were frankly not necessarily rooted in either first principles or long strategic thought in a way that can actually improve the state of play for everybody. Not just including us for the next 50 or 100 years. So I'm not completely convinced that it's as catastrophically bad as you think. Well, what about this freedberg if if we were thinking about food stability, you mentioned your slurry and, you know, being able to make these calories without actually planting any food. If we ain't going anywhere, if you call it a slurry, but yeah, OK, let's call it a protein bar, you know, like, like, ultimately, Jason, we can actually create pasta, bread, rice. I mean, that's where this all goes. Because by the way, just so you guys know, I want to frame this up. It's super important. 60% of the world's calories come from carbohydrates, which are basically 2 molecules, amylose and amylopectin. That's what makes up starch. So if we can synthesize analysis and amylopectin, we can make it into any long would it take? How long would it take, what would it cost to build your pasta making machine and rice making machine, you know, to have more food? Decades long scale up problems, right. This is not like this is like, hey, we got a similar to nuclear or solar. Exactly. Yeah. Yeah, got it. OK. But there are solutions to this. I look I mean This is why I keep coming back to saying like we're evolving the the global economy and planet Earth away from this model of centralized industrial manufacturing into a production. System that looks more distributed, more decentralized with better technology and that that's really a big trend for this century for for our global economy. And that's why right now I think the near term trend is in deglobalization people making less capital efficient decisions that create redundancy and supply chains and there's a lot of ways as investors to play that. By the way, Sachs, what are your thoughts on maybe the the high order bit for the West being a race to resiliency or a race to redundancy in energy in semiconductors, this race? Resiliency in food supply, yeah, I mean look, trade creates economic wealth that it also creates dependency and we're realizing the downsides of having that dependency if we're dependent and or Europe is dependent on Russian Cass or you know you saw during COVID, we've become dependent on Chinese pharmaceuticals. All the pharma companies have moved their manufacturing over there and then you know that got when China was rattling the Sabre because we were blaming them for COVID. This is back in, in 2020, they all of a sudden started implying we might not get access to pharmaceuticals. So look, we are going to have to rethink all those trade relationships. You can't have trade without trust because again, if you if you, you are empowering the producer to cut you off when you make yourself dependent on that. So. So look, I think we have to rethink all of that. But can I go back to your best case, worst case question. Yes. I was trying to get somebody in there and I think that's a good question. And I, you know, here, here lay out the best case and then the worst. So the best case, look the the best case is the sort of the Fukuyama argument, the sort of. The from argument is this Western triumphalism, which is luck. Sanctions are going to drive the Russians into submission, they're going to topple Putin. The people are going to rise up, they're going to lose this war. We are going to strike a great blow against autocracy, and liberal democracy is going to win. OK, I understand that argument. OK, now what's the the worst case scenario? Worst case scenario is. Freiberg's right, we end up with hundreds of millions of people starving. The war drags on because Russians aren't going to give up. So the sanctions. You know, while be while hurting the Russians don't end the war and in fact drive them into the arms of the Chinese, you know the Russia has been called a big gas station with nukes. That gas station will now fill up the Chinese economy henceforth. Worsening the balance of power in Cold War two. And then there's a big, you know, tsunami or Boomerang headed for the US economy. And we we have a recession later this year as gas prices go to $7.00 and $10 a gallon. And so it ends up hurting us. And so I don't I, I I certainly see the case for sanctions. But but I wonder if people are really thinking through the downside scenarios and what what I what I do think is that if that that the removal of sanctions should be certainly something we're affirmatively putting on the table in the ceasefire negotiations. And and that sounds obvious, but I saw a tweet from Ian Bremmer who sort of part of the foreign policy establishment think tank Guy who has been pretty good on like smart. He's smart and he's been good on no fly zone. He's been saying the same things I've been saying like guys this is tantamount to a declaration of war. I'll go in there also, basically saying that, listen, no matter what the Russians do, we are not going to get into war three here. He's been coolheaded about that, but he also tweeted that listen, as long as Putin's in control. Of Russia, we can't ever do business with them again. Sanctions are sticking around basically forever, and I just wonder if that is. An overreaction? If if we're going to make that policy, I'd rather see us as America be willing to put economic relations back on the table. As you know, in this peace process, as opposed to saying the