Is Donald Trump Unwinding the Global Order?

Transcript

welcome to Banklist where we explore the frontier of internet money and internet finance and today we are exploring the continuing saga of the liberation day tariffs on the show today I have a traditional finance commentator Rana Faruhar she's a FT columnist she's a CNN economic analyst and she has a wealth of knowledge on capital markets and geopolitics we start the conversation today discussing Donald Trump attempting something that no one has ever attempted before which is materially credibly attempting to unwind the global world order by upending the Triffin dilemma threatening the US dollar as a global reserve currency and for the first time in decades making material pushes to restore manufacturing back to the United States is this good or bad what are the costs of doing this do they outweigh the

benefits what are the stock market the bond market and the dollar strength index signaling about these strategies ra likens the decisions of Donald Trump to treating America's capital markets much more like an emerging economy and we discussed the consequences of that both good and bad ra is not the usual commentator that we typically have on Banklist but she nonetheless delivered a particularly educational and insightful interview and it was an honor to have her on the show so let's go ahead and get right into the interview with Ra Fuhar but first a moment to talk about some of these fantastic sponsors that make the show possible imagine verifying yourself without handing over personal data no hacked databases no unnecessary personal exposure for airdrops and no AI bots ruining community governance meet Self the onchain identity verification

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welcome to Bankless thanks for having me okay Veron I wanted to set the stage a little bit because I think all of our listeners are all glued to the screens of the tariff debacle tariff drama whatever is going on in the macro markets this is a subject that we have been following over the years at bank list adam really as we are understanding uh why and how Donald Trump got elected in the first place in in 2016 not this most recent election but he really just flipped some key blue states in the rust belt uh to to red by his appeal to voters that experienced substantial manufacturing job losses these are state the jobs and states Michigan Pennsylvania Wisconsin Ohio Indiana it was really the manufacturing story that

elected Donald Trump in the first place in 2016 now he's back uh and he kind of believed that he just has this mandate to restore manufacturing in the United States uh and we understand that there's this thing called the Triffin dilemma we have covered this on bank list a handful of times uh that because we have the global reserve currency that is what we produce we export dollars we buy manufactured goods elsewhere and then we import those goods and that contributes to the global trade imbalances that Donald Trump seems to have such an incredible problem with uh this this order has worked for most of America but not for Donald Trump's base from what I can tell uh and it is clear that Donald Trump seems to be more intent in

unwinding this global order than we've ever really seen before no one's really credibly tried to unwind this global order and I think that is how I would set the context for the significance of the events of last week is we are seeing the largest credible attempt at unwinding this global order that we have seen that is how I see this i want to pass the conversation to you do you see this as that and how do you also just set the the stage for this conversation at hand yeah for sure no I mean I think you did a really good job sort of outlining the key macro issues here um you know I think that this process in in some ways we began to be uh a little bit suspicious i would say in 2008 some of us did that uh maybe we need a new

global order here you know the entire financial system just collapsed we have a very financialized economy in America and by that I mean that it's based on asset price growth rather than you know making things in factories let's say and and bolstering wages and and then you start thinking about well why is that and part of it is down to the fact that the US dollar is the global reserve currency so everybody wants to pour money into the US sort of regardless of what the real story on the ground is um that's helped along by the fact that you've had 40 years of falling interest rates which again just increase the money flow and you know kind of lubricate the system um but oftentimes in a in a bit of an artificial way and then you know as you go on past the

financial crisis and you see that the problem of debt isn't being solved it's actually getting bigger so there's more debt out there in the world than ever before there's there's there's actually you know the risk moves from the financial system to to the private uh shadow banking system hedge funds private equity etc but the problem doesn't change then you get the pandemic and you get the war in Ukraine and then you begin to see oh wow not only are there these distortions in the financial system there are distortions in supply chains you know we we've got these supply chains that are set up to work really well if nothing bad is happening in the world but the minute that you know China needs its PPE back suddenly you have a shortage in in in the US or

if Russia invades Ukraine you have a global grain crisis overnight um so I think that became this wow felt experience for a lot of Americans that there's fragility in the highly globalized highly concentrated order where business has essentially been taught and and the US policy makers have encouraged business to think this way that all you have to do is move things from point A to point B to point C as cheaply and fast as possible and doesn't matter if you're outsourcing jobs it doesn't matter if you're offshoring risk um what matters is asset prices going up consumer prices going down now that neoliberal order made people like me for example that have a lot of money in the

