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Douglas Macgregor: U.S. War on Iran Risks Triggering World War https://youtu.be/S7ze8RFhqXk https://t.co/2dma1vdOhj
Video Transcript AI Summary
Colonel Douglas MacGregor discusses the likelihood and dynamics of a potential new war involving Iran, the Middle East, and broader great-power competition.
- On a possible Iran strike: MacGregor says there will be a resumption of the war, though he cannot predict timing. He cites Western attempts to destabilize Iran (Mossad, CIA, MI6-backed unrest) and argues Iran is more cohesive now than it was forty years ago, with demonstrations representing a small minority and not a broad collapse of support for the government. He contends that those who want to destroy Iran or empower Israel believe the regime can be toppled with Western support and Israeli action, but he asserts that such a regime change is unlikely and that Iran will respond forcefully if attacked. He notes that current deployments are heavy on airpower with limited naval presence, and he suggests Israel’s broader goals (Gaza, Lebanon, Syria) will not be achievable without addressing Iran.
- Regional actors and incentives: Netanyahu’s regional aims require confronting Iran, and Turkish involvement with the Kurds could influence the balance. He describes a recent Kurdish incursion into northern Iran that Iran suppressed, aided by Turkish coordination. He frames BRICS as militarizing in reaction to Western actions, including in Venezuela, Russia, and Ukraine, and says disrupting the Persian Gulf oil flow would harm China, prompting cooperation with Azerbaijan and Turkey against Iran to undermine the One Belt, One Road project. He also argues that BRICS countries—Russia, China, India—will not easily align with U.S. plans if Washington proceeds toward war.
- Russian and Chinese calculations: On Russia and China, MacGregor says they have supplied Iran with military tech and missile/radar capabilities and helped counteract efforts to disrupt Iran with Starlink. He believes many Iranians still oppose regime collapse and that a broader war would risk escalation with Russia and China backing Iran. He cites Moscow’s withdrawal of Russian personnel from Israel and the sense in Moscow that Trump is unreliable, leading Russia to hedge against U.S. actions. He notes Russians are concerned about Europe and envision potential conflicts with Europe, while he questions U.S. strategy and end states.
- No first-use and nuclear considerations: MacGregor discusses the idea of no-first-use (NNU) as a potential framework to reduce the risk of nuclear escalation, suggesting a multilateral agreement among the major nuclear powers (US, Russia, China, India, Pakistan, Israel, North Korea, Britain, France). He posits that such an agreement could advance diplomacy, including on Korea, and reduce the likelihood of Armageddon. He mentions that Trump could leverage such a stance, though he notes Trump’s tendency to pursue more aggressive policies in other areas.
- Europe and NATO: He argues Europe is unprepared for renewed large-scale conflict and has disarmed substantially over decades. He criticizes Britain and France for rhetoric and capability gaps and suggests the United States is fatigued with European demands, though he doubts Europe could sustain a conflict against Russia.
- Venezuela and domestic budget: He emphasizes the futility of long wars in certain contexts (Venezuela) and the mismatch between spending and real capability gains. He references the defense budget as largely consumed by fixed costs like veterans’ medical care and pensions, arguing that simply increasing the budget does not guarantee meaningful strategic gains. He notes the role of special operations as valuable but not decisive in major wars.
- Concluding view: MacGregor reiterates that war in the region is likely, with many overlapping alarms and uncertainties about timing, leadership decisions, and the risk of escalation. He stresses that both Russia and China have stakes in the outcome and that the Middle East conflict could influence global alignments and deterrence dynamics. He closes by underscoring the potential importance of no-first-use diplomacy and broader nuclear risk reduction as a path forward.
Full Transcript
Speaker 0: Welcome back to the program. We're here today with colonel Douglas MacGregor, a highly decorated combat veteran and also a former adviser to the US secretary of defense. So thank you for coming back on.
Speaker 1: Sure. Sure. Of course. Good to see you, Voin.
Speaker 0: We already now see that there's some new increased military activity in The Middle East, primarily, you know, involving these different aircraft carriers or at least a lot of battleships coming, new equipment moving in. We heard stories about troops as well and refueling tankers. Do you do you think another strike is pending in Iran? I know Lindsey Graham seemed very excited about the prospect that, yes, strike could be imminent.
Speaker 1: I I think there will be a resumption of the war. I'm surprised it's taken this long. I don't know when it will occur. Obviously, the Mossad, CIA, MI six, sponsored unrest inside Iran was supposed to disrupt preparations to defend the country, if not ultimately to replace the government. We have a lot of people who believe first and foremost that you can change a regime, and that means to remove the people at the the top and suddenly peace will break out everywhere.
And then you have a lot of people who are absolutely convinced that Iran is exactly the way it was forty years ago. Nothing's changed, and therefore strongly believe that the Iranian population has come to its senses and is now devoted to the idea of, destroying its own government. Then you have those who are diehard Israel supporters, and, they believe that, Israel just needs to be, given the go go ahead, the green light, and Israel will destroy Iran. And, as as a result, once again, the entire region will benefit. The world will be a better place.
So which lens do you wanna look through? All three lenses are the predominant ones here in The United States. Anybody who suggests as I do and others have, first of all, Iran is not about to fall apart. Iran is probably more cohesive in a social sense now than at any point that I can remember. That these people that, took to the streets were a small minority, And initially, large numbers of them were very sincere, but they weren't as upset with the government as they were struggling for more reform or in some cases, conservatives opposing reform.
But eventually, that gave way to what you saw on television, the more violent, unrest that was induced by the CIA, Mossad and MI six. So I I think that we have a lot of people that are anxiously awaiting the imminent destruction of Iran, And I think their belief is that, if we give the Israelis enough of what they need, they'll be able to do it without our help. I don't think that's the case. I'm not sure that president Trump was very excited about the idea of going back to war with Iran, but he obviously has no way to stop it. And he's obliged for a whole range of reasons strategically to support them.
What's interesting is that we have not seen the movement of, one or two carrier battle groups back into the region. Normally, expect to see that. There those are short legged fighters, but nevertheless, they contribute enormously to the punching power of, the force of the region. So right now, it's almost all air force with some modest naval presence. So I I don't know.
I think it's coming. Let's face it. Mister Netanyahu cannot walk away from Iran in his current position. Nothing he wants to accomplish. The wholesale elimination of the population in Gaza, the complete conquest of Southern And Central Lebanon, which means the elimination of Hezbollah, the encroaching movement into Syria.
You know, these things are not gonna work unless he finishes off Iran. There's a lot of activity involving the Kurds right now. And as you know, we and and the Israelis have worked very hard with the Kurds, so have the British, to turn them into a a dangerous force. And a few days ago, we had an incursion of somebody said to me that's knowledgeable about 400 Kurds headed into Iran, Northern Iran. Thanks to the Turks who were working closely with the Iranian, Revolutionary Guard Corps, they identified this, and the Iranians were able to annihilate virtually the entire contingent without much difficulty.
So I think what we're seeing happening is that globally, BRICS is being militarized. And that's largely our fault because of our behavior in Venezuela, our behavior towards Russia and Ukraine, and obviously what's happening in The Middle East. We have an interest in the destruction of Ukraine insofar as we think it will harm China, and it could if you can forestall the movement of oil out of the Persian Gulf, and that represents probably 25 or 30% of all the oil that China utilizes. So if you're interested in harming China per se, that's one way to do it. It also creates the opportunity for you to work with us, you know, with Azerbaijan and the Turks against Iran insofar as you're disrupting the One Belt, One Road project.
I mean, there are a lot of things. Mean, depending upon whom you talk to in the administration in Washington, you get a different story. That's why I say it's hard to know with president Trump because president Trump, whatever his faults, is really privately not somebody who wants to bomb the world. Unfortunately, that's exactly what he ends up doing because of the people that surround him. But, you know, that's another matter entirely.
So I think we have to conclude that, yeah, war is coming. Exactly when, we don't know, but we see all the conditions that are being developed with the hope of dooming the Iranian regime to defeat. I don't think the Russians or the Chinese are gonna go along with it.
Speaker 0: When you say the Russians and Chinese won't go along with it, to what extent, though, would they back Iran? I mean, they don't they don't they don't want a direct shooting war with The United States as that would be well, we wouldn't be able to control the escalation if this happens. But but this is in terms of economic support or supplying weapons, or how how how can they prevent The United States from knocking out Iran?
Speaker 1: Well, I think the Chinese and the Russians have provided military technology and technical assistance. There's no question about that. And this time, I think the Iranians have welcomed more assistance technologically, particularly with missiles and radars from the Russians than they previously received. Secondly, I think the Chinese have been instrumental in defeating the use of Starlink by the MI six, both sides, CIA opposition, inside the country. We now think that 40,000 starlight terminals were smuggled into Iran.
Remember, this is a huge country. It's the size of Western Europe. It's got 90,000,000 people in it. So no one should be surprised that you can penetrate the borders. I mean, they penetrate our borders.
They're penetrating Iran's borders. And they they were able to bring these startling terminals in, but the Chinese apparently came to the rescue to shut them down. And they've they've enabled a blackout largely of all all the urban areas, and it may be national at this point, to regain control. But the point that needs to be kept in mind is that there are millions of Iranians, tens of millions, that have demonstrated in favor of and in support of the government, and the vast majority of people do not welcome the kind of disruption that the destruction of their government would bring at this particular point in time, given the dangers that confront Iran. Iran's living in a state of siege.
I mean, somebody earlier today was critical of me because I when I said that, yes, I'm sure that several 100 people are being round up and probably facing summary execution for treason. But I said, you're talking about a nation in a state of siege. What do you expect to happen? Stalin, we know, from the time the Germans invaded until the end of the war, executed 1,000,000 Soviet soldiers who refused to fight for communism. That's what he had to do.
He used the NKVD. That kept the other several million soldiers in line. The Germans in contrast, by the way, only had to execute 23,000 out of some six or 7,000,000 German soldiers. That's a very modest number given the numbers that we're talking about and the pressures of that battlefield. But I think we have to understand that if you don't impose that kind of draconian measure, it will continue.
And I think that's what the Iranians are aware of. So I think the Iranian regime is recovering. It's putting things back together again. I I don't think it disrupted in any way their, air and missile defense. I don't think it had any impact whatsoever on their missile stocks and their ability to attack Israel or for that matter, our bases in the region.
So we're back to the initial question. Everybody wants to know when's this going to happen. Nobody knows, but there are plenty of indicators that suggest it can't be that far off.
Speaker 0: Yeah. And I thought it was strange, the the narrative for the for legitimizing the new war that is, of course, is not in the Western Hemisphere. So instead, we see Trump referencing, well, his love for freedom and protest and democracy in order for you know, as as why, you know, he stands with in their solidarity. I thought this was strange. I thought it was kinda breaking a little bit away from this liberal imperialism, but apparently not.
However, though, how how would this war be different? Because the first round didn't go well. The Iranians proved that they were able to overwhelm the the air defenses of Israel, which were quickly being depleted. And, also, Trump seems to have an aversion for for long wars. He he likes to finish them off quickly, it seems.
A little bit like Venezuela and do not get dragged into a long war. So did you think they would just try to go for overwhelming decapitation strike or going after key government figures? Because they tried this last time.
Speaker 1: Well, I think, first of all, we have to keep in mind that president Trump is aware that in the senate and the house, he does not have support for the use of American ground forces in Venezuela. The senate has already voted on a measure that would prohibit the use of US ground troops, and they voted 52 to 47 against it. That means the Democrats had Republican support. So I think president Trump, is now, I don't wanna say he's being humiliated, but he is certainly being chastened, in a sense that, he's not pushing to get US troops on the ground. Now I think in Venezuela, he's a bit, naive to think that, the population of Venezuela, is going to go along with whatever we want in with regard to their minerals and mines, gold mines, emerald mines, silver mines, rare earths, plus all of the oil.
That's not gonna happen for a whole range of reasons. It may be that he just decides that, he's done all that he can do. He'll turn his attention elsewhere. I I don't know. There has never been a viable executable plan in my judgment for Venezuela or for that matter for operations in general in Latin America.
So that's the first thing. Now when you move to Iran, that's a that's an entirely different matter because that really does attract, Russian and and Chinese intervention. Even even India is is not supportive of, anything we might do to do against Iran. So I think if you're looking at BRICS, Russia, India, China, that's a substantial chunk of the world. Now we could probably go through the rest and find even more, opposition.
I don't know how he's gonna handle that. There's nothing clean about an airpower only operation. I mean, this this notion that airpower can achieve miraculous outcomes is a big lie. It always has been. We we bombed and bombed routinely in all numbers of places, but until we ultimately went in on the ground, nothing fundamentally changed.
Now after that, we weren't weren't very successful either, but that speaks more to the wisdom of having gone to begin with than anything else. So I think at this point, he's trapped. He's going to have to take action in support of Israel. He may go in with Israel simultaneously when they finally attack. Now we don't know what the Iranians will do because for the first time, the Iranians have actually talked about potentially a preemptive attack.
I don't expect them to sit around and wait for negotiations to have an impact. I don't think anybody really trusts us anymore. I don't think anything that Trump says is going to be believed. It's that simple. So if you're an Iranian right now, you've got your finger on the trigger.
And I think if it looks like something's imminent, they're gonna pull the trigger. And this time, I think they'll throw everything they've got, including the kitchen sink at Israel and our bases in the region. My great concern is always the same. What does Israel do if it's facing potential destruction and annihilation, from Iranian missiles and rockets and so forth? Does it turn to the use of a nuclear weapon?
If it does, do we have any influence over that? Can we constrain them in any way? I don't know. Now the the thing we haven't discussed again that has to be taken into consideration is Turkey. You know, Turkey has enormous problems with inflation.
They wanna get it down to 5%. It's been up to 20%. So that is operated as a brake on things that they might do. Erdogan is very clever. He wants to be on all sides of every issue, but is he going to be compelled finally to intervene?
And and the reason for that would be the Kurds. The Kurdish threat to the Turks is substantial and serious. The Turks could be mobilized in a in a few days to fight the Kurds. Will that spill over and involve Israel? I mean, I I don't know the answers to these questions, but this this region is not stable.
It's not predictable. It's it's at a slow boil. The question is when does it boil over? But everyone is beginning to coalesce against Israel. Think that's clear.
Speaker 0: Yeah. Though you mentioned the possibility of a preemptive strike, and I think this is a, yeah, a variable which should be taken, seriously because this whole idea that The US can, just, well, place all its air force around Iran in a perfect position and then go for a strike, which Iran knows is intended to knock out their country, a decapitation strike. The idea that they would sit by and just wait for this to come, I, yeah, I I would take that warning from Iran rather serious. They have a lot at stake here. But with you you mentioned that the Russians, again, the Chinese wouldn't sit by.
But how do you see the Russians calculation having changed, though? Because if this was a few months ago, they would have been perhaps more optimistic about the possibility of a diplomatic solution with Trump that is to improve relations between The US and Russia and ending the Ukraine war at the negotiation table. But over the past weeks with this, we learned that there's been more US involvement in tack on attacks on refineries, on Russian civilian ships, even on Russia's nuclear deterrent, and, of course, the continued efforts to sanction Russia in order to break its economy. So it it I get the impression now from Moscow that they they, well, that they well, lost hope in the Trump presidency that he would be the one who would be able to, well, end a century of tensions between Russia and and The US and essentially become, if not allies, at least much, much closer. Do you think this would impact how Russia would respond to an American attack on Iran?
Speaker 1: The Russians have withdrawn their citizens. In other words, evacuated them from Israel. They've evacuated their embassy and staff from Israel. I think, mister Netanyahu has poisoned relations with the Russians. Then you add to that particular matter what you just discussed regarding president Trump.
We used to have something, and I'm sure you're familiar with this, we called Kremlinology, where we had all sorts of people sitting around trying to evaluate, estimate, analyze who was going to be in the Politburo, who was next up to be secretary general, you know, of the communist party and so forth. I think a lot of that is going on inside Moscow's inner circle. I think they're they've looked at Trump, and I think they've concluded a few things. First of all, I think the Russians like president Trump. As a person, I don't think they dislike him at all.
And they would like to get along with him, but I think they've concluded that he's unreliable. See, he may say one thing at one point in time, and then a day or two later, he changes his mind and launches in a new direction. You remember that in January, February, there were discussions. Well, we're we we need to find a way forward, and we're going to meet with the the Russian leadership in Saudi Arabia. Remember they went to Riyadh.
They held these meetings. You had lots of top people, people representing business interests. The usual suspects that supported Trump are showing up to cash in on a particular deal. Unfortunately, these billionaires align themselves or Trump aligns himself with them. I don't know which chicken or egg.
You have to figure that out. But bottom line is we thought there would be a normalization of relations with Moscow. And I think the Russians thought that that was coming. All of a sudden, that stops. Everyone goes home and forgets about it.
Then, Donald Trump, who doesn't change the sanctions regime, refuses to completely divorce himself from Zelensky despite Zelensky's bad behavior and routine tendency to ignore what Trump says, he turns around, has a meeting in Alaska, shows up with no new proposals, and then tells the Russians, we want a ceasefire. Reading nothing, studying nothing, paying no attention whatsoever to Russia's security interests. That meeting went off well. It was it had great atmospherics, wonderful optics, but it went nowhere. It produced nothing.
And I think now the Russians have concluded that's the best you're gonna get out of Donald Trump. Excuse me. It's not that he is a menace or he's deliberately, misleading. He just can't deliver. And they're looking at other people, whether it's somebody like Lindsey Graham in the in the senate who is the chief warmonger, on the senate side, but he's not alone.
He pulls in lots of Democrats like Blumenthal and others who are willing to join the the Russia hate club. Then you have the usual suspects in the White House. You have Rubio. You have Hagsef. They're they're in the camp of bombs away.
Let's let's go for it. Let's get these bastards and so forth. It's why I wrote in that that piece that came out a couple of weeks ago. It's team America. And I think they truly believe that there's not much anybody in the world can do to stop us.
And I think that was president Trump's comments within the last twenty four hours. Well, what what counter counterforce is there to what you wanna do? In other words, what are the constraints or limitations on you, mister president? And he says, well, none except my own morality. Whatever that means, and I'm sure everybody's asking that question, just what does that mean, mister president?
That's why Greenland is up for grabs. That's why Venezuela's up for grabs. That's why Iran's on the agenda. As far as he's concerned, it's whatever his whim is is his will. His wish becomes reality.
Now I don't think it works very well, but I have a feeling that's where we are. And I think the Russians have figured that out. So what do you do? You you prepare for the worst. Everybody in Russia on the ground in the military is saying we have to prepare for a war with Europe.
They're absolutely convinced that's gonna be unavoidable. Now they're hoping they won't have to fight us because they don't want to. They would like to have good relations with us. There there is, for some strange reason, a lingering sense of genuine mutual, respect and and, affection for America. It's it's really amazes me.
I don't know how it persists, but it does. So I think the Russians are torn right now. They figure, well, we're gonna have to fight the Europeans, even though you try to tell the Europeans have nothing to throw at you. They they sort of say, well, you know, we we we see what they say and do. We're gonna have to fight them.
And, of course, the French and the British, have given them plenty of reason for that. Same thing with the Germans. You know, you saw that enormous, arsenal of Taurus missiles down in Odessa that was targeted and destroyed. An enormous, enormous impact down there. Huge explosion.
And Mertz went public and said, oh, well, this is a terrible thing. And instead of, sort of feeling someone embarrassed, which he should have, he did the opposite. So I I could understand why the Russians are taking that position. But I look at us, and I just ask the question, what is the strategy? In other words, what's the end state?
What are we trying to achieve? And I don't think we've moved beyond Biden's previous positions. Harm Russia, bully Russia, push Russia into an agreement that it would otherwise never sign. You and I know that's not going to happen.
Speaker 0: Do you share that sentiment though, the, or the expectation that a war between Europe and Russia is, unavoidable?
Speaker 1: No. I I don't think it's unavoidable at all. That's the Russian view. Because of all the rhetoric and statements and behaviors, I don't think the Europeans have anything to put into the battle. And if they push hard enough, I guess, potentially, they could come under attack.
What are they gonna do about it? I mean, when this war started, there was a a study done in NATO of just how much of the territory within NATO could be defended against air and missile attack. And the answer was less than 5% of the territory. That hasn't changed. You know?
So you're talking about going into a war completely unprepared. You know, in 1941, when Pearl Harbor was destroyed or at least partially destroyed, the expectation by the army was that the navy would carry through on its prewar plan. Its prewar plan was we attack immediately straight across the Pacific all the way to The Philippines and relieve the Philippine garrison. In other words, reinforce its strength and so forth. Two divisions from the United States Army, fully manned, National Guard formations were in San Francisco ready to board ships and go to The Philippines.
Well, the Navy suddenly said we can't do that. They'd had this plan for a decade. They'd tweaked it every year. They couldn't do it. Why?
Well, one of the reasons was they had six operational oilers. In other words, vessels that carried fuel for the surface fleet. At six in the entire Pacific. And you know what the size of the Pacific is like. How far are you going to get?
The answer is not very far. There was another problem called Japanese submarines. They were afraid. They couldn't protect the troop transports. So you know where our troops went?
They went to Australia. And so the whole war took a different course. My my point is right now, that's the position the Europeans are in. It's even worse. They just don't have anything to throw at anybody.
I mean, they they have effectively disarmed themselves over the last thirty five, forty years. So I tell the Russians forget it. I mean, I would if I was asked. I would say you're you're waiting for something to happen. It's not gonna happen.
But remember, it's their country. The Ukrainians are using our intelligence and our technology to attack deep targets. So the Russians look at that and say, this is gonna go on until we ultimately crush you everybody in Ukraine. I mean, that's the position they're in right now. We have done nothing to change that.
We could have intervened a long time ago, had a real impact. We could have forced the Europeans into an agreement with us and Russia. We have done nothing. So the war continues, and it's dangerous because it could involve us, especially if we do stupid things in the Middle East. Venezuela, remember, the difference between us and the Russians and Chinese is as follows.
We're dumb enough to think that we could fight a war in Ukraine against Russia and win. Impossible for strategic reasons. Should be patently obvious. We have stupid people that think you can fight a war over Taiwan against China and win some six, seven thousand miles from The United States. Stupid.
Can't be done. The Chinese and the Russians are not dumb. They are not going to intervene in the Western Hemisphere against us militarily over Venezuela. It's not gonna happen because they know they can't win that fight, not in the Caribbean Basin. So now we go to the Middle East.
We can project power, but for how long and how much? And the last time around, we were getting close to the end in terms of our ability to project that much power successfully. Fortunately, the Iranians were also low in their capabilities, and so were the Israelis. What happens this time around? We don't know.
But this time around, both the Russians and the Chinese have more at stake. The Chinese, particularly because of the Strait Of Hormuz and because of the one belt, one route, and the Russians because of their southern flank, and we've talked about that. They're not going to allow that to fall into enemy hands. They've they're already quite upset over what's happened in Azerbaijan. So, bottom line is this is a terrible strategic position for us to be in.
It's a terrible strategic position for the Russians and the Chinese. Something's got to give.
Speaker 0: Just looks like we might be heading into this perfect storm because this 25% tariffs on anyone trading with Iran, it seems that China would be the primary target of this, and that would restart the economic war with with the Chinese. As you said, the the Russians and Chinese would likely back Iran at least indirectly with intelligence, weapons. But also if there is a war, wouldn't wouldn't there be some opportunism? I I feel like if The US gets, well, held up in the Middle East, that the Russians would then feel a bit more confident in terms of retaliating against any European provocations. I just saw two days ago that the British foreign ministry was or defense ministry was making a point that, oh, well, we're developing missiles now, which can go 500 kilometers with 200 kilogram warheads so we can start bombing Moscow.
I mean, how it it at some point, the Russians will we will see it as irresponsible not to retaliate because it only emboldens the Europeans. Because in Europe now, it's kind of accepted as normal. We can strike Russia all we want, and we just call it helping Ukraine. And but it looks as if the now that the Russians are coming in a stronger position, they're not gonna accept this anymore.
Speaker 1: I think that's entirely valid. And I think of the three when you look at Germany, France, and Great Britain that are the principal culprits responsible for what goes on from Ukraine into Russia. They're not alone because let's face it, we still provide targeting data and information. Our overhead surveillance is still critical to all of that. But of the three, they really, really have had it with the British because they know how weak the British really are.
The British have nothing to fight with. They're in terrible shit. They don't hate the British people, but they hate that damn government that is talking and behaving the way it is. Now the interesting part is they seem to want to challenge us over Greenland. That's about as ridiculous as the Russians or Chinese trying to challenge us in the Caribbean.
So hopefully, the British and the French will show that that dumb idea. And they're all talking about, well, America is bringing an end to NATO. They don't seem to understand that that's fine as far as this administration is concerned. We we have been tired of the Europeans and their demands on us for a very long time. The problem is we can't seem to shed the Russia hate problem, which I think is entirely an artificial construct that sits in Washington as a result of powerful lobbies.
And the American population doesn't share that view. They they don't know much about it. Their knee jerk reaction is to think, oh, it must be the Soviets again. Oh, that's right. It's not Soviet Union anymore.
I mean, Americans don't know much about what's beyond their borders. Let's face it. You know that from having been here. But nevertheless, it's not a systemic problem in The United States. But I think the Russians, if they're pushed, they could respond.
And I think the British want to seriously examine their fragility, their vulnerability. The Russians aren't gonna attack London and blow anything up, but there are lots of military targets that could easily be brought under attack and absolutely annihilated, and there's not a damn thing the British can do about it. Now there's something else, I you know, this is something I've been working on with some friends, and I'm gonna try and make this presentation in the near future, but I'm trying to get people to think a little differently about our relationship with Russia, and that's about no first use. This idea has been kicked around many times. JFK, before he was killed after his experience during the Cuban Missile Crisis, wanted to pursue a course that I think would have ultimately led to something like that.
The Chinese have a declared no first use policy, but we dismiss that because after all, their arsenal isn't that large. Well, it's actually growing, and it's very potentially lethal. But we have many nuclear powers today, Pakistan, India, Israel, North Korea, Russia, China, Great Britain, France. I think given the dangers that we're talking about in Eastern Europe, and in The Middle East, if we cannot come to any sort of agreement that would bring those conflicts to a head, perhaps we can come to some sort of arrangement that prevents the use of nuclear weapons. Because once a nuclear weapon is used, the escalation is inevitable.
Every every study that we've done, every model that we've looked at inevitably leads to escalation because every side decides, well, if I don't use it, I'll lose it. So I'm going to use it. And this is this has been discussed for many years behind the scenes. I think president Trump, who's talked a great deal about his qualifications for the Nobel Peace Prize, most of the time that evokes laughter. But if he were to step forward and say, you know, we can't solve the Ukraine problem today, but we can at least prevent Armageddon now and look at it from that standpoint and stand up for no first use and then sit with, Moscow and Beijing and then ultimately India, Pakistan, and the rest, and put together an agreement under which everybody says none of us will be the first to use a nuclear weapon under any circumstances, I think that could be very good.
It would also promote a new way forward on the Korean Peninsula because I know that the Republic Of South Korea wants to put this away, wants that to go away, the nuclear problem, but they'd also like us to leave because we're now increasingly seen as a catalyst for war on the Korean Peninsula. We're no longer seen as a security blanket that we once were. So I would hope that the president will think about that. We're gonna make a push in the very near few future about that. I hope to talk about that in Vancouver at the Vancouver Resource Investment Conference that's coming up at the January '25 through twenty seven January.
But I that's the only thing I can think of right now that would circumvent this this, sort of jammed up diplomatic mess and get to something that is really critical to the survival of the planet, something that we could agree on, I hope.
Speaker 0: Well, the START treaty is due to expire next month, if I'm not mistaken. And it it seemed to some point that Trump was prepared to make the nuclear weapons a key issue. He talked about denuclearizing the relationship between The US, Russia, and China. And indeed, if you wanna go with the largest nuclear powers, then, well, this this would be a a good approach. But I haven't heard much talk about it lately.
Instead, I've heard talks about increasing The US military budget to $1,500,000,000,000, which, well, could have imposed. I'm sure they find the money, but this will have some consequences.
Speaker 1: Well, you know, there's somebody named William Hartung that you should continue consider interviewing. I don't know if you've interviewed him or not. But William Hartung, who writes frequently at the Quincy Institute, talks about the budget, and he makes the point that this leads to more foreign interventions, and it's inherently escalatory in terms of moving us down the road to greater violence. I think that's part of it, but something that most people don't understand inside or outside of The United States is that a large part of our defense budget is fixed. It involves the cost of medical care.
You know, that may seem you say, well, why is that a big deal? Well, we have a lot of veterans. We have a lot of wounded. We have a lot of people who were killed, and their families have suffered. There's a lot of money in in that for that purpose, dealing with those issues.
Then on top of that, you have pensions. Huge numbers of people have retired because we've gone to this quote unquote all volunteer force. That's very expensive. So at the end of the day, that's a big chunk of the budget. Now moving beyond that, an awful lot of money that he's talking about will not produce the dream military establishment he talks about.
You're just gonna get more of what you got because, ultimately, that's what the generals and the admirals want. And the people on the hill don't pay any attention. They just wanna spend money. If I take you to Washington and walk you through the senate and the house and you ask these people, what do you do here? They say, well, we spend money.
If we're not spending money, we have nothing to do. Now when you say that, then they also look at the budget as an opportunity to do what? Agrandize themselves, their donors, you know, the various corporate structures that are rooted in their districts and states. And so they start piling on in this massive feeding frenzy at the public trough. So just before you add more money doesn't necessarily mean that you're buying more real capability.
Now, you just saw us go into and out of Venezuela in what everybody is describing as this brilliant operation. Well, it was. And we have remarkable capabilities in the special operations world, but special operations don't win wars. They're a niche capability, and you have to have an environment conducive to the use of special operations. That worked very well in Venezuela.
I wouldn't try it in North Korea. I wouldn't necessarily try it in China or Russia. Right now, Iran, maybe. But even there, you're going to have problems. And then we have, we haven't really told everybody just how much money we spent to buy off key members of the Venezuelan government and security forces.
So what I'm saying is that you're liable to see a lot more money go into those things, but you may not necessarily see anything that fundamentally dramatically improves your position in a strategic sense. And then finally, you have the problem of the debasement of our currency, because all of this is push button money. It comes out of thin air.
Speaker 0: Yeah. The economic crisis coming, I think, is gonna be come as a unfortunately, as as a as a surprise, which will complicate all of these conflicts, which are now seemingly playing out at the same time. So, yes, interesting times ahead. Well, colonel, as always, thank you very much for your time.
Speaker 1: Thank you, Glenn. Bye bye.
@Glenn_Diesen - Glenn Diesen
Yanis Varoufakis: The Imperial "Board of Peace" & End of the United Nations https://youtu.be/Xx351NmhCEk https://t.co/EKpQIzSKwE
Video Transcript AI Summary
Ioannis Varoufakis and Glenn discuss Donald Trump’s “Board of Peace” and the broader implications for international order. Varoufakis argues the Security Council’s approval of a private “owner and chair” of peace, effectively a corporation-led board, would mark the end of the United Nations and the end of international law as we know it. He notes that only China and Russia abstained on resolution 28-03 (11/17/2025), and contends the move annuls decades of UN effort on the Israeli–Palestinian conflict, resetting the clock to a pre-1945 framework and erasing Palestinian claims in the resolution. He emphasizes that this would enable a border peace outside international law, restore Netanyahu’s political standing, and undermine ICJ and ICC actions that had condemned Israeli policies. He decries the privatization of peace, where a single private individual—Donald J. Trump—would not be answerable to a public or parliamentary body, merely required to report biannually to the UN.
Varoufakis expands the critique beyond Palestine, arguing the Board embodies a broader privatization of international governance. He connects this to a long-standing trend: the replacement of states by corporations, a view echoed by tech-entrepreneur circles (Peter Thiel’s circle) who envision “free cities” governed by corporate boards. He traces the idea to colonial antecedents like the Dutch and British East India Companies and argues that today’s financiers and tech elites aim to privatize essential sovereignty—controlling currency, borders, and security—through private boards and privatized global governance.
He contends this privatization is supported by a troubling coalition: big tech loves the privatization of power (cloud capital, AI-enabled surveillance, stablecoins, privatized dollars), the military–industrial complex benefits from ongoing conflicts and weapon sales, and Wall Street seeks rents generated by the new financial architecture (including “Genius Act” implications and the potential for private digital currencies). Varoufakis argues Trump’s alignment with these forces is designed to disrupt established Western-led international arrangements, including a weakened EU and NATO, to extract maximum rents from allies while negotiating anew with China.
Discussing Canada, Britain, and Europe, Varoufakis criticizes their hypocrisy and reluctance to challenge the US, using Mark Carney’s much-discussed speech as an example. He disputes Carney’s claim that the rules-based order produced public goods like open sea lanes and a stable financial system, pointing to 2008’s financial crisis, Libya’s destruction, and ongoing Palestinian suffering as evidence of deep flaws. He argues Carney’s proposed “new alliance” of middle powers with Germany and France lacks a concrete peace initiative for Ukraine or Palestine.
In the broader historical frame, Varoufakis provides two analyses of US dominance. He says the postwar American hegemony effectively ended in 1971 with the Nixon shocks and Bretton Woods’ collapse; the modern order shifted to a system where the US runs deficits, exports dollars, and relies on the private sector to shape policy. He argues Trump’s strategy is not a simple return to past practices but a bid to preserve US dominance in the face of China’s rapid rise, by privatizing the dollar, decoupling Europe, and using geopolitical salients (Greenland, Canada) as leverage. He suggests Trump’s approach aims to keep the Western wheel turning with the US at the hub, regardless of the spokes’ weakness.
The discussion closes with a warning: the ongoing erosion of international law and the rise of private, corporate-driven governance could redefine the balance of power, with Europe and other allies potentially bearing the consequences of a new, privatized world order.
Full Transcript
Speaker 0: Welcome back. We are very privileged to be joined today by Ioannis Varoufakis, the former finance minister of Greece, a professor, and also the founder of DiEM25, that is democracy in Europe movement. So thank you for coming on. I've been looking forward to speak with you regarding Trump's new peace board, which many people interpret as an effort to push aside and replace the United Nations and international law itself. Well, you have referred to Trump's peace board as an abomination.
Now I was wondering why do you see this being so dangerous?
Speaker 1: I don't just see it as being dangerous. I think that historians of the future will remember the 11/17/2025 when resolution twenty eight zero three of the Security Council approved the board of peace and Donald Trump as its owner and chair. That approval by the Security Council, I do believe, is going to go down in history as the end of the United Nations. Essentially, the United Nations abolished itself through that resolution. Now at the time, you will recall that only two countries abstained in the Security Council.
It was China and Russia. I have to say that I was mad that they did. But then again, when when I heard their arguments, I thought, unfortunately, they may have a point. But the the the reason why I'm saying that it abolishes the United Nations, Glenn, is because, you know, come to think of it, essentially, what it does is it is a recognition of the end of history, not in Francis Fukuyama's terms, but in terms of the end of history regarding the Israeli Palestinian conflict. You will recall, and I'm sure our audience know this knows this very well, that the United Nations Security Council has been making every few months, every year, all the time, some efforts to keep on the rapes, the peace process or whatever is left of the peace process between the two sides, the Israeli side and the Palestinian side.
And the United Nations has this tactic or, let's say, it's an institutional memory. Not tactic, institutional memory, whereby, you know, every resolution follows the previous resolutions. So, you know, if if you follow the history of the engagement of the United Nations with the issue of Palestine, you'll find that there is a continuity. It begins with the recognition of two parallel states, Israel and a Palestinian state. One of them was inaugurated.
The other one never was. And then it moves on to resolutions after every battle was fought, every defeat of the Palestinian people. What the November 17 resolution accepting the Board of Peace as the next step in this process, what it does, it annuls this whole history. Essentially, it was a remarkable success by Donald Trump to step in and salvage the bacon of Benjamin Netanyahu because you will recall that before that resolution, before the ceasefire, the so called ceasefire, because there's no ceasefire. I mean, Palestinians are being killed and starved to death on a daily basis as we speak.
What that so called ceasefire and the resolution by the Security Council did was essentially to save Netanyahu from a major propaganda defeat. You will remember that four major countries, middle powers, Canada, Australia, Britain, and France, recognized the state of Palestine. It was a very hypocritical recognition because they never if they really wanted to do something about bringing about the Palestinian state, which they recognized so hypocritically, they would have stopped arming Israel. They would have embargoed Israel. They would have done all the things that the BDS movement says that they should be doing, but they never did.
But then, nevertheless, it was still a major defeat for Entenango. Trump steps in, imposes that ceasefire, brings about the notion of a border peace, which will be totally outside international law, totally outside the history of the Palestinian occupied lands as occupied lands, and effectively resets the clock as if we are going back to 1945 or 1948 or maybe even before that. That saved Netanyahu because, you know, let's face it. The International Court of Justice in June 2024 had clearly stipulated that Israel was in breach of international law, ordered Israel to withdraw from East Jerusalem, the West Bank, and Gaza. You had international condemnation of the genocide.
You had International Criminal Court indicting Netanyahu and his former defense minister as war criminals. And with that resolution, the United Nations Security Council effectively. And we go back to situation then, and this is the point, the main point I want to make, whereby Gaza doesn't belong to the Palestinians anymore. There are no Palestinians in the resolution. They don't exist.
This is as if as if it is, an empty land. And I'm mentioning that term very poignantly because terra nullius was the legalistic term that European colonial powers used back in, you know, a century ago or more than two centuries ago in order to justify colonizing various lands around the world from Australia, New Zealand, Kenya, South Africa, so on. The first thing that European colonizers did was to say, that land has no people and no history, no owners. It's outside the international law. It's like, know, going to an asteroid between Jupiter and, I don't know, some other planet.
Right? And, you know, the fact that the United Nations recognize that and recognize that there is going to be a corporation, a corporation, a private company, that is going to have as a lifelong chairman, a man, not a president, not a representative of the people, but a man called Donald j Trump, And that he has no obligation whatsoever. He's not answerable to any to the board. He's not answerable to the United Nations. He's not answering answerable even to the congress of the United States of America.
And he simply has to give a report every six months to the United Nations if he wants to. It's not even a report that has to be approved of or anything like that. So, essentially, the United Nations annulled itself when it approved of that resolution in on the 11/17/2025. And I have to and this is how I'm gonna complete my long answer. Apologies for taking so long, but I'm livid about all this.
The why did the French and the British who had supposedly recognized the state of Palestine, including Gaza, only a few weeks before, why did they accept that? Well, they accepted that because for them, this was something that concerned brown people in The Middle East. It didn't concern them. Now they know better. They know that the border of peace is not just about Palestine.
It's not about Gaza. And now the border of peace is about everything. And, you know, you have all these Bond villains that Trump has amassed has surrounded himself with, and he's talking about Greenland. Tomorrow's week, he's going to talk about Canada. And, you know, now the chickens are coming home to roost, metaphorically speaking.