Russians are cut off forever because otherwise they're just going to become a Chinese client state. I don't see how that benefits us long term. Well, again, I think, but again, David, what do you think they do with China? China, what are they going to do, take 60% of their goods and still export them to us, even though it just contains Russian materials that are now considered contraband? They think, so they can't absorb it economically. As my point, there's not enough demand outside these OACD countries to absorb all of that. Well, here's what I think. It's just mathematically not possible. I think so. So look, I think you you make a point, but I think if you're gonna look at this from like a 50,000 foot level, I think there's like 2 grand narratives about what is happening in the world. One narrative, sort of the NEO con sort of liberal hegemony narrative, is that we're in a great battle between democracy and autocracy. The other narrative is that we're in Cold War two is that it's more of a great power rivalry between the US and China. I tend to think that the latter is where we're really at in the world. And the reason why I say that is you look at there's a lot of autocracies. Who, frankly, we support because we want them on our side, for example. You know Turkey is run by an autocrat. You know Erdogan is becoming more autocratic. In Egypt we had sort of democracy there for a brief moment. When Morbark got overthrown, guess what? They elected the the the Muslim Brotherhood and we didn't like that too much. And now we got General Al Sisi in charge. We like that a lot better. You know, we are still allies with the the Saudis and there are, there are more autocratic government. And so I tend to think that, you know the better way to describe what's happening in the world is a balance of power rivalry between the US and China, which is only going to pick up momentum in the current in the coming decades. And we have to think about who's on our side of the Ledger and who's on their side of the Ledger and you know, I think. At this point it's we've pretty much driven Russia completely onto the Chinese side of the Ledger and. I think it's gonna have, like, very bad consequences for us. Alright, let's segue from here into the economy, inflation and markets. In a previous episode, Chamath, you talked about the the psychological cycle of, you know, ignoring good news, then accepting it, being outraged by it, and then maybe not taking the good news. In the bad news column, obviously inflation continues last six months of CPI numbers year over year, obviously. September 5.4. I'll Fast forward to November 6.8. January 7.5, February 7.9. To excluding food and energy, core inflation still rose 6.4%. That being said, we have 11 point X million jobs available for Americans, 5 or 6 million people unemployed who are looking for work. Obviously, there will be some mismatch in terms of geography and skills there. And then corporate earnings, great but a recession possibly looming. Where are you on this and obviously the markets bottomed out. So where are you at with the economy hope, fear and otherwise? Well I think that we're in the midst of what I would call a melt up so you know probably the next. Month, month and 1/2. There really isn't much quote UN quote bad news that hasn't been priced in, and the the the thing that I've learned over the last few years is that. Markets don't actually care what the news is. They they can process good news and bad news equally well. What they despise is the uncertainty of what the news could be. And so this week was really important because we had two huge buckets of uncertainty taken out of the market. So the one we've already talked about, which is when when the markets saw that there was a surface area of a deal between Ukraine and Russia that was really constructive. Because neither side would have signaled something if both parties were very far apart, so that that meant to the markets were a few weeks out from something getting done. And then the second thing was Jerome Powell and the Federal Reserve. They finally had their meeting. They raised rates 25 basis points, but even more importantly, they gave you a very prescriptive forecast of what the next year will look like at a minimum and possibly even two years. And once you could have that. You were able to then go and redo all of your expectations and what people realized was, OK, you know, inflation may actually start to get tamed in the back half of the year. The economy is still quite strong and we could actually support two 2 1/2% interest rates. And still actually grow really well. And So what you've seen in the last three or four days is a reaction to the loss of uncertainty. And so there really isn't, you know, the only thing the fly in the ointment could be if. The war all of a sudden escalates, not that it gets dragged on because at that point that's also I think been priced in, but if something very meaningfully different and some and and Russia in this case ratchets up the intensity. By going, you know, nuclear or something else, although I think that's a very long tail. Chemical weapon seems a possibility, or carpet bombing, I think. These are all very, very low probability events, but in the absence of these things, you basically have really constructive dynamics right now for at least the next month and 1/2, maybe even two months. How much of this has to do with retail investors who were Yolo hodlers speculators, stemmy