financial markets extremely wealthy you know relative to many Americans my house price um which has doubled since I bought it 18 years ago in Brooklyn is down to the fact that we have a highly financialized economy and we allow people to write off jumbo mortgages but that paradigm also resulted in the outsourcing of much of the manufacturing base to China which is now the biggest strategic adversary of America according to the US military um this is a problem this is an imbalance system and the way that I sort of pull the lens way back is I think about political pendulums and and how they shift and you know basically every political economy is kind of purpose-built for its time you

can go all the way back to the 18th century and look at mercantalism and say "Yeah that kind of worked until it didn't." And then you get lassair and the hyper globalization of the 19th century but then you get too much speculation and you get the financial crisis of 29 and the great depression and then you get more public uh involvement in the market so the pendulum begins to swing and then eventually we get to the 70s and there's been um you know too much public involvement maybe markets are a little sclerotic maybe you need some more animal spirits and then you get the Reagan Thatcher revolution so the pendulum shifts again well by the time you get 2008 uh the tw you know the the the the financial crisis um the election of Trump you're beginning to see the

pendulum really reaching its tipping point and I would argue now it's swinging back the other way as we realize on both sides of the aisle that this neoliberal system of globalization was really great for a certain class of people asset owners knowledge workers on the coast but there were a lot of people living in many other places that did far less well and that creates this fundamental problem which is the disconnection of the global market system from the interests of the voting public and so I want to get your opinion on the relationship between the the nature and the decisions of Donald Trump versus the correction of that pendulum i think

largely we are we are understanding that this p pendulum is in a suboptimal place and we should find a more optimum place for that pendulum to lie like may the global globalization has done has brought its good to the world and now we are seeing that start to invert and maybe maybe now the costs of globalization are starting to rear its head and so we should fix things and that's what's Donald Trump understands uh what he wants to do uh also Donald Trump's strategy is also something to consider here uh and so I want to get your take on uh it sounds like you are generally aligned with yeah we need to we need to fix the fix the the equilibrium we need to fix the millu of the globe and then there's also you know

the actual strategy for for doing that so how would you just reflect on his choices versus uh what could have been right so I would I would um differentiate between Trump one and Trump two there so Trump one you know you got Bob Lighheiser who was the USR coming in and saying we need a reset of the global trading system you know it was it was a little bit utree at the time but a lot of people now agree with tariffs on China again a lot of people agreed with that you then get Biden coming in continuing the tariffs on China but layering an industrial strategy on top of it and saying "We need more resilience for the reasons I just talked about you want to make masks you want to make pharmaceuticals you want to make semiconductors you know not

just in Taiwan but all around the world." Um then you get Trump coming in for the second term and what's interesting is he just throws the entire chessboard up in the air and um even his adviserss I think were were shocked at how chaotic the tariff roll out was um there were people in the administration um uh you know Marin who's the head of the council of economic adviserss um Scott Besson who I think were like yeah we need a reset of global trade but let's do this with allies let's do this a little bit more slowly we want to weaken the dollar but we don't want to just you know crash the markets well Trump was basically listening to Peter Navaro who's the most

extreme China hawk and is for tariffs on everybody adversaries allies and so suddenly the entire entire Bretonwood system is up for grabs and the markets just did not know what to make of it and by the time the dust had settled you begin to see that a lot of damage has been done so that even as Trump turns back now and says "Oh you know nothing to see here we're not at war with the entire world we this really is about China." You know stocks recover a little bit but the bond market is still saying "We're very very worried we don't trust anything this man has to Okay and so my worry is that even if this plan were incredibly well orchestrated and and executed upon which that in of itself is

difficult um that the markets just simply have lost trust yeah you um I think the million-dollar question the billion dollar question that everyone is asking is are these tariffs real when when we net net when we fast forward three six months what tariffs are still in place if any because I remember Donald Trump doing this in 2016 we started the presidency off with a wave of tariffs and then that just became irrelevant and the markets moved on uh this is being a little bit different like I said this is the most credible and legitimate uh move towards unwinding this order and the tariffs have just been 10 times larger 100 times larger than the last presidency and it's really like I said the billion billion dollar question is like what how serious is