And you have people like, you know, Mark Carney, the liberal premier of Canada, prime minister of Canada, coming out with a very interesting speech in divorce recently saying, oh my goodness. You know? This is this is the end of the world as we knew it. Well, you idiots. You brought us about by approving a United Nations resolution, which effectively annals the United Nations and annals international law and annals your right to exist.
Speaker 0: Well, I remember when Trump first proposed to ethnically cleanse the entire population of Gaza, have The United States take over the region and create this Riviera Of The Middle East. Mhmm. To be honest, at the time, I I interpret it as an effort to shake up the status quo and create some room for maneuver, But I thought it was gonna be a bit limited as well. But this, as you said, this is something a lot bigger. This is again, and I think he I I I didn't take it literally, I thought, because he what he says and what he does is two different different things, but the I think, yeah, we opened up Pandora's box with with this one.
So but another aspect of this whole thing is the whole what what you already alluded to, which is that this is a private corporation, and even the members have to pay in a billion dollars. How do you make sense of this privatization of international law or bringing merging all this commercial interest with coercion and and, yeah, essentially law because this is well, it's not unprecedented, but it is well, where is this going?
Speaker 1: You know what surprises me, Glenn? What surprises me is that people are surprised because, you know, I have always followed a very simple strategy, a very simple method of thinking. I take seriously what villains say. So, you know, Donald Trump, maybe he's not the most cogent and eloquent of theorists in the history of the universe, but he's got people around him. Who are?
If you ever listen to Peter Thiel speak to various tech lords that he has amassed around him, they have a very clear view of the future. Their future is the replacement of the state by corporations. They talk about free cities, and they don't mean it in terms of freedom of the citizens. They mean it in terms of cities that belong to corporations, where the board the members of the board of the corporation are free to do whatever they want with the city. They went to Honduras, and they carved out a chunk of Honduras, and they turned it into a corporate mini state.
And this is what they want to do. They want to convert our cities. They want to convert our states. They want to convert Raza. They want Greenland.
Tomorrow, it will be Canada. Maybe my country well, my country has already been taken over by corporations anyway after 2015. It's totally consistent with their own very specifically and clearly stated political philosophy. So, you know, as I said, I'm only surprised that people are surprised. And you did allude to the fact that this is not unprecedented.
Now if you look at the history of colonialism, it does not begin with states. It begins with corporations. It was the Dutch East India Company and the British East India Company that conquered Asia, and similar corporations conquered Africa. People say it as and you mentioned that. Oh my god.
He's asking people to chip in a billion dollars in order to be, you know, legitimate members of the board of peace. Well, isn't that how the East India Company was created? Businessmen got together in a kind of thatched roofed building in London at some point in 1599, if I if my memory serves me right, and they all chipped in. They became shareholders. And not only shareholders, but the share share shares were tradable as well.
And off they went, and they occupied occupied, took over India, And then they took over Indonesia. And then they took took over parts of Southeast East Asia. At some point, the East India Company had 200,000 soldiers under its command. It was only later that this was nationalized when it was facing financial difficulties. You know?
Another it was a state bailout or a crown bailout, and that's how the British Empire, you know, begun. So this is what he wants. That's what Peter Thiel that cuts you know, that's the the various thinkers and technocrats and tech lords around him. That's how they imagine the world. Now that is not surprising at all.
I'll tell you what is surprising. Maybe not that surprising, but more surprising. It is that the rest of the world went along with it. The British went along with it. The French went along with it.
Every simple single Arab country went along with it. Turkey that supported Hamas to a very large extent went along with it. Qatar, which had Hamas leaders on its soil, went along with that. You had, you know, countries like Egypt and Algeria waxing lyrical about Donald Trump, calling him a man of peace. Right?
And, of course, you had the Europeans who thought, well, why do we care? As I said before, this is about Palestinians. It's not about Palestinians. It's about you folks as well. So it's the only the only silver lining I see in this disaster for the world and for humanity is that the centrists who, you know, just like think about it a bit like the Weimar Republic.
Hindenburg handed over the chancellorship of Germany to Hitler, thinking he can control him. And look what happened to those liberals who were more afraid of the left than they were of the Nazis. In the end, they ended up in the same prison prison camp as them. So it's it's only a tiny silver lining. It the catastrophe is still with us.
Speaker 0: I think that's a great point that that, well, eventually, it will come for you then as well. And I think it was obvious in a message that Macron sent to Trump, which he then published this private message on his truth social, which was Macron apparently wrote him saying that, listen, we we are fully with you. You're doing great things in Syria and Iran. We are completely with you, but just leave Greenland alone. This assumption, if we just cheer him on, back him, what he might be doing to other parts of the world, then perhaps he will leave us alone.
But I think we're just feeding and building up this monster, which, as you said, is is gonna be out of our control. But what does this mean for I mean, I was gonna ask how you expect the Wall Street and military industrial complex and big tech to react to such a thing if they would support it. But overall, there's there's a tendency in capitalism to have this concentration of wealth to the point when, yeah, a a democracy can no longer work. I mean, this is not just opponents of liberal democracy I'm sorry, of capitalism, which suggests, but even liberal capitalists, be it classical capitalists, that is like David Ricardo, made this note in his work that with every new technological innovation, it would concentrate more power in capital as opposed to labor, and that would skew the whole relationship. But is this do you see it in this context that now we're gonna have corporations beginning to displace entire nations?
Speaker 1: Well, as I said before, corporations began the process of imperialism. And, you know, militarism, corporatism, and imperialism went hand in hand. At some point, when corporations, just like, you know, when Wall Street went belly up in 2008, they were essentially nationalized, essentially bailed out, their losses were passed on to the state. This is exactly what happened decades ago. And now now that they are back on their feet, they are taking over the states again.
So you asked me, what would the response of the military industrial complex be of big tech and Wall Street? Well, let me take this one at a time. The ones who are loving it are big tech because, you know, I've I've written a book a couple of years ago called techno feudalism in which I argue that a new form of capital has emerged living in our phones. It's called cloud capital. It's not producing anything except the power directly to control our minds and through that to amass particular forms of rents in the pockets of big tech.
And this cloud capital over the last few years, especially after the war in Ukraine and the genocide in in the Azer, this this this cloud capital is merging with the Middlegar Industrial Complex because we have autonomous AI drones. We have software by Palantir that is running on the servers of Amazon wire services and of Google and of Microsoft. These pieces of software are being trained in Gaza. They are being trained in Ukraine. And then, you know, the result of this training leads is pieces of software that then are sold to the National Health Service in Britain, for instance.
So you have the privatization of the National Health Service by American cloud capital trained in the killing fields of Gaza. So as I said, big tech is loving it. And this is why people like, you know, Jeff Bezos, like Mark Zuckerberg, even even Elon Musk who disliked, despised Donald Trump have surrounded him, and they are, you know, treating him. They're looking at him as their great benefactor. And just another dimension which explains the great enthusiasm of big tech for Donald Trump, you know, with the Genius Act last April, that he passed through the Senate and through the House of Representatives.
Essentially, he's, legitimizing the privatization of the dollar through big tech, through companies like Tether. And now, you know, you're gonna have Google and Apple and others, you know, issuing their own stablecoins. These are not like they are cryptocurrencies, but they're nothing like, let's say, Bitcoin, which would be anarchic. No. These are US Dollar denominated cryptocurrencies, and that is going they're they're we're going back to the nineteenth century when private banks had a capacity to mint dollars, a capacity that was at some point taken over and monopolized by the Fed.
And the Fed has been has had its wings clipped. So big tech loves all that. It loves the ball of fees. It loves what's happening in Palestine. It loves what's happening with with stablecoins and the privatization of the dollar.
The military industrial complex is a little bit more worried. I mean, they like war. They like, you know, these interventions. They like the fact that they're selling huge quantities of weapons to Ukraine with European money more recently, that Israel is is eating up their, you know, 10,000, 20,000 pound bombs like confetti. They love that.
They're a little bit worried that com companies like Palantir, the big tech companies, the techno feudal war machines as I call them, they are, you know, sort of competing with them. They are a little bit worried about that. But I think that the the one of the three conglomerates that you mentioned in your question, that is Wall Street, I think they are the the ones who are the most worried by Donald Trump. And they're worried because, as I said, with the Genius Act, he is effectively eating into their financial rents on behalf of big tech companies of Tether, of stablecoins, so on. They will try to join them.
JPMorgan, for instance, is about to issue its own stablecoin, but they are worried. So when you see that Donald Trump is fighting over the you know, who's going going to control the Fed, He's trying to clip the wings of the chairman of the Fed and also of the powers of the of Fed through legislation like the Genius Act. This is because the Fed belongs to the large banks, the walls Wall Street banks, and they don't want to have to compete with Silicon Valley, with the West Coast. So but nevertheless, it's it's clear to me that so far, least, so far, Donald Trump manages to dominate those three, Wall Street, big tech, and the military industrial complex. And they're on board.
What's how he's doing with the board of peace and the dissolution, essentially, of The United Nations, turning the United Nations effectively into what the League of Nations was, an empty shell.
Speaker 0: This whole dissolution of the United Nations, it it seems this is some well, this started more than well, at least thirty years ago, it seems. That is you mentioned before the prime minister of Canada, he made his comments at Davos. And I thought this was interesting because he more or less called the so called rules based international order a fraud. And I I agree with this sentiment because I think at least if you go back to Kosovo, this is when we started saying, well, it wasn't legal, but it was legitimate. And the assumption was that the legitimacy rested on liberal democratic or humanitarian justification.
So so in other words, what we said was international law is supreme. However, because of our we're champions of liberal democracy, we're allowed to refer to human rights of democracy to give ourselves the right to be exempted, not the Chinese or Russians or others, but it's kind of the sole prerogative of the political West. So it became a hegemonic order to some extent. What I thought was interesting with the Canadian prime minister, he kinda recognized that, yeah, this is you know, there was very selective, and, again, the com the common denominator was not human rights, but the power of the the political West. So he, yeah, he seems to see that is which shouldn't just take a root look at what Trump's doing now, but in the wider context.
Meanwhile, the Europeans, they they they did they really bend the knee to to Trump here, and they well, they they seem to bow and do as they're as they're told. Indeed, if you only look at 2025, what what they backed in Gaza, attacks on Iran, and what they didn't mention, the The US bombing of Nigeria, but also participating in Yemen, of course, installing this horrible government in Syria. So it it doesn't seem like they wanna go back to international law in this, but rather return to this rules based international order where the political West is the entity that exempt itself from law. That is the the Europeans just wanna be inside of this hegemonic construct. It doesn't wanna be on the outside.
Is is this what differentiates the Europeans from the Canadians now?
Speaker 1: No. I don't think so. I think, look, Mark Carlin's speech was very interesting and very well scripted and well delivered. And as you said, he did say things that no liberal centrist has said so far. But in the end, I don't see much of a difference between him, between Canada and Britain or France.
The hypocrisy is oozing out of every pore of their bodies, including Mark Carney. It's, you know, for another purpose, nothing to do with this discussion between you and you and I. Just before we connected, I was making notes, reading very carefully for the second time Mark Garney's speech, and I was making some notes, if I may read something that I wrote here. You know, he says that he agreed as you said, he says that, you know, the, the rules the international rules based order was, fake or quasi fake or partial fake. So that that's a big thing.
By way, the BBC, Deutsche Valdezon, never never reported that part of the speech by Mark Arne. Okay? Just put an asterisk there. But then he's he goes on and says, at least, he said, you know, American hegemony helped provide public goods, and that's why it was tolerated by Canada, by Europe, and so on. And then he explains what these public goods were.
He says, open sea lanes. Really? Ask the Cubans. Did they ever have open sea lanes? And then he says, a stable financial system.
What? Has he forgotten 2008? Has he forgotten the weapons of mass financial destruction, which were not an aberration? They were part and parcel of these international based rules, whatever, rules based order. The whole you know, the the Washington consensus was built on financialization.
So to say that, you know, the Americans were providing us with public goods, including a stable financial system, The only thing that the financial system before 2008 or 2000 and, you know, 1516 when Trump came along, the only thing it was not was stable. It was a totally unstable disequilibrium. And then he goes on to say, collective security. Really? Have you have has he ever spoken to Iraqis or Afghanis?
You know, millions dead. What about Libyans? They wrecked that country. Okay? There was a tyrant there, mister Gaddafi.
And what happened after the international rules based order bombed Libya? It they just destroyed the place. There's no country as Libya anymore. Oh, and also in support of a framework for resolving disputes. Really?
What happened to Palestine during the international rules based order? What kind of disputes were resolved there? The genocide, the ethnic cleansing, the apartheid state, you know, was effectively erected upon this international rules based order. So, you know, even Mark Carney's great speech is riddled with hypocrisy. And what is he proposing to do?
He wants to have a new alliance between middle powers, with Germany, and with France, and with Britain. Well, if you really want to do that, begin with a peace process for Ukraine. Where's your peace process for Ukraine? An alternative and, you know, an alt you know, a replacement of what Trump and Putin are doing. Nothing.
The only, you know, idea that they have about Ukraine is that they should find more weapons for Ukraine to continue killing Ukrainians and Russians in in this reproduction of the of the first World War with drones that killed thousands of people without any resolution in sight. What about mister Carney's proposal about Palestine? What is he proposing about Palestine? Nothing. You know, he's going to recoil.
He gave a great speech. He would be remembered for a great speech that described the situation reasonably well and had absolutely nothing to offer in terms of what to do about it. Because let's face it. You know? You heard what Trump said today, that if Canada ratifies the agreement, the free trade agreement or the trade agreement with China, he's going to slap a 100% tariffs on them.
Now what happens to the auto workers in Canada who will lose their jobs because, you know, they are producing cars and parts, spare parts for American companies? Does he have a plan for that? Is he going to invest in you know, is is he going to bring BYD in to take over from Ford and General Motors? No. He's got no such plan.
Speaker 0: Yeah. This that's a good point because, of course, it's a good speech, but the honesty and principles which he suddenly comes to champion, one has to ask why right now, and, you know, the like, the day before Trump went out and put a post on Truth Social, which he had AI fixed with AI, the a map of of North America, which is also colored in the in Canada, in the American flag, so in front of the European audience. So it he knows that after Greenland, The US might come for Canada. So it's it seems this is suddenly why the principles come into play. But it is oh, it it is still extraordinary that there's not more pushback against this, though.
Just as a final question, do you see this more in the larger context of The US having to find a new approach to dominance because after World War two, The US had many benefits. It had there was a technological leader. Through the war, it had built up this industrial power. It had begun to control all international sea lanes. It asserted control over a lot of the natural resources from Saudi Arabia, other places.
It's had a a key role in the financial institutions, the World Bank, the IMF, and, of course, the world then signed up to the dollar as the world's reserve currency. So it it was the economic hegemon. So in those regards, a liberal economic system is is a good thing when you're the hegemon, much like Britain in the nineteenth century because it means you integrate the world under your administration. But but what we see now is the desperation of The US, all these wars, the economic wars. Is this rooted in the inability to compete with China and overall The US exhausting itself as you see with their debts?
Essentially, desperate effort to reshuffle the deck, develop a new system, just anything which would put The US back on the throne.
Speaker 1: I have a slightly different perspective on this. What you described as the postwar American hegemony ended in 1971. It was exactly as you described it up until 1971 during the Bretton Woods era. Here you had in the nineteen fifties and sixties, you had a hegemon. It was a surplus country.
It was technologically advanced. It was a net exporter. And the whole point of Bretton Woods, Glenn, was to retain the surplus position of The United States. Now by the end of the ninety sixties, they lost that position for a number of reasons, which we don't need to get into now, including, you know, the Vietnam War, the great society, the fact that it was American capital that invested heavily into German and Japanese industry, and the result was the German and Japanese industries became more efficient than the American ones. And at some point, especially with the Vietnam War, you know, in the end, the Bretton Woods system was no longer sustainable because it was based on the idea that America will be a surplus country and it will be dollarizing Britain Britain.
Yes. Britain, Europe, and Japan so as to allow Europe, Britain, and Japan to keep buying the net exports of The United States. But once the net exports went, that system went, and, of course, the Americans themselves blew it up. And then they replaced it with a very different system, not the one that you described. The the the system which is based on the reversal of the recycling scheme that was bread and woods.
Instead of America being the surplus country, recycling surpluses, its surpluses into Europe and Asia and Japan, in particular, and later China, what happened was now it had a deficit, and it used the deficit to create aggregate demand in Europe and in Japan and later in China, sending IOUs called dollars to them, which then were repatriated to New York, and they became three things, government bonds, in other words, funding the American federal government. Secondly, some shares that were allowed to buy the foreigners, and thirdly, primarily real estate, which is what made Donald Trump Donald Trump. So, you know, this attempt to maintain the hegemony after they had fallen behind, after they had become a deficit country, that was Nixon. And Nixon had no problem waging an economic war against his allies. So the you know, Trump is not the first president to wage an economic war.
When John Connolly, the treasury secretary of Richard Nixon, after the blowing up of the blood and wood system by Richard Nixon on the 08/15/1971, he went to Europe, and he said to Europeans, you know, you're stuffed. I'm here to pay you. The dollar is my currency and your problem. And the Europeans went into a tailspin, and, you know, they tried to create their own Bretton Woods, their own fixed exchange rate system. So they went through various configurations of a fixed exchange rate regime, and they were failing with a snake within the European monetary system, the European exchange rate mechanism.
In the end, they created the euro that was a disaster for, you know, for investment in Europe, for integration and so on. And similarly, remember what Ronald Reagan did in 1985 to the Japanese, you know, the plaza courts. He put a gun under their head and said, I'm going to put 200% tariffs on you unless you revive it again. And they did. And the result is that the Japanese miracle died there and then.
So this is not new. What is new, the fundamental difference between the Nixon shock and the Trump shock, is China. Because when Nixon was shocking his allies the way that I just described, there was no competing economic system. There was a Soviet Union, but already was in decline. From, you know, the late sixties, early seventies, it was abundantly clear that the Soviet economic system did not have the capacity to compete in terms of technology technological advancement, in terms of, exports, in terms of all the things that matter in financial markets and in markets more generally.
But Trump is trying to create a new Nixon shock in the context of a China, which is advancing exponentially, which is already, yeah, twice, three times the size of American industry. In terms of even big tech, half of the AI experts now in the world are Chinese. They are not Brits or Germans and so on. They are Chinese. In terms of green energy, they you know, already we see the reduction in reliance on fossil fuels and massive expansion in green energy, which Europe and particularly Trump's America is turning us back to.
So he's trying to extend American hegemony by means of privatizing the dollar through the Genius Act, as I was saying before, and through essentially blowing up the European Union, blowing up Canada, blowing up his allies because he's he's a very he's a he's a realist. He tried to bamboozle the Chinese. He failed. The Chinese won the trade war against him. He's already effectively succumbed to that.
In April, you will see that there will be a meeting between Trump and Xi, and they will extend the truce. And I think they will keep extending it because The United States needs China more than China needs The United States in terms of rare earths, in terms of a number of critical materials for American industry and for the American American industrial complex. And what he's doing is he's he says, okay. Well, what what I'm now going I'm going to extract maximum rents for my allies. I'm going to coexist with the Chinese.
But, you know, I don't want to have to deal with the European Union as a whole, so I'm going to undermine the European Union. I want to deal with the Germans. I want to deal deal with the French. I want to deal deal with the Italians. I want to deal deal with the Canadians.
So I'm going to put the cut amongst the pigeons. You know, when the Europeans complain that, oh my god, you know, by threatening to take over Greenland, you are blowing up NATO and the EU. Well, exactly. That's what he wants. He wants to be you know, he sees the Western Hemisphere as a bicycle wheel where he's the hub and they are the spokes.
And even if he some spokes are broken, the bicycle wheel still works.
Speaker 0: Yeah. No. I think this is the thing that Europeans probably have to understand because I think the assumption is the more they give in, the then they eventually will be well, this loyalty will be appreciated, and that he will see the value of having Europe as a partner. I think all he sees is weakness and looking for, yeah, looking for something to extract as he decouples from Europe. So oh, it's that's extraordinary to watch.
Anyways, thank you so much for letting me pick your brain on the weekend, and it's as you said, if this is actually ending to the end of the United Nations, I think it's quite a dramatic development. But as you said, a lot of the people who will complain helped to bring this about as well. So thanks again.
Speaker 1: Thank you, Glenn.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: U.S. War on Iran - "An Attack Is Imminent" https://youtu.be/sYAW_XvvreU https://t.co/Q1QXZV3EA4
Video Transcript AI Summary
Jeffrey Sachs and Glenn discuss the threat environment around Iran amid Trump-era tensions.
- Observed mobilization: The United States has a massive military build-up in the region; allied transports appear en route to the Middle East. The impression, from Tehran’s view, is that an attack seems unavoidable, with Israel and Washington seemingly seeking regime change.
- Threat framing and regime change: Sachs says Israel has pursued over thirty years to overthrow the Iranian government, with the United States broadly acting in lockstep with Israel. He notes that last summer’s effort aimed at regime change did not succeed, and that a carrier task group is now moving toward Iran, signaling imminent attack. He asserts that “the goal here has never been negotiation.”
- JCPOA history and negotiations: A nuclear deal, JCPOA, was reached and ratified by UN Security Council resolution 2231 (2015). Trump ripped it up in his first term. Sachs argues there has never been genuine readiness by the United States or Israel for a negotiated settlement; when negotiations occurred, Israel resisted, and the attack on Iran two days before scheduled U.S.–Iran negotiations in June 2025 is cited as proof that the goal is regime change, not diplomacy.
- Hybrid warfare and tactics: The plan is described as a regime change operation carried out through hybrid warfare—cyber, street unrest, economic strangulation, bombing, assassinations. Trump is characterized as blustering to pressure Iran to comply with demands that would amount to dismantling the regime.
- UN Charter and legality: Sachs invokes UN Charter Article 2(4), stating that all members shall refrain from threat or use of force against the territorial integrity or political independence of any state, and argues the current posture is a gross violation of the charter.
- Venezuela comparison and propaganda accusation: He likens the current stance to the coercive U.S. approach seen in Venezuela, accusing the United States of invasion, kidnapping, oil seizures, and confiscation of oil profits, with Trump claiming the money goes to him. He alleges similar propaganda is present in major media regarding Iran, including misrepresentation of economic collapse as a sign of Iranian misgovernment.
- Economic statecraft and its effects: Scott Bessent, the U.S. Treasury Secretary, is cited as stating that sanctions aimed to “collapse” Iran’s currency and provoke mass unrest, enabling a political outcome favorable to U.S. aims. Sachs claims sanctions caused a December economic collapse, bank failures, currency issues, and imports shortages, driving people into the streets.
- Marketed outcomes and media treatment: Bessent is accused of describing a “positive” outcome from destabilization, with mainstream media avoiding coverage of this stance. The claim is that weaponized finance is a tactic to destabilize Iran without conventional warfare.
- Containment risk and nuclear considerations: Sachs warns that if the situation deteriorates, Iran could decide to dash for nuclear weapons, particularly if existential threats mount. He emphasizes that a broader regional war could involve many countries and risk nuclear escalation, making prevention imperative. He argues the UN Security Council should convene immediately to stop escalation.
- Prospects for Europe and regional actors: He criticizes European leaders for not resisting aggression, noting skepticism about who would oppose U.S. aggression. He suggests some regional players (Saudi Arabia, Qatar, UAE, Turkey) may not want a wider war, but questions whether they can prevent it given U.S. leadership and Israeli influence.
- Final note: Sachs calls for a strong, principled international response to prevent an explosion in a highly volatile region, urging opposition to unilateral threats and actions.
Full Transcript
Speaker 0: Welcome back. We are joined today by professor Jeffrey Sachs to discuss, the threats now being made by Trump against, Iran. So I'm very grateful you could come on because if you're sitting in Tehran, you're assessing threats. Essentially, you assess capabilities and intentions. Now you would then see this massive accumulation of military force by The United States in the region.
You would see the British, German, Spanish, Italians transport plane seemingly heading towards the Middle East. And in terms of intention, it seems that an an attack is unavoidable. The Israelis want it. Washington wants it. It's speaking of regime change.
And on social media, Trump writes that, yeah, quote, a massive armada is heading to Iran. It is moving quickly with great power, enthusiasm, and purpose. Then goes on writing that time is running out. What do you make of these threats?
Speaker 1: I think it's clear. Well, for Israel, this has been a thirty year effort to overthrow the Iranian government. The United States basically does what Israel says, and so Israel has been pulling The United States into war with Iran and attempting to do that endlessly. It did that last summer. The goal was to create regime change, to have an overthrow that didn't work.
The US then has been using economic instruments, what our treasury secretary Scott Bessent called economic statecraft. But he laid out the deliberate measures by The United States to destroy the Iranian economy. The idea again was regime change. That didn't work. And so now we have a carrier task group, strike group on its way to attack Iran.
So an attack is imminent, I think. The goal here has never been negotiation. Whenever there has been negotiation, Israel has jumped up and down saying don't negotiate. Of course, a nuclear agreement was reached with Iran a decade ago, the Joint Comprehensive Plan of Action, JCPOA. It was actually ratified by the UN Security Council resolution twenty two thirty one on the 07/20/2015.
Then Trump ripped it up, in his first term. So there's never been any desire by Israel to have a negotiated settlement. And since The United States does what Israel tells it to do, there has never been a readiness of The United States to have real negotiations with Iran. And, Trump proved that again, last summer, because we can recall that when Israel, with US support bombed Iran, which was, on the June 2025, that was two days before scheduled negotiations between The United States and Iran. So this whole idea that this is about Iran negotiating is phony.
This is a regime change operation that's being carried out through hybrid warfare, meaning, you try cyber warfare, you try, street, unrest, You try crushing the economy, and, you try bombing. You try assassinations. They're trying, in every which way to overthrow this government and Trump, being Trump, blast this out, that, well, if you don't do what we say, I this is, like Venezuela. We this what does it say? This fleet is ready, willing, and able to rapidly fulfill its mission with speed and violence if necessary.
You know, it's pure thuggery. People should understand under the UN Charter, which Trump's deputy chief of staff called a nicety. It happens to be the international law, not for the gangsters in the White House, but for the rest of humanity. It says under article two section four, all members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state or in any other manner inconsistent with the purposes of the United Nations. So this is where we are right now, Glenn.
I I think, of course, we just went through this with Venezuela. Brazen gross threats followed by an invasion, a kidnapping of the president and the first lady and a claim by The United States that it runs Venezuela, including stealing oil off of tankers and sending that to The United States with Donald Trump declaring that the money goes to him. So this kind of brazenness and lawlessness is part of our scene right now, but Iran is is vastly more dangerous for the world and still waiting for a European country to say boo about it, to say something, oh, maybe that's not a good idea. Maybe we shouldn't have a war. Maybe we should obey the UN Charter.
The question for Europe is does it only speak up when The United States is about to attack Europe? Or does Europe have any principles at all? And we're gonna find out in the next few days.
Speaker 0: Chancellor Mertz, who said during the first attack on Iran that Israel is doing our dirty work, has now said that Iran's days are numbered. It may be weeks, but this regime has no legitimacy whatsoever to govern. So I think the the Europeans are jumping on board on this fully.
Speaker 1: But
Speaker 0: But Trump also said that, well, now it's time we now it's time for Iran to make a deal. Otherwise, we'll hit them hard. What deal is he referring to? He's is it we're still back at the nuclear deal? Because this seems very dishonest at this point, because they're already been very open that the goal is regime change.
And any regime change, you wouldn't be able to get a unifying opposition. So this is the destruction of Iran we're looking at, which is
Speaker 1: That is correct. There there is no interest in any negotiated deal because negotiated deals have been available for more than a dozen years. And whenever they've been reached, The United States has ripped them up. And Israel has been the chief proponent of ripping up any negotiated deal. And since Trump works for Israel, there's absolutely no intention of any negotiation at all.
They are out to overthrow the government. Shame on Mertz, but again, it's it's just so typical. I had not seen that statement before. The thuggishness of Europe shouldn't surprise me, but it always disappoints me. The only attempt ever to rally to principles it seems is when Europe's own narrow interest is on the line.
Then suddenly it's not right for The US to attack Denmark by claiming Greenland. That would be an abuse. But overthrowing the government of Iran, that is fine. I think it's worth us spending just a a few minutes on the propaganda that is now flowing freely in The New York Times, The Washington Post, I'm sure in the European media that the economic collapse shows the corruption and mismanagement of the Iranian regime and why they're not fit to govern like chancellor Mertz has just declared as you read to me. And people should understand this is part of the game.
And the game is absolutely vulgar, but it is perfectly understandable if one directs just a little bit of attention to it. And it happens that our treasury secretary in The United States, Scott Bessent, laid it out very clearly and explicitly in Davos, almost in a cartoonish way. And if if I may, Glenn, just to read his words so that people understand what has been happening during the past year. He's asked by the interviewer, what do you wanna say about sanctions? Something else you've been working on, of course.
What are you planning there in terms of Iran and the impact there? And Bessent says, okay, okay, there are treasury sanctions. And if you look at a speech that I gave at the Economic Club of New York last March, I said that I believe the Iranian currency was on the verge of collapse. That if I were an Iranian citizen, I would take my money out. President Trump ordered Treasury and our OFAC division, Office of Foreign Asset Control, to put maximum pressure on Iran.
And it's worked because in December their economy collapsed. We saw a major bank go under. The central bank has started to print money. There is dollar shortage. They are not able to get imports and this is why the people took to the streets.
So this is economic statecraft. No shots fired and things are moving in a very positive way here. It's an amazing statement. So amazing that the New York Times didn't dare to report it. The Washington Post didn't dare to report it because what Besant is explaining is that The United States has used its financial means to bring down the government, to bring people out on the streets, to bring mass unrest.
And things are going in a very positive way, says mister Besant. So the vulgarity of it is so stunning that, of course, the mainstream media won't even touch it. But what they do is run stories every day about the mismanagement, the corruption, the economic collapse, the suffering of the people without saying that our treasury secretary explained that's the American game. And I have spoken to, people recently explaining, yes, they cannot get paid for their oil because of what The United States is doing. The payments don't come.
Everybody's under sanctions. Everybody's under threat. Every bank, in the world refuses to handle, any of the transactions. That's The US weaponization of the dollar. And the design is to create chaos, to create bank failures, to create a currency collapse, to bring people out on the streets.
As Besson says, this is why the people took to the streets. So he even gives the chain of causation and blesses it. It's moving in a very positive way here. Okay. If this is the kind of world that people think we're going to be safe in, I'm sorry to say they're going to find that this is the absolute route to annihilation and disaster.
This is pure gangsterism against every principle. And why Mertz is a party to the gangsterism or the Europeans are a party to the gangsterism beats the hell out of me, I have to say. Because they were also parties to the negotiation of the JCPOA. And they watched how The United States killed it. So they know the truth, but they don't speak the truth.
Speaker 0: Well, this is the overwhelming propaganda because you can have all evidence in front of you. You can have Bessent sitting there as he does, say, this is how we're gonna destabilize or how we did destabilize Iran that has caused an economic problem. This will drive people to the street. You have Mike Pompeo saying, well, in the street, they're among the rioters. We have Mossad agents on if you turn on the Israeli news, they explained that they're pumping weapons into this to fuel the violence among the riots.
And, you know, I was in hope debate about what's happened in Iran because I didn't say that this was, you know, a completely organic movement without any Western interference. It meant that I do not care about the suffering of Iranians, and I'm a regime apologist. So if you really care about Iranians, you will advocate for the bombing of it. I mean, this is how perverse but this is with all wars. If you care about the Syrians, you would call for the toppling of Assad.
If you care about, Ukrainians, you would keep the war going forever. It's just it's so it's so vile.
Speaker 1: Yes. But what's interesting is that if you care for the Iranians, then you might pay attention to what Bessent himself said, which is that they're out to hurt the Iranians. That's the goal, to hurt them so much that people pour out to the streets. And then when it happens and there's violence and so forth and much of it false flags and stoked by provocateurs and by Mossad and so forth, then Besson says it's moving in a very positive way here. By the way, he had a little smirk on his face.
He couldn't he could not resist the smirk as he finished that last sentence. It was just an added touch of vulgarity. People should understand who Besant is, by the way. He's our treasury secretary. You might think that this means he knows something about the macro economy or that he knows about fiscal policy or he's a tax policy expert.
No. It has nothing to do with that. He is a hedge fund operator whose claim to fame is working with George Soros to destroy the British pound more than a decade ago, and that's what brought him this in when when the pound was attacked, excuse me, in the 1992, I guess it is. And that's that's his credentials. Here's a man who can destroy currencies.
So this this is so vile and flagrant that, again, it's it's not worth reporting.
Speaker 0: Well, when the treasury secretary is a economic hitman, you should be worried, especially Yes. Trump's behind the wheel. Let me just ask, though, about the possibility of this war actually spreading because it seems that both what The US side is aiming for as well as the what the Iranians are indicating is this will be very different from the former war, that this is essentially all or nothing. So how how likely do you think that this can be contained to the region? Because Israel Iran's been already saying that anyone who participates will be they will retaliate against.
But and then you had Saudi Arabia saying, well, our airspace won't be used, so they take it serious. But but do you think this will be contained? Because this is gonna be very different, I think, from the the previous war.
Speaker 1: I I think we learned again, I'm not a a military expert, but from what I gather, we have learned a few things. One is that Iran can penetrate Israeli air defenses. And I think they clearly demonstrated that they have hypersonic missiles that can do that. They did not aim them at highly sensitive targets the first time in a war that is existential. They will aim them at highly sensitive targets.
So this is, one thing that I think, will be very, very different. They are prepared for that. A second thing we learned is that the strikes on the nuclear facilities obviously did not end or perhaps even hinder Iran's path to nuclear weapons if they want that path. The amount of enrichment that they would have to carry out to take their current enriched uranium to the levels for a an atomic bomb or several of them, in fact, is not much. And so if this became an existential struggle, Iran could, I think, absolutely, without question, make a dash for nuclear weapons.
They have said, and they have said credibly, we don't want that. We want the IAEA here to monitor. We will keep stringent limits on, any kind of, enrichment processing. But that's what The United States ripped up already a decade ago under when Trump came in in his first term. So the next point is that Iran themselves and especially, I I think, the, revolutionary guard, could decide this is the fate of our nation, and we make a dash for nuclear weapons.
If the situation became dire for Iran, I assume that, other countries would support Iran. Iran is a big country. It is, of course, Israel tried through assassinations and through Mossad attacks and through the bombing, a decapitation strike. It did not work. I don't believe it would work.
And so this could be quite the prelude to greatly expanded war. This is not Venezuela in America's backyard. This is would be a war in the most explosive region of the world with plenty of nuclear armed countries all around here and with significant stakes in what would be happening. So I think it would be completely reckless and potentially globally ruinous. And so it should be prevented now before we have to speculate about how it's going to end.
And again, I'm just dismayed to hear the German view of this. Not shocked, but dismayed. If we don't have countries in the world that are ready anymore to say you cannot launch wars like this in, these explosive regions completely against every principle that we have of the UN system. The chance for utter wreckage is very, very high. I believe the UN Security Council should be forced to meet immediately and stay in meetings and take its responsibility, which is unique in the world, to stop this and to say clearly to The United States, to the president of The United States, no, you cannot even threaten that way, much less make an attack.
The threat itself is a gross violation of the UN Charter.
Speaker 0: Yeah. I fear that it can't be prevented anymore, though, if all these capabilities are built up and the only way to avoid it according to Trump is a deal which essentially is nonexistent. It does it's hard to see what else they can go for.
Speaker 1: Yeah. Trump Trump sometimes backs down if he faces really a wall of opposition. In fact, he often backs down. He hasn't faced that wall right now. But I wouldn't stop trying to create the wall of opposition up to the moment and even after, but up to the moment where Trump recklessly pulls the trigger.
It hasn't happened yet. And God help us, there must be someone in Europe that has a brain left that, if only you were in charge, Glenn. But, there must be someone in power, that has some minimal sense of responsibility for humanity. And there are many countries around the world that don't want this to happen. And interestingly, I firmly do believe that the Saudis don't want a war, that Qatar doesn't want a war, that The Emirates do not want a war, that Turkey does not want a war?
Do they really want to be in another Israeli created regional war that could escalate to full disaster? I don't think anybody wants that other than Israel and its vassal state, The United States.
Speaker 0: On that grim note, thank you very much for sharing your thoughts on this, and I really hope, yeah, there will be pressure and doubt from the Europeans, but ideally from some of the regional allies. So thank you very much.
Speaker 1: Great to be with you, Glenn. Thanks.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: U.S. Economic Coercion & the Death of the Dollar https://youtu.be/ls3ynNpMMPk https://t.co/w5SOVbWR9H
Video Transcript AI Summary
Jeffrey Sachs argues that "economic statecraft" is a euphemism for coercion, describing it as "war by economic means" used largely by the United States to crush other economies rather than to promote development or cooperation. He notes that treasury officials have framed it proudly as a tool to bring about regime change, citing Scott Besent’s Davos remarks about crushing the Iranian economy to foment change. Sachs emphasizes that this machinery is "warfare" aimed at destruction, not at improving well-being or enriching the United States, and it has real human costs—driving impoverishment, health crises, and rising mortality.
To understand this tool, Sachs situates it within American imperial practice, which he says relies on indirect rule through puppet regimes rather than outright territorial conquest. He traces the lineage to the late 19th and early 20th centuries, including the overthrow of the Kingdom of Hawaii, the phasing of interventions in Latin America under the Monroe Doctrine’s Roosevelt Corollary, and the 1954 Guatemalan coup against Jacobo Arbenz. He cites Lindsey O’Rourke’s Covert Regime Change, which counted 64 covert regime-change operations by the United States between 1947 and 1989. Economic statecraft, in his view, can function as a regime-change instrument by weakening an economy enough to destabilize a government, facilitating CIA-led or CIA-backed interventions, sometimes wrapped as color revolutions.
In the Venezuela case, Sachs traces the shift from a failed 2002 coup attempt to economic coercion as the primary mechanism of pressure. He explains how Venezuela’s oil wealth, once seen as the world’s largest reserves, interacted with U.S. corporate and political power—ExxonMobil and Chevron among them—and how that dynamic fed efforts to topple the Chávez/Maduro governments. He describes the sequence starting with 2014 color-revolution attempts, the role of U.S. funding and media operations via organizations like the National Endowment for Democracy, and the crackdown that followed protests. Sanctions escalated under Obama with the designation of Venezuela as a national security emergency and intensified under Trump, including confiscating foreign-exchange reserves, freezing accounts, and declaring PDVSA under sanction. This culminated in Severe economic collapse: oil production fell about 75% from 2016 to 2020, currency and import capacities deteriorated, and per-capita output dropped by about two-thirds, which Sachs characterizes as "worse than a war." He also points to Trump’s unorthodox actions, such as naming Juan Guaidó as president in IMF context, signaling a unilateral reshaping of legitimacy.