chatting to getting super active for two years and then maybe getting super spooked right now and maybe needing the money to deploy in their lives? Look, the the the thing to remember and and and. I hate to be this blunt, but it's true. Retail is not very good. Signal of anything, in fact, if you actually look at retail flows. Typically you will make money by doing the exact opposite of what retail does, and I posted this in the group chat to you guys, you know, every single day of since the beginning of this year, retail was a net buyer. In all of those days, the market got punched in the face. Finally, at the beginning of March, retail capitulated. Right. And I posted that same day and I said guys, this is the moment to buy and it lo and behold what happened. The markets rallied meaningfully from that point and the reason is because they were going into the end of Q1. You have a huge tax bill due in April 15th. People were starting to just finally give up. They were buying every single day and they finally gave up. But that capitulation was the moment that that you buy. So if anything retail is is is the, you know, you know I've said before you fade your fate list, you know retail flows or something you. Typically will make money by fading, by doing the exact opposite of whatever retail is doing, and you just need to have access to that information. If you have access to it, you can. Kind of. The profit from it so. Where are we going from here? Probably up David, you've been pessimistic. We're seeing a lot of changes in the private market, funding rounds taking longer, lot of funds getting closed, you know venture funds that is, but seems like a lot more diligence is being done. The time meantime to closing a deal has definitely extended massively. What you're betting strategy now as a venture capitalist, I think that there's going to be a trickle down effect of what's happened in the market to to privates and the valuations are going to go back to their pre COVID levels. I mean there are multiples pre COVID were like 20, not 100. So we're seeing a massive repricing of deals and that's going to continue and I don't think it's going to be this like transient effect. Everything is going to bounce back in a few weeks. On the public markets, the defining characteristic of these markets is volatility. I mean the VIX, which is the measure of volatility is at one of its all time highs. And so it's true that over the past week we saw a nice sort of melt up or rally. Because there was speculation about this peace deal, the Financial Times had that article in the 15 point plan. Chamath is right that if that peace deal gets signed, I think the market rally strongly because you know, it went up considerably just on hopes that it might be signed. But on the other hand, if this peace process falls apart, I think the market will give back all those gains and then some. I think we are. Nowhere near out of the woods on all the risky scenarios that could develop from this war. I think that if there is no peace deal, I think you can almost expect Russia to escalate in the war. But they have said this is an existential issue for them. I think that would mean at a minimum you know heavy bombing of Ukrainian cities and then they'll step up the pressure even more on Biden and Washington to get militarily involved. This situation could still spin out of control. So you know I think in the absence of peace deal and then finally we have all the risk of recession. We we definitely are seeing a slowdown in the economy right now and I think if this war continues and we don't get the spring planning and. Things keep, you know, deteriorating. I think we're headed for a very serious recession in this country. I think we'll go from slow down to recession. So if I were advising Biden, of course, no one's listening to me. But if I were advising Biden, I would be telling Biden. Listen, Mr. President, we are going to have a horrible midterms in November. And, you know, we are going to have a really hard time in 2024 if this war continues and, you know, we head down into recession or any of the other catastrophes that could happen, we need to push for a peace deal right now. And the US should be playing a constructive role and we should be applying pressure wherever we can to make a deal, because the broad contours of this deal to month point have been set. I don't think any of the details now that we know. Look, it's about Crimea. It's about Donbass, about neutrality. None of the details that we're still fighting over are more important than getting a piece right now, and if I were in the White House, I'd be singularly pushing for that. Yeah, it's it's complicated. There are the, the counter to that obviously is this could be, you know, the beginning of the end for Putin and, you know, even if that's a 10% chance or 20% chance, the possibility that in our lifetime, you know, Russia could have a leadership change, could be tremendous. Obviously it's a coin toss which way it goes, but change could be. So look, that's certainly in the cards and and look if somehow magically Putin got toppled and replaced with a Democrat. That would be a wonderful thing. Uh, however, we shouldn't before it's there. But it happens. Yeah, well, tell me, when. When does it happen? East Germany, right? We tore down the wall. Yeah, I mean, that was a reunification. Here's the basic problem is, is we, we we understand the Russians and the Russian system. You've got