this man about how much follow-through he has with the tariffs now I think I could ask you that question like how how leg how uh real do you think Donald Trump's tariffs are but I think your guess is anyone's guess and that's really the punchline here is there's there's just confusion about what we we don't really know and you wrote you recently wrote a column in the FT titled America the unstable and you opened it with uh America under Donald Trump is an emerging market can you talk about the pattern that you are seeing in this current administration why you liken it to an emerging market yeah so um emerging markets and and I should caveat this by saying I'm kind of talking about emerging markets as we

remember them from the 70s and 80s and even the 90s i mean the truth of the matter is emerging markets have cleaned up their act a lot in the last few years whereas rich countries like the US and many parts of Europe have kind of gone downhill but but let's just take the emerging market paradigm as one that describes a market that doesn't have its sea legs yet you know you you you probably have a lot of concentration in certain industries you may have a certain level of corruption you tend to have more unstable politics you often have politics by cult of personality which leads to um oligopoly and it it leads to a sense that even the judicial system can't be trusted those are all risk factors for business so while you might have high growth levels on occasion in some of those markets you

also have very high risk levels which is why borrowing costs tend to be higher for emerging markets because people know that you know if you go into um Indonesia or Mexico or South Africa you know you're you're risking more than presumably when you go into a um established market where there is a rule of law and um a very liquid global currency unfortunately under Donald Trump we seem to be squandering some of that benefit um and the the fact that decisions are being made seemingly by a single man i mean literally um when the tariffs were being pulled back a few days ago Jameson Greer who is the president's USR the trade representative was in Congress arguing

for tariffs and so in real time you're getting two different messages and the rest of the world is looking at us and just thinking okay what do we do during the next trade negotiation is what the USR is actually saying going to hold or is it going to be something different the next day that starts to get you into um a kind of an unpredictability which is typically what you get in emerging markets and what's interesting is it's now being reflected in the numbers so if you look at correlations between political risk and say the dollar or political risk and the price of the S&P they're now much more tightly correlated whereas in the past even during things like say debt crisis debacles or um you know political polarization the hanging Chad episode if you remember you know

way back when with Gorvie Bush um you wouldn't see asset prices declining because people had faith in the rule of law and in the the um solveny of institutions in the US and I think that faith has been damaged there are just a number of um three fourletter agencies out there whose mandate it is to preserve uh fair and orderly markets uh because we've understood that like orderly markets is good for capital formation it's good for investment it's good for businesses uh and as you noted on on April 10th specifically although it's been happening over the last 10 days or so really marked an interesting set of changes in some of the prices of uh global markets mainly the US stock market going down S&P 500 Dow Jones

going down 10-year bond yields going up uh and then also the value of the dollar the the Dixie the dollar index going down so when you put all these things together it's a it's a different interpretation of the United States role in the world as the capital center of the world uh when you when you see all these pieces the dollar going down bond yields going up stock market going down putting all these pieces together what what do you see here i see that we're moving towards a post-neoliberal world potentially a tripolar world in which you've got the US and whichever other countries might eventually be in its orbit Europe and Asia a sort of you know Southeast Asia

led by China kind of paradigm um there are certain other big Asian countries India being you know primarily one I'm thinking about that may and Japan that may or may not go in with that um Asian orbit but I think we're really headed towards a much more fragmented regionalized world in which the dollar as the global reserve certainly won't uh disappear overnight that never happens you know if you look back to other similar paradigm shifts like when sterling the British sterling um lost its place as the global reserve wasn't like an overnight thing but there was a lot of zuzz up and down market um volatility that kind of let you know ooh there's a change of foot here and then

eventually the dollar replaces sterling and you're in the post Breton Woods period so I think that's where we're going um I think that there will be more trade done in R&B i think if Europe were to get its act together and pull together as a political union and issue shared bonds um that the world would snap them up as a hedge against the dollar um now it's possible if we were to see a real huge turnout in the midterms for Democrats that markets would like that and they would say okay well you know let's slow down this this process towards a new world but I'm not so sure we're going to get there i want to uh ask about whether this phase change of u the global order is a