For Iran, Sachs describes decades of comprehensive sanctions and Trump’s renewed push to crush the economy using OFAC and extraterritorial sanctions. He cites Scott Besant’s interview claiming that by December, the currency had plummeted and dollar shortages followed, framing this as a deliberate regime-change strategy. He notes that mainstream media largely omitted the causal narrative—U.S. role in provoking protests—despite Besant’s public account.
Looking ahead, Sachs discusses the multi-polarity challenge. He suggests that the dollar's dominance is waning as alternative settlement systems emerge, such as non-dollar currencies and parallel institutions, notably driven by China and BRICS members. He envisions a shift toward non-dollar settlements—potentially 25% of global transactions within ten years—enabled by digital settlements and new infrastructure that reduces the reach of U.S. extraterritorial sanctions. However, achieving this requires new, dollar-independent institutions, since existing banks remain reluctant to abandon dollar-based business due to sanctions risk. He concludes by noting that the United States’ heavy-handed currency policy may not be sustainable in the long run, as sanctions reach could lessen once non-dollar settlement networks gain traction.
The host closes, recognizing this as a pivotal moment where U.S. coercion could either deter rivals or precipitate broader self-harm, and thanks Sachs for his insights.
Full Transcript
Speaker 0: Welcome back. We are joined by professor Jeffrey Sachs to discuss, economic statecraft and, how it might be used, excessively and, coercively. So thank you for coming on. Economic statecraft, though, it can be a very effective tool of governance that is using money, trade, finance, and access to markets as an instrument of influence and facilitating cooperation. But economic statecraft, it feels, has begun to replace diplomacy, and we see economic statecraft almost exclusively now in an accordive form.
What do you see being, I guess, the long term risks of relying on this economic coercion as opposed to, yeah, having negotiated multilateral solutions?
Speaker 1: Economic statecraft is a euphemism. It is coercion. You could call it war by economic means. So economic statecraft, if you just hear the term, could suggest that you're using economic tools for promoting development, or promoting cooperation, or supporting trade, or stabilizing the economy. No, the way that the term is used right now is rather cynical.
It means using economic tools by The US to crush other economies. This is a very strange use of the term in my view, and it's a very pernicious set of policies. I have a personal resentment about it because my whole life is, my career is aimed at trying to help economies to be more productive, more prosperous, to help people's well-being. But economic statecraft in quotation marks, as our treasury secretary, Scott Besant used the term recently in an interview that he gave in Davos meant, and he said it proudly, to crush the Iranian economy in order to bring people out onto the streets with the idea of fomenting regime change. So this is quite a remarkable use of economic power.
It is warfare. It aims at destruction. It doesn't even transfer well-being. It's not extraction or appropriation. It is not aimed at enriching The United States.
It's aimed at crushing other economies. And if you're in the line of activity that I am of economic development, and you know how hard it is, and how many years, and how much effort it takes of everyday people to create economic prosperity and well-being, to escape from poverty. Watching the deployment of these instruments to bring people to impoverishment, to misery, to health crises, to rising infant and child mortality, to measured reductions of years of life expectancy. It's terrible. Now having said all of that, it is now a very common tool, if you wanna call it that again, a euphemism, an instrument of American power.
And I find it deplorable as I've explained, but it's used pervasively. And I think, Glenn, to put it in context, we have to understand something unique about the American imperium, about American imperialism. In American imperialism, unlike the British Empire or the French Empire of the nineteenth century, America rules indirectly. America has rarely done what Trump says he wants to do, which is just take over territory. We've done that for a lot of islands and military bases, but generally it hasn't been The United States invading in order to directly rule an overseas territory.
It's been The US invading to impose a puppet regime in an overseas territory. And this idea is regime change. So a core of American foreign policy is regime change. Just to say, that's an extraordinarily unusual kind of foreign policy. For most countries, in most of history, you dealt with other countries as they were.
You didn't dream of overturning their government and running their country. You had to address their country either through diplomacy or deterrence or some other way. But The US mentality that started in the eighteen nineties when The US overthrew the Kingdom of Hawaii, and then when The US created the pretext for war with the diminished and disappearing Spanish Empire in order to claim The Philippines, Puerto Rico, Cuba in 1898. The idea came to put The United States that it would create an overseas empire by controlling the governance of overseas territories by regime change, overthrowing governments. And you could say that it, that idea came naturally because creating the Continental United States was dozens of regime changes, but against indigenous populations, or war with Mexico, and so forth during the nineteenth century.
But for the overseas empire, that started at the end of the nineteenth century. Then The US practiced this under the Roosevelt corollary of the Monroe Doctrine, where Theodore Roosevelt basically declared, we will be the policeman of The Americas. And what that meant in practice is we will determine who is in government in The Americas. And when a government arises that threatens American land holdings, for example, that wants to do land reform as Jacob Arbenz wanted to do in Guatemala in 1954. Well, company United Fruit picked up the phone, called its law firm Sullivan and Cromwell.
They called their old associate John Foster Dulles, who at the time happened to be The US Secretary of State. He picked up the phone and called his brother, Alan Dulles, who was the CIA director. And they overthrew Arbenz. So it was a regime change operation. If you count the number of these operations, it's amazing.
There have been dozens in The Americas alone. And in one of my favorite books of recent times by Lindsey O'Rourke, a student of John Mearsheimer and now a professor at Boston College. She wrote in 2018, I think it is, a book called Covert Regime Change, where she counted 64 covert regime change operations by The United States between 1947 and 1989, the Cold War era. I mention all of this because this is where economic statecraft so called plugs in. Economic statecraft can itself be a regime change operation because you can squeeze an economy to the point where a government collapses.
It's not so hard to do. More often, you can squeeze an economy to the point where the government doesn't collapse, but it is fragile, and then you push it over through a CIA operation. You bring people out onto the streets. You do what came to be called, in the last thirty years, color revolutions. Because they often were CIA operations that operated under a banner of a color in the flags that were being waved, or the Rose Revolution or the Orange Revolution, in Ukraine in, 2004, 2005, and so forth.
What these are are instigated regime change operations, often softened up by economic means that have weakened the regime. So we have to understand that the so called statecraft is part of a broader strategy of empire. But the American empire is rule through puppet governments rather than through directly changing the map to put The US flag on it. Though Trump, because he's especially vulgar, seems to want to do that as well. So he wants to put aside the covert part because that's nothing to hide.
He wants to do overt regime change. And at the same time, maybe, Canada, and Greenland, and other places under The US flag. But typically it's not that. So when we come to recent events, both Venezuela and Iran have been targets of US regime change operation in which economic means played a very direct role. And in the case of Venezuela, The US has been aiming to overthrow the left wing government that has been in power for a quarter century in Venezuela.
America is absolutely at a government level, always aiming to overthrow so called left wing regimes because left wing regimes threaten American extortion by US companies or plunder by US mining companies or big oil like ExxonMobil and Chevron and so forth that operate in poorer and weaker states. So The US has been out to overthrow the the Chavez Maduro government that has been in power in Venezuela for a quarter century. In 2002, they tried the direct route, which was a CIA engagement with a local coup attempt by a part of the Venezuelan military. The coup took place. The US said that's great.
And then within a day, the coup failed because Hugo Chavez, was the president, had popular support and he was back in the Presidential Palace within a day. After that, The US then used economic means. These accelerated interestingly by the curse of natural resources that occurred in the late years of the first decade of this century when the US Geologic Survey officially determined that Venezuela's petroleum reserves were the largest in the world. And that set in motion on the Venezuelan side a determination to essentially make those reserves owned by the Venezuelan nation and by the lead Venezuelan company, the state oil company, P. D.
Vesa. And it put Venezuela on a war path with The United States because there is ExxonMobil, there's Chevron. These are powerful companies that pay for the presidents, that pay for the congress, and that suddenly are being pushed aside by this quote unquote left wing regime. So in 2014, The United States worked to try to make a color revolution in Venezuela. People came out on the streets.
If you think that's spontaneous, I have some more, stories to tell you. But this is what color revolutions are. The CIA is all over, these operations. Other institutions like the National Endowment for Democracy, the National Democratic Institute, the National Republican Institute, and so forth, work with the local media, work with groups that they create or that they fund to foment unrest. That's a standard playbook for such covert operations.
They're not very covert, but they're called covert because The US role is denied. Well, the government cracked down on these protests. No doubt there are local protesters, by the way, because people ask that have many objections or disgruntlements with the government, no doubt. But the organization, the financing, the bussing in of people, the mass media, that doesn't happen spontaneously. And so The US played its role.
There was the crackdown, and then part of the game is, oh, when the crackdown comes, now we put on even more overt sanctions. So Obama declared an emergency that Venezuela represented an emergency to US national security. Can you imagine? We were so threatened by Venezuela. It was so dangerous.
That's what Obama declared in 2015. He started the escalation of the sanctions. Then Trump came in in 2017. Trump being Trump said, I don't get it. Why don't we just invade?
And he had a dinner with Latin American presidents on the margin of the UN General Assembly in September 2017. And I've spoken with two presidents that were there at that dinner at some length. And they described exactly the scenario both of them ended separately to me. And basically the scenario was that the president's assembled and then Trump said, why don't I just invade Venezuela? And they were shocked by this.
And they explained, mister president, maybe that wouldn't be such a great idea. Maybe it would be a little complicated. There might be a backlash. It could result in chaos. It could result in millions of refugees.
It could result in big loss of life. In Latin America, there's a lot of anti Americanism, anti US sentiment. It would stoke that. So they tried to talk him down from this. And Trump said, okay, I'll just crush the Venezuelan economy.
So what began was a ratcheting up of punitive economic measures, confiscating Venezuela's foreign exchange reserves, freezing Venezuela's accounts, designating PDVSA as an entity under sanction so that other companies couldn't do business with Venezuela. And The US tools are varied and many. And we have a number of emergency acts, the International Emergency Economic Powers Act, the IEEPA, which gives the executive branch essentially unbridled authority to impose a very wide range of financial sanctions, cutting off the economy from the dollar based payment system. So for most of the world, doing international business involves using dollars as the medium of exchange, and doing it through international banks that facilitate the payments and settlements of an international transaction. And because these are dollar based transactions, ultimately they involve dollar accounts of US banks held with the US Federal Reserve.
And so The US can impose a blockade, a choke point on payments for international trade. For example, on Venezuela's ability to receive dollars for the oil that it exports, or the ability of PDVSA, the oil company, to pay for repairs for operations in the oil fields. So Trump imposed extraordinarily comprehensive and very tough sanctions on Venezuela. And between 2016 and 2020, oil production collapsed by about three quarters. That's the physical flow of oil.
And since that's Venezuela's essential, essentially only export, the Venezuelan economy collapsed. The currency collapsed, the inflation soared, the ability to make imports collapsed, the standard of living collapsed. And according to the data of the International Monetary Fund, for example, the national output per person fell by about two thirds between 2016 and 2020. That's worse than a war. That is a cataclysm.
That's not a downturn. That is a destruction of the economy. Of course Trump did many other things that were seemingly farcical, but were not treated as farce. He named a different president. Suddenly one day, the White House said, no, mister Maduro's not president, it's Juan Guido.
So we all scratched our heads. Who's Juan Guido? Oh, he's in the National Assembly. And The US just picked him out, said he's the legitimate president. And you might think this is a comic book, this is a joke.
But it had two implications. One is that The US used its economic sanctions to say they now belong to mister Guido. And this could hold from The US unilateral point of view. The US said in the IMF, it's mister Guido that gets to appoint the executive director and so forth. So The US, by using its power, just declared a different president.
And the second point was about 60 other countries, basically vassals of The US, that means Europe, and others said, oh yes, Mr. Guido is president now. In a way you can't even imagine. Okay, fast forward to this past year. Trump just decided, now we're gonna invade.
We've crushed the economy, we've put on the sanctions, we've weakened the regime, we're just gonna invade. And all of our so disheartening mainstream media, like the New York Times, says, well, there's so much unhappiness about the Maduro regime, and people are suffering, and they don't explain one word about what the root causes are. I don't know whether they're just utterly ignorant, utterly bought out, whether the reporters God knows who they work for. But the point is they don't understand or tell the story. Iran is the same story.
Of course, played out in a very different context. But The US has been imposing comprehensive economic sanctions on Iran for now, actually decades. But when Trump came in to power again in the second term, one of the first actions was to take extra steps to crush the Iranian economy. And the Treasury Secretary, Scott Bessent, who is there, I think mainly because he is willing to use the US Treasury to crush other countries, invoked the emergency operations mechanisms. Trump gave the order that Venezuela constituted an emergency.
And as Besant explained in an interview to Fox Business on January 20, just a few weeks ago in Davos, Trump ordered the crushing of the Iranian economy. And OFAC, which is the part of the US Treasury that operates the sanctions, went to work to basically bring down the Iranian currency by cutting off Iran from any remaining dollar based transactions internationally. And you tell banks all over the world, if you do any business directly or indirectly with Iranian entities, we will sanction you. You may be 5,000 miles away just facilitating a trade transaction, but we're coming after you. And that's how extraterritorial sanctions by The US are enforced.
And what Bessen says in this interview is quite remarkable. He says, we went out to crush the economy, and by December it worked. The currency plummeted, the dollars ran out, there were shortages of dollars, and people came out onto the streets because of this, Bessen says. And then he says, this is all moving in a very positive way. So the cynicism of it is extraordinary.
Of course, go to the New York Times, go to the Washington Post, go to the Wall Street Journal. What is the narrative there? That people came out onto the streets to protest the corruption and mis management of their regime. And what is amazing for me, Glenn, is that even after the US Treasury Secretary explained it, for those people who know the Wizard of Oz when the dog Toto pulls the curtain aside and exposes the wizard as some old guy speaking into a megaphone. Even after the game is exposed, no mainstream medium reported it.
Nobody had an article saying, oh, this is why people came out onto the streets. This is the reason for the protest. This was a US game. This is a US regime change operation. Not even noted.
Even after it's explained gleefully with that grin on the face of the treasury secretary, not discussed. So that's the background as I see it. This is regime change, top to bottom. This is economic instruments, and The US has them because of the role of the dollar in the international system, and the fact that The US alone of any country essentially controls the IMF because it alone has the veto. And I like to remind people, the World Bank is on 18th Street and Pennsylvania Avenue, one block away from the executive office of the president, two blocks away from the White House, and three blocks away from the Treasury.
And the IMF is one block further on. And so it it is the row of US international power to crush other governments.
Speaker 0: Yeah. This isn't, though, without consequences anymore, I think. Yeah. Well, after the Cold War, of course, America was the only game in town. So without any alternatives, one can do this economic coercion quite efficiently and without that much consequences.
But it seems that as this multipolar world emerges, there's there's a dilemma because on one hand, it is more incentive to use this economic coercion to prevent the rise of rivals. On the other hand, the economic coercion comes with consequences because now there's alternative centers of power that offers access to technologies, to industries, the supply chains, physical transportation corridors, as you said, the banks, the currencies, alternatives to SWIFT. So it seems it can be a very self destructive process as The US goes into hyperdrive and new alternatives are set up by organizations such as BRICS. But I guess that belongs to a different day.
Speaker 1: Well, just if I if I may just say, not to keep us too long, but these alternatives are moving faster than people realize. And one of the reasons is that it is not technically difficult to have settlements in a non dollar basis. But the point is the following. If you are a Russian enterprise, or an Iranian enterprise, or a Venezuelan enterprise, and you say, I wanna settle in rubles, or in renminbi, or in some other currency. You cannot go to your bank to do that.
Even though for the bank it would be very straightforward to have a correspondent account, not in dollars, but in these other currencies. And the reason is that even if you make the transaction in rubles or in renminbi, the bank is still vulnerable to The US reach if it also deals in its normal business with dollars. And that's because the sanctions could still be imposed on that bank. So what is needed is not sophisticated technical fixes, because that's not so hard to do the plumbing. But it's institutions that are completely separated from the dollar system so that they're not subject to US sanction.
So what's being set up is a parallel system of settlements. It can't go through the main banks, but in non dollar currencies. It has to be in distinct institutions. In Russia, there is a new set of digital institutions that have nothing to do with the banks, but can affect transboundary settlements almost in real time. It's better than swift in many ways.
And that has emerged in the last couple of years. China has determined we've got to move forward, because otherwise, we are constantly under the gun of The United States. We're constantly threatened. Chinese banks don't wanna be cut off from The US settlement system, the swift settlement system. So China is creating an alternative system, and non dollar new institutions are arising to operate under the Chinese interbank payments system.
So my view is this will move faster than people think. I would think that in ten years from now, maybe an extra 25% of global transactions will be settled in non dollar currencies. Because technically, it's absolutely feasible. With new digital settlements, it's even more efficient than swift to do it. But the challenge is it requires setting up a wholly new set of institutions, because any institution that has at least some dollar business can't do that non dollar business except under the shadow of potential US sanctions.
The bottom line for me is that The US use of the currency as a weapon, which has gone into overdrive across the world, will not be sustained. It won't end immediately, but within the next five or ten years, The US itself will have dethroned the US dollar by misusing it, by abusing the privilege of being the issuer of the key currency. And we will have a very significant proportion of global settlements in non dollar currencies. And then the reach of US sanctions will fall decisively because The US won't be able to impose its will extraterritorially. In other words, it may still be able to prevent US businesses from doing business with a targeted country, but it won't be able to stop third countries from doing business with that targeted country.
Speaker 0: Well, interesting times indeed. It seems this is a all or nothing moment where The US can either break its rivals or destroy itself in the process. So as always, I know you have a busy day there in Greece, so thank you very much for giving us the time.
Speaker 1: Of course. Pleasure to be with you, Ben. Thanks.
@Glenn_Diesen - Glenn Diesen
Alex Krainer: Iran War - Economic Disaster & End of Trump? https://youtu.be/p8oka89hzHc https://t.co/aCn8jelCHc
Video Transcript AI Summary
Alex Kraner and Glenn discuss the geopolitical and economic fallout from Iran’s weekend strikes and the broader shifts in global risk, energy, and power blocs.
- Oil and energy impact: Iran’s strikes targeted energy infrastructure, including Ras Tanura in Saudi Arabia, and crude prices jumped about 10% with Friday’s close around $73.50 and current levels near $80 per barrel. Prices could push higher if Hormuz traffic is disrupted or closed, given that one in five barrels of crude exports pass through the Hormuz gates. The potential for further oil disruptions is acknowledged, with the possibility of triple-digit or higher prices depending on how the conflict evolves.
- Market dynamics and energy dependence: The guest notes a hockey-stick pattern in uptrends across markets when driven by large asset holders waking up to energy exposure, referencing shadow banking as a driver of rapid moves. He points to vast assets under management (approximately $220 trillion) among pension funds, hedge funds, endowments, and insurers that could push energy markets higher if they reallocate toward oil futures and energy-related assets. He emphasizes that energy is essential for broad economic activity, and a curtailed oil economy would slow economies globally.
- European vulnerabilities: Europe faces a fragile energy security position, already dealing with an energy crisis and decreased reliance on Russian hydrocarbons. Disruptions to LNG supplies from Qatar or other sources could further threaten Europe, complicating efforts by Ursula von der Leyen and Christine Lagarde to manage inflation and debt. The panel highlights potential increased debt concerns in Europe, with Lagarde signaling uncertainty and the possibility of higher interest rates, and warns of a possible future resembling Weimar-era debt dynamics or systemic stress in European bonds.
- Global geopolitics and blocs: The discussion suggests a risk of the world fracturing into two blocs, with BRICS controlling more diverse energy supplies and the West potentially losing its energy dominance. The US pivot to Asia could be undone as the United States becomes more entangled in Middle East conflicts. The guests anticipate renewed US engagement with traditional alliances (France, Britain, Germany) and a possible retraction from attempts to pursue multipolar integration with Russia and China. The possibility of a broader two-block, cold-war-like order is raised, with energy as a central question.
- Iran and US diplomacy optics: The negotiations reportedly had Iran willing to concede to American proposals when the leadership was assassinated, prompting questions about US policy and timing. The attack is described as damaging to public opinion and diplomacy, with potential impeachment momentum for Trump discussed in light of his handling of the Iran situation. The geopolitical optics are characterized as highly damaging to US credibility and to the prospects of reaching future deals with Iran and other actors.
- Middle East dynamics and US security commitments: The strikes impact the US-Israel relationship and the US-Gulf states’ security posture. Pentagon statements reportedly indicated no signs that Iran planned to attack the US first, raising questions about the strategic calculus of the strikes and the broader risk to regional stability. The conversation notes persistent supply chain and defense material challenges—including concerns about weapon stockpiles and the sustainability of military deployments in the region.
- Long-range grim projections: The discussion concludes with caution about the potential long arc of decline for Western economic and political influence if current trajectories persist, contrasted with the rise of Eastern blocs. There is warning about a possible long-term, multi-decade period of geopolitical and economic restructuring, with energy security and debt dynamics at the core of those shifts.
- Closing reflections: The speakers acknowledge the unpredictability of markets and geopolitics, refraining from definitive forecasts but underscoring how energy, debt, and alliance realignments will likely shape the coming period.
Full Transcript
Speaker 0: Welcome back. And, back by popular demand is Alex Kraner, a market analyst, a political commentator, and a former hedge fund manager. And, of course, we can add author to this as well. So thank you for coming back on the program.
Speaker 1: Thank you for having me, Glenn. Always good to join you, and warm greetings to everyone, but especially those who created that popular demand.
Speaker 0: Well, I I wanted to ask you about how how you're reading the the economic situation from this after this weekend. That is Iran, it has many targets and pressure points in its retaliatory strikes. Iran is hitting US bases, Israel, The Gulf States, but what is very interesting though is the energy targets and the economic targets. Indeed, this morning alone, Iran hit Saudi Arabia's Ras Tanura oil refinery, one of the largest in the world, and the Saudis have, yeah, thus shut it down. I was wondering, how do you assess this economic targeting by Iran?
Speaker 1: Well, you know, this is this is where, Trump and his administration are in for, an avalanche of consequences because, you know, already this morning, crude oil prices opened about 10%. So Friday close was, I think, around $73.50. Now we're trading very close to $80, maybe a little bit below, but I can even check that for you in a real time. 74 $79.46 dollars per barrel. And the, you know, the way I read oil prices, I I have I have these trend following algorithms, and they've already shifted into the uptrend.
So, you know, we were we were trading in low sixties just a few weeks ago. And then by Friday, before the attacks happened, the market closed at $73.50, so we were more than $10 from from the low. And now we are at close to $80 a barrel. And that's just in a couple of days' times, which is which is extraordinarily rapid price change. As far as the you know, predicting what happens is is always a very thankless task.
But, you know, trends usually when they get going, they don't necessarily reverse as easily, and we can't say that this is a trend yet. But I think that at this time, it's the geopolitical events that are maybe exerting the decisive influence on the markets. And from what I can read, this war will not go will will not be over so soon, and it could be very, very disruptive. One in five barrels of crude oil exports passes through the gates of Hormuz. If the Iranians close the gates of Hormuz, and they've apparently done so, and if they keep it closed, we could see the price of oil reach deep into triple digits where it's impossible to say.
But one predictions that one prediction that I've been making over the last ten years or so and which has proven correct time and again, it's it's a very broad brush prediction. So, you know, you have to take it with a grain of salt. But what I've noticed is that over the last ten years or so, when when an individual market goes into an uptrend, it often creates what we call a hockey stick progression. You know, it it launches up and then it it accelerates And at some point, it becomes vertical. And so we've seen that in market after market after market after market.
And the reason why I I think this happens is because we have something called the shadow banking system, which is, let's say, financial institutions with large amount of liquid investable assets, which grand total in the world is estimated about at about $220,000,000,000,000. And so these are pension funds, hedge funds, endowments, charitable organizations, insurance companies, entities like this. And so if if people who control these $220,000,000,000,000 wake up one day and say, You know, maybe we should have more more exposure to energy markets, and they start buying, crude oil futures or, oil related exchange traded funds and so forth, they could overwhelm the market. And this is why we get this vertical progression. And we've you know, the the most recent markets that we've seen were, gold and silver because in the last two year, years, gold has appreciated by more than 150%, and silver has very near nearly quadrupled.
So this is what I'm talking about, and this is the reason why I'm not comfortable giving a prediction because whatever I say might end up to to to be lower than what we'll see. You know, I I read some people today talk about a $100 oil, but we were already at 120 in $2,121 a barrel is not exactly doesn't reflect the global emergency. We go to $200 a barrel or we can go to $300 a barrel, nobody can predict this. And it will depend on how this war evolves. The the the the fact that Ras El Tanura oil facilities were were targeted, and I I I I'm not, you know, I I I don't buy that it was necessarily the Iranians.
There would be many people who would have an interest in in disrupting the oil industry. That means that somebody's targeting the oil industry. Right? Which means that we might see a lot more disruptions, and any any prediction might end up being might be might might end up under underestimating the the forces that are now pushing the oil price higher.
Speaker 0: Yeah. No. Well, usually, there's economic incentives to both start and end wars. I see that there's a the son of the shah, that is the puppet monarchy and dictatorship that ruled Iran before the Islamic revolution of seventy nine. He, you know, he gave an interview arguing that The US could get a trillion of dollars in business if they would just topple the government and put him in power.
So this talk was in almost a complete copy paste from Machado in Venezuela, so maybe he will get the Nobel Peace Prize as well. But but but but what what are the wider economic ramifications you think, though? Because, again, shutting down the Strait Of Hormuz is important for oil. That's the main concern, obviously. But overall, given that we see Iran also striking some ports, again, the this could have a military purpose as well.
But but do do you see any other problems with shutting down global supply chains, or is this mostly I mean, is the economic aspect the same as energy, or do you think it will encompass more?
Speaker 1: It will certainly encompass more because energy is essential for all kinds of things in in our economies. You know? Today, again, a broad brush estimate is that 50 times more work gets carried out with the aid of hydrocarbons than manually. So, you know, if if if oil economy is curtailed, the whole the whole economy slows down. And I think that some nations in this will be winners, other nations will be losers.
I think that Europe is in a particularly vulnerable position because we're already in the middle of a of a self inflicted energy crisis. This only makes it worse. Europe has you know, because we don't like the the dirty Russian hydrocarbons, we wanted the Europeans reoriented towards more democratic hydrocarbons like American and Qatari ones. And so now even natural gas from Qatar flow might might get disrupted towards Europe. So I think that Europe is in a in a in a huge deal of trouble, and we've we've been destroying nuclear power plants.
We've been destroying our relationship with with with with Russia. European powers have also antagonized The United States under under Trump administration, which now might might all be changing. You know? Trump has made an absolutely colossal blunder by attacking Iran. And look.
Two days later, he is flanked by the dream team of Emmanuel Macron, Kirstymar, and Friedrich Mertz along with Benjamin Netanyahu. So even even Trump's geopolitical strategy, even his it it it's all in jeopardy now. And, okay, United States now secured Venezuelan oil flows. They have their own. He might this might put pressure on Trump to to try to gain control over Canada, which was his which was his intent from the get go.
But I think the European economies, which were which are already in recession, in a severe recession, are now looking to accelerate into depression and probably hyperinflation. Because even, you know, even if you go back before before the war started in Iran and you look at the speeches by Ursula von der Leyen and Christine Lagarde, Ursula von der Leyen is is pitching rearmament as a great way to revive European economies and bring prosperity and jobs to to the Europeans. At the same time, Christine Lagarde did not sound confident at all. She was she was pretty much saying, we have to get prepared for for a period of heightened uncertainties, which is, you know, central bank speak for we're losing control. And then two days later after that speech, she announced that she would be retiring retiring early.
Her I think her term goes to the October, November 2027, and she will step down one year sooner, which and that's not the only speech she gave like that. She's already made some speeches like that saying things are bad. And but what what she said in Munich in the Munich Security Conference, she was worried about European debt, European bonds being dumped at fire sale prices in the international markets, meaning that international investors are going to be dumping the bonds of European countries. What does that tell you? It tells you that interest rates are going to move sky high.
So I, you know, I I I think that Europe is looking at a future that's going to be some combination of Weimar Republic in Germany last century and the collapse of the Soviet Union. So I think that's probably one of the one of the big events that's ahead of us, which will of course, these things never happen overnight. You know? It's it's the the event itself might span many months or even years, and we don't know what the trigger point is going to be. You know?
Markets are good at pretending like nothing's wrong, and then one day, you have a panic reaction. And I think that we'll probably see it in in dumping on of European bonds, which is not going on yet. European bonds and British bonds have been trading great for the past three or four months or so. But if you look back in the last four years, we they they sustained the greatest bear market on record, the biggest bear market on record between 2021 and 2023. There's never been that much of a bear market on European bonds.
And maybe that was just the first act. And this war in Iran with all of its consequences and collateral damage and then Emmanuel Macron, Kirstarmer, and Friedrich Mertz, of course, as as as as one could have predicted joining that war or, you know, supporting The United States in that war, it's only putting their may making their situation worse.
Speaker 0: But the I was wondering how how do you see the wider shift in the risk global geoeconomics? Because a lot of money is being put into The Gulf States because, well, it's it's a it's a lot of real estate. It's a seems like a safe place to put money. What happens if those governments begin to look shaky that The US can't protect them? Also, the the larger powers, China, Russia, and others, to what extent do they see it necessary as further decoupling from the West?
Even if this war now comes to an end through some diplomatic way, you know, the diplomacy now is kinda meaningless. It doesn't mean, you know, whatever the Americans sign, you know, in six months, they might be back. You know, do you expect to shift deeper into economic blocks where they reduce their vulnerability? And you mentioned the bond markets, but what what what would in East Asia, the ones who are very dependent on Middle Eastern energy, will China lean heavier into Russia to reduce reliance in Middle East? How about countries like Japan?
It's you know, they have a very hostile relationship with Russia now because all their financing, the proxy war in Ukraine. But but but at some point, they also have to diversify a bit away from the Middle East if this becomes, you know, an unreliable supplier? So that's a very, very long question. But, yeah, to summarize, what do see being the major economic shifts or geoeconomic shifts as this also have political consequences?
Speaker 1: I'm afraid that it might lead to you know, rather instead of instead of, stimulating, multipolar integrations, we might see the world falling into two blocks, and then maybe energy is going to be one of the critical questions. And two blocks meaning, what are the consequences of this war in Iran, on Iran, would be that The United States gets pulled back into its traditional alliances. You know, Donald Trump has been trying to break free of that. He's been trying to well, this has been an overt explicit position of his administration that the post World War two global order is obsolete and that The United States intends to embrace multipolar integrations. Now I think Trump may have committed a fatal mistake, and now we see him flanked by exactly the his allies of the post World War two global order, France, Britain, and Germany.
And so if The United States gets pulled back into this block and and and distances itself from Russia, China, India, and so forth, then we get we get two blocks again and and a cold war. And the BRICS block today controls most of the global energy supplies. Not only that, but they also have their their energy supplies are more diverse because they still rely on coal or nuclear power, oil, gas, they have a lot of it. The Western hegemony over the Western Asia or The Middle East is slipping away. And so I don't, you know, I don't know how to predict this, but maybe West goes back to whaling and extracting whale oil or because, obviously, solar and and wind didn't work out.
Okay. The United States has nuclear technology, but American nuclear technology is a lot more expensive than Chinese nuclear technology. And they have certain innovations in the pipeline, but they are they are far behind. So I I think that we might we we might get the world recede into into some kind of a two block cold world. And maybe, you know, maybe this will get maybe this will thaw out again with you know, maybe we're not in in for forty years of Cold War, but the I think the net result is going to be that the East is going to eclipse the West and that the West is going to fall behind.
And as things stand, you know, we have to consider that if we don't change course, the West could end up like the Western Roman Empire, meaning we could be going into into into total collapse. You know? Total collapse where you know, when the Empire was one of the most important empires one of the most powerful empires in history. It was very similar to today's rules based global orders order in many ways. But it never reformed and it persisted on it on the road to collapse to the point where, you know, stone houses ended up disappearing from the archaeological footprint.
Dirt floors became the norm. Markets disappeared because money disappeared. So the world of the under Western Roman Empire went to a self sustained community that bartered. That was the economy. Until that lasted until they managed to sack sack Constantinople and plunder its gold and silver with which then they got a new credit impulse.
And then we got the Renaissance and, you know, revival of the of the Western world. But I I'm afraid that there's a risk that we are now on that road. That road, you know, that that that magnitude collapse could could span centuries, like two centuries. So it's very difficult to make predictions about that. But I I I'm afraid that Trump's tragic blunder in Iran has now created, like, a point of gravity, you know, like a point of gravity in space that could, you know, curve the space leading the American fall of foreign policy and and and it boomerangs right back to the to the old colonial order.
I'm I'm afraid that's a very broad brush prediction, but I you know, it's it's very difficult to see past it's very difficult to see past today in these in these circumstances, let alone years or decades from now.
Speaker 0: Yeah. No. No. One should be careful to look too deep into the crystal ball because there's too many unknown variables. But, you know, energy production is, as we know, is often considered to be, yeah, the key indicator of the potential future economic power because it reflects a country's ability to enhance industrial activity.
This is also true, of course, in the age of AI when you need the energy to operate this data centers and all this. But But, you know, the Europeans, they always obsess about energy security, and I'm all for that. I think that should be a top priority. And that means not having excessive dependence on Russia. I agree as well.
Well, you don't want too much dependence on one actor. But energy security means not to cut yourself off from from any of the sources. You wanna diversify one of as many and cheap access possible access as possible. I don't understand the Europeans, though. They, you know, they celebrate liberating themselves from Russian energy.
It's a bit like liberating yourself from, you know, oxygen. You you do need these things, and, you know, you don't even have any any, you know, good replacement. So everything becomes less safe. It becomes more expensive. So I I don't I don't get it.
But, of course, as you said, now that the The US and Israel has set the whole Middle East on fire as well, I just just looks like all the problems we've they've been building up will just accelerate now. It's, yeah, it's very frustrating to watch. But but how does this also affect The US pivot, Because they were supposed to pivot to Asia. Now they're bogged down in
Speaker 1: Yes. It's it's it's horrifically problematic now because, you know, the optics of this war are about as ugly as it gets because, again, we had the situation where Iranian leaders were assassinated in the in the middle of the process of negotiations. My understanding is that they met together to discuss the American proposals, and we have information from Omani officials who said that the Iranians were very yielding, that they were very accommodating, and that they were practically giving the Americans everything they wanted, and then they got killed. And, you know, when this happened in Oman, with the Hamas leadership, I was not inclined to believe that it was that it was deliberate or that it no. I mean, obviously, it was deliberate that it was the deliberate policy of the Trump administration.
But this is not the third time this happened. It happened in Oman with Hamas. It happened with the Iranians seven months ago, and now it happened again the third time, which you know, now you go back to 90 plus drones that were launched towards Vladimir Putin's compound. And I was not at all inclined to think that that was unite you know, that that was anybody from Trump administration attempting to assassinate Vladimir Putin. I I I would be more inclined to believe that it was a joint venture between the Ukrainian and British intelligence.
But now I think a lot of people are going to suspect that this is this is what Trump is doing as a as a as a matter of course. So who is going to be negotiating in good faith? I I I think it's in terms of optics, it's about as bad as it gets. And, you know, we shouldn't think that optics is just a, you know, a soft tissue on the side because you remember when when when when Benjamin Netanyahu was in The United States a few months ago and he met up with a group of influencers when they, you know, when they decided to buy you know, Larry Ellison decided to buy TikTok and everything. And Netanyahu, who understands this, was saying, what's the most important weapon of all?
It's public opinion. And this is why TikTok for them at that time was the most important weapon of all, more than bombs, more than airplanes, more than everything. Because public opinion matters a great deal. And I think that Trump has blundered so badly that in terms of public opinion, I I believe that the only way he could recover now is to publicly sack everybody in his administration who has advised him to go forward with this and then to apply a radical truth truth therapy, which means probably opening up Epstein files completely and letting letting history take its course from there. Everything short of that, I'm afraid, is is a is a is a stain that will not wash, and it will mark his it will mark his administration and his name.
This makes this makes his legacy. The reason why I'm saying this is that if the world sympathizes with Trump, they say, okay. He committed many mistakes, but he's trying to do something good for for the American people and the world, then he can negotiate with the Russians. He can negotiate with the Chinese, with the Indians, with the Japanese, with with with Iranians and so forth. And he could get concessions.
Investments. He could open markets. He could create a large economic space opening for American corporations and so forth. But now all of that is in jeopardy. You know, if if if people in any country regard you as a lawless rogue, they will not be wanting to deal with you.
And, you know, this is this is now becoming a realistic possibility. He's going to be thrown back to his old allies from World War two and, you know, maybe maybe in the next administration, The United States is right back being the military enforcement arm of the of the Western European empire.
Speaker 0: Well, the optics problem, though, it appears to also extend to the to Europe. That is, as you said, Iran, you know, made huge concessions. The CNN reported on this as well that they seem to be hours away from a deal before before, yeah, The US and Israel launched a surprise attack in killing much of the Iranian leadership. And, again, if if this was a once off but this was the exact same thing that happened six months ago in back in June when they also in the middle of negotiations and then just you know, they saw Iran had its guard down, so let's just, you know, wipe them out instead. So the whole optics of it, I mean, is Iran is always sold as being this irrational, you know, the mullahs, Yatollahs who want nuclear weapons.
This is kind of the successful narrative which has been built. But now this is the Iran that also had accepted the JCPOA before the Americans walked away. So Iran seems suddenly very reasonable. It's very strange to see Iran almost capable of controlling the narrative here because they are not the one with the media power. But my my my point was with the optics.
The the EU also doesn't look good now. The I see Mertz, you know, giving speeches where he blames Iran for defending itself. So it's disproportionate. You know? You shouldn't attack this or that.
You know, we we we will tell you what what they're allowed to retaliate against. I mean, disproportionate. If if this is a war for Iran's existence, then this, you know, this it is sort of strange comment to make. Also, Wunderland come came out now saying that what Iran needs is a transition away from this government, regime change, and also abandon its ballistic missiles. So capitulation, a bit like, you know, in in victory, they want Russia to capitulate.
Now as Iran seems to triumph, they want Iran to capitulate. It just this is just very, very bizarre diplomacy. There's no olive branch. There's nothing. Even even even when you're being defeated or at least the Iran is giving you a good beating, this is what you put on the table, capitulate?
Speaker 1: But I think in a way we got used to that from European from the Europeans. You know? So that's not that's not surprising. That's almost like a constant. Europe has staffed its key positions with probably the least competent professionals that they could find, and this is how they've been dealing with other, you know, Kayakalas and Ursula von der Leyen.