all these oligarchs are basically like bosses or mob bosses, and then Putin's like the boss of bosses, right? So what are the odds, if you take out the boss of bosses, that he's replaced with someone who's a Democrat versus the next biggest, baddest boss? I I think, you know, look that that's certainly a possibility. But my concern is that when you play for maximalist upside like that, you're also taking maximalist downside. And a lot of people have made this point that, look, if Putin's life is on the line, he's going to be more willing to do anything. And I think that the better approach, and you've heard people mentioned this idea of the Golden Bridge from Sun Sue, which is give your enemy a golden bridge to retreat, mentioned it so that he's not fighting for his life. Clever framework, Jacob. I think I mean the other way you guys, if you guys went and created a tally, and I'm not trying to be Debbie Downer here, but you know, since the advent of the CIA, the number of times that we have tried to incite regime change and then the number of times it's been successful, what is that percentage? I mean we don't know because we don't know how many times we've tried. Well, we know we know what many attempts. And I mean we've changed a lot of two Outers which jakel. Every time we try it we either get the same or worse. So for example. Area. We tried to get rid of Assad. He's still there. And now it's worse. Afghanistan, we tried it. The Taliban are back in power. Well, no, but hold on. Me finish to take it to the calculation is what if it does change? Hold on. Iraq, we got rid of Saddam and now we've handed that country to Iran on a silver platter. The ayatollahs control it. Gaddafi in Libya, we got rid of him because he was so horrible and now that country is in chaos. You've got to try open air slave markets. We tried in in Ukraine, we tried in Ukraine in 2014. So our track record is not super good. Yeah, no, I mean, I I think regime change is like chasing someone out or something. You know, for a company at some point we would have been pipped for our ability to do regime change. I don't, I don't think it's a great strategy. I'm not necessarily advocating for it, but I'm not saying that. I'm saying whether or not it's a good strategy. I think that we are particularly not good at it. Yeah, we need a performance improvement plan on that front. We should just, I think we should just stop trying that we shouldn't be going for a regime change. We should be. This is a good question. You and I had this thing where I said you and I are In Sync. We both want to contain dictators and maybe isolation. And you were like, I'm not into isolation. So I think a definition of, like, what is the strategy for containment going forward? Post a peace deal with Russia and isolationism. You know, I, I guess is a bit of a trigger word, and it's loaded. But yeah, I'm not an isolationist next person. I would describe my strategy as selective engagement, meaning that we still engage internationally on behalf of vital American interests and our core interests, but we don't stick our fingers in the pie of the internal affairs of all these. Countries all over the world to try and ferment regime change. So for example, like what's an example of a vital American interest I would say. Standing up to to China in the sense that we do not want them dominating Asia and becoming a peer competitor to the United States that can then challenge us all over the world. So some more pragmatist on it and I would be more pragmatic. We can be isolationist with North Korea because there's literally nothing they can do for us. And and look, I would not be throwing countries like Turkey and Egypt and Saudi Arabia out of our coalition and Cold War two because we don't like the the nature of their governments. And I'm not saying I support autocracy. I don't. No, but the reality is dialogue is reasonable, because if you don't, then the other side will. The foreign policy playbook is going to get fundamentally rewritten after this Russia, Ukraine war, in large part because of the effectiveness of government sanctions plus. Corporate social responsibility, whatever you want to call that CSR function, sentiment, woke culture, or whatever you want to call it. Yes, I agree. But the combination of these two things has proved to be incredibly effective at setting the stage for. Some sort of compromise or regime change. The spectrum of outcomes is there. But the point is that's an incredibly unique set of circumstances where before we never would have thought an economy that large or a country that important on the world stage would ever have compromised in the absence of military intervention. And I think that that's important to think about as we think about what our forward going China policy looks like. I think really like the the importance of like the OCD, right, the importance of all these organized nations that. Consume from China. Becoming more organized now probably makes more sense. I said this before the tweet, but the importance of the US dollar has become completely primary, which has been an incredible benefit, you know, benefit of what has happened because of this war. You know, very small Silver Linings in the grand scheme of all of this humanitarian crisis. But those are going to be really important things that the United States can seize on. So, you know, we may in some ways have have had some diminished power in order to facilitate peace in this. In