oneway street word that's a good word by the way phase change yeah is it is this a one-way street like say say the Democrats come in uh win like sweep the midterms have a very strong presence and it's it's an indictment of Donald Trump's leadership and it's like okay we the United States actually don't agree with anything Donald Trump's been doing for the last few years let's try and unwind this can we actually go back or is there no going back is the damage done or is there is there possibility an undoing of what has been done i don't think we're ever going back to like the early9s sense of this is the end of history this is the you know the the US-led Washington consensus is is it this is the the global order from now

until forever um we're not going there i think depending on what kind of um democratic victory you saw we could go one of two ways if you saw um as I expect that you would um a democratic a sort of economic populism emerge from the left in which the left says yeah th this this point the average working voting populations in rich countries have have been penalized to a certain extent by globalization and we need to tweak that we need to soften it we need to come up with a trading system that say accounts for the fact that there are high higher wages and and environmental standards in rich countries i think you could slow the

process somewhat and it might be smoother but I don't think you could turn it back on the other hand um if you saw a a Democratic victory and then policy makers saying we just want to pretend like none of this last eight years happened I actually think you would see more of a resurgence um towards a new order because I really think that the neoliberal economic message simply does not resonate anymore with working people right now we're having both sides of the aisle are debating about the strategy of Donald Trump and the effectiveness of the decisions being made like recently uh the podcast that everyone is listening to is the all-in podcast debate between Larry Summers and Ezra Klene on the on the right side of the

spectrum or excuse me on the left side of the spectrum versus David Sax and Shimatha on the right and David Sax and Shimoth are all saying this is all part of the strategy this is the master plan beautifully executed larry Summers and Ezra Klene are saying seriously this is a huge foolish error there's this we are losing trust do you have an opinion about where we land between those two ends of the spectrum well definitely between them um I'll start with the kind of lowhanging fruit which is Larry Summers and Ezra Klene i mean you know Larry I think I I actually think he was sort of disingenuous with his criticisms of inflation i think inflation has come from a lot of different places not just the Biden fiscal um uh spending which by

the way led to the most robust postco recovery in the rich world ezra's new book you know with Derek Thomas abundance tries to set a new agenda for Democrats but it's frankly it's slight and I say it's slight because it's focused on the lowhanging fruit of regulation and don't get me wrong I think there's plenty of room for government to become more efficient and certainly it's important for Democrats to think about that it's not usually their sweet spot but even if you were to make every single tweak in the housing market that you could make every single tweak to transportation policy you're not going to get in this uh quote abundance agenda down to the real problem in the economy not just in the

US but globally which is concentration of power this is what the neoliberal system wrought this gets back to the only goal was get from point A to point C as fast and cheaply as possible that sorted for high concentration in China it sorted for high concentration in a handful of large global multinationals it has led to a gilded era level of concentration in core industries technology being primary but but finance which has only become more concentrated since the great financial crisis pharmaceuticals um you know all the important stuff has just gotten more conc uh concentrated and that math doesn't work because in a 70% consumer spending economy if you can't create

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there's been a the big conversation uh about bringing manufacturing back home has led to some pretty interesting memes being shared on Twitter uh mainly uh the memes that have been going around are just like AI generated videos of uh people that look like they're Donald Trump's base in uh factories like building iPhones and I think the the punchline that these memes are really trying to land are kind of the the farcical idea that United States citizens are actually interested in some of the jobs that Donald Trump wants to bring home now this is also a debate on crypto Twitter where some people say like when I when I give this take out on Twitter that United States citizens don't actually want these jobs um I am critiqued with well I'm I'm a podcaster

i'm a service I'm a I I'm in the service industry right uh and so uh maybe actually I'm out of touch and many of American citizens actually are very happy build working in factory jobs doing manufacturing and that's what they are primarily interested in what do you think about this conversation about bringing manufacturing jobs back home does the form factor even fit inside of the country that we have yeah I'll answer that question and I realize I didn't answer the second part of your previous question about the plan is there a plan that's being executed on perfectly but let me just answer the manufacturing question for starters I mean I know a lot about manufacturing my dad ran factories in the in the Midwest in the um Detroit um orbit auto components and supply chains um