They go to China to negotiate deals, and they end up lecturing the Chinese leadership on human rights. The I don't think that Europe is almost inconsequential in all this. Iran has, in addition to many regional proxies, they have two of the most powerful allies in the world, which is Russia and China. So this is this is the people with power to change things on the ground. The Europeans are virtue signaling out of out of their own conceit of righteousness.
You know, they think, oh, you know, we we matter, we are Europe, and Iran should listen to us. I think that Iran has more economic exchange with Afghanistan than than they have with the with the whole of the European Union and by, you know, by a lot. So I I I take that as as statements for domestic consumption, which are completely inconsequential to to the rest of the world. But the anyway, you know, Europeans don't Europeans, their their positions aren't surprising at all. But the Trump's turn the Trump administration's gambit is is absolutely shocking.
And I I I have to say I always thought that they wouldn't go through with it because I thought that going to war against Iran would be so staggeringly dumb that nobody could possibly be that dumb to actually pull the trigger, but they did. And I think that allegedly Trump was convinced that by hitting Iran with big bombing raids that the Iranians would soften and become much easier at the negotiating table, and that they would accept all the conditions and that maybe there would be even a regime change and so forth. But the opposite happened, and now it was a completely reckless gamble, and now the war is not gonna last two or three days. It's probably gonna go on for considerable time. And you any idea of being able to control the consequences and the fallout is completely unrealistic.
There is no way that anybody in Trump administration can predict how this is going to unfold. And Iran has the whole Iran has all the advantages. I mean, short of using nuclear weapons against Iran, which, you know, we can't unfortunately, we can't discount either. Iran has all the cards because they're at home. They are dug in.
They've been preparing for this encounter for more than twenty years. They have enough missiles and drones to feed a 20 fourseven conveyor belt of missiles and drones against Israel and against Western assets in the region. United States is there with their military bases which are surrounded and their naval assets which are very limited. You know, they have so many planes on them, but, you know, every time you use up all your weapons, have to sail two, three, four days to Diego Garcia to to replenish. So you you don't have the staying power.
You cannot sustain a long campaign. Iran can, which means Iran wins this one. There's no question about it. And so it's it's the attack on Iran is so staggeringly dumb, I still sometimes think like, am I dreaming, or did they really do this? But they really did this.
Speaker 0: It just seems like they bet everything on this. I mean, for The US, this will The US Israeli relationship will be shaped by this. The relationship between United States and the Gulf States were not under protection now, but instead getting hit heavily for being frontline states. So The US credibility of being this all powerful state to which all American presidents suggest, you know, and that we can take down anyone, and this is a reason why countries ally with them. The US weapons, as you said, the now all of this is going into shortage.
There's some big concerns, like general Keane warned last week. How are you gonna contain the China? How are you gonna do all all these other things you want to do when you're running out of these weapons? The the energy issue can sink. The European economies, which are already sinking.
The global economy could go. And the Trump administration itself, I mean, he could be impeached by the sea. He could be finished. Indeed, I just saw the reports that the Pentagon informed the congress that there was no indications that Iran had any intentions of attacking The US first. So so it looks like the Pentagon is ready to throw their old Donald under the bus here.
So it's it just seemed everything was bet on something, which just seemed so ridiculous in terms of the the the likely success. The idea that you kill off Khomeini, and now suddenly the whole instead of rallying around the government, they they would all surrender and, you know, bow to the Americans for having liberated them from their, you know, highest religious authority. I mean, all of this made no sense at all, but I I just don't understand how any of this like you said, it does seem like a dream. How how how could any intelligence he had been fed been been so just horrible?
Speaker 1: Yeah. And, you know, with regards to impeachment, this time, the impeachment will almost certainly be successful because so far, you know, they were they were going on nothing. They were going on a lot of it was it was always going to be a big stretch whether they were going to be able to impeach him and where the impeachment will go. Now I think they have a they have a slam dunk Yeah. Because Trump really broke with every protocol, with the constitution, with with with the usage and customs, and he's completely and totally in the wrong.
So I of course, and and the troops are probably up in arms because they see this as as as dying for Israel and the Epstein class. They, you know well, you saw that every time over the last two last year since Trump has been in in the White House, when they were being sent to the Red Sea to confront the Houthis, when they were being sent to the East Mediterranean or the Persian Gulf to con con con confront whoever, Syria, Hamas, Hezbollah, Iran, and so forth, you always had these technical problems. Right? You know, there was there was first the Abraham Lincoln carrier strike group was sent to the Red Sea from the from the Persian Gulf, and then their oiler ran aground. And, you know, that's fuel supply for the whole group.
So without fuel supply, you're not going anywhere. They didn't even have a fuel supply in a fuel vessel in reserve. And then another aircraft carrier was being sent from Malta to towards Egypt, towards Eastern Mediterranean, again, in support of of Israel. Yeah. Maybe they were being sent to to confront the Houthis as well.
And then they they collided with a commercial vessel in the off the offshore off the shore of Egypt. And now we have Gerald Ford, is sinking in its own excrement because the troops have been stuffing the toilets with with socks and t shirts. You know, this is when you're in the military, you can't you can't really mutiny. You can't disobey orders because you could be court martialed. You could be dis get a dishonorable discharge and so forth, But you can always sabotage the equipment and make mistakes that that set you at a disadvantage and maybe pre prevent the deployment.
And so when this happens again and again and again, what it tells you is that troops are not at are not at all with their hearts and minds in this fight. They don't wanna do it. So, of course, there are going to be blowback through the Pentagon to stop the commander in chief. I mean, it's it's a completely incomprehensible gamble because it was a gamble. You know, the worst thing is it really was a gamble.
Like, alright. We do this and if we're lucky, the regime falls, people take over, we're welcomed with with flowers and and parades, and everyone lives happily ever after. First of all, to even believe that, you have to be completely misinformed about what's really out there. And then second of all, this is not real estate speculation. So, you know, if we if we fail, we we lose on the deal.
This is history. It it doesn't end the day you say, like, oh, you know, didn't go well. The the avalanche of consequences is going to continue rolling. And then the the the most amazing thing to me is that I cannot figure out for for the life in me what was his upside because the downside was very clear. You could get ejected from the region, you could sustain hundreds if not thousands of casualties.
Israel is probably finished. You know, that's probably past tense. All of this to gain what exactly? I I can't figure it out. It's it's very close to nothing.
This must go down in history as one of the dumbest policy decisions ever, and it's very regrettable because I think that Trump had a great chance. He had a very strong popular mandate. I think he started moving in the right direction on so many important issues. And how how he got seduced into into this boondoggle is I have to say, I I find it very regrettable because if if if the whole Trump machine falls, The United States could find itself back in the camp of, you know, the WHO is gonna go be back, USAID is gonna be resurrected, LGBT ideology is going to gain strength again, Children are gonna be getting, you know, transitioned to whatever gender they choose or is chosen for them. And all these all these things that I I I I was hoping that we transcended are going to come back with a vengeance.
So that's that's where that's where the whole thing is actually heartbreaking. But then again, you know, it's it's it's ultimately going to be up to the American people who didn't vote for this. They act they voted exactly for the opposite.
Speaker 0: That's why this was different than Yemen. You know, Yemen, you can launch some strikes. If it doesn't work okay, you pull away. You can manage the situation, but this this is a real, you know, horse show.
Speaker 1: Quick this is quick send.
Speaker 0: Yeah. Anyways, I know you have a place to go, so thank you very much for taking the time.
Speaker 1: Thank you very much for inviting me, Glenn. Until the next time. Thank you.
@Glenn_Diesen - Glenn Diesen
Peter Schiff: Iran War Creates Chaos in the World Economy https://youtu.be/006qiqgvpVs https://t.co/5tCDOgZ3t3
Video Transcript AI Summary
Peter Schiff discusses the economic dimension of the Iran war, arguing it will have negative implications for the U.S. and global economy. He notes the economy was weak before the war, citing February jobs data showing 92,000 lost jobs (the worst report in five years on the initial numbers) and later downward revisions indicating a larger October 2025 job loss. He says three of the last five monthly job reports show net losses, indicating a weakening labor market that will deteriorate due to the war. Inflationary pressures are already present, and he expects oil to rise toward $90 a barrel (up more than 60% so far in 2026). As a result, consumers face a weakening economy, job losses, and a higher cost of living. He also highlights the war’s cost and the likelihood that, if it lasts longer than anticipated, it will extend the period of volatility and expenditure.
Schiff questions whether the war can achieve its stated objectives, suggesting that bombing alone may not produce regime change and that the ensuing vacuum could be filled by a regime more hostile to the United States. He warns that a ground campaign could entail substantial casualties on both sides and implies that a prolonged conflict could be economically and politically damaging. He argues wars are expensive and tend to fuel inflation through debt and money printing, describing the war as a net negative. Politically, he expects increased Republican losses in the midterms and a Democratic White House in 2028, which he views as detrimental to the U.S. economy due to a presumed shift toward more expansive socialist policies.
Regarding whether war can serve as a distraction from domestic problems, Schiff allows the possibility but points out related risks: he notes Trump had accused Obama of starting a war with Iran to distract from domestic shortcomings and argues the current conflict could similarly divert attention from other problems. He contends that Trump’s tariffs and broader economic policies have been problematic, and he criticizes the administration’s handling of various policy areas, asserting that the war could undermine Trump’s previous anti-war stance and appeal.
On regional dynamics and energy, Schiff emphasizes that Iran may target U.S. assets in neighboring countries, and missiles in the region could cause collateral damage and draw in other countries. He discusses potential spillovers, including possible alignment changes among regional powers and Russia and China, and raises the specter of a broader regional or even global confrontation. He criticizes the idea that the United States should be deeply engaged across multiple theaters and reiterates his preference for accountable congressional deliberation on war decisions. He argues that a wider conflict could involve escalation risks and that the U.S. finding itself bogged down and unable to achieve swift victory would damage its standing.
Energy implications are highlighted: higher energy prices would burden consumers and limit spending elsewhere, with some winners (oil producers benefiting from higher prices) and many losers. Schiff notes Europe’s energy choices, political shifts toward restricting fossil fuels, and argues that energy costs will eventually impose political consequences in Europe. He also discusses the potential for the Gulf States to move away from the dollar as the petrodollar system faces stress, predicting that the war could hasten dedollarization and increased interest in gold.
Gold and silver are discussed as price hedges: Schiff notes that gold and silver prices were not quickly dramatic in the immediate aftermath, with gold around $5,150–$5,300 and silver around $82–$83, but he remains bullish that prices will rise as the dollar declines and deficits expand. He predicts a substantial upside for precious metals and contends that the long-term trend toward dedollarization and greater gold ownership will intensify. He frames the war as a strategic and economic inflection point, with potential winners and losers, and argues that the overall effect on the world is negative, even if some actors profit.
Full Transcript
Speaker 0: Welcome back. We are joined today by Peter Schiff, the CEO of Euro Pacific Asset Management and also host of the very popular Peter Schiff Show podcast, and I will leave a link in the description. So thank you for coming back on again.
Speaker 1: Glenn, thanks for having me on.
Speaker 0: So we know that politics and economics often go hand in hand, so I've been looking forward to the opportunity to ask you about the, I guess, economic dimension of this war against Iran. I'm not sure, yeah, where was a good place to start, perhaps the Iran's deterrence. Is this simply or efforts to push back The United States? Is this aimed mainly at, I guess, trashing the economy, or how do you see the the economic dimension of this war?
Speaker 1: Well, I think it's gonna have negative implications. I think the economy was already weak before we launched this war. In fact, we just got the jobs numbers today from February, which, of course, was before the war, and we lost 92,000 jobs. It was the the worst report in five years on at least the way they initially reported it. But with downward revisions, there was actually a bigger job loss now in October 2025.
But three of the last five monthly job reports have shown losses, net losses in jobs. So we have a very weak labor market that's now gonna get even weaker because of the war. We already had inflationary pressures building. Now they're gonna build even more. In fact, oil is now almost $90 a barrel.
It's up more than 60% so far in 2026. So, you know, consumers are gonna get hit with the worst of everything, a weakening economy, job losses, a rising cost of living. So this is, you know, very damaging. The war, you know, obviously is expensive. If the war lasts longer than the administration hopes, which it probably will, because I don't know a war that's really ever gone the way, the warmongers have have promised.
You know, we get into the Middle East, and we're there a lot longer. It takes a lot longer. Who knows if we could win the war based on what our objectives are? I mean, can we bomb Iraq Iran, rather, ultimately into submission, I suppose we could drop enough bombs on them. But I don't know that that accomplishes regime change because the regime that rises to fill the vacuum that we create could be even more hostile to The United States than the one that we destroyed.
And and who knows? I mean, you know, we may not be able to do this with missiles and bombs. We may have to have troops on the ground, and that could be an even longer process. And there could be a lot of casualties, if that's the case on both sides. So, you know, I think this is a net negative.
Wars are expensive. They often lead to a lot of inflation because governments tend to pay for wars, with debt and, you know, money printing. So I think I think this is bad, and I think it's also politically, gonna damage the president further. I think Republicans are gonna take a shalacking in the midterms, and I I I think the Democrats will get the White House back in 2028, which is not positive for The US economy because I think they're gonna be emboldened with a with a a socialist mandate, at least that's what they're gonna claim, and a complete repudiation of everything Trump supposedly stands for, which would be capitalism, even though he's really a socialist too based on the policies that he advocates. So I think all in all, it's a it's it's a it's a big problem.
Speaker 0: But isn't a benefit of war to divert a bit tension away from failings at home. I mean, definitely here in Europe, the whenever things are going bad at home, there tends to be excessive focus on foreign policy. But with with this war in Iran, what there's already some problems with the tariffs, the bond markets. You can look at the Epstein files. Did you think at least this will fall in the background as this war progresses or not this time?
Speaker 1: Well, there's always the chance that that's exactly why we went to war as a distraction from all these other problems. In fact, if you look at some of Donald Trump's, older posts on X, and at the time, it was it was, Twitter. But he accused Obama of potentially starting a war with Iran, to, you know, be use it as a distraction from his inability to negotiate, from his faltering poll numbers, from problems in The US economy. So it's very possible that Donald Trump is doing exactly what he thought Obama was gonna do. And, you know, he he did have some significant losses.
The Supreme Court rightly, declared his tariffs unconstitutional. Also, the tariffs were never paid by foreigners the way Trump claimed. They were paid by Americans. In fact, if you look at import prices year over year from before the tariffs were implemented or before Trump was even really president until now, import prices are basically flat. They didn't go down.
And the only way foreigners would have paid our tariffs would have been if they dropped their prices enough to compensate for the tariffs that we pay, but they did not do that. So Americans are still paying full price for the imports, and they're paying the tariffs on top. Now I think that's gonna change this year. I think you're gonna see import prices rising, in addition to the tariffs. Now the tariffs might be lower now because the Supreme Court has struck down a lot of them, so we'll see.
But they're gonna end up being a policy and economic disaster for the president. And, of course, yeah, look what was going on with the Epstein files. Howard Lutnick, you know, in the president's cabinet looking particularly bad when it comes to his relationship with Epstein and the obvious lies he's been telling to try to downplay the significance. Not that I necessarily think he was involved with with with anything illicit, but I think he's lying about his relationship with Epstein. He's afraid to come clean and admit, I think, you know, how how, you know, how how big that relationship actually was.
But and it was not just Lutnick. I think the whole Trump administration wanted to get past the Epstein files. It was a a developing story. And, yeah, this, war certainly knocked everything off the headlines. And now the war is the big topic of conversation, and so it may have been started to achieve that purpose.
I don't know. But I don't believe what Trump said. I I don't believe for a minute that he had any credible reason to believe that Iran was about to attack us. It doesn't make any sense that they would do that. And I think that we put them in a stronger position by attacking them because now they look like the victims, and we look like the bad guy.
And, you know, if they were gonna attack us, we should have let them do it, and then we could have retaliated from a much higher moral ground. And there would have been a lot more support for the war had we been attacked by Iran. Instead, we chose to go to war with Iran, and we put them in a position of having to defend themselves.
Speaker 0: Yeah. That's it's a bit disappointing. I I initially was a bit enthusiastic about the potential of a Trump presidency. That is the promise of of reindustrializing, ending all these expensive forever wars, having more transparency in terms of flushing out the Epstein class, but all of this kind of reversed at some point, which was
Speaker 1: Yeah. Disappointing. I mean, I I was disappointed in the president's economic policies. The big beautiful bill was a spending disaster. I was against the tariffs.
A lot of his other economic policies that he's advocated, you know, capping credit card interest rates, banning, private companies from buying residential real estate, you know, the efforts to potentially privatize Fannie and Freddie, what he's already done with the GSEs as far as having them go into the market and buy mortgage backed securities. Pretty much all of his economic policies have been wrong. But at least, you know, at least, you know, on as the military on defense, he wasn't starting any wars. You know? But now he's ruined that.
You know? Now now so he's betrayed everything that he supposedly stood for. And I think this is gonna be the biggest political blunder since George, Herbert Walker Bush read my lips, no new taxes, because he made a promise to the American people and then broke it. That's exactly what Trump did. Trump ran to end wars.
He specifically criticized prior presidents who went to war in The Middle East and said that never would have happened if I was president. And so nobody voted for Trump hoping that he was going to start a war with Iran. In fact, there were people who were told that if you voted for Harris, you were voting for war with Iran. And so we needed to vote for Trump to make sure that didn't happen. And and so now, Trump is president, and we're fighting a war with Iran.
Speaker 0: Yeah. That was the advertisement as well. Trump vans the peace ticket, so that didn't go as planned. But this war, of course, is taking place in a very sensitive part of the world. And given that the retaliation from from Iran isn't only going after the US military, but it appears to be going after US allies, more specifically economic interest.
The The Gulf States, they do have an interesting position, I think, in the world economy. They're much of these, well, I guess, states well, family run countries. They organized a lot around energy because they are, well, lushed with energy, also finance, real estate, often populated by mostly expats. So how do you see the potential of, I guess, this region unraveling?
Speaker 1: Well, I mean, obviously, there's a lot of potential there. I mean, first of all, you've got the disruption in the Straits Of Vermuz. You you've disrupted all of the the the traffic through that particular, you know, water body. About a quarter, I think, 25% of all the world's oil is moving through there. But you've also got missiles flying around The Middle East because I I I Iran is in a position where it has to attack US assets in its neighboring countries.
I mean, we've got bases all over the Middle East. And now, you know, Iran is having to launch missiles at, you know, at those bases to try to take them out because we're using those bases to, you know, attack them. But in the process, with all these missiles flying around, you know, you're gonna have some collateral damage. You're gonna have some civilian targets that are in inadvertently hit. But there's also the chance that other countries get dragged into the war because they they perceive what Iran is doing as an attack on them because their missiles are going into their country.
But you never know. Other countries could side with Iran, you know, in the Muslim world. They could, you know, look at Iran as the victim, especially since we put them in the position to claim that status by being the aggressor and by by by launching an attack with them. I mean, there were negotiations going on. Now Trump claims that they weren't going anywhere, but, you know, you're not supposed to attack your you know, the guys that you're negotiating with.
I mean, it's not, you know, really good good form to do that. You should break off the negotiations first. But so I think, you know, other countries could side with Iran. There could be an entire war in the region. And who knows?
Other countries could be dragged in. Iran has some power for allies. I mean, the Russians, the Chinese. I mean, now you're talking about a world war. So you never know, you know, what could happen.
Right? You open up a can of worms, and you just have no idea what what what you've let let loose. And that's why we shouldn't have done this in the first place. I mean, I was I'm I've been against it for all sorts of reasons. First and foremost, that I think it's another unconstitutional war.
It's another war started by a president. The presidents are not supposed to start wars. Congress needs to declare war. The decision to go to war needs to be deliberated, and it needs to be arrived at by a consensus of congress, not just the whim of one man. We can't have one individual deciding that America is gonna go to war.
That that's not how our republic was formed, and I don't think it's a good idea because wars are gonna be a lot more common and a lot more frequent if one person can just decide to take us into a war for whatever reason he wants or no reason whatsoever. And, it's much more difficult if you have to convince congress that the war is necessary, and they all have to go on record voting for it. You know, I'd much rather see that than than just have a president who doesn't even have to there's no even, know, reelection. Trump can't run again. So, you know, other Republicans could bear the consequences of his decision, but he doesn't.
But at least the congressmen and the senators, you know, they're always gonna be held accountable for their decisions and their votes because they have to run for reelection. At least they want to. These guys constantly run for reelection. So I'd rather have accountable politicians deciding to take us into war than than than someone who's not gonna be accountable to anybody.
Speaker 0: Yeah. I guess the strange dimension was Trump seemed to be leaning towards the idea that the The US had to make a pivot, it can't be everywhere. So pivot to Western Hemisphere, Asia. In other words, get out of Europe and The Middle East. Now it's
Speaker 1: still I guess I Europe and Middle East. I guess the the Nobel committee now is happy that they decided not to give him the Nobel Peace Prize after all. He was really pissed off that he didn't get the Nobel Peace Prize. They'd they'd be asking for it back if they if they gave it to him, and then he goes and starts a war.
Speaker 0: Yeah. Well, I guess, it is a bit strange. The military should, you know, be the last resort because it's, you know, expensive, not just in monetary terms, but also on society. And, but I guess what you
Speaker 1: need We dropped a bomb on a school. We killed, like, a 100 plus schoolgirls. Obviously, that wasn't our intent, but stuff like that happens. You know, it's just a unavoidable consequence when when when when when when you're, you know, launching missiles. You know, they don't always hit on target, you know, or whatever.
But I just think about all the brothers and the fathers of these girls. How much are they gonna hate The United States now compared to before? You know, we're we're making a lot of enemies when we do stuff like this. Yeah.
Speaker 0: Well, it's a problem when all you have is a hammer. Every problem looks like a nail. I think it's one of the curse of having a big military that creates when you have the supply, it creates, you know, seemingly demand for it. But but regarding the the energy, because you mentioned not just the Gulf States, but as you said, they closed down
Speaker 1: the Strait Of Hormuz where 20% of the world's oil goes through. What what is the what are the wider consequences, though, for this in terms of the energy wars or how how how the other great powers might position themselves? Well, I mean, obviously, higher energy prices will take a toll on consumers of energy now that it becomes more expensive. And to the extent that we have to spend more money on energy, we have less money to spend on other things. So, yes, there's obviously consequences.
Now there are winners, you know, obviously, companies to the extent that, you know, they can actually produce and sell their oil at the higher prices, then they're gonna be winners. But but overall, I think, you know, it's gonna do a lot of harm to the global economy that that lives off of energy. And we need more energy than ever ever before, especially now with all the build out of the AI data centers. All these data centers need energy. They all need to be powered.
So this was not a good time to start a war in The Middle East. You know? Not that there ever is a good time to start one, but, you know, there there are a lot of reasons that we should have tried to avoid going to war. And I don't think there was an imminent threat to The United States. I don't know exactly what the threat was to Israel or why they thought it was so imminent that, you know, they needed to attack Iran.
But if it was really something that Israel needed to do, I still think that The US could have stayed out of it, and, you know, that may have been better for for The US and for the reason region because then Iran would not be attacking our military bases in these other countries, and it would be concentrated between Israel and Iran. And I'm sure the Israeli army could take care of itself. But, you know, by by having America come into it, that really raises the stakes and and makes it a much bigger deal because, you know, we're the big, bad, you know, evil guys as far as they're concerned, and a lot of other people in the Arab world will will will see it that way. And the longer it drags on, the more they're gonna see it that way. You know, the more civilians that end up dead, the worse we're going to look.
Speaker 0: Well, regarding energy supply, the China, of course, they they in a very impressive way, been building up their energy production, which is a quite an astonishing growth to have in terms of the supply of cheap energy, which is a great indicator, though, for industrial might if you want that lifeblood to feed your industries. But in Europe, we have a bit of an opposite problem. That is our leaders recently celebrated that they liberated themselves from Russian energy. And now, I guess, against our will, we're also liberated from Middle Eastern energy. Do you how do you see the European the European economists being influenced by this?
Speaker 1: Yeah. I mean, they've made a lot of bad decisions on the altar of, you know, global warming and and trying to move away from fossil fuels, and that's been a disaster. And, you know, they need to move away from that and and start, you know, exploiting the best possible sources of energy and, you know, and and forget about this nonsense. You know? But, politically, that's kind of, you know, how the pendulum has swung.
But I I do believe that eventually high energy costs and the damage that that inflicts on economies will ultimately have blowback against these politicians and will force some kind of change in in the agenda here over there.
Speaker 0: I I did also wanna ask about the gold and silver markets, though, because, you know, after reading your books, this is what really motivated me to buy gold and silver. But how do you see these price? Because they've already been exploding over the past weeks. How do you see gold and silver moving as a result of this? I mean, all inflation Well, they haven't really
Speaker 1: or yeah. They haven't really moved much at all over the past week. I mean, gold's still around $5,151.50. Silver's $82.82 dollars, somewhere in there. So the metals prices haven't moved very much.
There was an initial move up the evening, the, you know, the Sunday night after the bombs dropped on Saturday, but it was muted. I mean, gold didn't even make a new high above 5,500. Of course, silver didn't even come close to its high that it set. And and then, you know, we gotta buy the rumor, sell the fact. I think it was pretty obvious for a while that something was gonna happen with Iran, and I think some traders had positioned themselves along the market in anticipation of that.
And when it happened, they they sold the news. But I think after we start digesting the implications, gold and silver prices are just headed much, much higher. I mean, it it was already a bullish case even before the war, but the war just makes it even more bullish. So I think we're gonna see a big move up, especially when the dollar rolls over and falls. The knee jerk reaction, just like every conflict, is buying the dollar as some kind of safe haven.
But I think that's gonna wear off pretty quickly, and the markets are gonna resume the dedollarization trend that was already in place, you know, especially when they start to pencil in the massive deficits that we're going to be running as a result of the war and the recession that the war helps, you know, create, the deficits are gonna be in the stratosphere. And so we're gonna be cranking up the printing presses like never before to pay for it. And I think, you know, the world's gonna recognize that and run and and and move even faster to dedollarize and embrace gold.
Speaker 0: Well, just the last time we spoke, you you mentioned that you foresaw a big economic crisis coming much worse than the one in 02/1989. Do how do you see the overall trend now? Is is this speeding up towards that end, or or do you or do
Speaker 1: you see some possibilities of, well, America coming out on top of this somehow with some, I guess, economic benefits? I mean, the war Look. I I suppose if we actually can achieve the objectives in just a few weeks where the Iranian government is replaced with a more Western friendly government that's not, you know, a religious state where the Iranian people enjoy, you know, more freedoms and more liberties. So it's a more tolerant society and more western type values, and it's not a military threat to anybody. They're not a sponsor of terrorists or any of that.
If, you know, if we get this Goldilocks perfect scenario and The Middle East ends up being a lot safer and more prosperous, then, yeah, I guess it could it would be a win. But, I mean, I think it's kinda Pollyanna ish to, to to believe that that's gonna be the outcome. Yeah. I just don't see any historical precedent for that kind of outcome. All of the prior adventures that we've had, have not ended that way.
And and so I don't expect this to be any different. I think we're going to be in there for a long time. We're going to spend a lot of money, and we're not going to make the situation better. And there's a pretty good chance that we make it worse. That's what I think.
Speaker 0: Just the last question, Do do you see anyone gaining from this war at all, or is this just a massive loss for the world?
Speaker 1: Well, there are always gainers. Right? First of all, the military industrial complex gains because now they get orders from the Pentagon for more weapons and more bombs. You know, these things, you know, are expensive. And so that's why the military stocks have really taken off because their earnings are gonna explode based on this war.
I mean, war is very profitable for the companies that supply the war effort. And, yes, the war is gonna disrupt things in ways that some lose and others gain. So there are gonna be companies and countries that are better off because the world's at war. But, you know, there are gonna be plenty of countries and companies that are worse off. And overall, it's a net loss for the world, and it's you know, I don't even think it's zero sum.
I think overall, the world is poor, and that's not even taking into account the human toll. Forget, you know, the the the individuals who lose their lives and the impact that that has on their families. Apart from all that, right, the world is worse off. I mean, we're we're talking about destroying a lot of infrastructure in Iran, and now we gotta rebuild it. In fact, Trump is saying that we're gonna help rebuild it.
With what money? I mean, we're gonna destroy the infrastructure with expensive bombs, and then we're gonna build it back up again. So we're gonna pay to destroy it, and then we're gonna pay to recreate what was already there. That would've waste. But we're already in debt.
So, look, I I think there's gonna be winners and losers. I think The US will ultimately be a big loser. I think the dollar will be a loser, especially if we lose the war. I mean, imagine that. I mean, that's not outside the realm of possibility.
I mean, what if Iran hangs tight? What if we blow up all our bombs and our missiles, and they're still there? You know? Yeah. We kill a bunch of them, but they don't surrender.
The regime is still in power, and they're still firing missiles at us. Then what? And then we're are we gonna have to have a ground war? Are we gonna bring all our troops in? Mean, if we have to do that, we pretty much lost the whole idea that we're just gonna do it, you know, from the sky.
And then could we win the landlord? I mean, Iran's a pretty big country. You look at it on a map. You know? And, yeah, I mean, how many troops are we gonna send over there?
And, you know, I mean, the Iranis could be, you know, hunkered down deep in the ground. I mean, I don't know. It may not be a cakewalk. I mean, look. I mean, we didn't we didn't win the Vietnam War.
I mean, we're a much bigger country than Vietnam. We couldn't beat Vietnam. So who the hell knows? It's possible. It can be an embarrassment to The United States, and our our our, you know, reputation can go down, militarily.
You know, Trump is out. We're so strong. We're so great. We got the greatest this. We got the best that.
Well, we'll see. You know? I I I mean, anything is possible. As I said, you open up a can of worms. You just have no idea which which you're in for.
Speaker 0: Yeah. Well, it's a country with 90,000,000 people on a territory, I think about 2.7 times the size of Ukraine. So it's a it's a massive mountainous country as well. So, also, without ground troops, it could be, a difficult thing Yeah. Look.
Pull off.
Speaker 1: And Russia hasn't even won in The Ukraine yet. Look how long they've been fighting that war. Yeah.
Speaker 0: No. It's no. It doesn't seem like a very good good good good strategy at all. But I would just final question. A lot of the, you know, the post Bretton Woods system is built up all around the petrodollar, the the The Gulf States selling selling the energy and oil and sorry.
Selling their oil in dollars and then reinvesting the dollars into The US. Do a lot of this is premised on the idea that The United States would be you know, that that security guarantee would be solid. Do you see any do you see possibility of the Gulf States, I guess, pulling back after this or any disruption to this system?
Speaker 1: Yeah. There I mean, I've been predicting that even before the war. I mean, I think this could hasten that. Now maybe there are some people that think it'll slow it down, that the war will cause people to buy the dollar, which has happened so far. But I don't think so.
I think that as the war wages, you're gonna see a reversal in the dollar. I think you're gonna see more money continuing to flow into gold, and that's gonna undermine the dollar's position as the reserve currency.
Speaker 0: Well, as always, thank you very much for taking the time. I know you're busy, so very much appreciate it.
Speaker 1: Yeah. And, you know, your listeners, you know, take advantage of the fact that the markets are in a wall right now. You know, just like oil was a delayed reaction. You know? For the first couple of days, you know, everybody was celebrating.
Like, oh, look. Oil's barely up. It's all because of Donald Trump's drill, baby, drill. Well, you know, we're we're barely producing any more oil now than we were in in in 2024, so that's got nothing to do with it. I think it was just a delayed reaction.
And now oil's up almost $90 and headed higher. I think gold's gonna have a delayed reaction. I think gold's gonna explode much higher. We could be at 6,000 very quickly. So before that happens, people should buy it.
You you should go to my my company, Shift Gold, at shiftgold.com and buy gold, buy silver now before the next big move up, which could be happening any day. And, also, as I mentioned, there's winners and losers. I think the investment strategies that we are pursuing at Europacific Asset Management, think our clients are gonna be big winners economically. I mean, we all lose as Americans. We lose as human beings, but we could win as investors.
And and that you know, that's all we can do. We can't control the war. We can't stop it, so we can either lose or profit. And given those two choices, I'd rather make money than lose money. Most people are gonna lose money because they're following the wrong strategies.
But I think the strategies that we're pursuing at Euro Pacific Asset Management are gonna win. You can you know, people should, you know, go to our website, contact our advisers at Europac dot com, or if you wanna do it yourself, learn about my mutual funds. I've got five mutual funds that we manage. You can get information on all five at europac.com, and you can buy them no load at any, any of the major discount brokerage houses throughout the country. So, do your homework now and and get positioned because, you know, if you wait too long, I think it's gonna be an unfortunate outcome.
And, unfortunately, most people are gonna be in that boat.
Speaker 0: Well, I I will leave a link in the description because I very much agree when the world burns, it's an important consideration to to protect the wealth as well. So thank you very much.
Speaker 1: Alright. Take care.
@Glenn_Diesen - Glenn Diesen
Jiang Xueqin: New World Order - Iran War Ends U.S. Empire https://youtu.be/6rTlI_Qwd1I https://t.co/tIwdOitPyE
Video Transcript AI Summary
Professor Zhang returns to discuss the Iran war and geopolitics through historical patterns and game theory. He argues that Trump has failed to articulate a clear purpose or strategy for the war. Initially, the narrative centered on preventing Iran’s nuclear uranium enrichment, but the Oman foreign minister reportedly told observers that Iranians had already agreed to zero uranium enrichment even for civilian purposes, calling the nuclear weapon pretext into question. He notes that Rubio proposed preempting Israel’s anticipated attack, suggesting the U.S. acted to defend itself. After initial strikes, Iran bombarded U.S. bases in the GCC and closed the Strait of Hormuz, causing significant global economic disruption as oil prices rose toward around $120 a barrel. Iran’s aim, Zhang says, is to pressure global economies and the GCC to push Trump to end the war, while the United States and its allies pursue a destructive approach, including strikes on desalination and oil facilities, which he characterizes as civilian targets that would jeopardize civilians’ access to water and fuel. He cites a 170 schoolgirls’ deaths in a Tomahawk strike as an example of the civilian toll and argues the war’s conduct suggests a focus on destroying Iran rather than regime change.
Glenn observes the narrative’s inconsistency and compares it with other wars, where a single organizing narrative typically emerges. Zhang expands the view: the war is a war of attrition for Iran, pressuring global energy supplies and GCC partners to influence Washington to end the conflict, whereas the United States and Israel pursue a path of destruction. He emphasizes Iran’s vulnerability of Gulf States, arguing their dependence on U.S. protection—despite their vulnerability when Hormuz closes and their desalination capacity is threatened. He explains that Gulf economies depend on oil revenue and import food and water; closing Hormuz and attacking desalination plants could collapse the GCC’s economic and physical stability. He contends that the Gulf’s petrodollar system ties the region to the U.S. economy, and destroying that link would threaten both American debt and the AI/flood of investment in the United States from Gulf capital.
Zhang further argues that the war’s broader global impact could unsettle the current liberal international order. Iran seeks to push the U.S. out of the Middle East, gain control of Hormuz, and finance rebuilding domestically, while the U.S. and its allies resist recognizing the limits of empire. He asserts that the petrodollar system ties Gulf investments to the U.S. economy; if Gulf States stop funding American growth, an AI-driven financial bubble could burst, triggering a severe downturn reminiscent of a Great Depression. He counters a belief that the United States could gracefully withdraw from the region, labeling such thinking as wishful and attributing the U.S. position to imperial hubris.
Glenn asks about the war’s potential global spread and how the conflict might draw in other powers, including Russia, China, Turkey, and Pakistan. Zhang contends there is likely no off-ramp; Israel intends to widen the conflict to achieve its Greater Israel project, while Iran would strike GCC targets more than Israel. He notes Turkey’s weakness and predicts possible broad regional engagement, with Pakistan obligated to defend Saudi Arabia and potentially becoming a participant due to mutual defense pacts. He suggests a multi-vector expansion: from Pakistan, Iraq, and Azerbaijan to secure the Shatt al-Arab and Hormuz, leading to broader regional escalation and eventual intervention by Southeast Asian economies reliant on Hormuz oil.
Discussing Russia, Zhang argues that Vladimir Putin has a grand strategy. He believes Putin is waiting for a U.S. ground invasion of Iran; once U.S. forces commit ground troops, Russia could exploit the distraction to advance objectives, notably Odessa, potentially triggering a European defense and a prolonged, draining conflict. This, he says, would exhaust Europe and push for a political realignment favorable to Russia, potentially replacing the current order with a new balance of power.
Towards the end, Zhang forecasts three major post-war trends: deindustrialization due to energy scarcity, mercantilism with localized supply networks, and remilitarization as Pax Americana ends and Pax Judaica or similar regional orders emerge. He suggests Japan might lead East Asia in deindustrialization and remilitarization, while China remains tied to the old global order. He predicts a potential rapprochement between the United States and China but maintains the global order will not be saved. He also notes that Europe is in a dire condition, facing demographic and economic strain, refugee integration challenges, and political fragmentation, which undercuts Western liberal hegemonies.
In closing, Zhang reiterates that his earlier prediction from two years prior—that the United States would invade Iran—has been fulfilled with shock, and he expresses sympathy with the unsettling realization of the unfolding dynamics.
Full Transcript
Speaker 0: Welcome back. We are joined today by professor Zhang, who uses historical patterns and game theory to predict the direction of geopolitics. And professor Zhang is famous for many things, among some predicting the return of Trump and also the war against Iran, now a second war that is. So thank you for coming back on the program.
Speaker 1: Thanks, Glenn.
Speaker 0: How how do you make sense of this war, though, against Iran? I mean, how how do you measure how this war is developing in terms of where the successes or failures are?
Speaker 1: Right. So first of all, Trump has failed to articulate a purpose and a strategy for this war. At first, it was about nuclear uranium enrichment in Iran and the fear that Iran would develop a nuclear weapon. In fact, in Trump's state of the of the union address, he said that he would never allow Iran to develop a nuclear weapon. And both chambers of congress, the both the Democrats and Republicans rose to cheer and applaud.
It was really the first time that congress demonstrated any unity during that speech. It was a extremely political speech. But the problem with that is that the Omani foreign minister, a few hours before the Americans and that's really struck Tehran, told us that the Iranians had already agreed to zero uranium enrichment even for civil civilian purposes. So the idea that Trump needs to prevent a nuclear weapon, that doesn't hold. It's just a pretext.
And they tried different many different excuses. And then finally, Rubio said this. Rubio basically said, look. We had to attack because Israel was gonna attack first, and then the Iranians would retaliate against both the Israelis and us. So to defend ourselves, we had to preempt Israel and attack first.
Okay? So they're struggling for a narrative. They're struggling to explain to to the American people why this is happening. They're also struggling to contain a fallout because after the Americans initially struck Iranians, the Iranians start to bombard US bases in the GCC, and they closed off the Strait Of Hormuz. This is doing tremendous damage to the global economy.