this conflict. But the downstream capital that we could accumulate by organizing these countries more effectively, I think, could be really important. And then, separately, we have to have a moral conversation in the United States about all these things, like environmental laws, like our approach to agriculture that may have been underwritten with faulty logic. A little more pragmatism would go a long way. Yes, it would. I'm a little more pessimistic about our foreign policy establishment. And part of the reason I say this is because I'm very disappointed in the Republicans. The Republicans used to be the party. A vital national interest, meaning America did not get involved all over the world unless we had a vital national interest. You just never hear them making that case anymore. It's all the way back to sort of Bush doctrine and you know, as an example, they're all pushing for the no fly zone. They're all pushing for the delivery of the Migs despite they want war. Just say the words. They're weird. I mean, those right wingers are crazy. Why are they? So far, I've been very critical. I mean, I've been war on this. I don't understand there. Well, I think there's two possibilities. Tourism, I think there's anxiety. I think, I think there's two possibilities. I think the free book, what is it? Anxiety. Yeah. And This is why I predicted war at the end of last year. But, you know, I think that turned out to be a great prediction. Right. Look, I've been, I've been very disappointed in the Republicans. And I think, I think, here's what I think is going on. I think if any of those Republicans like, say, a Mitt Romney or something, I look, I think Lindsey Graham is just a crazy sort of warmonger. But. But did you take someone like Mitt Romney who's basically saying all of these sort of more bellicose and escalatory things if he was actually in Biden's? Choose I bet he'd be making the same decisions as Biden because he would not want to risk war three. But it's such a cheap, easy partisan political attack to say that Biden is being weak and he's not doing everything he can be weak at all. I think history will look back and think two things about about this whole thing with with the American lens. The first thing was, for whatever set of reasons, we lost it, and we diminished some stature in the world as a perceived arbitrator and mediator in these kinds of conflicts. But separately, I do think Biden has done a very good job in seeing the forest from the trees. He held the line on military intervention and he has really ratcheted up the ability for others to impose economic sanctions beside and behind the United States and I think that will turn out to be a masterstroke. I give him credit and I think that that he deserves to be acknowledged that he didn't agree with you on that because I I think the Biden has done an amazing job of just saying outright, we're not going to war. We are not starting World War three. That takes a lot of courage. Has not even. I mean, in fact, you've added him. I think that shows some intellectual honesty on your part and to your point mouth. There's a reason why we lost our credibility. These misadventures of sacks, called them in the Middle East have been disastrous. We made huge mistakes, and we need to take a different approach. I'll give a Trump a compliment. He didn't start any worse. And if you look at every president who came before him in our lifetime. Every time they start two or three conflicts and he was like, we're gonna have no war policy and now you got Biden say, we're not gonna go to war either. This could be a tipping point and our focus. I think the ultimate checkmate should be Biden coming out and the EU coming out saying we are going to start a race to resiliency. And here's how it's going to look, Jason, it's an incredible point that you just made. I just want to reiterate it since Reagan, I can, I can explicitly point out. Incremental conflicts that the President of the United States has approved and greenlit to get us into. Since Reagan we've we've been at 7 wars live. We've been in seven wars since the end of the Cold War. It's amazing the American people, Trump was the only one that did not start a new war and right for Biden. You you wanna know why? Because he was a populist and the people of the United States of America don't want these crazy wars. They are sick of all these wars. the IT is the foreign policy establishment that is pushing for all of these wars. And listen, why? And Obama, the same way. Obama, let's just go back. Obama beat Hillary Clinton for the Democratic nomination because he was against the Iraq war and she was for it. Obama had the right instincts on Ukraine. He did not want to escalate the situation. Remember in 2014 when they took Crimea, he said America does not have a vital national interest that justifies us going to war. He was right. The president that tried to incite regime change, it's it's right. You are why? You want to know why? Because. Because the State Department. Lifers you know who institute, who incited that are Under Secretary of State for Russian Affairs was Victoria Nuland, who was a foreign policy adviser for Dick Cheney. And these people Boll Weevil, their way into the foreign policy establishment. They're in the think tanks, they're in the State Department. What did you just use? Boll Weevil? They they like. They, they are the permanent, the hold on a second. They are the permanent establishment of Washington. The