and today's manufacturing is not your grandfather's manufacturing and so that's both challenging but it's also really exciting it's challenging because these jobs actually they create factories and and industries that are doing manufacturing now create fewer jobs individual numbers of jobs than they used to in part because so much more technology is used but the fact that there's so much more technology being used actually sort of transforms the entire idea of what is manufacturing and what is services so let me give you an example um uh 3D printing which used to be something that was considered kind of a hobbyist's um pastime is when you use um large pieces of equipment to

literally spray paint materials to build up products rather than cutting them out of a steel or aluminum um this can now be done at scale it's being used increasingly uh to do just in time manufacturing in ways that are incredibly high-tech and actually link up to services because you know uh you can have a factory today that is spray painting an entire run of all the parts that are in a jet engine in real time meanwhile the additive manufacturing company that's doing that might be working with say the airline which has sensors in each of those parts that are relaying real-time information down to a

factory where engineers are tweaking the algorithms that shift the design of the product in real time to account for problems incredibly cool it's incredibly cool and it's just the beginning we are going to I think in the next 5 to 10 years this is going to be the big tech revolution we're going to see major major advances in that whole industry um it actually got a big boost during co because the fact that normal supply chains were broken meant that these proto um prototypes and sort of you know proto efforts around additive manufacturing were really utilized and just took off people were spray painting respirator parts and um you know and PPE so um so that's that's part of um what's important here manufacturing is also

about resiliency so it's not just about jobs it's about resiliency it's about the fact that you know if there is going to be a more fraught more fragmented potentially more volatile world you want to be able to make things quickly um locally and regionally we want to be able to hub consumption and production uh a little bit more tightly together which also has the advantage of decreasing carbon load so if you look at supply chains as a whole the entire global logistics business that's shipping by air sea um truck that industry is the second largest global emitter of carbon after China so if you want to cut emissions make supply chain

shorter if you want to make supply chains shorter use high-tech manufacturing these are lots of good reasons to do that let me now quickly answer the second part of the question you asked earlier which is is there some plan that Trump's trying to execute on i mean again Steve Mirren at the Council of Economic Adviserss wrote this really quite interesting paper called a users's guide to restructuring the global trading system and it was a pretty good outline of what the highlevel plan is and frankly the risks involved in it and the plan involves weakening the US dollar to a certain extent so that you can make US exports more competitive us exports become more competitive investors want to put money into

manufacturing in the US again that allows the US to build not just chips but ships um more control over uh commercial logistics over security trump I would say is less interested although he professes to be interested I think he's less interested in the jobs piece of this than Biden was um and I also think that it's a complicated plan at the best of times and he is not executing it by the playbook even of his own people mhm okay i I I think uh Donald Trump uh for better for worse sometimes praiseworthy sometimes critiqued as a vibesbased president he's very totally vibes totally vibes yeah so I I there was an interview where people were um asking about uh there were there were damages

done to United States companies based off of this positioning of the tariffs uh and he was asked if if there would be uh like like uh refund not not refunds refund's not the right word but uh just like because of the damage done by the policy to United States companies there would be some sort of compensation paid back from the government to United States uh companies uh just to like hey sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry sorry for the pain uh here's here's a check uh and a reporter asked him uh what would be the policy or how would you go about determining who deserves some compensation versus who doesn't and he just responds uh instinctively just vibes just straight vibes how how do you just like think

about that as a as a leader of the United States as the leader of the you know quote unquote free world the capital markets the United States having this like instinctive vibes based president oh boy where to begin i mean there's so much that we there's so much that we could say about Donald Trump's psychology you know and part of this is about wanting power wanting attention wanting to keep everybody on tender hooks i mean there's a kind of a you know without breaking those rules against you know diagnosing people you've never met not that I'm a shrink but you know I think there's some narcissism at work here um that said um the thing that really worries me about the vibe stuff is that and this is how Russia Turkey you know autocratic states

tend to be run they tend to be run by individual leaders that say things yay nay and then you watch the fortunes of entire industries and societies kind of rise and fall i remember once I put this in my most recent column um several years ago Putin was speaking on television about a particular coal oligarch who I guess had displeased him and he said five lines about the guy and I was watching CNBC and they were showing the poor man's stock declining in real time like $5 trillion was wiped off of it by five sentences that Putin uttered and that's where we are i mean this is why I didn't think it was great that when Donald Trump posted on Truth Social it's a good time to buy that that