So oil right now, it's approaching $120 a barrel, $110 a barrel. I'm not quite sure. Okay? But this is double from a a week ago. And remember that the Sheriff Hormuz delivers most of this oil to the Asian economies of Pakistan, India, China, South Korea, and Japan.
Japan relies on 75% of its oil from the servant of Hormuz. So in about seven, eight months, prime minister Takayashi has informed her cabinet that Japan will be out of oil. And Japan is, you know, a manufacturing powerhouse. So this war has been a disaster. And even today, Trump has failed to articulate why the Americans are doing this, what the purpose is, and what the off ramp is.
And what we're seeing day by day is pretty rapid escalation. In fact, I think sec the second day or third day into this war, there are rumors of ground troops. Yesterday, there's rumors that the eighty second Airborne Division of of the American army was given deployment orders, meaning that meaning it is possible Americans will choose to airdrop these soldiers into the middle of Iran. For what purpose? We don't know.
There's talk of the Americans seizing Karg Island, which is the oil depart of of Iran and which accounts for 90% of Iranian oil exports. There's talk of the Americans funding proxies. There's talk of using tactical and nuclear weapons. There's talk of a national draft to find 500,000 soldiers for ground invasion of Iran. So this war is completely out of control, and it's completely unclear what the Americans hope to accomplish with this war.
Speaker 0: Yeah. The narrative, I think, was very poorly planned, even worse than the war has been planned, because it began, as you said, with nuclear weapons, then moved over to ballistic missiles. Then as apparently, they want to help protesters, and they was about to oil, that they should be taken out of the hands of Iranians. Then Trump mentioned Iran might take over the Middle East unless, you know, so we had to go in. And as I said, the Israel thing was interesting because if the argument is that, Israel will attack Iran, then Iran will retaliate against Israel now, I guess, Israel and The United States, so they had to go in first, and they're essentially admitting that they're fighting Israel's war, but they can't say that either.
So so the, you know, the the ability to find a narrative is was kind of poor compared to other wars. Other usually have one narrative, all the media, they they organize around it, and everyone obediently repeats the same talking points. It's hasn't been done well. But this is a war of attrition, though, to a large extent. That is both sides seeking well, not both.
There's many all all sides seeking to exhaust each other. But this is in terms of weapons, ammunition, but it's also spilling into energy and, yeah, water, if you will, or just general economics. How how do you see who would exhaust whom first?
Speaker 1: Right. So I think Iran is trying to fight a war of attrition where it is putting pressure on the global economy, on the GCC nations because Iran believes that the GCC nations, especially Saudi Arabia, Qatar, and UAE, can apply pressure on Trump to end this war as quickly as possible. By closing on the street of Hormuz, Iran is trying to pressure the Southeast Asian economies of China, Japan, and South Korea to press apply pressure on Trump to end this war as soon as possible. So the Iranians are fighting a war of attrition. Unfortunately, the Americans are fighting a war of destruction.
So even though they haven't stated the purpose, it is clear from what is happening on the ground that the Americans and the Israelis are intent on complete and out of destruction of the government's of their any government's capacity to deliver basic services to its people. What I mean by that is that they yesterday struck a desalination plant in Iran. It and, you know, so you're denying fresh water to the civilian population. That is a war crime. Then the Americans struck oil facilities in Tehran.
These are these are civilian oil facilities so that citizens in Tehran can drive their cars. And if you look at footage from Tehran, it is the apocalypse. It there's acid rain. The entire the entire sky is black, and these people have to breathe that air so they're they will develop cancer. They'll have birth defects.
It's almost like chemical warfare. So if you are just saying it's a war of attrition, that makes no sense. A war of attrition means when you embargo Iran economically. Why are you targeting civilians? You know, in the first of the war, a Tomahawk Tomahawk missile hit a school in Southern Iran and killed about a 170 school girls.
These are this is an elementary school. 170 school girls were killed in that. And and this war, the way it's being constructed, the way it's being fought, seems to me that the Americans are first and foremost focused on the destruction of Iran as opposed to regime change.
Speaker 0: Yeah. Well, I guess that's a good description of that. Iran is fighting a war of attrition, so time won't be on their side while The US is, well, seeking to destroy the country with its, yeah, 90,000,000 people inside. So this is quite problematic. But the Iranians, of course, is limited what they can do to to The United States.
They can, of course, hit their bases. And but but it seems that Iran is obviously prioritizing going after the Gulf States because that's a good way of creating some pain for The US led alliance. How vulnerable do you see them being here, though?
Speaker 1: Yeah. So the Gulf States are the great vulnerability of the American empire because Israel, it has an eschatology. Unfortunately, religiously zealots have taken over the state of Israel. So they're perfectly okay to die for what they believe in, and they can live in bomb shelters for years and years. That's how strong their faith is.
And Israel was designed as an extremely resilient, extremely creative society. So Israel will emerge from this war intact and probably even stronger. The but the Gulf States are different. The Gulf States are basically mirages. These fifty years ago, these were just deserts.
Right? They and for most of human history, the the Arabian Peninsula was not that inhabited because it didn't have access to fresh water. It didn't have much agricultural output, and so it cannot sustain a large population, and most were desert nomads engaged in trade. But Pax Americana changed all that because Pax Americana could could needed oil to fund its empire, and it could offer protection to the Gulf State. So they they developed really rapidly.
So cities where maybe tens of thousands of people before now are in the millions. And one striking example is Dubai. You know, you go to Dubai, it's just skyscraper after skyscraper. It is a very glitzy city, and it it's trying to be the financial capital of The Middle East. And there are thousands of extremely wealthy individuals who've transferred their savings to Dubai because they believe that it's safe, it's comfortable, lots of good Michelin restaurants, lots of good five star hotels, and I'm not taxed.
But this image of Dubai as a financial hub is now shattered by this war, and they'll never recover from this. In fact, we're already hearing rumors of of millionaires just fleeing with with their wealth. Now they're going to Singapore. Now they're going to Southeast Asia. A bigger problem is this.
A bigger problem is that because the Strait Of Humores is closed, their oil economies have collapsed. They can no longer sell their oil and they shut down their their oil production facilities. What people don't recognize is that the Shreve Hormuz takes GCC oil to to Asia, but then it brings back food. This is usually import eighty eighty to 90% of its food supply. So Dubai was the rumor is Dubai will run out of food in about a week's time.
Then there there's issue of fresh water where the greatest vulnerability is actually desalination plants. So the GCC nations desalination plants provide about 6% of all their water needs. And so if these desalination plants are destroyed, then they run out of water in one or two weeks. And this means the entire destruction of the GCC. Now now, I mean, destroying desalination plants will be the nuclear option for Iran, and so I don't think they would use it very lightly.
But there's really no coming back from what's happening. I mean, for the longest time, the GCC had a reputation for being safe, for being extremely wealthy, and now that mirage, that illusion has been shattered. And once the illusion is shattered, you can't ever resurrect it again.
Speaker 0: No. I'll no. I very much agree. The well, the Gulf States not just are not just dependent on energy, but the the finance, the real estate market, which is propped up by all the expats. But what you're also describing, though, is that is the these small monarchy is selling the oils in in dollar and The US in return offering protection.
This was also the petrodollar system that replaced Bretton Woods once they closed the gold window. So how what do you see being the possible consequences for the global economy?
Speaker 1: Right. So what Iran wants to do is basically kick The US out of the Middle East for a lot of reasons. And the main advantage is that once The US leaves, Iran will be able to control the Shreve of Hormuz. Therefore, it will control trade access for the entire world. And that and and so the Gulf States will base basically become client states of the Iranians rather than Americans, and that oil money now will be able to finance the rebuilding of Iran.
So so that's the end goal or the end game for the Iranians. The problem with empire is the hubris. And so another saying this is the empire would rather destroy the world than surrender its power. Right? So the idea that the Americans will just leave the Middle East peacefully is this wishful thinking.
Everyone's saying that, you know, this war can only lead to the defeat of America. So America should just admit defeat right now and then go home and let Israel and Iran settle whatever problems that they have. Like like, the Middle East is not America's problem. But again, the problem is that America is addicted to the petrodollar. Leaving the Middle East would destroy the petrodollar.
And if the petrodollar is destroyed, it would collapse the American economy as well. So America has $40,000,000,000,000 in debt, And this debt is a is a ponzi scheme. Like, the American economy is is sustained by a ponzi scheme. And so the Gulf States, what they do is they sell the oil, get petrodollars, and then they recycle it back into the American economy, mainly by investing into AI, into data centers, which is now the main engine of growth for the American economy. So the Gulf States were to stop investing in America, the AI financial bubble would burst and with it the entire American economy.
America would suffer a much greater depression than the nineteen thirties. That's how dire the situation is for America right now.
Speaker 0: But The United States though, they must have known that this would be a disaster. I mean, they many of the top military people in The United States warned in advance that they they would have limited weapons. They would have a limited ability to go on for too long, which, of course, could explain why they're instead going for burning down Iran if if they can't if time is essentially on Iran's side. But but there's been war games in the past where they show that they they couldn't pull this off. I mean, you had god knows how many American presidents who wanted to attack Iran, but they always knew that, yeah, that's not a good idea.
So how how do how do you make sense of this? Because that was my one when when they were building up to this war, sending more and more military hardware to the region, my main reason for thinking this might not happen was it would simply be too crazy. The the likelihood of success, the amount of things that could go wrong, I mean, it just indicated that this that they can't possibly go down this path. So so why I guess, why why did they? They do have informed people in The United States.
I you know, we know. So how how do you make sense of this?
Speaker 1: Right. So, again, you I agree with you in that this war doesn't make any sense. It's not rational. And everyone everyone knows that America was gonna lose this war. The problem is that when empires are in decline, this is just the way they behave.
And this is the the the historical record, it's pretty overwhelming in that when empires decline, they lash out against the world. They start these stupid war to kind of possibly win. They overextend themselves and the collapse is terrible for the world. And America very much is an empire in decline. Look at things such as the collapse of the family.
Look at things such as the collapse of the currency. Currency debasement in in America is just a tremendous problem. US dollars no more worth as much as it was like like ten years ago. The political polarization in America, congress just cannot function properly. The president has so much power nowadays because congress has basically decided to just not do anything to avoid any political responsibility.
And so it's destroying the checks and balance systems of the US constitution. The economic depression in America is great. Young people feel as though there's absolutely no hope in the world. They're refusing to have families. They're refusing to invest in the future.
They gamble all the time. And so America is really the end of empire at this point. And so what they do is they go and start wars in order to distract people's people's attentions, in order to prove to the world that they still have it, to you know, they're still the bully in a playground, and they can still beat up every other kid even though they're old and they're and they're weak and they're handicapped. And so, you know, you were talking about Iran, but, like, look at what was happening before Iran. Right?
Trump kidnapped the president of of Venezuela, which went which went against national law. Trump deployed his navy in the Caribbean and started to bomb drug boats, which is again again against international law. Trump was trying to annex Greenland. He was threatening to invade Canada. He was threatening to attack Mexico.
Right now, he's embargoing Cuba. And people people people don't even recognize this is happening because there's so much going on in the world, but Cuba was dependent on Venezuela oil. That was its energy supply. And now that Venezuela has fallen to the Americans, the Americans have embargoed Cuba, and so now people don't don't have access to electricity. And there are actually people who are starving in Cuba.
So this is an empire in decline. It just lashes out against the world. It attacks everyone. And Iran is just the most current iteration of this anger and this hubris. But this hubris made the Americans underestimate the capacity of Iran.
They went in thinking that once they decapitate the regime, then the government would fall. And what they what the Americans didn't recognize was the resilience and resolve of the Iranian people.
Speaker 0: Well, about to say imperial decline, it it reminds me of something that Emmanuel Todd, the the the French scholar, argued because, well, again, he predicted the collapse of the Soviet Union already in seventies by looking at these different social variables. But he also predicted the US empire was heading towards, well, a similar fate already in the in the early two thousands. And he described essentially what you did, this strange, she called it, micromilitarism, this this, yeah, brutal use of military force in an effort to show power when it's obviously draining. So it is an interesting development. But you you mentioned that the Americans are losing as if it's a given.
How how do you why do you assess this? Is this the mainly the focus on on the military hardware at their disposal, or is it the lack of a clear objective? Or I guess regime change will be very hard without the ground troops.
Speaker 1: Right. So America right now has several disadvantages. The first major disadvantage is the lack of political will, and that just means the lack of of a strategy, the lack of a purpose. It cannot unify the American people in order to make the sacrifice necessary to win this war. In fact, most Americans are against this war.
Right before the war started, seventy seventy to 80% Americans voiced their disapproval of a possible war with Iran. Usually, when a war starts, people rally behind the flag, but not in this case. Most Americans are still against the war. So the first issue is the lack of political will. If you look at the Iranians, they believe that this is a struggle of of life and death.
So they've set aside the political differences, and they've committed to winning this war. Okay? So that's the first factor, political will. The second factor is just manufacturing capacity. So these past thirty, forty years, America went from a manufacturing based economy to a financial based economy, and they export their manufacturing capacity to China.
Now when you fight a war, what really matters is your capacity to produce ammunition, to replenish your your ammunitions, logistics. And America doesn't have manufacture capacity to fight a long war. In fact, what's happening already is that America is cannibalizing munitions from other parts of the world. So stuff so they are now transferring munitions from South Korea over to the Middle East, which is stupid to do because now you've you've basically opened more flanks, opened more vulnerabilities throughout the world. So manufacturing capacity is a very important factor.
On the other hand, Iran uses drones and ballistic missiles, and we know that Iran is able to manufacture about 500 drones a day. Quite honestly, you you only need to, like, have 10 drones hit their targets in Middle East every single day in order for the GCC to cry uncle. Right? So manufacturing capacity is a very important factor as well. And the third factor is that America is hamstring by a lot of political considerations.
So because they lack political will, they do not want to take too many casualties. Right? So Trump has said that six Americans have died in this war so far. There's absolutely no way this is true. We are we are having hearing rumors that there are a lot of casualties being flown to Germany to try to disguise the fact that the middle in the Middle East, many Americans are are are dying.
But this tells us that America has actually no appetite to sustain any casualties. If you refuse to have any casualties, how are you gonna fight a war? Right? On the other hand, the Iranians are very eschatological. They are very religious.
They are Shia Muslim, and they're not afraid to die. In fact, they believe it is the highest honor to monitor yourself for the higher good. And the the clear example of this is the Ayatollah Karmanad who was killed in the first day of strikes. And, you know, he could have gone to Moscow and he could have hit his bunker, but instead he chose to go go to his office and carry on with his life because he he's 86 years old and he does not wanna die afraid of Americans. And so he set the example that is galvanizing the Iranian people.
Just look at some social media footage from Iran. The Iranian people are now extremely energetic, extremely galvanized, and they will fight this war to the bitter end.
Speaker 0: Yeah. No. I was in Tehran last year, and I was also a bit well, that's one thing that really stood out, the culture of martyrdom, the way they would put the martyrs' pictures on the walls at many places. The it this is, you know, an important variable, but beyond the material variables, if you wanna assess how a country would actually fight. And the whole idea of, you know, killing Khomeini, and now everything will fall into place, I mean, his son has taken over now.
And it has to be pointed out that Americans killed his father, his mother. They killed his wife. They killed his sister, and they killed his son. I mean, the idea as Trump said, well, we we will pick the next guy, and, you know, he will have to be acceptable to us. He has to be more favorable to America and accommodating and more moderate.
It it doesn't make any sense. How how can you, you know, burn down the country and, again, just if you look at the new leader, slaughter his whole family, and then assume that they will just fall in line. If you look at the culture in Iran, again, the martyrdom culture, which is strong, you know, you can say among Shiites in general, this was always crazy, but for somehow, this seemed to have been the assumption. But how do you see, though, the possibility of this war spreading? Because they're, of course, they're attacking US bases, which, you know, covers a lot of country.
So you have US proxies being used, such as Kurds, which could then trigger a civil war in a country of 90,000,000 people. There's now I mean, the American and British media, especially, they're all up in arms that Russia is giving intelligence to Iran to try to, you know, make Trump push harder against Russia in Ukraine even though this, you know, is a, yeah, also also dangerous path. I'm not sure if what to what extent China would get get involved. I mean, do you see a pathway here from it being coming a proper regional war or or a world war? How how do you see this?
Speaker 1: Well, first of all, I don't think there's an off ramp for this war. I think it's very hard to deescalate. The idea that the Americans will just give up their petrodollar and the American bases and just go home is just absurd. That is not how empires behave. Also, Israel, because it wants to achieve the greater Israel project, is heavily invested in creating a regional conflagration to create as much havoc as possible so that that they could destroy the region and then be the only one left standing.
K? And so what Israel wants to do is drag everyone into the war, including Turkiye, including Saudi Arabia, including, basically, the entire Middle East. And so during the first couple of days, there's reporting that an Iranian throne had struck a Saudi Aramchol oil facility. And so Aramco closed down all its energy production. But then later reporting came out to reveal that, actually, the drone came from Lebanon.
So it didn't come from the E East. It came from the West, which meant Israel. Torok Carlson on his TV show sorry, sir, on on on his show said that he had received information from the Qataris, but they they had arrested two Mossad agents. And they suspected these Mossad agents of trying to sabotage the Qatar oral facilities in order to create a false flag. So the Israelis are heavily invested in trying to create as much conflict between the GCC and Iran as possible.
And now there's talk of Turkey coming in as well. Recently, there was a drone attack from Iran against Azerbaijan, and Azerbaijan was very angry about this and even felt the possibility of sending in ground troops against Iran, but then it was later discovered that this was probably a false flag of of the Israelis. So the Israelis are in are heavily interested in spreading this war as far as possible and creating as much destruction as possible. And they want this war to continue for as long as possible because they have nuclear weapons. So Iranians the Iranians are not gonna hit them too hard.
The Iranians are going to hit the GCC much harder. And so it's just for the for the Israelis, they just have to endure. Right? It's a war of attrition. And then once Saudi Arabia is destroyed, once the GCC is destroyed, then Israel will be the only power left standing.
Okay? So that's so that is Israel's intention. Other nations will eventually have to be drawn in as well. So one wild card is Pakistan. So during the twelve day war, Pakistan supported Iran.
But after that, a few months after that, Saudi Arabia signed a mutual defense pact with Pakistan. So if Saudi Arabia is attacked, Pakistan must come to its aid, and we know that Pakistan has nuclear weapons. So it is very likely that at some point, Saudi Arabia will join this war on behalf of the Americans because the animosity between Saudi Arabia and Iran go way back. Iran is a theocracy. Saudi Arabia is a monarchy, and they see each other as as as heretical.
Okay? As against Islam. The Iranians hate Saudi Arabia because Saudi Arabia is the home of Mecca and Medina, the two holiest sites in the Islamic world. At the same time, they host a lot of American soldiers. These are infidels in the eyes of Iranians, and so the Iranians are heavily interested in trying to topple the Saudi regime.
And they're gonna apply pressure to cause uprisings throughout the the GGC. And I believe that at some point, the Saudi government will decide to enter this war. And if they enter this war, then Pakistan is obligated to enter this war as well. If the Americans were to launch a ground invasion, it would make sense to attack from multiple vectors. And one vector would be from Pakistan.
Another vector, of course, would be from Iraq. The last vector would be from Azerbaijan. They would also try to seize the should of Hamus as soon as possible in order to maintain global trade. So that in the short term so in the short term, we can expect the entire Middle East to be engulfed in this war at some point. In the long term, eventually, the Southeast Asian economies will have to intervene.
So South Korea and Japan are extremely reliant on oil from the Strait Of Hormuz. In fact, they will basically starve to death if it were not from this oil from the Strait Of Hormuz. But there's a wild card, and that's North Korea. So if you're in North Korea and you are analyzing the situation, you recognize that now is the perfect opportunity to threaten South Korea because Americans are distracted in the Middle East, and the South Koreans don't have access to the oil they need to protect themselves against the North Koreans. So just threaten South Korea, and then the Americans are forced to to direct their attention back to Southeast Asia, and Japan is forced to come into this conflict as as well.
And the North Koreans aren't doing this to start to start a war, that means to settle. They're doing this to extort as much as possible from South Korea and Japan, And so I expect that to happen as well. The Western Hemisphere will not be quiet this time because while this is happening, Trump is still intent on toppling the Cuban government. Okay? So it's possible two weeks from now, while this war is still raging, Trump attacks Cuba or Mexico or Colombia.
It is complete insanity. But this is again, unfortunately, this is the way an empire behaves as it declines.
Speaker 0: So, yeah, what you're describing is more or less a suicide or death of empire at least. But after this war is over, of course, there's no going back to the way things were. So how do you see this the wider change to the Middle East as a region?
Speaker 1: Well, I think the GCC is done for. I don't think it's possible to come back from what's happening. And after this this war is done, I think that Israel emerges as a dominant power in the Middle East. It achieves the greater Israel project. And the Iranians will not lose this war.
They will maintain their sovereignty, but this war is gonna destroy a lot of their infrastructure, and they'll have to rebuild. Fortunately, they will be able to control the Shirdir Hormuz, and so they'll have the financing necessary to rebuild their nation. And I think that after this war, the Iranians will actually come out much stronger than before. They will be they will control the Khosil who moves. They will have a more vibrant, coherent national identity, and they will will have upgraded a lot of their military capacity.
So maybe at this war, they're destroyed, but they'll rebuild and they'll come out much stronger. And this will lead to, in a long term, regional regional conflict between Iran and Israel. And in eschatology, in Islamic and in Jewish, and in Christian eschatology, this conflict between Iran and Israel and this is a long term thing. Right? But it is often referred to as the wharf gog and magog when the entire world attacks Israel.
K? So but before that happens, Israel will achieve the greater Israel project, and it will create something called Pax Judaica. So imagine that the center of gravity basically transfers from Washington DC to Jerusalem. Why? Because at this point in history, Israel, it controls all global trade.
It's it's already built the Ben Gurion Canal, which cuts through Gaza and replaces the the Suez Canal. It is the technological and financial center of the Middle East because GCC has been destroyed. And so since whatever oil money there is is put invested into Israel. You know, the Indian prime prime minister Modi visited Netanyahu before the war struck out before the war began. And it was a very pleasant meeting.
And the reason why is that in order to build Pax Choudhaka, Israel needs to import millions and millions of cheap laborers and India is the best source of cheap laborers for for Israel. So I think that that is what they have in mind. You know, a lot of technological companies in United States, Google, Nvidia, Oracle, they are they will probably move to Jerusalem and help help build the technological center of the world, create an AI an AI surveillance state. So these past few decades, they create this surveillance model in Gaza, and then they'll just scale it out to include the entire Middle East. So that's what I see happening.
In the short in the short term, this will be devastating. In the midterm, Israel, what's the greater Israel project and create Paxhedeka. In the long term, Israel will face the world in in in a global conflict.
Speaker 0: But to what extent would Israel be in a positional to to project this kind of power? Because after this war, there would be a seemingly very diminished US presence in at least the ability to project power in the Middle East. Turkey is also growing more concerned about Israel. Indeed, Israelis also have a very tough rhetoric about Turkey and especially Erdogan. And with the war as well, the the amount of destruction that will be levied against the Israelis, the economic complications, the demographic problems as many settlers might be simply leaving.
I mean, it's not a big country. What is this? Million people now? Seven, eight? How how how would they be able to, I guess, sustain themselves in this region once all of these things begin to kick in?
Also, political instability, one could put out to the list, I guess. Yeah.
Speaker 1: So I think let let's talk political instability because Israel is notorious for political divisions. Right? It's almost impossible to get people to agree on anything. Israelis argue all the time. But this war is gonna have a traumatic traumatic effect on Israeli society.
The democracy is going to to give way to a theocracy. The religious zealots are going to gain greater control over Israeli society. And what is whatever is left of an open cosmopolitan democratic society will wither away. Basically, Jerusalem will replace Tel Aviv as the heart and center of Israeli society. So that's part one.
Point two is that people severely underestimate Israel because it is a small nation in a desert with very few resources, but the real wealth of Israel is a Jewish diaspora spread all around the world. They are extremely well educated. They're $10 really savvy, and they are and and they are extremely united. Like like, they believe in the greater greater Israel project. So it's possible for Israel to draw on basically unlimited financing on the most advanced technology, on political support from all over the Jewish diaspora.
And I think that once this war is over, Israel will have no peer competitor in the Middle East, meaning that Saudi Arabia Saudi Saudi Arabia will probably be destroyed and Turkiye will be similarly weakened in the process. I'll be honest with you. I have very little hope for Turkiye. It has suffered a great deal under Edelgarn. If you go back and look at how how Edelgarn came to power and how he cemented power, I believe it it it was in the '20 what what year what year was it?
Twenty eighteen coup? And, anyway, my my point is that Turkiye is a extremely corrupt and ostified society that is a paper tiger. And if Turkeya were to enter this war, you'd be surprised by how badly it it it does. So the so Israel, in other words, doesn't have a regional competitor. Iran will be a competitor in the future, but that is in the future.
Speaker 0: Yeah. No. I think yeah. No. No.
The the the coup attempt in 2016, I think this was very clear. Well, it's not the first time they have this every now and then that the stability might be quite fragile. But you you kinda covered very well the Middle East, how The US is impacted, how this could spread to East Asia. Israel could become a theocracy. Iran, even more confident regional power.
How about Europe? Because we, you know, our the Americans liberated us from the Nord Stream pipeline by blowing it up. European leaders recently congratulated themselves for liberating themselves from Russian energy and gas and oil. Sorry. And now, of course, we've also been cut off from energy from the Middle East, and all of this was the backdrop of The United States seeking to pivot away from Europe.
So how how does this debacle in The Middle East with the war in Iran impact the Europeans?
Speaker 1: Well, it's I mean, like, the Europe Europe is completely hopeless. It's a hopeless situation. You know, for the past twenty years, it's America has screwed over Europe. So these wars in The Middle East created millions of refugees who then went to Europe. And I don't know what the Europeans were thinking in allowing these millions of refugees to come into their society when they didn't have the capacity to absorb these millions of refugees.
Right? So Edmund Merkel, the chancellor of Germany famously said, we can do it. No. You can't. And time has shown that these millions of refugees have put a turn on a strain on the social cohesion, on the capacity of the state to govern Europe.
So there's tremendous political fissures within Europe at this point, and so that's why you see the rise of these right wing parties throughout Europe. The but the main problem as you point out is the economy. So Europe suffers from an aging population, so the population itself is not no longer as dynamic as it used to be. Before, the model the German model was very good. It was this, you know, buy cheap Russian energy, make really good German cars, subcontract the labor to Poland, and then sell extremely expensive German cars to China.
It's a great model for Germany. But then when Trump came to office, the China market Germany lost lost access to the China market. And then when you have this war break out, Germany will can no longer buy cheap Russian energy. As you point out, the Europeans then pivoted to the Middle East, primarily Qatar, and now Qatar has basically shut down all in LNG production. And so Europe is completely screwed in the process, and Macron has talked about sending an aircraft carrier to the Middle East.
What's that gonna do? I mean, send an aircraft carrier so that the Iranians can sink it with ballistic missile? I mean, what's the point of that? So and and still at this time, the Europeans are still talking about drafting young men to go die in the trenches of Ukraine in in 2029. So the Europeans, the European elite have their head in the sand.
They have actually no idea what's going on. They have actually no solution to the multiple crises that they face. And the Europe is a dumpster fire. I hate to say this, but it's a dumpster fire.
Speaker 0: Well, it's hard to disagree with that assessment, but, no, things are going from bad to worse. I think the the reason why Europe went from this immense optimism to now just crash, you know, you can say hubris and all this, which is all correct, I think it was post cold world order, though. It it became ideal for the Europeans. That is, The United States were, you know, declared a unipolar moment. The the role of the Europeans in this world was, well, let's have a collective hegemony of the political West standing on these two legs of The US and the EU, hoping that Europe would be an equal partner to The United States.
And not only would the political West dominate the world, but it would be a force for good because not only would it prevent great power rivalry, but also by dominating the liberal democratic West, we'll be able to elevate the role of liberal democratic values, humanitarian ideals. So, again, it's it's almost like a civilizing mission. The dominance is us, and sovereign inequality is a force for good in the world. The world will thank us for dominating. So this is the benign hegemon.
It's very appealing if you're a politician, you say we dominate, and the world will love us for it. So now that, of course, this is falling falling apart, I guess a bit of a mirage like the Gulf States that we're relying on, it's there is no no no clarity what what to do, and there's no political imagination because they they outsourced all strategic thinking to The US for the for eighty years. Now The US is essentially, well, pulling out its knives for the Europeans. They they've done this, as you said, over the past twenty years, but they did it did it more covertly. Now they were quite open about their contempt for Europe.
So no. No. I think Europe is done. But what what does this mean for the wider world order? Because this idea of, you know, the international distribution being focused around US global primacy legitimized then by liberal democratic values.
This world order, the post cold world world order of the liberal hegemony is gone. So The US is not dominant anymore, and liberal democratic values I mean, no one really thinks this is what the Western powers are, that these are their objectives in foreign policy. It's a thin veal which has been tossed away. So what is the new world order then from your perspective, or what will follow this? Right.
Speaker 1: So there'll be three major trends that follow from this. Okay? The first major trend is deindustrialization because you don't have access to cheap energy. So you need to make your economy much more balanced before we have the growth of urban centers, which engage in a knowledge economy, which engage in AI, in EV, in solar panels. Right?
But all that but all of that requires access to cheap energy, which is what The Middle East provided. But now that The Middle East is gonna be destroyed or being gulfed in war for the next ten, twenty years, you have to deindustrialize. Have to focus more on self sufficiency. Okay? So that's the first trend, deindustrialization.
Second major trend is mercantilism. Okay? And what I mean by that is that the global order is dead. And so what you need to do is basically focus on local trade or creating your own supply networks, spirits of influence. Okay?
And the third major trend, which is most troubling is remilitarization Because pax Americana is dead and pax judicas are interested in protecting you from big bad bullies. Okay? So it's either you rearm as soon as possible and defend yourself or you will be or you'll be eaten alive by a wolf. Right? So I think in East Asia, the the first nation to recognize the changing world order, because it has no choice in the matter, is Japan.
I think that they brought in partnership with Takeuchi because she appealed to the young, and she has the charisma to galvanize the young to make make this make the sacrifices necessary in order to de industrialize, remilitarize, and create a self sufficient economic system. So I think that Japan will actually suffer in the beginning, but they will actually be in the forefront of global change. And nations that absolutely refuse to make these three necessary changes will be the most likely to suffer. And quite honestly, I have very little hope for my own country, which is China. I think that because of these changes, Japan will start to emerge as the local hegemon while China is still stuck to the old global order.
But in the short term, what this means is that The United States and China will have a rapport month. Okay? So even though this war has started, Trump will still visit Beijing March 31 at the end of this month for a three day state visit. And I think that people will be surprised by how friendly and productive this meeting will be. And in fact, actually, this year, this vote, there are scheduled three major summits between China and The United States.
And so I think that both nations are working towards a rapprochement in order to repair the global order, but there's no saving the global order. It's dying. And so if you omit this reality and commit to revamping society, the as sorry, deindustrialization, remilitarization, and moving towards a self sufficient economy, then you are much more likely to weather the storm that is coming.
Speaker 0: Well, you said that China's, yeah, stuck in the old world order, and one can see why well, with forty years of unprecedented prosperity and growth in human history, one can see why one would want to, at all cost, keep this world going even though it already went away. It's not that unlike the Europeans, though, because then, you know, the nineties, you know, it's a rebirth of Europe or, you know, thought together with The US was the center of the world. I remember having books at university, which were with the title why the twenty first century belongs to Europe. I mean, was kind of the mentality. I thought that was also always a bit ridiculous.
But, anyways, there was reason for optimism, it seemed. So that's why they also cling on to a world order, which is dying, which is why they're not able to to adjust to the new world. One place though where there's a lot of pressure to readjust to the new order is Russia. That is, you know, the spokesperson, Peskov, he was he made a comment now recently saying that we have lost what well, we have all lost what we call international law. So the system is essentially dying, if not dead.
And I think what really shook them was the decapitation strike on Iran because this is, you know, the desperate act of a dying empire, and why wouldn't they do the same towards Russia? Indeed, they've been attacking their nuclear deterrent very openly, I would say. They there was a I I think this is likely that they tried to assassinate Putin at Valdai with this attack, at least, you know, it's a theory. And, again, why why wouldn't they go for a decapitation strike against Russia? This is what many are thinking.
They look what they have done to Iran. There's no rules. So why then is Russia doing this slow war of attrition? And, also, they did this at expense of their deterrent. That is they allowed the Americans and Europeans to openly, you know, launch missiles deep into Russia.
You can have a German chancellor sitting on stage saying, oh, yes. We imposed untold casualties on the Russians. I mean, this there's so much pressure now on the Kremlin to drop this whatever they've done the past four years, and why not do like the Iranians? Time to, you know, bring some pain to the Europeans because the Europeans for the past four years said, why should the war be limited to Ukraine? Why not also extend it to Russia?
Well, why shouldn't the Russians bring it to Europe? This is what I see as the direction, which is, well, terrifying because this is you know, recipe for a much larger war. I was wondering how do you see this, the Russian component here? Because, you know, they're also one of the great powers.
Speaker 1: Right. So what so look. Look. I personally think that of all the world leaders, Vladimir Putin is the only one only one with a grand strategy. He's a very capable leader, and he sees the big picture.
He he plays chess. And so what he's waiting for is a US ground invasion of Iran. That's what he's waiting for. Because once The United States sends in ground troops, then The United States is all in. It can't extricate itself from the situation.
And at any point, The United States can stop this air campaign and say, you know what? We killed the Anatolia. We destroyed the Iranian nuclear threat. So we're gonna go home, guys. Goodbye.
Okay? But once The United States is in ground troops, then it's locked in to this Iran quagmire for five to ten years, and there's no escaping. It'll be like it'll be like another Vietnam. Right? This gives Putin and Russia the perfect opportunity to move towards Odessa, which is the real goal and the end goal of this war in Ukraine.
Because once they have Odessa, then they have basically achieved all their major military objectives. And so what's gonna happen is the Europeans will have no choice but to defend Odessa to the last European. And that's where the next major conflict will be, the siege of of Odessa. And if the siege of Odessa were to happen, the Europeans would exhaust themselves defending against the Russian attack. The Russians have perfected drone artillery warfare in the trenches of Ukraine, and that's a perfect combination if you are to besiege Odessa.
And so the Europeans, they may be fresh, but they will be inexperienced. And so they will make a lot of mistakes. They will lose a lot of casualties. And this war will eventually become so unpopular back in Europe that the that the population would would revolt against the governments. Okay?
So remember, this is a time of nuclear war, so you can't actually destroy each other's military. What you what you can do is put so much stress and pain on the global system that the citizens ultimately rebel and overthrow the the political system and and impose a new system that is much more friendly towards Russia. So that I think is the grand plan that Putin has, and it's gonna work.
Speaker 0: Well, as I think it's a Chinese who say it's we live in interesting times, so thank you very much.
Speaker 1: It's not too interesting.
Speaker 0: Well, thank you for taking the time, and, yeah, it's as as you began saying this war against Iran, like, it's hard to believe that they went through with this given all the risks, but this is I always make the point that this is gonna be the the greatest catastrophe is this illusion of escalation control, the assumption that they can control all the variables, decide how it ends, who's allowed to participate, how they contribute. I mean, this is really the same as with the Russians in Ukraine. The this assumption of escalation control. This is what's gonna kill us effectively, though.
Speaker 1: Well, I will say this. I made this prediction two years ago of The United States will would invade Iran. I've been saying for two years consistently that this would happen. The moment that it happened, I was shocked and bit wilder, and I couldn't sleep because I was like, why would they do this? So so yeah.
I mean, I I I sympathize with what what you're feeling.
@Glenn_Diesen - Glenn Diesen
John Mearsheimer: U.S. Already Lost Iran War - No Off-Ramp in Sight https://youtu.be/1e9NhLfPNKU https://t.co/cc7CUaaIDa
Video Transcript AI Summary
John Mersheimer argues that the war against Iran is not proceeding as the United States hoped and that there is no plausible off-ramp or decisive pathway to victory. He contends that Washington cannot narrate a decisive end to the conflict the way it could have against Nazi Germany or Imperial Japan, because the war has not produced a decisive Iranian collapse. Instead, Iran has an incentive to convert the fight into a protracted war of attrition and possesses the means to do so, including a broad set of missiles and drones and the ability to retaliate across the region. The result, he says, is a stalemate in which Iran would drive a hard bargain to secure sanctions relief or other concessions, and escalation by the U.S. and Israel will simply provoke Iran to escalate further.
On why Iran will not settle on American terms, Mersheimer emphasizes that Iran has a strong hand and time on its side. He notes that the more time passes, the more desperate the U.S. will be to settle, which strengthens Iran’s position. He argues that even heavy bombardment would not compel Iran to quit; rather, Iran could strike back against Gulf states, Israel, and American assets with significant effect. The Gulf States are particularly vulnerable due to a small number of petroleum sites, short-range missiles, drones, and, crucially, desalination plants that provide most of their fresh water. He cites Saudi Arabia, Kuwait, and Oman as heavily dependent on desalination, implying that destroying such infrastructure would have catastrophic humanitarian and economic consequences. Iran could also target energy infrastructure, and even if the Strait of Hormuz remains open, widespread damage to Gulf energy infrastructure would devastate the regional and global economy. He warns that Israel could suffer increasing Iranian pressure as time goes on, especially as interceptors become depleted.
Regarding energy and the Strait of Hormuz, Mersheimer stresses that 20% of the world’s oil and gas passes through the Persian Gulf, making the energy dimension the war’s most consequential aspect. He argues that opening the Strait of Hormuz would be exceedingly difficult, and destroying desalination and petroleum infrastructure in the Gulf States would negate any advantage of keeping the straits open. He suggests that escalation without a viable endgame will have grave economic repercussions for the world, pushing the U.S. toward a coerced end that would not be a victory.
Mersheimer contends that strategic bombing or air power alone cannot win such wars. He contrasts World War II and Korea/Vietnam with the present, where there are no boots on the ground and no clear path to victory via air power alone. He notes that the deterrent value of air power is limited, and a regime change strategy is notoriously difficult without ground forces. He argues that the decapitation strategy and ongoing escalations are unlikely to produce a decisive American/Israeli victory, and could instead lead to a stalemate or American concession under economic strain.
On leadership and credibility, Mersheimer critiques U.S. leadership, particularly President Trump, for ignoring warning from generals and the National Intelligence Council that regime change was unlikely to succeed. He cites General James Mattis-era warnings that there was no viable military option and notes the pre-war intelligence that suggested limited prospects for quick regime change. He points to Trump’s sometimes contradictory and inaccurate statements about Iranian capabilities, including claims that Iran possessed Tomahawk missiles and that U.S. strikes had erased Iran’s nuclear capability. He argues that such statements undermine U.S. credibility, though he distinguishes between outright lies and genuine mistaken beliefs by leaders.