Presidents come and go. They stay forever. She was there. She was caught on a phone call basically picking the new leader of Ukraine after a coup in 2014. She is she the one that had that famous quote that said Putin, ****. Putin was that he said no. He said, he said yeah. She said yes. Is our guide basically picking yachts and yuck to be the new leader and she said **** the EU when the EU. Wanted to take a more temperate approach. OK, OK. Look at William F Buckley. Here you go in sacks. I think the mistake Biden made. Listen, I think Biden has good instincts on this. I think he had good instincts last year in June when he called for basically an emergency summit with Putin to dial down the tensions. And I think that summit was successful. So what happened? OK, the intercept just had a great article talking about how tensions ratcheted down after that June summit. But they picked back up in October, November. What happened between June and October? I'll tell you what. On September 1st, Zelinsky met with Biden in the White House, and the State Department issued a joint statement basically reaffirming that Ukraine would be part of NATO. They would reaffirm military ties, economic ties, and then on November 10th, they published a giant charter agreement between the United States and Ukraine that was signed by Blinken. Now, look, did Biden know about this? Yes, but this is the State Department agenda, and it was on the heels of this Charter agreement that the Russians basically. Said they had reached the boiling point. They basically delivered the ultimatum to the US in December and precipitated the crisis that preceded this war. So my point is just listen. We have a State Department with its own agenda. It loves regime change. It loves having clients all over the world and inserting its fingers in the pie. And unless Biden hold on, if unless Biden stands up to his own state department, we will not get a ceasefire and we will not get a peace deal. And that will be disastrous for his presidency. What I will say is I think. Biden has done a very good job and I know Tony really well, and I think Tony's trying to do the best job he can. I think he's done a pretty good job all things considered as well. That's all pretty final. Final thoughts here on, you know, a very difficult time period we're living through. The global order is being restructured. It's predictable. I think, again, if you read Ray Dalio's book, which I recommended heavily last year, it's surprising how much of that simple rubric is playing out today, exactly as that rubric kind of estimated it would. And you know the look. I mean, by the way, one way to think about the China, Russia, US dynamic, you know, you got a 1-2 and three player game theories. Number one wants two and three to be at it because then they'll, you know, end up diminishing. Value #2 wants one and three to be added. #3 wants one and two to be added, and so we're seeing that. That multi party game theory play out right now and you know again, based on that rubric you could probably predict where this is all going to end up. Brilliant point. Listen, if you were to look at this from the Chinese standpoint, they must be loving what's going on. Loving it. Old saying. I think Napoleon said it. Never interrupt your enemy when he's making a mistake. Why is China so quiet right now? Because they love their dream. Their dream is the US and Russia attacking each other. Implement energy independence writ large, and we have to make sure that it is very clear we have influence amongst all these OACD countries, because if China takes 1 foot over the line, we have to have the ability to do to them what we've done to Russia economically. It's the only way in which we can ratchet down all this tension and find peace. Yes, the new war is the war on our dependency on dictators. We must, must, must have a race. To resiliency. We're going to talk about this and more at the Allen Summit May 15, 1617, no more May 1516 and 17 all in summit Miami. 500 of the 700 tickets are gone. If you want to apply for a scholarship, you can apply. Tell us how much you love the show with the website. Just do a Google search for all in summit. Really excited to announce Keith Raboy will be joining US1 of Sax's besties, a very iconoclastic person we're going for iconoclast. Next up, Brian Peterson, friend of the pod from Flexport, talking about all these. Side chain issues. The number of speakers we're going to have is going to be extraordinary. Brad Gerstner, friend of the pod, is gonna come talking about markets education. Joe Lonsdale is halfway in again, another iconoclastic, controversial person. And that's what we're going for the day, you know? Yeah, and. We'll keep announcing more. We'll keep announcing more every week. Apply for a scholarship if you like, and we'll see you all there. Four. Love you guys. Salt enough science. The Rain Man and the dictator. I'm Jake al. Love you, bestie. Bye bye bye bye best. Love you, sax. Love you, sax. Love you. Free bird. Back atcha. Those are good feelings for you to have. Let your winners ride Rain Man, David Saxon. We open sources to the fans and they've just gone crazy with it. You can. What? What? Besties? Play a dog with your driveway. Ohh man. You should all just get a room and just have one big huge order because they're all just useless. It's like this, like sexual tension that they just need to release stuff out there. Beat, beat. See what we need to get merchants?