that was a good thing this isn't stabilizing the markets this is just showing us that he has the power to push them up and down that's not what investors want to hear and I think we're still getting clarity about the impacts of uh the decisions made by the Donald Trump administration over the last 7 to 10 days but you can just look at the the markets both the bond markets stock markets there are hedge funds being liquidated people getting carded out there are real impacts on businesses based on this like top-down uh influence over the markets of which Donald Trump knows he has like he keeps on saying "I'm not looking at the stock market i'm not looking at the bond market." And I don't think anyone is really believing him no absolutely not it's funny i was um just on a program with his former um

press secretary uh the other day on CNN and she was saying that you know he's playing a somewhat different game this time around but eventually he will always pay attention to the markets he will always revert and I think the difference this time around is it's not even so much the equity market he's paying attention to it's the bond market because the bond market is essentially what says the US still has preeminent financial power once that starts to fall apart the US doesn't have a lot of leverage and so I hope for all of our stakes he's watching it carefully what signal did you get from the fact that um Donald Trump did the 90day tariff pause he made he he made that announcement

something like 12 to 18 hours after the bond market pretty credibly showed that it was not going down anymore i think the yields on the 10-year bonds cratered at something like 3.8% you know going down pretty far everyone was you know applauding uh Besson's strategy here to get those bond yields down because of all the debt that we have to turn over over the next 6 to9 months that's the whole story there uh but then but then bonds did the surprising thing that no one was really expecting and they just went back up and they went all the way back up to like 4.7% and that difference between like 3.8 and 4.7% is something in the hundreds of billions of dollars of future costs to uh the United States because of the debt that we have to pay uh and then a like like 12 half a day

later Donald Trump announces the 90-day tariff pause what what signal did you get from that order of events well you know I mean everybody keeps talking about the old James Carville quip about you know I want to come back in my next life as the bond market i think he looked at the bond market and said uh oh this isn't going down as well as I would have thought and you know also you saw all the advisers flying to Mara Lago and you heard the billionaires on television and on radio saying um ah we don't love this this is going to make it harder this is you know they were using the recession word they were saying talking about stagflation and um you know I think he was able as we all kind of knew he would to find a way to spin this as some kind

of large s on his part but I think it was entirely a reaction to the market one effect that I think we are are seeing when we net this all together kind of going back up to those three market indicators that I pulled up earlier stock market going down 10ear yields going up the value of the dollar the Dixie the index going down Um my interpretation of this is a uh decline of the significance of the United States as the financial center uh the gravitational center of the world for finance uh now it still is it still likely will be dominant but you are lo seeing it lose its strength at least to some fraction to some degree uh and we we cons continue to see these metrics where they go as how far that goes

whether United States will completely lose control over that i don't think anyone will ever think it's completely losing but you're you're seeing a decrease of strength here and that's a again my interpretation largely because of the chaoticness of Donald Trump markets love stability they love assuredness and that's not what Donald Trump is supplying into the market so as a as a result the chaoticness is creating insecurity in the markets and and that's what we're seeing one benefit yeah maybe if you just want to comment on that I'll have I have a question for you but go for it i completely agree and I think the fact that you've seen you know gold prices largely going up with the exception and this is worrisome you did see a couple of times gold going down as people sold it off to pay losses in other areas which is like whoa that

tells you there's blood on the street somewhere now the I want to talk about one potential benefit of this um uh United States centralized supply chains is a concept out there and I think um of anyone the person who's really mastered the idea of a controlled verticalized uh doicile supply chain is Elon Musk uh Tesla Tesla is assembled from parts all over the world but even SpaceX has a lot of a lot of United States self-built materials and I think as a result of that a a potential future out there is because of the chaoticness in the market uh and because of general chaoticness in the in leadership and because of the shifting phase change that we were

talking about earlier United States companies are going to be interested in centralizing their supply chain in the United States and that is going to be a reaction to the leadership and to the the market that we are seeing and that might be a long-term outcome here of companies are just going to find ways to derisk and they are going to choose to derisk by figuring out how to put as much of their supply chain in the United States as possible that is just my uninformed take uh how would you react to that no I think that's fair um you know it's going to depend on the industry it's going to depend um I mean you think about someone like Elon Musk I totally agree with you um Tesla I was always interested and impressed that he