The discussion also covers Russia’s involvement, with Russia believed to be providing intelligence to Iran and possibly supplying matériel and oil if needed. Mersheimer asserts that the war benefits Russia strategically: it diverts U.S. resources from Europe and Ukraine, potentially worsens Ukraine’s trajectory, and could raise global energy prices that benefit Russian revenue. He suggests that Russia, and possibly China, have strong incentives to aid Iran to counter American power.
Europe’s role is analyzed as largely symbolic or marginal in determining the war’s outcome. Mersheimer argues that European elites are aligned with the U.S., prioritizing NATO continuity and the maintenance of American military presence, despite the damaging consequences for Europe. He suggests a radical approach for Europe: adopt a hardball stance toward the U.S., diversify its economic and strategic relations (including with China, Russia, and India), and resist being economically manipulated or coerced by Washington. He emphasizes that Europe’s interests would be better served by reducing overreliance on the United States and pursuing a more balanced set of strategic partners.
Towards the end, the hosts revisit the idea that leaders lie and that liberal democracies tend to rely more on public persuasion and propaganda, with Trump’s statements illustrating the complexities of truth in international politics. The conversation ends with a reflection on whether Europe should recalibrate its posture toward the United States and broaden its strategic hedges to protect its own interests, rather than assuming continued U.S. leadership in a costly and protracted confrontation with Iran.
Full Transcript
Speaker 0: Welcome back. We are joined by professor John Mersheimer, to discuss the war against Iran, which is, definitely not going as planned. So thank you very much for coming back on.
Speaker 1: My pleasure, Glenn.
Speaker 0: So, well, as I said, the the war definitely not going as, Trump had hoped, but, it seems to be going as, many would have predicted. Indeed, Trump himself had, was met with a lot of warnings before he went down this road. And, now, of course, it's unclear what direction he should take. We also see reports from the Israeli sorry, from the American media that even Israel is now growing concerned. They don't think is that Iran's gonna collapse.
They don't think it's going to surrender. So what exactly if time is on Iran's side, why go down this road? And the Wall The Wall Street Journal said something similar that Trump's adviser would like to find a quick exit from this war. So what do you make of this? Is is this reaching the end of the war, or will Iran not permit this?
Speaker 1: Well, it's quite clear that the war is not going well for The United States, and that president Trump, I think, would like to put an end to it. And the problem that he faces is he can't find an off ramp. I think nobody can tell a plausible story about how this war ends. If we had decisively defeated Iran the way we decisively defeated both Nazi Germany and Imperial Japan in World War II, then you can say the war is over with, we are the winner, and we're gonna impose terms on the loser. But that's not what's happened here.
They haven't won anything approximating a decisive victory. And in a very important way, the Iranians have an incentive to continue the war, to turn it into a protracted war of attrition, and they have the means to do that. So the question then is how does President Trump get Iran to agree to settle this war. When you listen to people in the administration talk, they sometimes talk as if we're the only player in the game. Of course, the Israelis as well.
But the Americans and the Israelis are in the driver's seat. We determined when the war started, we determined when it ends, we determined the conditions that the Iranians have to accept. This is the sort of view you get from inside the administration. But this is not the way the real world works. The Iranians have a say in this.
And the question is how do you get the Iranians to agree to stop fighting? Now some people might say that we are inflicting so much punishment on the Iranians that they would be happy to quit. Pete Hegseth has been saying that today is going to be the day of the heaviest bombardment that Israel and The United States inflict on Iran. Okay. Let's assume they inflict more punishment today than they have in any of the previous eleven days of the war.
Does that mean that the Iranians are gonna throw up their hands and quit? I hardly think that's the case. I think that Iran has prepared itself to accept massive punishment by The United States and Israel. So we can dish it out, but the Iranians are not going to throw their hands up. And in fact what the Iranians are gonna do is they're gonna up the ante from their side.
As we go up the escalation ladder, they'll go up the escalation ladder. If you start destroying critical infrastructure inside of Iran, they'll destroy critical infrastructure inside The Gulf States and inside of Israel. And they can do it. They have lots of ballistic missiles, they have lots of drones, almost all of them are highly accurate, and they're operating in a target rich environment. It's not like they can't find targets to hit.
They can hit vulnerable and important economic and strategic targets with relative ease. So they have a strong hand to play. And when I say they, I mean the Iranians have a strong hand to play. And they have no incentive to settle this one on America's terms. They have a deep seated interest in making sure they get something out of a settlement, sanctions relief, reparations, who knows?
But they're going to drive a hard bargain because the more time goes by the more desperate we are going to be to settle this one. So all of this is to say, I don't see what the off ramp is at this point in time for President Trump. I hope I'm wrong. I hope I'm missing something and the war can just be shut down. But nobody's been able to tell me a plausible story as to how you bring this thing to an end anytime soon.
I would just say one final point, Glenn. I think if the effects on the international economy are significant, it looks like we're heading off a cliff and that is possible, I think at that point the Americans will bring the war to an end, but that will not be a victory. We will have caved in to the Iranians if that scenario plays itself out. And that is, as you well know, a very realistic scenario.
Speaker 0: What do you describe though, what The United States hoped or thought the war would be like, it it's, you know, what we refer to then as escalation dominance, this assumption that one can decide the pace of moving up or down the escalation ladder. This seems to be something that is reasonable once one is in a comfortable hegemonic position, that is, when one can dominate, that is to dictate when the war starts, who should be involved, what are acceptable targets, when do we put an end to it. But but but it just seems that Iran can't end this war because if they end it now, except some ceasefire, then I guess the main fear, not unlike what the Russians are fearing, is then that The US would just be back again in a few months. So but but if there is no deal I mean, if if you look at the Russian conflict, if they can't get a deal which gives them security, they will take territory to make sure. But on the Iranian side, if they can't get any deal which gives them proper security to make sure this doesn't happen again, you know, they're not going for territory.
It looks as if, well, kicking The US out of the region by eliminating these Gulf States could be a reasonable pathway. I used the word reasonable, well, probably not correct here. But but what do you think is the consequence for the Gulf States here? How vulnerable are they?
Speaker 1: Well, the Gulf States are remarkably vulnerable. I mean, first of all, they have only a handful of petroleum sites where they reprocess the petroleum and the liquid natural gas and so forth and so on. The petroleum infrastructure is just very vulnerable. These are big fat targets and there's no question that the Iranians can take out the petroleum infrastructure in all the Gulf States with relative ease. They have the short range ballistic missiles and the drones to do it.
But the other set of targets that really matters are the desalination plants. These countries in The Gulf States are heavily dependent on fresh water that comes out of the desalination plants. I was reading the other day that there's one desalination plant that services Riyadh, the capital of Saudi Arabia. And if you take that desalination plant out, you're taking away 90% of the water that Riyadh depends on. And overall it appears that the country of Saudi Arabia depends on 70% of its water from desalination plants.
Kuwait, the number is 90%. Oman, the number is 76%. I mean these countries are just massively dependent on desalinization plants. And water, you can't live without water, just think about that. So you have this vulnerable set of targets, these desalination plants that the Iranians can easily take out.
And then you have the petroleum sites that I talked about earlier that are few in number, easily targeted, and can be taken out. You can wreck these states. You can take, you know, Abu Dhabi and and just wreck it. So Iranians have really serious options here. And then if you turn to Israel, I don't think that Iran could do that to Israel.
But as time goes by and as the Israelis run out of defensive interceptors, you know, interceptors that can knock down these incoming ballistic missiles, the amount of damage that Iran can do to Israel will be very great. And, you already see evidence that the Iranians are pounding Israel and that pounding will get greater with the passage of time. So this is why it's so obvious that the Iranians have real options. The idea that we have escalation dominance and that, you know, we can beat the Iranians as we go up the escalation ladder think is a fallacious argument. They have in a way an assured destruction capability.
They can destroy The Gulf States and that would have a profound effect on the world economy. Surely President Trump and his advisors have begun to realize that That's one of the reasons I think they're interested in looking for an off ramp now. But then the question is how do you find the off ramp? And I don't think there is an off ramp at this point. And I think what they'll do is they'll escalate.
And they'll think that escalation will solve the problem. This gets back to my point about what Pete Hegseth is saying about today, Tuesday being the day when we will inflict the most punishment on the Iranians that we have inflicted so far. Okay, we start walking up the escalation ladder, but then this brings me back to my point about what the Iranians can do if they go up the escalation ladder with us. And the point is they can do massive damage to the Gulf States. So they have options here and they can do massive damage to the international economy.
So I think going up the escalation ladder is not gonna produce a satisfactory outcome for us, for The United States, and for Israel.
Speaker 0: Yeah. Given that they're so vulnerable with the desalination plants, it's a bit strange that The United States would have chosen to escalate by attacking the desalination plant within Iran because now Iran can almost well, can can retaliate by by the same means without being seen as the the main aggressor, essentially having an alibi to do so. But what how significant though is the attack on the or the suspension of the trade in energy? Because did you know, when people make the point, it's also linked into the entire international financial system with the petrodollar, but but this is seems to be one of the areas where the Trump administration is worried. Again, they make the point now that if Iran tries to block the Strait Of Hormuz, then well, according to Trump's tweet, they will hit Iran 20 times harder.
And now we hear Macron also say, well, we're gonna come and help defensively somehow to open up the Strait Of Vermouth. So how how do you see how important is the energy aspect here, or what what kind of dimensions are there to it?
Speaker 1: Well, the energy dimension is of enormous importance. 20% of the world's oil and gas comes out of the Persian Gulf. It just matters enormously and everybody understands that if this turns into a long war it will have disastrous consequences for the world economy. Again, this is one of the principal reasons that President Trump is looking for an off ramp. He likes to talk about opening the Straits Of Hormuz.
All I can say is good luck on that one. If that was easy we would have done it earlier. I don't think we can open the Straits Of Hormuz. You remember not too long ago President Trump was talking about escorting tankers in the Persian Gulf And the Navy basically told them that was not possible. Those naval ships, American naval ships, would be too vulnerable.
So I don't think that they can open the straits. The other thing you want to remember is if they actually destroy the petroleum infrastructure in the Gulf States, it doesn't matter whether the Straits Of Hormuz is open or not because there's going to be no oil coming out of the Straits Of Hormuz. And if they destroy the desalination plants and the petroleum installations in the Gulf States, are effectively not going be any Gulf States left. I mean the point is that the Iranians have options here. They can play hardball and the consequences would be devastating for the Gulf States.
And as I say, then it wouldn't matter whether the straits are open or not. But I don't think we're going to open the straits anyway. I don't think we're going to put naval ships in the Persian Gulf either. So I think in a very important way the Iranians are in the driver's seat. If I can just make a historical point that gets back to an issue that you were raising before having to do with escalation dominance and air power and even decapitation.
If you go back to the period before World War I, as we all know wars before World War I had no air dimension. Wars were fought between armies and navies. And it was in World War I where we first saw air forces employed by the fighting forces in Europe. Then after the war, this is in the nineteen twenty's and the nineteen thirty's, this is before World War II, you developed independent air forces. And those air forces became very interested in strategic bombing.
And strategic bombing is another way of saying long range bombing. And the idea was, and this was of course popular in the air forces of the world and among air force thinkers, that an air force by itself could independently win a war. In other words, you would no longer have to win that war on the ground or at sea. You could just take your air force and you could hit the other country's homeland. You could hit its economy, you could hit its population, you could hit its military forces, whatever.
And you could bring that country to its knees with air power alone. And in a very important way we tested this in World War II and we have tested this theory many times since. Now there are still some people who believe you can do magical things with strategic air power, which again is another way of saying with air power alone. But the fact is there are real limits to what you can do. There's no question that you want to have a powerful air force if you go to war.
And there's no question that in some cases strategic bombing helps win a war. But strategic air power by itself cannot win a war. It just can't. The historical record is unequivocally clear on this. So when you go to war against a country like Iraq in 2003, you definitely use air power.
You remember shock and awe Glenn. That was the American Air Force pounding Iraq before we sent the ground forces in. Strategic bombing came before the ground forces went in. But the fact is to create regime change and win a decisive victory in Iraq we had to use land power. We had to send in ground forces.
We couldn't do it with air power alone. Fast forward to the present. This is a campaign where we have no boots on the ground. There's no land power. And we're talking about doing it with air power alone.
We're talking about doing it with strategic bombing. This is what the decapitation strategy in the opening stages of the war was all about. And when people now talk about going up the escalation ladder, when you talk about Pete Hekseith announcing that we're going to punish Iran more today than we have in any of the previous eleven days, what they're saying is that we're going to win this war with strategic air power, with air power alone. We don't need ground forces. Well the historical record again is unequivocally clear on this.
You can't win wars, especially against formidable adversaries, with air power alone. It just doesn't work. So here we are in a world where we have no boots on the ground and president Trump does not want to put boots on the ground, I mean serious boots on the ground, are we gonna conquer Iran the way we conquered Iraq? I don't think so. So of course the end result is that we're relying on strategic air power alone.
And what are we gonna do? We're gonna punish Iran like it's never been punished before. There's no question about that. You turn the American and Israeli air forces loose on Iran, they're going to inflict an enormous amount of punishment, do an enormous amount of damage to Iran. No question about that.
But again, the historical record is clear that countries can absorb that punishment. Look at what we did in World War II. Look at what we did in Korea. Look at what we did in Vietnam. You can inflict massive punishment on civilian populations and the countries fight on.
And in terms of military targets, we're not going to get all those ballistic missiles and drones. They're going to continue to fire ballistic missiles and drones at Israel, at The Gulf States, and at American military assets. So strategic bombing is not going to produce a decisive victory here in all likelihood unless there's a miracle. And I don't believe in miracles. I hope I'm wrong.
You know, I hope this war comes to an end. But I don't think that's going to happen. And I think the historical record is on my side. So when Pete Heksith and President Trump talk about escalation dominance and pounding Iran more than ever, don't believe that that's gonna gonna work. It hasn't worked in the past, and there's no reason to think it's gonna work now.
Speaker 0: Yeah. This is a problem, how to put an end to the war on stars. I think it was Ottoman Bismarck who made the point that it was something along the line that it was easy to lure the Russian bear out of his side, but difficult to get him back in. You can say the same about the Iranians here, because they they didn't want this war, but now that it's here, it's it's very dangerous for them, I think, if it ends on terms, which would will allow the whole thing to play out yet again. So not not to draw too many parallels with the Russians again, but I also think that for them now restoring their deterrent to make sure that no one goes down this path again is, I guess, a key a key objective.
But this comparison to Iraq, though, I mean, even if even if one would introduce ground troops, Iraq is Iran is almost four times the territory of Iraq, and it has almost twice the population. This is a massive country. The I don't know. I thought it was strange that the idea of introducing some a few Kurdish troops was was somehow gonna overrun this country. It's I mean, as you said, it will contribute probably probably significantly to disrupt and destroy things, but but but in terms of if if there's an objective besides just causing death and mayhem, then it it is unclear.
Is is this the source of the miscalculation, though? Because the idea that you could regime change a country only with an air force, because, you know, there had to be a plan. It appears to be have have been regime change. And it again, in in this country, we actually had in Norway, we actually had a political leader of one of the political parties who who went out on Facebook or Twitter and actually wrote that, well, now the Iranian regime has fallen because they saw that Khomeini had been assassinated, so that's it. Now the government is over.
I mean, is this the kind of the thinking that, you know, you have one bad man. If we just kill the bad man, then the regime is gone. I it's very hard it's so remarkably stupid if if this is the case. Well, that fact that you have leaders, political leaders who think in this way, communicate in this way, it makes you think no one's behind the wheel, I guess.
Speaker 1: Well, a couple points. I think that the initial strategy, and we have gotten at this issue in our previous comments, but the initial strategy was decapitation. And then if the decapitation didn't work, I believe that we felt that we could punish them in ways that would force them to throw up their hands and surrender. We would have escalation dominance. And this is another way of saying we thought we could do it with air power alone.
Now, very importantly, the administration was told by insiders, two sets of insiders before the war, that this was unlikely to work. You remember that General Cain, who was the Chairman of the Joint Chiefs of Staff and was handpicked by President Trump to be the Chairman Remember, he brought him out of retirement. He was only a three star general. President Trump brought him out of retirement, made him a four star general and made him chairman of the Joint Chiefs. So he was, in a very important way, Trump's general.
Much to his credit, General Keane told President Trump that we did not have a viable military option. This is before February 28. Furthermore, the National Intelligence Council, which is separate from General Kane, did a study before the war that said, you're unlikely to get regime change and bring this war to a quick end. This was careful analysis done by the National Intelligence Council, done by insiders. So there were two flashing orange lights, if not red lights, that were in the president's face that he just ignored.
And as I said to you before, you know, we have a huge body of literature on air wars and sanctions and regime change that anyone can easily access and easily figure out what the bottom lines are here. It's not a complex literature in the sense that almost everybody agrees that air power alone or strategic bombing doesn't win wars, that sanctions have real limits, that regime change is wickedly difficult. First of it's almost impossible without ground forces, but even with ground forces the whole process is wickedly difficult. The literature is unequivocally clear on this. So when you marry what we know from previous analysis by scholars and policy analysts with the fact that you had General Kane and the National Intelligence Council warning the president not to do this, And when 20% of the American people approved it but the rest didn't, you want to think about that, only 20% of the American people were enthusiastic about this war.
The other 80% either opposed it or wasn't too sure. To go to war, you know, in those circumstances is quite remarkable and you just sort of wonder what was Trump thinking? How could he have possibly done this? And when you look at where we are today, given everything I just said, it's hardly surprising that we're in a real mess and there's no apparent way to get out of it. It's just not surprising.
What is happening now is consistent with the historical record. And just to add one more dimension to this, go back to the twelve day war last June. The twelve day war between Israel and The United States on one side and Iran on the other side. It was the Israelis and the Americans, not the Iranians, who wanted to end that war after twelve days. Decapitation didn't work in that war.
We didn't have escalation dominance in that war. I mean, what more evidence do you need before February 28 to tell you that this is a bad idea? But nevertheless, Trump jumped in along with Netanyahu who, of course, was pushing him and promising him that we would have a quick victory, and here we are.
Speaker 0: See, that's a great point. That makes this even more extraordinary, the fact that we already had this war back in June for twelve days, and it was the same problems. I mean, the the weapon shortage, that was a key problem. That's why they had to put an end to it. And, of course, because it was only with Israel, Iran was more willing to put an end to it.
But how does it surprise you The US didn't pack a bigger bag for this war, though, and that they didn't have more weapons? Because I heard they only prepared for a few weeks at most, but this is yeah. Or it was was or was it just assumption that if it didn't work, then we can just put it to halt again after twelve days like last time?
Speaker 1: Well, you're assuming that president Trump is a rational legal thinker. Right? You're assuming that he does the careful analysis that you would do or I would do if we were taking our countries into war. But that's just not the way he operates. And it's clear from listening to him talk that he has all these pictures in his head that bear no resemblance to reality.
He's constantly saying things that are just simply untrue. And if he believes them, you know, you can see why he just does foolish things. He's recently been saying that, first of all, Iran has weapons that are not accurate at all. These are all inaccurate weapons. Nothing could be further from the truth.
They have ballistic missiles and drones that are highly accurate. Not all of the ballistic missiles for sure, but many of them and certainly almost all the drones. But to say that they have an inventory of weapons that are all inaccurate is a foolish thing to say. And then furthermore, he made the outlandish comment that Iran has Tomahawk missiles. There's no way Iran would have Tomahawk missiles.
How could he say that? And then he tells all these stories about, you know, how we decimated last year Iran's nuclear capability. We basically erased it from the map. But now we find out that that wasn't true, that 60% enriched uranium that Iran had before the twelve day war started, before we, The United States, bombed those critically important Iranian nuclear sites on 06/22/1965. Despite all that, the Iranians 60% enriched nuclear material is still there.
We didn't destroy it, but he said we did. So you never know exactly what he's thinking, but it does seem quite clear that the pictures, many of the pictures that he has in his head, don't square with reality. And in that circumstance he can understand how he could be bamboozled by someone like Prime Minister Netanyahu into thinking he could win a quick and decisive victory. And by the way, if there's one person who was telling him that this was all going to work out in a magical way and we were going to live happily ever after a quick military victory against Iran. It was Prime Minister Netanyahu.
He's been arguing for a long time that the regime in Iran was vulnerable and all we had to do was hit it hard and it would collapse and apparently more moderate leaders would take over in Iran who would be willing to be subservient to The United States and Israel. But we just had to show that we had the courage this is Prime Minister Netanyahu speaking we just had to show that we had the courage to really hit Iran hard, to pursue a regime change strategy. And Netanyahu, for God knows how long, had been trying to get The United States to do that. He's trying he had been trying to drag us into a war against Iran by promising us that it would produce a great victory. But every president before Trump, including President Biden, avoided falling into that trap because they all understood that it was a trap and that we would not win a quick and decisive victory.
But anyway, it appears that prime minister Netanyahu bamboozled president Trump, convinced him that we would win a quick and decisive victory. And we have not won that quick and decisive victory.
Speaker 0: We can set another great irony here that is the whole argument that the Iranians are, you know, an irrational actor while we see now this kind of a bit unhinged rhetoric coming from the White House because only over the past twenty four hours, I've seen Trump's claim that, the Iranians told Witkoff that, you know, they would insist on developing nuclear weapons no matter what, that Iran was gonna take over the whole Middle East if we hadn't, attacked first. We had maybe three days before Iranians would have attacked The United States, and, again, with this attack on the girls school, killing 160 girls, very young ones as well. It looked many of them were between eight and ten. I I use again, I went with assumption that this was at least well, I think a safe assumption that it was a mistake. You know, no one hopefully doesn't target and kill 160 young girls on purpose, but I don't understand, first, the claim, well, there was an Iranian missile, then find out there's a tomahawk.
His whole administration then goes on, you know, moving away from, okay, Iran didn't bomb, you know, kill these girls on their own. But then moving on to the tomahawk that, yeah, Iran could have it. I mean, nobody else in the administration would go out, you know, with such an absurd statement. Just seems that, you know, governments always lie, all governments, but this really, you know, takes it to a new level to the extent that the credibility, not just of Trump, but The United States could be at at risk. And, you know, that's a, you know, it's a nonmaterial asset, you can call it, but it's still very vital, it would seem, though.
Speaker 1: Well, I think if you look at both Iran and Russia, whether you like the regimes in those two countries or not, I think the leaders, and here we're talking about Putin in the case of Russia, and of course Ayatollah Khomeini and now his son, all the evidence is that these regimes are rational legal, that they're thinking strategically. I mean, just to segue to Putin for a second, Putin is a first rate strategic thinker. I don't know how anybody could disagree with that. The idea that he's some sort of fool who's detached from reality makes no sense. You don't have to like what he's doing.
You can think that he was wrong to invade Ukraine. I understand that. But he thinks in a very logical way. I think he has a powerful strategic mind. And I think if you look at the Iranians, you listen to the foreign minister talk, he is an impressive individual.
Again, you don't have to like the Iranian regime and you can view Iran as an adversary. But I think it's very important when you're in a war and you're trying to assess the other side that you do it in a rational, legal way. And if the other side is smart and clever that you appreciate that fact and take it into account as you put your plans together for dealing with the adversary. But all I would say is that The United States, when it comes to dealing with Russia, when it comes to dealing with China as well, and when it comes to dealing with Iran, you're dealing with leaders in those countries who are smart and who know how to think strategically. But then when you look at the Europeans and you look at the Americans, especially President Trump and Secretary of Defense Pete Hegseth, and you listen to them talk, you say to yourself, it's not clear that these people understand strategy 101.
It's not clear that they're operating in a rational, legal way. Sometimes I think it's quite frightening to hear President Trump talk about a particular issue because the things he's saying are just simply not true. Again, the point about Iran having Tomahawk missiles. This is just not a plausible argument aside from the fact that it's not true. It's just not plausible.
And he tells stories like that all the time. So I think that when you look at our side of the equation, it's not a pretty picture.
Speaker 0: Well, you have no. No. Definitely. You have written a book on this topic that is titled Why Leaders Lie? So the truth about lying in international politics.
What how do you make sense of this then? Or or why? Because I I remember from from your book that one of the key arguments was that often we find more lying in from from liberal democracies. I remember I cited that once in political propaganda because we often portray propaganda simply coming from authoritarian states. But if you go back to Walter Lippmann, Edouard Bernays, all the original scholars on on propaganda, they all made the point that, you know, if you're a liberal democracy, then, essentially, sovereignty has been transferred to the people.
There's more need to to manage the masses. So there was was more demand for propaganda. But kinda we we we propagandize the concept of propaganda to only mean what other people would do. But but how do you have any conclusions why how it came to this? Because as I said, this is the stories in the media is is just you know, it it yeah.
It's beyond belief. It's it's not credible in any way.
Speaker 1: Let me excuse me, Glenn. Let me make a couple points. First of all, in the book that I wrote about lying, one thing you discover is that there are not many lies told by states to other states. And one of the reasons is that if you lie all the time then lying becomes an ineffective tool. In other words, lying only works when the other side suspects that you're telling the truth.
So if you're a habitual liar, lying is just a waste of time. So I was actually shocked to discover when I wrote the book and many of my audiences refused to believe the argument that states don't lie to each other very much. And the argument I made was that you see more lying by state leaders to their own publics than you see cases of state leaders lying to other leaders. And this is counterintuitive and I found it hard to swallow at first, but I just gave you the logic. Now, as you point out, I also found that in democracies leaders are more likely to lie than they are in autocracies for the reasons that you laid out.
So you see quite a few instances of presidents lying to the public. And of course this book was written before President Trump. So how does President Trump fit with this book? First of all, President Trump doesn't lie on a lot of occasions because he actually believes what he is saying, which is scarier than him lying. I think he actually believes a lot of these statements that he makes that bear little resemblance to reality.
I wouldn't be surprised, for example, if he believes that Iran has Tomahawk missiles. He has a lot of false beliefs firmly embedded in his brain. So that's point one. Point two is I do think that he tells lots of lies. I think he lies, one could argue, almost all the time.
He's constantly telling lies. But the fact is that they're ineffective because everybody understands that he's lying. He just says whatever he thinks. As I said before, he may believe some of those things and if he believes them then they're not lies. But then there are other occasions where he says things that he has to know are not true.
But the fact that he tells so many lies means that lying is not an effective instrument for him. Lying, again, is only effective when people think that you're a truth teller or that you're not going to lie. If you and I have a personal relationship that spanned twenty five years and we've had a huge number of interactions, you, Glenn and I, and I've always been truthful to you, it's easy for me to lie to you because you trust me and you let your guard down. But if you've dealt with me for twenty five years, we're friends but you know that I lie all the time, I really can't get away with a meaningful lie because you just don't trust me. You see the logic?
So I think with regard to president Trump, the fact that he lies just doesn't make that much difference. It doesn't buy him anything. And if anything, because some people think some of the time that he really believes what he says, you think that he's not playing with a full deck.
Speaker 0: Well, I'm I'm glad you well, before pivoted a bit towards Russia because that seems to be a possible well, an an important component now. Well, for for two reasons. I guess one would be well, how how do you see Russia's involvement here? There's been a lot of noise in the media that the the Russians are providing intelligence to Iran to, yeah, to hit American targets. I, yeah, I kind of assumed that this was happening.
I think I assumed the Chinese were doing the same as they have a war concern, of course, that Iran could be defeated. But also, of course, because, well, The United States is doing the exact same thing in Ukraine, but but also how what do you think the the extent of the Russian involvement is? But also, how do you think this war is affecting our war in Ukraine at the moment?
Speaker 1: I think, to start with the latter part of your questioning, that this war is wonderful news for the Russians. First of all, it means that The United States is wasting precious assets in this fight that it might otherwise give to the Europeans or allow the Europeans to buy to give to the Ukrainians. I think that there's no question that this is hurting Ukraine's efforts on the battlefield because we're expending huge amounts of munitions in this fight. Patriots, THAADs, things like that are being used. And by the way, you notice that we're bringing THAADs and patriots from East Asia to the Middle East.
And this means that we're weakening our deterrent against China. We're weakening our containment policy vis a vis China. But going back to the Russians, the Russians fully understand that this is going to have deleterious effects for the Ukrainians. Furthermore, as you know, The United States has been working overtime, the West has been working overtime to inflict pain on the Russian economy. This war is going to have the opposite effect.
If, you know, the flow of oil and gas out of the Persian Gulf is greatly reduced, that means the demand for Russian oil and gas is gonna go up. And we already see evidence that The United States is willing to allow India now to buy more oil from the Russians because India is hurting as a result of the cutoff in The Gulf. So economically this is wonderful news for Russia and again in terms of the battlefield it's wonderful news. So I think this is a net positive for the Russians from that point of view. With regard to what the Russians are doing to help the Iranians, as you know that's hard to tell, I think that it is quite clear that the Russians are providing intelligence for the Iranians and that that intelligence is helping the Iranians wage the war.
And it's limiting what the Americans and the Israelis can do to defend against Iranian ballistic missiles. So I think that is almost certainly being done. And I wouldn't be surprised if at some point if Iran needs oil that the Russians provide oil or gas to the Iranians. It's hard to say for sure what's going on there, but that's another possibility. And I wouldn't be surprised if they provided some weaponry before the war and they'll provide weaponry during the war.
What exactly they'll provide in terms of numbers and quality, who knows? But I wouldn't be surprised if the Russians and the Chinese as well are helping the Iranians. Both of those countries obviously have a deep seated interest in seeing Iran defeat The United States and Israel in this war. I mean, if you or I were playing China's hand or playing Russia's hand, we would want to see the United States suffer a humiliating defeat in its fight with Iran. So the incentives here for Russia and China to help Iran are great.
And exactly what they're doing is hard to say, but it does look like they're helping out, especially with regard to intelligence. And that's complicating our problem.
Speaker 0: It seems another benefit for the Russians though would be to, I guess, improve their image within Iran because, you know, if you take a step back and stretch out for, you know, your viewpoint over the past centuries now, the Iranians and the Russians have you know, they had quite a few wars behind them, and there's every reason in the war in the world for the Iranians to distrust the Russians as well. This is a, I guess, a good opportunity for the Russians, though, to be seen as a savior instead of a nemesis or, you know, someone who who, you know, stab them in the back at the most critical hour. But it's yeah. I my last question was really about Europe, though, because it doesn't it it also has, well, responded in some very strange ways. The the the EU, of course, is, you know, is giving its full full support, at least rhetorically.
I think Mertz, he positions himself now as the number one Trump man to support whatever Trump wants to do. The British are also, of course, supportive, but they didn't wanna send any weapons. Then now they do wanna send weapons, but Trump doesn't want it because according to Trump, they already won. How how do you make sense of the European position on this? And, you know, how much what's the relevance of French participation, you think?
And how how how is Europe impacted by this war? Because, you know, we just cut ourselves off or we like to say liberated ourselves from Russian energy, and now the Iranians are liberating us from Middle Eastern energy. It's it's not much more, coming our way, it seems.
Speaker 1: I think the economic consequences for Europe, if this war escalates and some of the scenarios we described at the start of the program play out, the consequences of that for Europe would be catastrophic. And I think the European elites understand that. I think they wish very much that this war had never started. This is a war that is not good for Europe. But as is almost always the case, the Europeans do pretty much what the Americans want them to do.
And they're kissing up to the Americans and supporting the American war effort, failing to condemn The United States and Israel for this brazen war of aggression, for assassinating the leader of a foreign country. The Europeans are not condemning this, save for the Spanish. It's really what you would expect from the Europeans. And what drives this, as we've talked about many times before, Glenn, is the European fear that The United States will leave Europe or at least markedly reduce its military footprint. The Europeans don't want that.
They want to keep NATO intact. They want to keep the Americans fully committed to Europe. And the European elites believe that the only way you can do that is to lick America's boots. And in this case that means lick president Trump's boots. And so as you would expect, the Europeans are following the Pied Piper.
The question is do the Europeans matter in terms of winning this war? And the answer is no. I mean who cares whether the Europeans get involved or not. Maybe they'll help on the margins but that just doesn't matter at this point. There's nothing the Europeans can do to, you know, fundamentally affect the balance of power between Iran on one side and The United States and Israel on the other side.
I mean, President Macron talks like, this is, 1799 or eighteen o five where France is, you know, under Napoleon and by far the most powerful state in Europe. It's Europe's Godzilla and France can do X, Y, and Z. Those days are long gone. France has very little military capability and it certainly has little capability to affect events in the Middle East. So it just doesn't matter very much.
This war is gonna be settled between the Iranians on one side and the Americans and the Israelis on the other side. And what's in the interest of those three actors is what really matters here. And from Europe's point of view, the sad truth is that their interests are going to be largely ignored because the Americans are just not going to pay Europe's interests much attention. We don't care that much about Europe. President Trump views the Europeans with contempt.
The idea that he's going to go out of his way to help Europe is not a serious argument. In fact, if the Europeans get hurt in the process, I would imagine that President Trump will think that's a good thing. Know, he has contempt for the European elites. So Europe is in real trouble. It started with the Ukraine war, and this war just makes a bad situation much worse.
Speaker 0: That seems like, again, I I always agreed with the idea that The United States is the pacifier, and we and Europe's gonna have a lot of problems fragmenting if not so much if more than when United States departs, but it it looks as if the efforts now to keep The US there is will will only fragment Europe faster because we're gonna keep The US there by prolonging the Ukraine war, which means we're turning we we turn on the Slovakians, the Hungarians, you know, ignore them, or now that Mertz was sitting next to Trump, and Trump could just hammer away threatening Spain, and, you know, Mertz has to sit there obediently, not say anything critical because he has to show loyalty to Trump. And now, of course, they're alienating the Spanish, so it just seems, you know, always the worst of both worlds is what the Europeans are are going for. It's quite, yeah, it's quite extraordinary to watch. It doesn't give one a lot of optimism.
Speaker 1: Yes. Let me make a radical statement, Glenn. I think that one could make an argument that it's in the European's interest to in effect pursue the Spanish model vis a vis The United States, to play hardball with The United States, to tell The United States that you're going to greatly improve your relations with China, you're going to trade with China, and you're going to trade sophisticated technologies with the Chinese. And if the Americans don't like that, well, we'll cut a deal then. But in the meantime, we're going to fundamentally change our relationship with China.
And furthermore, with regard to the Middle East, we're going to condemn what you're doing in the most powerful terms. And we're even going to look for ways to punish you. Aggression. We're going to condemn you for collaborating with the Israelis and waging a genocide. We're going to condemn you for assassinating Ayatollah Khomeini.
Pursuing a really hardball strategy with The United States, and given that The United States needs Europe in all sorts of ways, that will provide the Europeans with some leverage so that they can protect their own interests. And what we're saying here is that by constantly kowtowing to the Americans by licking President Trump's boots, you put your situation you put yourself in a situation where your interests are not protected and if anything your interests are hurt and you're getting yourself into more and more trouble as the years go by. That's the way I'd look at it if I were a European, but again this is radical argument and the European's brains have been grooved to think that this is heresy. That the arguments I'm making are wrong. They're just simply wrong.
We don't have to analyze them. We just dismiss them out of hand. We've learned all along that the only way to deal with The United States is to be nice and to be subservient. That might have been true at one point, but I don't think that's true with President Trump. And I'm surprised they haven't figured that out.
I think the Spanish leader has figured that out. President Trump is a classic bully. In many ways, The United States is a country that is a bully and long has been a bully. But President Trump is a classic bully. The only way you deal with a bully is you stand up to that bully and if you show weakness, the bully will walk all over you.
And of course this is what President Trump is doing with the Europeans. He walks all over them. He doesn't pay attention to their interests. He does what he thinks is in America's interests and if that hurts the Europeans, tough luck for them. That's his approach.
And you would think that the Europeans would have learned this by now and would have altered their policies towards The United States in fundamental ways. But apparently, that's not the case.
Speaker 0: No. I just like I said, I I don't think it's radical at all. I I always make the point as well that the the most important partner for Europe, should be The United States. But if you want to keep this relationship, then, you know, the Europe should do exactly the opposite of what its instincts tells it, that is not to put all its eggs in that one basket. What you wanna do is diversify, work with the Russians, the Chinese, the Indians, and all others, because if you have this asymmetrical interdependence where all of Europe's relations depend on The US, but Europe is not really that important to The US, with this asymmetry, The US can walk all over Europe, and the relationship isn't any more sustainable.
So if you wanna save the relationship, you need a balance of dependence, diversify as well. I mean, this is the logic of the Russians. For them, the the Chinese relationship is the most important they have, but they also realize there's asymmetry there, that they would become much too dependent on China compared to China's dependence on Russia. So they recognize if they want the Chinese relationship to work. You diversify as well.
You also would deal with the Indians and all others. And, you know but I think the mindset in Europe is just, America's our liberal democratic partner, so let's just show our loyalty. Let's cut ourselves off from the Russians, cut ourselves off from the Chinese, you know, threaten the Indians a little bit, and now the Americans will reward us for our loyalty and, you know, sit in front of his desk, call him daddy, and somehow everything will be fine. It's it's very strange. I don't understand where where the thinking is, but yeah.
Speaker 1: Yeah. With with regard to India, I've given a number of talks in India recently, and I was recently in Mumbai. And my advice to the Indians, I hate to say this as an American, but if I were an Indian, I would not get too close to The United States. As I like to say, The United States is a rogue elephant and if India gets close, it will pay a certain price. It discovered this last year when we put when President Trump put 50% tariffs on India.
And I think that basic logic which applies to India applies to the Europeans as well. You just do not want to get too close to The United States because when you do that you give The United States all the leverage and The United States will use that leverage. That's certainly true of President Trump. So you want to give The United States as little leverage over you as possible and you want to maximize the amount of leverage that you have over The United States. This is my point about trading with China.
The United States has a vested interest in making sure that European states don't trade sophisticated technologies with the Chinese. Okay. But that tells me that the Europeans therefore have leverage. They can threaten to trade sophisticated technologies with the Chinese. The Americans will not want that and the Europeans can exact the quid pro quo from the Americans if they cut off the flow of cutting edge technologies to, China.
Speaker 0: Well, thank you very much, John, for taking the time. As always, I always learn a lot listening to you. So, thank you, and I hope you come back on soon.
Speaker 1: Thank you for having me, Glenn. I enjoyed the conversation. I just wish the subject wasn't so depressing.
@Glenn_Diesen - Glenn Diesen
Alex Krainer: Iran War Goes Global - Economic, Energy & Food Crisis https://youtu.be/WzWBIS17aqY https://t.co/K5JdZtll2n
Video Transcript AI Summary
The discussion centers on the cascading economic and geopolitical consequences of the unfolding West Asia conflict, with an emphasis on energy markets, food production, and the potential reconfiguration of global power relations.
Key points and insights:
- The Iran-related war is described as an “absolutely massive disruption” not only to oil but also to natural gas markets. Speaker 1 notes that gas is the main feedstock for nitrogen fertilizers, so disruptions could choke fertilizer production if Gulf shipments are blocked or LNG tankers are trapped, amplifying downstream effects across industries.
- The fallout is unlikely to be immediate, but rather a protracted process. Authorities and markets may react with forecasts of various scenarios, yet the overall path is highly uncertain, given the scale of disruption and the exposure of Western food systems to energy costs and inputs.
- Pre-war conditions already showed fragility in Western food supplies and agriculture. The speaker cites visible declines in produce variety and quality in France, including eggs shortages and reduced meat cuts, even before the current shock, tied to earlier policies and disruptions.
- Historical price dynamics are invoked: oil prices have spiked from around $60 to just over $100 a barrel in a short period, suggesting that large-scale price moves tend to unfold over months to years. The speaker points to past predictions of extreme oil shortages (e.g., to $380–$500/barrel) as illustrative of potential but uncertain outcomes, including possible long-term shifts in energy markets and prices.
- Gold as a barometer: gold prices surged in 2023 after a long period of stagnation, suggesting that the environment could produce substantial moves in safe-haven assets, with potential volatility up to very high levels (even speculative ranges like $5,000 to $10,000/oz or more discussed).
- Structural vulnerabilities: over decades, redundancy has been removed from food and energy systems, making them more fragile. Large agribusinesses dominate, while smallholder farming has been eroded by policy incentives. If input costs surge (oil, gas, fertilizer), there may be insufficient production capacity to rebound quickly, risking famine-like conditions.
- Policy paralysis and governance: the speaker laments that policymakers remain focused on Russia, Ukraine, and net-zero policies, failing to address immediate shocks. This could necessitate private resilience: stocking nonperishables, growing food, and strengthening neighborhood networks.
- Broader systemic critique: the discussion expands beyond energy to global supply chains and the “neoliberal” model of outsourcing, just-in-time logistics, and dependence on a few critical minerals (e.g., gallium) concentrated in a single country (China). The argument is that absorption of shocks requires strategic autonomy and a rethinking of wealth extraction mechanisms in Western economies.
- Conspiracy and risk framing: the speakers touch on the idea that ruling elites use wars and engineered shocks to suppress populations, citing medical, environmental, and demographic trends (e.g., concerns about toxins and vaccines, chronic disease trends, CBDCs, digital IDs, 15-minute cities). These points are presented as part of a larger pattern of deliberate disruption, though no definitive causality is asserted.
- Multipolar transition: a core theme is that the Western-led liberal order is collapsing or in serious flux. The BRICS and Belt and Road frameworks, along with East–West energy and technology leadership (notably China in nuclear tech and batteries), are shaping a move toward multipolar integration. The speaker anticipates that Europe’s future may involve engagement with multipolar economies and a shift away from exclusive Western hegemony.
- European trajectory: Europe is portrayed as unsustainable under current models, potentially sliding toward an austerity-driven, iron-curtain-like system if it cannot compete or recalibrate. The conversation envisions a gradual, possibly painful transition driven by democratic politics and public pressure, with a risk of civil unrest if elites resist reform.
- NATO and European security: there is speculation about how the Middle East turmoil could draw Europe into broader conflict, especially if Russia leverages the situation to complicate European decisions. A cautious approach is suggested: Russia has shown a willingness to create friction without provoking Article 5, but could exploit Middle East tensions to pressure European governments while avoiding a full European war.
- Outlook: the speakers foresee no easy return to the pre-war status quo. The path forward could involve a reordering of international trade, energy, and security architectures, with a possible pivot toward multipolar alliances and a greater emphasis on grassroots resilience and regional cooperation.
Overall, the dialogue emphasizes the profound interconnectedness of energy, agriculture, finance, and geopolitics, arguing that the current crisis could catalyze a permanent reordering of the global system toward multipolarism, while underscoring the fragility of Western economic and political models in absorbing such shocks.
Full Transcript
Speaker 0: Welcome back. We are joined today by Alex Kraner, a market analyst, author, and former head fund manager. Also, we can add the host of the Alex Kraner podcast, and I will leave a link in the description. And I saw you had a new video come out just now. Thank you for coming on.
I we keep seeing this uncontrolled war unraveling in in Iran that is it seems to be spiraling out of control. There's no efforts to deescalate or seeking an off ramp. And I was wondering what do you see as being this economic consequences of this war around the world. So, you know, they can be the minor things. For example, if there's less oil, you know, fewer fishing boats go out, food prices go up, people can't pay their bills, you have socioeconomic instability.
And I guess what's fascinating here is that the entire world is impacted by this war. So what is it that you expect to see in terms of the very integrated global economy being affected by taking all this energy off the market?
Speaker 1: Glenn, thank you for having me. It's always a pleasure to join you. Unfortunately, here we are discussing fairly bad developments in the world. Let's say that it would be impossible to predict the fallout from the current war in the in in West Asia. And the reasons are because we have just had a a an absolutely massive disruption not only in the in the oil market, but also in in natural gas markets.
And then, you know, it impacts many other industries because, you know, natural gas is the main feedstock for production of of fertilizers, nitrogen fertilizers. So if one third of the feedstock is stuck in The Gulf and half of all the LNG tankers are stuck in The Gulf, we could be in a lot of trouble. I think that the the fallout will not happen overnight, and there's going to be a lot of discussion. Oh, this is gonna happen, and that's gonna happen. But we already start from a very, very bad point because many western nations have already been destroying their agricultural production for for many years now, you know, over over net zero policies and and and whatnot.
And you can already you if the let's say that the reduced food production in the West is already discernible. I live in France, and, you know, I'm one of those people who likes to buy fresh ingredients and and cook my food at home. And so I'm very you know, I I tend to be discerning about what I buy. And France has always had, of all the countries where I lived, the best food merchandising industry and food distribution. You know, you always had a very wide variety of high quality produce available at all times.
It was pretty much taken for granted. But even before this war started, I started noticing, I mean, this this started happening probably since the since the pandemic, that the both the variety and the quality of produce that's offered in the market has been on a on a decline, and I mean drastic decline. You know? This year, in the last, you know, maybe six to twelve months, for the first time ever, many supermarkets have signs we're out of eggs, for example. The meat section is visibly reduced.
I think there's less than half of what used to be available, and there are many fewer cuts that are available. At the same time, you know, the processed foods are doesn't seem that they're they're impacted. It's, you know, the the junk and the low quality stuff. So now add the largest ever disruption that ever impacted oil markets and and natural gas markets in the world, and we can't tell how this will unfold and and and you know, because this is a situation that will snowball. You know, now we now we're aware, we're rationally aware that something's not right and that it's going to have consequences, but what those consequences will be is nearly impossible to predict.
You know, I I used to be an oil market analyst, and I I remember that in 2012, I read I read reports drafted by the the American military intelligence, by British military intelligence, Ministry of Defense actually, and by the German Ministry of Defense, and they were all they were all predicting that we are going into a period of shortage of oil and that this is going to have extreme consequences. The British Ministry of Defense was predicting that by 2040, the price of oil will go to $500 a barrel. Now I know that that might sound high, but, you know, even even just as recently as 2022, we had a we had a analysis report by JPMorgan saying that the oil is going the the price of the barrel is going to $380 per barrel. Today, we are trading just over $100 a barrel, and the war has been going on for, what, just over two weeks. These types of large scale price events never happened overnight.
So we had a jolt because I think that two or three months ago, the barrel of oil was trading at about $60. So we are now 67, 70% higher than two months ago, but this could just be the first jolt. Large scale price events tend to tend to span months and years. So we can't exclude the possibility that the price of a barrel really does go to 380 or to $500 a barrel or or who knows where. And what the consequences of that will be, I think it's impossible to predict.
You know, we've been talking about gold prices for many, many years, and gold prices have done more or less nothing until 2023. Until then, they were, you know, kind of languishing between 1,600 and 2,000, you know, bouncing in horizontal range. But then once they went above, once the price went decisively above $2,000 an ounce, then it kept going, and then over the next two years, so between the 2023 and now, we now have gold at $5,000 an ounce. And, you know, there's no telling where it might go. It might go to 5 to to to 10,000 or 20,000.
Nobody can predict these things. And then another troubling factor is that over these over the over the decades, we've removed redundancy out of the system in the sense that, let's say if you have larger agricultural concerns that are producing massive quantities of corn and wheat and soybeans and these strategic crops, but you keep putting small hold farmers at a disadvantage and you are slowly destroying smallhold farmers, once these large concerns that that are producing food in in great bulk, once they start going bankrupt because they can't pay for the oil, they can't pay for the gas, they can't pay for the fertilizer and so forth, we don't have family owned farms to fall back on. Because, you know, in the past, if all these mountains of corn and wheat don't materialize, okay, there's still family farms that are producing food. It'll be expensive, but at least it's there. We have destroyed this to a large extent.
So I think that we are in a serious trouble because this cannot come back overnight. Know? This takes time and skill and know how and and and commitment and dedication. And once you uproot it, it'll take years for smallhold farming to come back if they allow it because they're still you know, the bureaucracy is still destroying family farming and there's no in a way, there's no reverse gear. They're not saying nobody's saying, Oh, this was a bad idea.
Let's quickly reverse these policies. All the incentives and all the directives that went from the EU from central governments to their bureaucracy are still there, and the incentives are still there. So the, you know, the the big train wreck is still happening. And so I I I I'm I'm afraid that we might be going to a place that nobody's prepared for because it hasn't happened in since maybe since since the the last World War. And, you know, people who lived through the through World War two, they do remember famine.
And so we might be going to a place of famine. And, you know, unfortunately, our policymakers, our governments are not taking this seriously. I don't know if they're discussing this at all. I don't I don't see it being discussed anything. It's an urgent matter.
But, you know, they are still obsessed with Russia, with Ukraine, with net zero policies and and so forth. And so, unfortunately, I'm afraid that ordinary people will have to take these things into their own hands and see if they can, you know, make make food for themselves, plant potatoes and leeks and tomatoes and, you know, stock up on nonperishable items.
Speaker 0: Well, that was part of the problem of the we've seen in the past few years with the Ukraine war alone, these limitations on artificial fertilizers and all of these things because of of the sanctions. This, of course, will add further to it. But there seems to be a much wider challenge at the sector. That is over the past few decades now under this neoliberal economics, we kinda let the market dictate everything in terms of, you know, outsourcing what others might produce more efficiently. So assuming that the markets are already or will always be open, we also saw The U US outsourcing its in the development of critical medicine to China.
I mean, critical minerals, of course, depend on China. And, again, not just nations, but we see businesses organizing this just in time logistics, there's no need for storage. We saw people as well becoming more dependent on living paycheck to paycheck. It's across society. It's it's it doesn't seem like we are capable of absorbing a shock unlike, you know, the second World War.
At least there was some strategic autonomy and, yeah, ability to absorb these kind of shocks. And even in the military sphere, I see the the the Iranians have blown up a lot of American radars worth, you know, hundreds of millions of dollars. I think it's their their t p y two radars. And, you know, if if you wanna rebuild this as well as the interceptors and all these weapons stockpiles, which The US has been burning through, it needs, you know, access to, like, gallium and other rare earths, which just happens that China controls, I think, about 98 of the total. So it's just it's just an unmitigated disaster.
So it's not clear what we're gonna do. We're not gonna make peace and restore trust in the supply chains. And yet, if if we want to have complete strategic autonomy, we need we need many years, if not decades, to reorganize the entire economy. But we seem to be just heading straight into massive conflicts, war, dismantling supply chains without any ability to absorb any of these shocks. I mean, how yeah.
If if if if we could predict what will happen, it would be one thing, but I think it's too many unknown variables perhaps, which is why it's so difficult to assess.
Speaker 1: Yes. Correct. I I I'm afraid that there's a there's a very significant conflict between the ruling establishments in the in the in the Western worlds and the people. And, unfortunately, this is one of those things that keeps happening throughout history, that people who hold the levers of powers, who enjoy all the privileges of the system as it is, you know, set up today, they don't want to change the system. And what happens is that, you know, with the, you know, with money lending and usury and this fraudulent money that we have, over time, you know, this this mechanism acts as a as a wealth extraction conveyor belt.
And so it creates a polarization of wealth, meaning that the people who are at the levels levers of power, they become more and more wealthy. A greater and greater amount of capital, of collateral, is in their hands, while the ordinary people are increasingly disenfranchised poor, have difficulty paying their bills, have difficulty making a living, live paycheck to paycheck and so forth. And so what has always been the first reflex of the ruling establishment has been to get rid of the people. And they usually did this by crying barbarians at the gate. If there were no barbarians at the gates, they would invent them.
They would orchestrate wars, and then they would sacrifice, especially military aged men in very large numbers in these wars because military aged men are exactly their greatest threat the the greatest threat to themselves. Well, I think that war against Russia was intended to serve this purpose, but it hasn't quite worked out and people are not convinced. And people in France, Germany, Poland, Great Britain, none of them think that Russia is the greatest existential threat, so none of them are willing to send their sons to to fight and die in that war. So I think that other other approaches are being used, and this goes into into conspiracy theory realm, which we all know that there are no conspiracies. You know?
Everything is a coincidence. But it does appear that a lot of what they do is now used as plan b, plan c, and so forth to keep getting rid of the people. And, you know, in Canada, we now see that the one of one of their leading medical treatments is called medical assistance in dying, and they're so excited about it that they already since the law passed, they already killed a 100,000 people for, you know, for a population of the size of Canada that's very significant. I think it's now become the third leading cause of death in Canada. Well, it's being passed in France.
European countries are enthusiastically adopting it, and it's one of those things where if you if you say the wrong word, you can't even opt out of it anymore. You know? If you if you say today, well, maybe I'll consider it, you're you're already done. They're you know, they don't give you an out. You you have to fight to save your life.
Then our our supplies are increasingly toxic, which very often turns out to be strange because it's like, oh, yeah. Well, sorry, you know, we got some lead in the water. That was, you know, a mistake. Oh, we have all these cancer causing agents in our toothpaste. Well, that's a mistake, obvious.
But, you know, there's been a lot of mistakes all going in the same direction. So the rates of chronic diseases, the rates of cancers, and so forth are exploding, and I have to be I have to wonder if that is not on purpose. And in fact, it's almost certain that it is on purpose because we have we have very detailed data from, let's say, the vaccine industry where, you know, the the the statistics from systems like VAERS in The United States show that over the last thirty years, the safety of these shots has been on the decline and the side effects have been increasingly severe. And then fewer and fewer people are recovering from these side effects ever. And, you know, that's that's a trend that has now been going on for more than thirty years.
So if you have this trillion dollar industry that has all the research money can buy, all these specialists, all all the all the production facilities, and the trend of safety is on a steady decline for thirty years going, you have to suspect that it's deliberate because otherwise somebody would say like, oh, you know, we made these mistakes, we correct them. And so with all the know how, with all the research, with all the investment, we should see an increase in safety and effectiveness but we see the opposite. Anyhow, you know, there's I I what I've been saying for since the pandemic now that it's that we are fighting a thousand battles at this time, and it's not just that. It's the CBDCs. It's the it's the digital digital IDs.
It's the fifteen minute cities. It's the net zero. It's the assault on farmers. It's the destruction of food production. It's the toxification of the environment steady.
It's it's wars breaking out everywhere and more and more of them breaking out almost as though it's it's being done deliberately. So in the end, I think that we won't solve it. We I I I don't see that we we're going to be able to vote our way out of it. I think that it's going to take people simply taking things into their own hands, making sure that they know how to take care of their families and their health, making sure that they know how to procure food, making sure that they have good relations with their neighbors, that they're net that they network in their community, that they know, you know, who can who can fix your car, who can fix your leaky roof, who knows how to treat wounds and and set broken bones and so forth. And in the end, you know, when the CBDCs get unrolled, and that's almost 100% going to be a train wreck, I I I think they're going to fail because it's an extremely, extremely ambitious complex problem that they need to tackle, we are not going to survive without gray and black markets.
And people are generally very, very good at creating gray and black markets because they simply have needs that are urgent and, you know, you need to eat, you need to have water and and roof over your head, and then these black markets self organize. But that means that the political establishment loses control, and then, you know, we need I I I think that ultimately the solution will be for the Western world to integrate with with the eastern solutions, you know, SEO, bricks and the bricks organization, Belt and Road, multipolar integrations, and so forth. And maybe this war in Iran now is a is a great catalyst that that will accelerate all of these all of these changes. But, you know, one thing that everybody has to keep in mind, we will not get solutions from our governments. That that that's just the way they're the way things are today, we cannot expect that our governments will will deliver us, and we shouldn't expect it even if we vote the current the current governments out of power and replace them with the new ones.
Just look at how things are going in The United States. You know? Voting Trump into the office was practically a revolution, and now it's it seems that Trump revolution is very, very much jeopardized pretty much by Trump's own goal in Iran. Yeah. Well, a lot of
Speaker 0: the problems we have today, we have different solutions in the past. This is not advocacy, but in the past colonization, it tended to have some be like a safety valve to release some pressure that is economic pressure could be unreleased could be released by colonizing political dissent. They could get a new if if, you know, you opened up to to send them abroad, it would release some of this, the sense of purpose, you know, built up nationalism, prestige. All of this could be done abroad, but the but the same kind of dynamics, the problems building up. We don't have them to we don't really have them today.
Yes. But, yeah, it's a very it's it's a good point with Trump because he was, like, he was seen as the the revolutionary, though he was definitely not part of the establishment. He would do something very different. You know, the fact that the entire political class and entire media went after him, it was kind of worn wore as a badge of honor to show that, well, they don't own me. And people, you know, they didn't not vote before because of it.
They voted because of it. This was important.
Speaker 1: Yes.
Speaker 0: Yeah, here is. And I'm I'm not even sure how to explain what happened to Trump because, you know, one can say, yes, that The US is to a large extent controlled or influenced by Israeli foreign policy, but that can't be it only because I I I don't doubt it, but but one also has to look at the threats against Panama, the, you know, the kidnapping of president of Venezuela. Now the war on Iran, of course, that can be explained, but he's already saying Cuba is next in line. They he might go for Nicaragua. He already attacked Cuba.
Why not threaten Canada? And it's just it's just yeah. Threatened Colombia as well and, yeah, Greenland, of course. I mean, they did the list of quite impressive for a second.
Speaker 1: It would be it would be quicker to list it would be quicker to list the countries that he didn't threaten.
Speaker 0: No. I know, which is why it's hard to understand what happened because he was, you know, he was the peace president. That that's that's what he was running on, and he prided himself in the first administration of not starting new wars, all of these things. So I'm not sure what happened to to Trump. He's you know, when he says, you know, we want peace, but peace through through strength, well, that's like the NATO motto.
That means essentially hegemonic peace. We'll be so powerful, no one can challenge us. We had hegemonic peace. That's why people voted for Trump because they they thought that this was exhausting The US. It was creating collective balancing, and but but here we are.
Back back to the same thing. That being said, this list of countries he wants to invade, from, you know, Venezuela, he said, oh, we got their oil in Iran. You know, Lindsey Graham made a point, oh, we're gonna make a ton of money if we can control their oil. Greenland have all these resources. How how do you see the are are we seeing the beginning of some energy war here, or because a competition over controlling the international resources?
You can say, yes. It's just The United States playing this game now. But if they're trying to, essentially, corner the market now with military force, other countries will have to respond in some way.
Speaker 1: Yes. But, you know, I think it's it's a lot more complicated than it has been for the past century because let's say this the scramble for The Middle East started, let's call it, about a hundred and twenty years ago. So it was nineteen o two, nineteen o three that the British realized that they need oil, that Middle East is very rich with oil, and they already started colonizing the Middle East in order to secure access to to to oil. And this has been almost a a constant of the foreign policy of Western powers. But, you know, today, we we do have a an energy transformation process that is based on, you know, advances in nuclear power and and electricity generation and battery technology and so forth.
And it's coming from it's coming largely largely from China, but it's other other countries are also participating. So, you know, at the moment where you have, you know, when you when you have battery technology that, you know, you can charge a a car battery in five minutes or ten minutes, and it runs, it can run 3,000 kilometers on one charge, that's a massive game changer that then impacts automotive industry. And then, you know, with respect to to, you know, the need for heavy oil for ships and diesel, you know, diesel engines and generators, well, you know, Middle East is not the only game in town anymore, and maybe this is why Trump was keen on controlling Venezuela's oil supply, and then maybe this this is why he's keen on securing Canadian resources. But, you know, then there's you know, Russia has massive energy supplies oil supplies is one it's one of the world's largest oil producers, and it's completely unrealistic for Trump to think that he can control Russia. And, clearly, they're losing grip on the Middle East, and I think that, you know, it's been let's say that it's been almost obvious that if he pulled the trigger on war against Iran that The United States would end up evicted from the Middle East.
And this is now probably going to happen. I don't see how they avoid it, and we can see even Trump in the last, I think, twenty four, forty eight hours has been saying, well, we don't really even have to be there because it's it's very it's it's very clear that this is an unwinnable war and that the longer it goes on, the more it plays to the advantage of Russia, China, and Iran, and the less it plays to the advantage of Western powers, which are growing weaker and weaker and weaker. So I think in the end, we're going back to the you know, I I I kind of predicted this in the past that either we're going to have the fall of the Western Empire or the West is going to close itself off into a block, you know, into into, like, a a former Soviet block, and we're going to have an iron curtain. And then they're going to try to regroup and reorganize themselves for for the next hurrah of of imperial wars and colonialism. But, you know, only the political establishments that are in charge in the West want this.
The people don't want this. And I think that today, unlike in the past, the people are more aware than ever before that their political establishments are basically Epstein classes and that the way we're going to win a better future and an emancipation is going to have to be by changing our political establishments rather than going along with, you know, whatever agenda they set in front of us. And, you know, given that they no longer control the narratives as as they one once did, then, you know, I think that the people have a very, good chance to actually prevail and that we see a complete transformation of the global order. And I think that, you know, like this is now that that discontinuity that we've been talking about for a while that the, you know, the five hundred years of Western centric global order is collapsing, and now it is collapsing. And so the energy dimensions will play a role, but maybe not in the same way that it has done in the twentieth century because oil is no longer the only game in town.
And then, you know, advanced technologies, we have a lot of catching up to do because, you know, China is leading the way. In nuclear technology, China and Russia are leading the way. The United States has nuclear technologies that are that are advanced and that could that could help them to catch up, but they're far behind, and they're too expensive still. American nuclear power plants generate energy that's five times more expensive than what the Chinese can build. So it's we we we really are far behind.
But, you know, if we integrate, if we if we say, okay. We have to give up on colonialism. We have to give up on imperialism. Well, then, you know, we can trade as partners in good faith constructively. And then, you know, we can sell them what we have, things that we do do well and buy from them things that we don't have, that we need.
And in that way, maybe, you know, the the dream of of the dream of peace and prosperity becomes realistic, not not a utopia. Because we also have to understand that the the wars, the misery that we've had to live with for so long are are the result of our money system and our political systems in the West, primarily in the West. West has been the driver of wars in the world. And so once this system is over overhauled and reorganized, then, you know, the the need to go to war drops away. It's it's not necessary.
So I'm I'm very hopeful in that respect. And maybe, you know, sometimes in history, very, very bad things happen, but, you know, they they blow open the path to very, very good things. So we have to we have to be very, how do you call we have to keep alert. We have to keep alert, and we have to make sure we're not hypnotized to sleep by our political leaders.
Speaker 0: Yeah. Well, a lot of this adjustment of of The United States away from the former model it had. That is after World War two, The United States was, you know, the factory of the world. It was the creditor of the world. It had dominated in technologies.
It controlled the maritime corridors of the world. It controlled the natural resources by allying up with the Arab states. It controlled the main development banks. It had the sole reserve currency. I mean, across all the economic levers of power, The US was dominant, and this is why hegemony could be established on the principle of a liberal hegemon.
Much like the Americans have criticized the British for in the beginning of the nineteenth century, they called it a free trade empire, because if the British were more competitive, all you have to do is push free trade, and no one would be able to compete with the British. But but now that this is gone, the essentially, the Americans can't compete well with the Chinese anymore. They're no longer the factory of the world. They can't produce that much. They're the deader of the world now.
And not just China, but you see through, for example, BRICS and these other multipolar form formats that a new world is being developed where it's not organized around The US. So having everything open and liberal is no longer the recipe for American leadership as it was intended to be after the nineties. But I heard some Americans refer to how they should reorganize the world. And remind me a bit of what you said there, that is, well, we have to stand up for then Western civilization, which means that the West should essentially, you know, block itself off a little bit from the rest. But this would mean for Europe to be exclusive economic zone for The US, which could be nice if it was after World War two, but a declining empire.
It's very different. That is, The US would be poor. It would be politically subordinated if it's not able to diversify and trade properly with the other great powers such as China and Russia. So how do you keep such a system in place? Because when you compare it to the Soviet system, that that seems about right.
Either you need some authoritarian model, or you have to demonize the outside world that is immoral to trade with Chinese or Russians. But anyways, this is not a model for prosperity. It's not a model for freedom. So I'm I'm just wondering how how do you see Europe how sustainable is this? Because after a while, the political elites, which advocate for this kind of economic isolationism and political subordination to, you know, what Rutte calls daddy, it it doesn't seem to have been based on much public support.
So after a while, wouldn't these governments just be washed away? And, I mean, in Europe, we just celebrated liberating ourselves from Russian energy and essentially liberated us ourselves from, you know, having industries. But now we see this extra hit in The Middle East. How how I mean, I can see why the Americans would wanna carve out zones of exclusive influence given that they can't compete properly with China and BRICS. But but why why how how would Europe look like in this formula format?
Speaker 1: Well, I think that the European system is is completely unsustainable, and I think that we are really in the danger of falling into some kind of an al Turkic Soviet type system, you know, where, you know, if you're unable to compete on world markets and you're unable to, let's say, destroy the regions and nations of the world that are are outcompeting you, then you erect an iron curtain, and you you you create, like, a like, a spider behind that iron curtain where, you know, it's all very, very austere. You know, you impose austerity. You impose a very, very rigid system of governance on on the people. But this is all these all these things with fifteen minute cities that they've been, you know, planning for us. But, you know, here we're talking about a very small political elite or, you know, quote unquote elite trying to exert control over, you know, hundreds of millions of people.
That never worked. That never ever worked in the past. It can sustain itself for some time. You know, Soviet Union was such a thing and it sustained itself for about three generations, but then it it it it still disintegrated. It still fell apart.
So it's not going to work anyway. And I suspect that in the West, it's not going to last as long as the Soviet Union did. You know? So it's going to fall apart anyhow, but something will inevitably have to take its place. And I think that that will largely depend on the people.
You know? It'll depend on a a a political awakening and people asserting themselves into the political process and rejecting war, rejecting an unaccountable system of democracy, you know, where you get to you get to vote between candidate a and b and c, but all three candidates have, you know, invisible strengths to some oligarchy that you are not allowed to even discuss. So I think that all of this has to change. And I think that in Europe, particularly, that transition might end up being very, very painful. And I hope that it won't involve revolutions and civil wars, but it might because, you know, the people who are in power now are not going to relinquish their power voluntarily.
So it's it's I I I think it's going to be very, very complicated in Europe. But, you know, history might be partly instructive in this sense, but but not not entirely. You know, we shouldn't we shouldn't fear French Revolution because, you know, back then, there were no other source you know, there were no other seats of power that had any influence in the in the same way that they do today. For example, Russia and China are, in in a way, leading the way towards a a different model of governance, and that will have a significant influence in Europe. And these are not fake models in the sense that, you know, Soviet communist revolution was a fake system in this sense because it wasn't it didn't emerge bottom up from the Russian people seeking seeking to over overhaul their system.
It was imported from the West, and it was a kind of a color revolution that happened. And then you had, basically, a government that you could in in some ways compare to Volodymyr Zelenskyy's, you know, Ukrainian government now. You know? Same thing. It was it was installed from outside.
I think this is you know, today we can we're we're not as vulnerable to these things, particularly since the the narrative is not under control. Well, I think that the beginning will be, let's say, the beginnings will take place through the democratic process, you know, because at some point point, Emmanuel Macron gets voted out, Friedrich Mertz gets voted out, maybe AFD takes takes power. We already are hearing sounds from European politicians that we have to reestablish good connections, good relations with Russia. You know, a year ago, you could not say that even. Well, yesterday we saw or today maybe even, we saw the Belgium prime minister say we need to fix our relations to Russia.
The Americans are dropping sanctions against Russia because of the, you know, market conditions. I think that the voices saying that we have to fix our relations with Russia, I think those voices are going to be growing stronger and stronger. Now we'll see how the other side will react. If they react with heavy handed repression, then we're moving in the direction of a civil war or a or a revolution. But if if they're forced to yield, then maybe we're going to have a gradual transition where, you know, Europe is going to be forced to open its markets to not just to Russian energy, but gradually towards towards the bricks, towards the multipolar integrations, Belt and Road, will need investment.
Investment might come from China and from the East. So I think that maybe there's a better chance in the near future that we are going to have a more orderly transition than we have had in the past. But it's basically, you know, it's very, very hard to answer these questions because even just us discussing this is already a step in the right direction, you know, in the sense that we are now aware that the current system is unsustainable, that very radical changes are coming our way, and that we have to be alert and engaged if we want positive outcomes out of this, and that we have to reject these simplistic narratives that tell us we're the good guys, those are the bad guys, and we have to fight, and we have to never give up, and we have to never let down the sanctions, and, you know, we just simply have to win. There's no compromise. I think that those arguments are going to be losing their hold.
So I I I genuinely hope for for good outcomes, but I I I think there's going to be a rough period for sure in the in the next probably one or two or three years.
Speaker 0: Well, you do see that the leadership of The United Kingdom, Germany, Scandinavian countries, the Baltic States, Poland, they seem not to care much about the you know, how the world is changing around them, that they will stick to their guns, that there can't be any compromise. So effectively, what what you described. But, yeah, this is a last question. I was wondering how you see this the possibility of this pulling in the Europeans into not just the Iran war, but possibly more direct with Russia. That is you know, you've probably seen in British media the reports that the Russians likely had Iran retaliate against British forces and provided intelligence in the Middle East region as as retaliation for the British attack on Bryansk.
I mean, I I don't have any difficulty in imagining this. I I think after four years of Britain taking the lead in in trying to, well, weaken Russia by essentially killing Russians, this is seems, yeah, very plausible. But but it does beg the question of whether or not this is something that can, again, pull the Europeans into the Middle East. Because if they get put pulled into the Middle East, I would assume that the Russians would step up any support for for Iran as well. So how how how do you see the possibility of this spreading?
Because this goes back to the main point. Everyone is affected by the Iran war. Usually, we we try to, you know, contain the conflict. You don't want it to regionalize or globalize, but this was always destined to, you know, become a global conflict. Because if Iran fears well, faces an existential threat, it will respond in a way which affects the global economy to to retaliate against Americans.
So now everyone has a stake in this. So it's just yeah. It's it's not the kind of war you wanna fight. So how do you see this possibility of the Europeans being pulled into this mess?
Speaker 1: I I think that the Russians will make this extremely difficult for the Europeans. You know, Russians have been very, very patient. They have been very, very careful not to make the mistake of providing any pretext for Europeans to evoke article five, to unite, to, you know, to pass the threshold of a collective war between Europe and the, you know, combined West. And I think that they know not to do this because that will be the fatal error for for the Russians. Not because they would lose that war, but be because it would it would become orders of magnitude more destructive.
Maybe Europeans cannot prevail over Russia, but, you know, together they can they can do a lot of damage, and so it will be it will be destructive for everybody. You know, the Germans made a mistake in World War one when at one point Kaiser Wilhelm no. Not Kaiser Wilhelm. I forget the name of the general, but, you know, they they declared unrestricted submarine warfare. And now they started sinking American ships that were they knew that they were shipping provisions for their for the Allied powers.
So in a way, from the military point of view, the Germans were justified to do that, but it created the pretext for Europeans to draw the Americans into the war. And I think that of all people, Russians have been very careful to study their history. So while militarily, they would be justified to strike at, let's say, British targets, like, I don't know, production facilities where storm shuttle missiles are being built. They will still not do this. But, you know, if I if I imagine that I was in a in in a Russian control and command hierarchy, I think if you wanted to retaliate, you could take advantage of the new situation in the Middle East.
And so, you know, Trump has been pressuring the French and the British to send their navies to the region and to try to keep the Hormuz gate open. And so if if French and French and British navy naval ships come within the range of Iranian missiles, well, then one one clever way of taking of retaliating would be to help the Iranians sink French and British naval ships. And I think that we might see that, you know, because that would that would do a few things. You know? It would destabilize French and British governments.
It would raise revolt against war. It would weaken them militarily. And in a in a sense, you know, I I I have to wonder if if that isn't part of Trump's agenda as well because he's already now saying, well, you know, if you don't wanna help us, well, I don't see what the point of NATO is. So we already see Trump taking advantage of this situation to say that, okay, you know, maybe we're done with NATO. Maybe NATO makes no sense.
So it's a it's the next you know, it's the next charge to blow up that alliance, which Trump has wanted to do for a long time, but he couldn't because he has too much opposition at home. But now with this new situation, he can can tell his audiences domestically, our European allies are completely useless. They left us completely alone to fight Iran. And so this this alliance is is there's no point maintaining it anymore. So I I I I think that the French and the British might get a black eye in the in the Arabian Sea or the Persian Gulf Persian Gulf or even, who knows, in the Eastern Mediterranean.
So that's that's going to be part of the unraveling of this whole situation. I think that NATO goes down the toilet, European Union probably with it, and in a in a very ugly, disruptive way, maybe the transition to the to the from from Western centric colonialist system in the world, we get a we get a multipolar architecture.
Speaker 0: Yeah. It could be. Well, all of this would have sounded like science fiction only a few four, five years ago, but now it seems it seems now it seems almost science fiction that the the status quo can't continue. So whatever happens after this, I don't think there's any going back to the way things were. So well, as always, thank you for taking the time.
And
Speaker 1: Thank you, Glenn. Always a pleasure to join you. Greetings to your audience, and until the next time.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: Iran War Could Escalate Into Nuclear War https://youtu.be/gmtJZvmOOes https://t.co/CNvb081Aqe
Video Transcript AI Summary
Professor Jeffrey Sachs discusses the Israel-Iran conflict, the risk of nuclear escalation, and a pathway to end the war. He clarifies that David Sacks is not related to him and was speaking as a Trump adviser, advocating that Trump declare victory and stop the conflict to avoid deeper disaster. Sachs outlines the economic and strategic dangers: the Strait of Hormuz could be closed, 400 million barrels released from reserves would cover only about twenty days of normal oil flow, and ongoing tit-for-tat strikes are destroying energy infrastructure, increasing global calamity risk.
Sachs recounts the five-step framework he and Sybil Ferris proposed to end the conflict, which he attributes to a need to recognize all security interests and to reduce aggression against Iran. He emphasizes that the US and Israel’s escalation harms Israel, the US, Iran, and regional stability. The five steps are:
1) Stop brazen, illegal armed aggression against Iran and recognize Iran’s security interests, noting that Iran does not want a nuclear weapon and had adhered to the 2015 Joint Comprehensive Plan of Action (JCPOA) until the US ripped it up in 2018. Iran reportedly wants negotiated oversight under UN scrutiny, and the plan’s collapse is linked to broader regional violence.
2) Acknowledge Iran’s desire not to develop nuclear weapons and acknowledge the JCPOA’s original framework, highlighting that Iran’s leadership signaled a preference for negotiation under international inspection, contrary to the perception that Tehran seeks to acquire a weapon.
3) Open the Strait of Hormuz through Gulf Cooperation Council states and Iran, with Gulf states reasserting sovereignty over military bases on their soil and pledging that bases will not be used for aggression against Iran. The Gulf states and Iran should negotiate bilaterally to ensure open trade routes, with regional solidarity in backing this approach.
4) Return Israel to its 06/04/1967 borders, creating a Palestinian state in Gaza, the West Bank, and East Jerusalem on internationally recognized borders. Sachs argues this addresses the root cause of continual conflict and links it to Netanyahu’s policy of denying a Palestinian state and pursuing broader regional control.
5) Establish a state of Palestine within the UN (as the 194th member) so that Hamas, Hezbollah, and other militant groups are disarmed, with disarmament supported by the regional consensus and the UN Security Council, contingent on Palestinian statehood.
Sachs asserts that what blocks peace is a coalition of Israeli supremacism, Israeli apartheid, and US support for aggressive actions. He references the Likud ideology and the historical “clean break” doctrine, noting that the US veto in the UN Security Council has repeatedly blocked recognition of a Palestinian state alongside Israel.
Speaker 0 adds a discussion on indivisible security versus hegemonic peace, arguing that true security must be indivisible and that hegemonic peace—enforcing dominance—has led to the current crises in both the Middle East and Ukraine. Sachs agrees that the delusion of overwhelming force undermines security and highlights parallel dynamics in Taiwan and Russia.
Finally, they address why Iran was underestimated: the U.S. has pursued a self-created reality approach, leading to improvisation and escalation without a coherent planning process. Sachs criticizes the American security establishment for improvisation, lack of careful analysis, and dependence on a hegemonic approach, suggesting that this mindset increases the risk of miscalculation and escalation. The conversation ends with acknowledging the late hour in Kuala Lumpur and expressing thanks.
Full Transcript
Speaker 0: Welcome back. We are joined by professor Jeffrey Sachs to discuss how the war in Iran may be spiraling out of control, but also how it's possible to put an end to it. So thank you very much for joining us again from Malaysia.
Speaker 1: Great to be with you, Glenn, as always.
Speaker 0: So Israel has what is often referred to as the Samson option. That is it's considered to be the last resort if Israel faces an existential threat, that is to use nuclear weapons against its enemies. So this is dangerous because The US and Israel seems to be exhausting their arsenals, including their interceptors, and the situation is not just deteriorating, but it's escalating very quickly. And I saw that Israeli newspaper, Harets, they reported that one of Trump's top advisers, David Sachs, warned that Israel could be destroyed, and under these conditions, Israel could use nuclear weapons against Iran. So I was wondering how you assess this, I guess, spiral of escalation and the possibility of this actually going, yeah, falling into a nuclear war.
Speaker 1: Yes. David Sachs, no relation to me, by the way, but a friend said a couple of days ago that Trump should declare victory and go home. And he was speaking essentially as a Trump adviser. He's the AI czar in the White House. So he advises on digital and AI policies.
And he's an influential, observer. He wasn't predicting a nuclear war, and he wasn't saying we're at, that juncture. But what he was saying is, if this just continues, it will be awful. And he was saying to his boss, Donald Trump, just go home. That was the message.
Just end this. This is a debacle, but call it a victory. Trump easily does that. But don't pursue this more. It's leading to worse and worse for the reasons that you said.