had developed a a pretty vertical supply chain there on the other hand if people are rejecting Teslas as they are in many parts in many of the top markets in the world California Germany etc because of his politics well it's not really going to matter how the supply chain is and nobody wants to buy your product um that said I think for sure um the semiconductor industry I mean I'm I'm glad to finally hear Trump stop talking about dismantling chips and start kind of going back to yeah we do i mean you heard Bessence say the other day we need to make our pharmaceuticals and our semiconductors in the US and that was like okay yes this makes sense and by the way I think that Europe should make some too i think the Chinese should make

some too taiwanese great but you don't want something that is the lifeblood of the global economy and being made in one place that doesn't make sense for anybody mhm so uh Ronald when we when we wrap this episode up and we go back to well me I'm going to go back to looking at Twitter i'm going to go back to like seeing who and where Scott Besson is making words what are you looking for as signal who are you paying attention to uh what are you looking at the bond market you looking at the stock market where are you trying to get signal for how this plays out in the future so I'm always looking at the bond market um I'm looking at the price of gold i'm looking at the oil dollar peg is it is it weakening um I'm looking at the percentage of trade being done in R&B

and how that's shifting um and I'm looking just generally at people who are about political risk as opposed to economists i mean economists have gotten it wrong so much in the last 20 years in particular but often in the last 40 years because they've acted as though the world could be modeled in these very kind of mathematical ways there's a lot of physics envy you know they want to kind of believe in perfect formulas and the world just isn't like that and it's becoming less and less so mhm uh I know um crypto isn't really a main player in this story here and I'm I'm not uh sure how informed or how much you pay attention to the crypto markets but if

if you have any uh opinions about how crypto is relevant here I'd love to hear them yeah you know I'm if we talk about crypto as as nonsovereignbacked you know commercial crypto Bitcoin things like that um I think that for some people particularly younger people it is kind of like a digital gold they're looking at it as a hedge against a postdollar world something that is finite in some way and thus can't you know the value of it can't be inflated away i personally would never buy crypto because I think unlike gold it doesn't have you know thousands of years of solid value behind it so I just don't see the point but I'm not a crypto billionaire so

let me let me share with you uh some of the conversations that has been going on in the crypto industry downstream of the tariffs and I'll I'll get you to to reflect on them and see how well they land uh one of them is that well tariffs don't impact crypto uh and so you see the Apple stock falling because of tariffs on Chinese products you see the stock market falling just because like these tariffs have material impacts on these like United States companies now you you see crypto falling too because it's just correlated risk assets there is no crypto asset out there that actually is impacted by tariffs and that's like an interesting um feature when you zoom in but you can also zoom out and understand that well crypto exists on the internet and while we are having this global order unwind where we

are shifting away from globalism we are going back to some sort of isolationism every country is going to look after themselves first well crypto exists on the internet it is inherently a crossborder transnational phenomenon ex it exists at a layer above the the the nation state and so while there has been this push back against globalism you are still finding this transnational globalism energy on the internet which is where crypto exists and so it's a little bit we get these are not the same things you know you're like crypto will never produce an iPhone it will never produce a car it'll never produce pharmaceuticals but nonetheless there is this inherently global phenomenon happening in the cloud in the internet in the crypto industry um any thoughts

or reflections on that kind of concept yeah I hear what you're saying i mean um and I you know I I know I know people that believe that um crypto has a place in in the way that you're describing i guess when I hear this I reflect more on the kind of techno optimism techchnofascism that you know fuels people like Elon Musk that kind of want a world that exists above the nation state that kind of floats at 35,000 ft and you know there's been a lot of scary regimes um Mussolini's Italy was very techno optimistic uh apartheid South Africa was very technoptimistic and this idea that you can somehow hover above of the nation

state when central banks by and large still are not um interested in this stuff and the average person has no idea what it is not sold yet Ra thank you so much for joining us on on bank list today I really appreciate your insights thank you banklistation we didn't talk about crypto too much today other than these takes at the end so I maybe the disclaimers don't make sense but nonetheless crypto is risky you can lose what you put in but nonetheless this is the frontier we're glad you're with us on the bankless journey thanks a