On the economic side, the risk of global calamity is absolutely growing day by day no matter how they try to talk calm to the markets, no matter how they talk about releasing emergency reserves from the strategic oil reserves. The fact of the matter is people can do arithmetic. The, Strait Of Hormuz is closed. The release of 400,000,000 barrels of oil, which was what was announced, is roughly twenty days of normal flow through the Strait Of Hormuz. Not very impressive actually for what looks like, could be a deadly long crisis and disaster, not only because The Straits are closed, but because production of oil and gas is shutting down and the physical facilities, one after another, are being destroyed right now in the tit for tat fire between The US and Iran.
And so this is why David Sacks advised his president whom he serves, just stop and go home. Since Trump lives in a delusional world to begin with, We can declare victory. He can say how wonderful it is. Look at how many people we murdered. Look at how many leaders we killed.
Look at how much infrastructure we destroyed. Remember last summer, he declared victory and went home. Of course, it was absurd then as well. But this is the option. What David Sacks was saying is that that is actually the best security for Israel as well.
That's not only the right thing to do from the point of view of the world economy, the right thing to do from the point of view of US security, but the thing that would keep Israel safest as well. In other words, this war is to nobody's advantage. It's a pure lose lose lose all around. Lose for Israel, lose for The United States, and lose for the rest of the world, and especially, of course, Iran and the Gulf countries. Yeah.
Speaker 0: No. I I spoken a bit with David Sachs on email. I've been trying to get him on the program. He seems like a good guy, so I Yeah. Yeah.
But, you know, but I was thinking as well that if if The US actually escalates one step further and go after Karg Island and Iran retaliates against the energy installations across the Gulf States, it doesn't really matter anymore if the Strait Of Hormuz is open, if everything is in flames and destroyed. And, of course, it's gonna take much more than twenty days, and I also thought the same by opening the strategic reserves. It doesn't communicate a lot of confidence either when one is willing to deplete it to such an extent. But you, with your colleague, you wrote that is you and civil affairs, you wrote about the five steps that which Trump could take to put an end to this war, essentially, ramp, which David Sacks advocated for. So if Trump reads it or calls you or listen to this podcast, what are these five steps you would advise?
Speaker 1: Well, one is he's not gonna call. Maybe David Sacks will read it.
Speaker 0: If I if I could interject very quickly. Yes. You at at one point, before he got elected now, he actually tweeted out a video of you when you were talking about The Middle East. So he you know, I'm I'm glad he listens to Reason, but sorry for
Speaker 1: Yes. And that was a video that warned about Netanyahu. I said that is one dark person. I used a little bit less temperate language. But I said that this is one big problem.
And Trump tweeted that out at the time, a mystery. But what I said turned out to be absolutely right, which is that not only is Netanyahu mister genocide, but now he is putting the whole Middle East in flames. And the whole world is going to come very soon to understand Israel created our global economic crisis. It's not gonna be good for Israel's security, this kind of approach. So, yes, mister Trump did tweet that out.
Maybe he can listen to somebody to tell him, cut your losses, declare them a victory in your own way. That's your business, but don't drag us into disaster. This is the point. Now what I and, my colleague, Sybil Ferris, recommend is a a real end to the conflict in The Middle East because we say that there are interlocking parts. It probably won't happen.
We stress that in the article. We're not naive optimists. We're just saying that the way you make peace is to recognize everybody's security interests. That is also the point about Ukraine. Since Russia's security interests are never recognized, there's no peace.
I the same in The Middle East. If you want peace, which most normal people in the world, I'd say all normal people in the world do, then you recognize everybody's security interests. What are Iran's security interests? Not to be bombed repeatedly by Israel and The United States and not to have Netanyahu say, for thirty years, overthrow that government. It's okay.
It can't be more simple than that. The US and Israel need to stop their brazen, blatant, illegal, armed aggression against Iran. This is not even a preemptive attack because Iran wasn't attacking anybody. This is just brazen, naked aggression, and it's the essence of the violation of international law. So that was point number one.
Point number two, Trump says every day, I need to stop Iran from getting a nuclear weapon. I don't know whether this is fatuous, whether he's so ignorant he doesn't understand what he does, or whether it's a game. But the simple point is there was such an agreement, and you, mister Trump, ripped it up. Of course, that was the joint comprehensive plan of action negotiated in 2015 between Iran and the permanent five members of the UN Security Council, not just The United States, but Russia and China, Britain, France, and The US and Germany, and then ratified unanimously by the UN Security Council. And the essence of it was to underpin the supreme leader's religious command that Iran would not get a nuclear weapon because the supreme leader said this is against our faith.
And so Iran put itself under scrupulous inspection and honored the agreement. It was The US that ripped it up. Trump in 2018. I don't know if he remembers the man on the surface remembers nothing, learns nothing, knows nothing. But I don't really know whether he remembers that he ripped up the agreement that accomplished exactly what he said.
Maybe he can remember that the Iranians said again last year and this year, they don't want a nuclear weapon. They want to have a negotiated agreement. They want to be under UN scrutiny. Maybe, I doubt it, but maybe he could find an aid to let him know what the Omani mediator said the day before they killed all the leadership, which was we made great progress and we're going on to a next round of negotiations in Vienna because the Iranians don't want a nuclear weapon. And so this is the second point is, yes, it's not even hard, mister Trump.
It's never been the issue with Netanyahu. It's not about the nuclear weapons. It's about overthrowing the Iranian government. That has always been his dream. The third point is to open up the Strait Of Hormuz, and that is not by Trump pitifully, pathetically demanding NATO, do this.
China, do this. To get him out of the incredible mess that he and Netanyahu have created for the world. It's something for the Gulf Cooperation Council, that is the countries of the Arabian Peninsula, and Iran to work out bilaterally. And what is needed is for the Gulf countries to say that they are taking sovereignty of the military bases in their territory, And those bases will never be allowed to be used in aggression against Iran. So that's how to get the Strait Of Hormuz opened up again.
It's the Gulf countries on one side. It's Iran on the other. All Islamic nations, all part of the organization of Islamic cooperation. In fact, both The United Arab Emirates and Iran are part of the BRICS countries. It's not even hard for them to agree with each other.
The mistake that the Gulf countries made was to hand over their sovereignty to The United States as if that's some kind of protection for them. But what they should do now, seeing that there's no protection to having these bases, is to reassert sovereignty over the bases in their country and to agree with Iran. The strait will open and these bases will never be used against Iran. The fourth plank is the one that, is is the is the one that is so obvious, but the one that is actually the cause of all the wars of the last thirty years. And that is that Israel needs to return to its borders of the 06/04/1967 so that a state of Palestine is created in Gaza, the West Bank, and East Jerusalem on the internationally recognized borders.
And this is what Israel has gone to war repeatedly to block. And this is the basic point of all of these wars, including this one. Why has Netanyahu dreamt for forty years of overthrowing the Iranian regime? Why has Netanyahu been part of every war in The Middle East? Because his doctrine is that Israel will control all of Palestine and with some of his zealous zealot partners, even more part of Syria, part of Lebanon, part of who knows what.
Because according to The US ambassador, Mike Huckabee, who's another part of this disaster, Israel has the right to haul the land from the Nile to the Euphrates, says ambassador Huckabee. Okay. Well, the whole reason for all these wars from the Israeli point of view is they're they've said there will never be a state of Palestine. We'll kill them. We'll expel them.
We'll rule over them, in an apartheid state, but there will never be a state of Palestine. And any government in this region that backs the Palestinians, we will overthrow. That is the so called clean break doctrine of Netanyahu that has been in place for thirty years. So the fourth plank is a state of Palestine alongside as the state of Israel. And you know what?
Israel has no veto over that. The reason it doesn't happen is The US and The US alone. This was voted in the Security Council last year and the year before. The US blocks this. This is simple.
People should understand. Almost every country in the world says, of course, there should be the state of Palestine alongside the state of Israel. But The US uses its veto in the UN Security Council to block that. So that's the fourth plank. Enough of this.
This is the most basic point. And Israel got insanely greedy or insanely zealot zealous, depending on who exactly we're talking about, to say we get a 100% of the land. You know what we're talking about for this Palestine right now? It's 22% of what was British mandatory Palestine. And Israel says, no.
Not even 22% for what is half the population. Not even 22%. We demand everything. That's why we're a nonstop war. So that's the fourth point.
And the fifth point is that with a state of Palestine established and welcomed into the United Nations as the hundred ninety fourth member state, Hamas, Hezbollah, and any other militant groups will be disarmed. They will disarm. And they will disarm because all of the region will insist that they disarm, and so will the UN Security Council. And that will be, and they will disarm because the state of Palestine will be created. And this is how to make peace.
So what blocks this? What blocks this is a coalition of Israeli supremacism, of Israeli apartheid, of Israeli violence that goes back to Netanyahu and his party, the Likud, which in its founding charter in 1977 says that all the territory from the Jordan River to the Mediterranean Sea will be Israeli sovereignty. That's why all of these wars across the region have raged, because that basic fact is against every standard of international law and decency, and countries have supported the Palestinian cause, and therefore, Netanyahu and The United States have gone to war to overthrow those governments that have supported the Palestinian cause.
Speaker 0: Wait. I yeah. No. I like this five step, but also like here our focus on indivisible security, though, because I think this goes at the heart of of what is required as well. Because, you know, states, they compete for security, and weapons for one state is often you know, security for one is insecurity for another.
So you have two ways of producing security. Either you have indivisible security where we elevate our common security. In other words, you know, I don't point a gun at you to have more security for me. This is one indivisible security. Alternatively, one can pursue hegemonic peace.
In this, you don't care about indivisible security. You have one dominate to such an extent no one can even dream of challenging it. I think this is this Iran source of the Iran war, but it's also the Ukraine war. If if we just Exactly. Accept that the hegemonic era is over, just as a matter of fact, the distribution of power has shifted, then we would have to essentially restore the principle of indivisible security.
Otherwise, if one wants hegemonic peace again like the nineties, one has to restore it. That means defeat Russia, defeat Iran, defeat China, and, you know, I would read China Israel's clean break into this because, you know, when it merged in '96, this is part of the hegemonic era. That is abandon diplomacy and compromise instead go for everything because they were backed up with overwhelming military force. And
Speaker 1: That is exactly right. And it and this is the delusion that such overwhelming force exists. It's immoral. That's another matter, but it turns out to be disastrous to hold such delusions. The United States held those delusions in, Ukraine because we should remember the Ukraine war started with The United States attempt to assert its, hegemony over Ukraine.
Zbigniew Brzezinski spelled it out. It was the doctrine of, the neocons. We're going to expand NATO anywhere we want up to Russia's borders surrounding Russia in Georgia, in the South Caucasus, in Ukraine, around the Black Sea. That's our business. We are the superpower.
Well, Russia had different thoughts about that, but that's where that war came from because no one cared to listen to Russia's security concerns at all, and that's still true today. It it's a blank wall to talk to any European leader that Russia has legitimate security concerns. Okay? And now in The Middle East, it's exactly what you say. Netanyahu thought, well, I got the easy plan.
I don't have to compromise on anything. We win because we have The United States. And there are famous clips of Netanyahu explaining to, I don't even know who he's talking to, we own the Senate. We own the Congress. We we can get The United States to do what we want.
The truth is our crazy CIA and, and, military as well have delusions. So they see Israel's hegemony in The Middle East is just fine because it's part of America's global hegemony. What's happening right now in part is Trump thinks I'm gonna corner every export of oil, Venezuela. I'm gonna demand that Mexico behave itself. I'm gonna take over The Americas as he's explained.
I'm gonna take over The Middle East. I'm gonna choke off Russian oil through sanctions. I'm gonna decide who gets energy in this world. Well, is a madman thought. It leads to global disaster, but it's exactly that hegemonic idea.
I don't have to deal with anybody. We don't have to discuss with Iran. We just have to kill them. That's all. And and that's what they think they're doing right now.
And it not only is it murder, but it doesn't work to achieve your own security. Israel is at far graver risk than it's ever been because of this, and so is The United States at graver risk because our risk is nuclear war. And we keep pushing the world closer to nuclear war through these actions of not respecting, even in discussion, the security interests of the other side. It's the same in Taiwan. We say, we're gonna send arms as we like to Taiwan.
China says, excuse me, Taiwan is part of China. Do not send arms on your own. That for us is a red line. The United States filled with the idiocy that it is, the recklessness that it is, says, we don't have to listen to them. It's our business.
We are The United States Of America. And by the way, it's Trump, but it's also the CIA. It's also the congressional armed services committees. It's also the arms contractors. It's also Silicon Valley.
They all have this delusion of we don't have to take into account anyone else's concerns. And that's what's leading us to disaster.
Speaker 0: Just as a last question, how do you make sense of the way that Iran was underestimated? Because, you know, you worked with a lot of state leaders around the world to see how they work, their strategic thinking, their considerations. How could it be that, you know, we have the reports suggesting that Trump dismissed the likelihood of Iran closing the Strait Of Hormuz, which should have been the most predictable thing. The attacks on The US bases seems to be underestimated the weapons that Iran has at its disposal or the belief that killing Khamenei would collapse the government and make people, you know, pour into the streets with American flags and essentially, also now the assumption that the threats will make Iran capitulate. Even though they see this in an existential fight, it's you know, it I'm just wondering how they got it this wrong.
Is this just hubris, or is this a, you know, disconnect with the intelligence community? I I just it's very you know, the the this I don't haven't seen this in previous wars. There have always been mistakes, but this seems to be something very, very different.
Speaker 1: Well, remember the Iraq war, for example, how every single thing was wrong, every prediction about the cakewalk that we were gonna have and how democracy was going to come and so on. And there was an interesting interview in 2004. I think it was a Time Magazine reporter, if I remember correctly, and a White House official, maybe Karl Rove. I'm not absolutely sure. But he was asked about, you know, about the reality of the situation and the response from the White House is, excuse me, we create our own reality.
And this is part of the issue, which is when you are so powerful and arrogant, you just think we'll make it work. Trump didn't know what he was gonna do after the first hour, but he said, we'll make it work. It's complete improvisation. Of course, the real lessons are that these are disasters. It said that it took twenty years for The United States to go from the Taliban regime in Afghanistan to the Taliban regime in Afghanistan.
So that was a twenty year effort. And they credit Trump that it took nine days to go from hominy to hominy. So this is American efficiency. In other words, we're not accomplishing anything. We're going around in circles, killing a lot of people, spending a lot of money.
Maybe that's part of the point because they wanna spend a lot of money. That is profits for somebody and losses for all the rest of us. But I think the main point is we don't even have a process in the security state right now. The United States planning on anything has collapsed. We're just in improv mode.
We have a psychologically unstable president. We have a constitutional process that is over because Congress does not, use its constitutional, I mean, it rejects using its constitutional authority and responsibility. And I can tell you in every area that I know of, there's no thinking going on. There are no reports. There are no studies.
There's no careful scrutiny. There's no review. It's improvisation. It's flailing around. So frankly, none of this surprises me.
We don't even have minimal processes of thought. We have a president who just makes up things as they go along, and you end up with everything fake, and then desperation. Oh, NATO has to come to our aid. Even China, which was the target of much of this, has to come to our aid. Where are our friends?
Says Donald Trump. My god. A five year old would show more self awareness and responsibility, frankly.
Speaker 0: Yeah. And I'm thinking with all the religious adviser who comes comes to his office, he should have known that, you know, pride comes before the fall or that God opposes arrogance, but he has different religious advisers, it seems. So Anyways, it's late over there in Kuala Lumpur, so thank you very much for taking the time. I was very much appreciate it. You.
Speaker 1: We'll see you soon. Thanks.
@Glenn_Diesen - Glenn Diesen
Seyed M. Marandi: U.S. Attacked World's Largest Gas Field & Iran Declares Economic War https://youtu.be/AYLACkCWXRA https://t.co/c611Upab7U
Video Transcript AI Summary
Seyyed Mohamed Marandi, a professor at Tehran University and former adviser to Iran’s nuclear negotiations, joins Glenn to discuss the latest dramatic escalations in the war with Iran. Marandi describes a multi-front confrontation: an attack near the Buchāe Nuclear Power Plant, repeated assassinations of Iranian leaders, and a recent strike on South Pars, the world’s largest natural gas field. He argues Iran has leverage in the region through control of the Strait of Hormuz, capabilities in missiles and drones, and a navy that is largely subterranean and prepared to move into the Persian Gulf, Gulf of Oman, and Indian Ocean when needed. He contends the U.S. leadership miscalculated Iran’s response and that Trump’s threats to obliterate Iran did not materialize.
Marandi suggests a shifting operational dynamic: “the operational control has shifted from The United States to the Israeli regime,” with Israel selecting targets and the U.S. agreeing to cooperate. He posits that the Israeli regime may seek escalation to destroy oil and gas assets in the Persian Gulf, possibly with U.S. backing, while Iran signals it will escalate if Israel or U.S. targets strike Iranian infrastructure. He argues the United States is “stuck with the Strait Of Hormuz,” while Iran “holds all the cards.” He notes that escalations have thus far failed to achieve strategic objectives, and that the martyrdoms have mobilized Iranian society rather than demoralized it, citing massive demonstrations in Tehran and at funerals, including the funeral for Doctor Larijani and for naval officers killed in attacks on an Iranian vessel.
On retaliation and potential scenarios, Marandi says Iran could respond against strikes on its key facilities; if the U.S. or its allies act to “destroy Iranian key installations,” Iran will “hit back,” with implications for the global economy if oil and gas infrastructure are damaged. He highlights that Yemen could become a more active theater, capable of threatening the Red Sea and potentially disrupting the Bab al-Mandab passage, which would complicate oil routes if Hormuz were already shut. He notes strikes against Qatar and Saudi Arabia may have occurred and asserts Yemen might “enter the full war,” with the UAE and Saudi campaigns increasingly pushing the region toward broader conflict. He argues that while US troops in the region could attempt to “open up the Strait of Hormuz,” Iran could counter with missiles and drones from within its borders, potentially targeting ships or installations far from the coast, and that any limited success by the U.S. would be outweighed by broader disruption and losses to Western interests, including petrodollars and regional assets.
Marandi emphasizes the problem with a ceasefire as a solution: Iran’s foreign minister stated Iran does not want a ceasefire, but a political settlement, arguing ceasefires allow the enemy to regroup. He contends the settlement must be inclusive of Iran’s regional allies and address “the facts on the ground”—not just a paper agreement. Iran’s demands include regional security arrangements that ensure Iran’s security without being forced into another short-term ceasefire, reparations for damages, and structural changes to how Gulf security is arranged so Iran does not feel threatened by U.S. forces or by Israeli actions. He predicts a long, sustained conflict if the United States and its allies insist on injections of force, arguing the Iranian public now views Western actions as unacceptable and that Iran is prepared for a protracted contest.
Marandi also challenges Western framing of legitimacy and moral authority, criticizing those who label Iran or others as “evil” while failing to acknowledge their own governments’ actions. He contends that the West’s support for allied regimes in the Persian Gulf has long funded aggression and he asserts that these regimes will not be able to return to their prior influence or behavior. He ends by noting Iranians’ broad unity and willingness to defend the Islamic Republic, regardless of external pressure, and he suggests that the United States will eventually have to withdraw, allowing a new regional order to emerge.
Full Transcript
Speaker 0: Welcome back. We are joined today by Seyyed Mohamed Marandi, a professor at Tehran University and a former adviser to Iran's nuclear negotiation team to discuss this, new round of, very dramatic escalations occurring in the war against Iran. So thank you very much for coming back on.
Speaker 1: Thank you, Glenn. It's always a great pleasure being on your show.
Speaker 0: Well, as I as I said, there seems to be some very powerful round of escalation. First, we heard about this attack on the Buchare Nuclear Power Plant, that is it didn't hit the the nuclear reactor, but close enough to create some concern about what could happen in such an attack in terms of nuclear contamination. We've seen further assassinations of Iranian leaders and also, of course, the most recent only, yeah, coming breaking news now over the past two hours, it seems, was this attack on this, South Parrs in Tehran, which is the largest natural gas field in the world. I mean, I guess Iran has many ways of retaliating. How how are you assessing this situation, and where do you see this heading?
Speaker 1: Well, there are a number of things. One is that Iran has a very strong chokehold on Trump and the Trump regime, and that is, of course, the Strait Of Hormuz and the vulnerability of Saudi Arabia even as it exports portion of its oil, through the Red Sea, Iran can block that with missiles and drones. And it is doing that with regards to The Emirates and that portion of, oil that it exports from outside the Persian Gulf. So this is a very difficult situation for Trump. Excuse me.
And as he admitted, he didn't think or his administration didn't think I'm it's not clear to me where the fault exactly lies. They didn't think that Iran was going to attack US assets in the Persian Gulf region or shut the trade of hormones, which I find extraordinary as you and I and many others, I think, knew quite well that such a thing would happen. We've been discussing this together for maybe a couple of years. So when this happened, Trump, of course, made many bold threats. He saw that they weren't working, and he despite saying that Iran was obliterated again, he called for the entire world to help him open the Strait Of Hormuz, and everyone said no.
Obviously, Iran hasn't been obliterated. Iran's navy is almost the entire navy that is used for wartime is in tunnels, and they will, enter the Persian Gulf, the Gulf Of Oman, and the Indian Ocean when the time comes. There's speedboats with missiles, and Iran's, missile capabilities and drone capabilities are are endless. They haven't struck any of the underground bases. They've, failed to do anything about Iran's production capabilities.
So Trump is in a very difficult place. On the other hand, Israeli regime wants escalation. And, from what I'm hearing in Iran, the operational control has shifted from The United States to the Israeli regime. And so it is the is being the war. And they are the ones who chose the targets, and The United States agreed to cooperate with it to strike these targets.
So it may not make a huge difference, but it is significant. And, I think the Israeli regime probably and The United States maybe, want to escalate to see how far Iran will go. That's one possibility. I think they'll soon find out find out that Iran is willing to go to the very end, and it will fight to the finish. So this experiment is a foolish one.
Some believe that the Israeli regime wants the total destruction of oil and gas assets in the Persian Gulf region, and it's possible that Trump will go along with it. In any case, Iran is going to go, up the escalation ladder if that is what The US Israeli Coalition does. So I think, ultimately, the big issue is that The United States is stuck with the Strait Of Hormuz, and Iran really holds all the cards. Now the Israelis are assassinating people. They may continue to do so or have successes, but it's not going to change anything.
The Iranians have a very sophisticated constitution. They have a very sophisticated state structure. They have many experts and, people who are acquainted, well acquainted with matters of state. So if one person is martyred, someone else will replace him. It's a loss without a doubt.
Doctor. I I've never worked in government, but, I encouraged him to go to China. And, ultimately, when he when he went, he asked me to go with him. And when he came back, he asked me to take care of the China dossier for him. So for a couple of years until he left parliament, he was the speaker of parliament, of course, I was in charge of the dossier on his behalf.
As a volunteer, I didn't receive any salary for this. But, he was an excellent man, very smart, very dedicated, very, yeah, a very moral person. And, it's a major loss. And I'm I'm I was very fond of him. He was a very polite, highly educated, but everyone can be replaced with someone else.
And martyrdom itself boosts the morale of society. It awakens the society further as we saw today on the streets during his funeral and the funeral of the victims of The US attack on Iran's naval ship that was unarmed and was participating in a naval ceremony in India. So I don't see any success of major substance, because, obviously, I you can't say an assassination is not an a success, but it's not going to achieve the results that they're seeking. And in a way, it's actually going to have the reverse effect as we saw with the martyrdom of Ayatollah Khomeini. It it really mobilized the nation in a way which I have never seen, even during the nineteen eighties.
I have witnessed things in Tehran personally, and I have seen images and videos that I have never seen before anywhere. People on the streets, huge crowds. I was there on Friday. And then the US Israeli coalition bombed the people demonstrating on the streets and murder a person, and you don't even hear about it in the hear about it in the Western media. But no one ran away.
You may have seen I'm I'm sure you've seen images of it, and many of your viewers may have, I'm sure have. But I've it's on my Twitter account. So people are steadfast, and people have been mobilized. And The United States has they they had a plan to, carry out terror attacks last night and riots as they did a couple of months ago. It failed completely.
People are on the streets throughout Tehran and throughout the country, and they couldn't do anything. So on the whole, I think the war is going very well for Iran. It's painful. They murdered many people, school children. They bombed hospitals.
Today, they bombed key infrastructure. This is this is not something, none of this is makes us happy. It's painful. When they murdered doctor Lardigiani, they murdered all the neighbors of that in that apartment block. But The United States and the Israeli regime have failed so far.
Speaker 0: Yeah. Well, what is he being likely retaliation? Because I watched a a spokesperson recently, well, twenty minutes ago or so, given talk about how the engine infrastructure of those who participate in this will now, I think you said, burn to ashes. But, we'll see now some incoming strikes on, the capital of Saudi Arabia. But I was also curious, what is the likelihood that Yemen could actually be be activated in terms of closing down the Red Sea as a response to this escalation?
Because there's an important straighter, of course, that is the we have Babel Mandeb, if I'm not slaughtering that name. Right. And, you know, essentially, also narrow strait, which can be used to sever access to the Red Sea. This is quite, you know, a critical maritime corridor as well because with the Strait Of Hormuz disconnected, this is essentially the only access to Saudi Arabia then, all on this Western Coast. So how do you how do you did you see this as a possibility, or how or or what kind of retaliations?
Again, I know the government doesn't tell you what they're gonna do, but what kind of retaliations do you think are realistic here?
Speaker 1: Well, the government has said that they will strike, oil and gas facilities in The Emirates and Qatar and Saudi Arabia. I think by the time your viewers see this video, probably that retaliation will have taken place. We already hear that there was a strike on Qatar and on Saudi Arabia. Apparently, this the strikes on Saudi Arabia targeted jet fuel depots for The US Air Force because the Saudis are deeply involved in this, and, it is increasingly becoming clear that the Saudis are encouraging the Americans to carry out these strikes against Iran. In the case of Yemen, they have said that they will enter the full war, and, we'll have to see when that happens.
Obviously, it things depend on the escalation matter. Iraq in in Iraq, the resistance is striking at US assets, but, it could do much more. And the same issue with Iran. Iran can strike much harder. Iran is moving up the escalation ladder based on US, Israeli, or what I would call the Epstein coalition's actions.
So so so, for example, today when they struck Iran's infrastructure, the gas installations, that was something that Iran had to respond to. Iran doesn't want to create a global economic meltdown. This war was imposed on Iran. And as we saw Joe Kent resign and basically say what we've been saying all along that Iran was no threat and that it was the Israeli regime and the Zionist lobby that pushed The United States to war, a war that's not in US interest at all. So Iran is responding to aggression, and it has shut the Strait Of Hormuz to put pressure on The United States and its proxies and its allies.
But if the United States moves to to destroy Iranian key installations, then Iran will do the same. And then we will go definitely, we will move to crisis mode with regards to the global economy. Because later on, if there is an end in hostilities and Iran, Iran's demands demands are met, if there's no oil or gas because of the damage and or the destruction of the installations? And if there are no tankers, then what's the use? So the global economic crisis will be permanent, or at least it'll last for many years.
There'll be a global economic depression. So The United States began this aggression, the US regime, the Trump regime, the Israeli regime, and its proxies in the region are all input. They are all complicit. The Iranians shut the trade of Hormuz to put pressure. But if The United States starts attacking Iran in key installations, key in key infrastructure, or the Israeli regime, it doesn't make a difference to us.
Iran will respond in kind. And since these Arab regimes are host US bases and allow them to use their airspace and allow them to use their air bases and allow them to use their territory to fire missiles towards Iran, like HIMARS missiles, they have no reason to complain whatsoever.
Speaker 0: Well, we see, these US troops which have been sent to the region, and some speak of, putting boots on the ground. I'm not sure if that it's on Iranian soil, or is it intended to open up the Strait Of Hormuz. Or, you know, it's also not unrealistic, that it could be used to invade Yemen perhaps to make sure that the Strait, while keeping the Red Sea accessible, is kept open. How how are you assessing this? Do you think that The US could go to this extent to, I guess, go in with troops on the ground?
Speaker 1: Well, Iraq and Yemen are not small countries with small populations. And Yemen today is much more powerful than it was a year ago when The United States waged a war against it and lost after seven weeks. And by the way, let's remember that during the seven year long genocidal war carried out by the Saudis and Emiratis against Yemen with the support of the entire region, except for Iran. And Turkey and and Qatar also supported the genocide in Yemen until, the Saudis and the Emiratis turned again turned against Qatar, then the the the one in Qatar tilted away from them. But but the entire West and the region were all supporting the genocide in Yemen.
And after seven years, it failed. What brought the Saudis to accept the ceasefire? When Yemen targeted Saudi oil installations and oil exports. If the if Yemen could do that four years ago, I think it was, it could definitely do it. And then now we can can end the Saudi oil exports that go to the Red Sea, and it can also shut the Red Sea.
So Yemen has these cap capabilities, and I'm sure it's missile and drone capabilities are more of a threat today than they were back then to the US Navy. I don't see a a scenario where The United States can its troops, a few I don't know, 2,000, 3,000, 4,000 troops can make any real difference. And this and it's even more implausible with regards to Iran. But let's say, hypothetically, that the Americans somehow with this small group takes the Strait Of Hormuz. They've already underestimated Iran's missile and drone capabilities, obviously.
And they say they keep saying they've destroyed them all, and Iran keeps firing missiles and drones. But let's say that they take the Strait Of Hormuz and that the Iranian armed forces, which have been preparing for such a scenario for twenty five years, they fail to dislodge them. What difference is it going to make? Ships have to come into the Persian Gulf. Iran if anyone looks at the map, Iran owns the one half of the Persian Gulf.
They could strike missiles at ships from anywhere, And then missiles that Iran fires are not fired from the coast. They're fired hundreds of kilometers in inside Iran. So they can take the Strait Of Hormuz, and Iran can still destroy whatever it wants, whether it's ships or whether it's installations as we're seeing right now. Or if they want to go all the way to the North of the Persian Gulf and take Hark Island, it's a flat island, then Iranians can hammer them on that flat piece of land, and they'll take large casualties. But still, they're not going to open the Straight Of Hormuz for trade.
There won't be any oil. The only thing that will happen is that through escalation, you're going to have more tankers destroyed and more oil and gas installations destroyed. And so, ultimately, when this ends, and it will end at some point, but with failure on the by the, you know, US failure and Israeli failure, then there won't be the oil that they're seeking to bring back to the market. And every day that goes by, Glenn, you have what, fifteen, twenty million barrels a day that are not being sent to the market. So the the shortage is growing by the hour, And they can manipulate the market for a few days or a couple of weeks, but then it's going to hit them very hard.
And, of course, it's not just oil. It's gas. And, of course, it's not just gas. It's fertilizer and petrochemicals and its imports and exports because the these Arab family dictatorships are are huge consumer markets, and The United States and the Europeans have huge assets in this region. Trillions of dollars.
They've invested all sorts of money in these consumer societies. Losses to The United States through the rise in the price of energy, the shortage of energy or fertilizer, the the the destruction of their assets. A lot of the weapons that The US sells, they sell it to these countries. And they these countries don't even know how to use them because they don't even have competent military forces. ATAAT doesn't it's only, like, 350,000, 4,000 people.
How are they going to use their all those jets that they bought? Those jets jets are basically bribes. And, also, the kickbacks and the commissions by Western senators and their business partners and the royal family and all that. And the same is true with other countries. So the losses to The United States are multidimensional.
And, of course, the petrodollar takes a hit. So as things stand, I don't see The United States finding a way out. They're only digging themselves further in the hole, and the world is going to blame them. I mean, what Joe Kent says is recognized across the world. So people are going to blame blame Zionism and Trump for for the misery that they are beginning to impose on the international community.
Speaker 0: Yeah. The resignation letter of Joe Kent. It's been read tens of millions of times, apparently, online now. So it's yeah. It's quite extraordinary that, essentially, the the second in commander would be the one who resigns and put this out there.
So it does show that, the narrative of this war is, well, also not going well. But I think what you referred as panic is probably correct because, this began it looked like Trump genuinely thought this would be another Venezuela, quick in and out. So attack in by the end of the weekend before the stock markets open, then have your, you know, the your victory speech prepared. But but the government didn't fall, and the army didn't collapse. And so I I can there seems to be uncertainty in terms of what what other cards can be played.
And we'll see reports that Trump was quite upset that there are no military ways to open up the Strait Of Hormuz. But it does seem that, as one often does in this kind of situation, that is to, prepare a proxy to fight on your behalf, that this has been attempted. But the Gulf States appear to have resisted so far, at least, that is they don't want to go and get into a direct fight with Iran. Azerbaijan looked for a moment like it could take in the more direct role, but then they turned the Kurds, which were armed by the CIA, then also apparently got very concerned. I'm not sure if they were ever ready to go or if they just, you know, didn't wanna bet on the losing horse.
But but even the allies of The US, NATO, and the in East Asia, they didn't want to join in on this mission to, I'm not sure how they would do it, but the the the, yeah, the convoy to try to open up the Strait Of Moose. So but the last efforts we see now is some we read in the American media some pressure on Syria to enter Lebanon, that is to take you know, in this chaos to assist Israelis, that is, Jolani's government, to help, Israel to essentially get rid of Hezbollah in, Lebanon. How do you how how do you see this scenario or the likelihood of this being initiated and even succeeding them?
Speaker 1: Well, first, Glenn, I want to say something, and then there are a number of things we have to unpack here. One is that, you know, the people in the West, in the mainstream, they have always there are two types. One says, let's go and take them out, and the other says, they're bad, but this is not a good idea. In my opinion, they're all the same. And the reason why I say this is that I won't name names, but one of your guests who came on a few days ago, he was that sort of person.
He he he said something dishonest about Massa Amini. He said that, she was murdered. There's no evidence of that. She the footage is out. The medical report clearly indicates that she had a condition.
She was not beaten. There's no evidence of that. And and when you just like the tens of thousands of people claim, you know, that they keep saying that Iran killed tens of thousands of people, these are all lies. And those people who repeat those lies are making the case for war. And so they're complicit in and they're they have blood on their hands.
Every single one of them. And it's unforgivable. I I'm I'm glad that you invite all sorts of people. I'm just saying that I'm I'm trying to make this point because I want people to know that those in The United States in the mainstream, it's like Maduro. Those who say Maduro is a bad guy, but we no.
They're they have blood on their hands. Because instead of saying, no. We're the bad guys or bombing boats in The Caribbean. We're the bad guys for murdering a 100 people and then, kidnapping the president. They say, yes.
He is a bad guy. No. You're the bad guys. And so these people who make repeat these lies, I think, usually, they just want to be relevant in the mainstream or some of these leftists, European leftists. In the global South, they're not like that at all.
But in Europe, they're very hostile towards Iran. They have this old irrational hatred because the only revolutionary movement for some of these people can be them. And so, obviously, the Islamic revolution in Iran is medieval and backward and evil, and the Mullahs, you know, they're crazy, and they suppress women and, you know, all that nonsense that we we've been hearing for forty seven years. But, but and for the last eighteen, nineteen days, ever since the beginning of the war, we've seen millions of people on the streets. Every night, as we speak, Glenn, there are huge crowds in Tehran.
Huge crowds across the city. And you and we all saw the footage of men and women standing standing their ground under missiles. That's that's not a people that hate the regime. That's not a people who will you know, people willing to die under airstrikes but stand their ground. That's not a people who believe that Massah Amini was battered to death and that the remullah regime is killing women all the time and that they're slaughtering tens of thousands of people.
Iranians know better what goes on in their country than these people who live in Europe and The United States and basically, buy about Iran because it serves their interest. But in any case, the point I'm making is that for me, those who say Maduro is evil, the Cuban regime is evil, but let's not do this. No. They are evil, and so are their governments. And if they are if they have intellectual honesty, they'll point the finger at their own on it, their own government and leave Cuba alone, leave Venezuela alone, leave Hezbollah alone, leave Iran alone.
It's none of their business. But to get back to the question, I I think that what we are what we are witnessing is a a completely new situation. And that is that for the first time the empire has failed, not only at regime change, it's failed to even take a country because we've always always been told that The United States lost the war in, in Iraq. It lost the war in Afghanistan. It lost the war in Vietnam.
But in the case of Iran, it hasn't even been able to take the occupied parts of the country. After weeks of battle and with a huge coalition, it collective West is behind it. All these regional regimes are with them, Azerbaijan, the Persian Gulf, Turkey under Erdogan, the transports oil. AWACS jets fly over Turkish airspace to airspace to gather intelligence against Iran, and so US bases work as well. They're all working against Iran, but they failed.
Why? Because the Iranian people support the Islamic Republic Of Iran today, yesterday, two weeks ago, and two months ago. Today, they're more mobilized. They're more united. And a and a lot of those that minority that was rioting, that small minority that was on the streets rioting that the West glorifies and and exaggerates and lies about, a lot of them have changed their positions because they now see that the West, said we are democratic and we support you know, they basically, they're kids.
They were kids. Like, first year university students, second year university students, like, you know, eleventh grade, twelfth grade high school kids. But they see that they're bombing schools. They're bombing hospitals, and their whole worldview has been shattered. So now they're I'm not saying all of them, but many of them them are on the streets like everyone else, and I have my own anecdotal, examples of that.
So that's why the Republic Of Azerbaijan would never dare attack Iran. I mean, look at the images of people on the streets in Tabriz, in Ardabil, in Urumiyyah, in Maran, another Azeri city. They would take over the Republic Of Azerbaijan in a week. They'd overthrow the regime, the Iranians. And the same is true with these Kurdish terrorist groups because the Iranians have warned the, semi autonomous government in Arabian, the Kurdish government in Northern Iraq, that if you allow these people, these terrorists to attack us on behalf of their masters, the CIA and Mossad, because that's what these these groups are.
They're they're owned by the, you know, by Western and Israeli intelligence agencies. Then we will destroy you. And we will and so will the Iraqi resistance. And then there will no longer be a autumn autonomous Kurdish government in Northern Iraq. So they stood back and stood down.
Jolani, if he tries to do anything against Lebanon first of all, he's shown his true colors. Everyone now who is have who unless they are, like, utterly sectarian, you know, ignorant sectarian people who just, you know, Wahhabi, akfiris, you know, salafif types that close their eyes to truth and just support these terrorists, you know, even though they know that the Americans were controlling them and the Israelis were allied to them. Everyone knows who Joe Lonnie is now. It's you know, he's a he's a US asset. If he attacks Lebanon, the Iraqi resistance will move into Syria, and Iran will destroy him and his commanders with drones and missiles.
We don't need our long range drones to do drones and missiles that we strike Israel with. We can do it with shorter range missiles and drones, different classes of missiles and drones, just like what we're doing in the Persian Gulf. So I don't think he's going to do that either. So, ultimately, The United States has failed to create to use terrorists inside Iran. Maybe try something in the days and weeks ahead, but it will fail.
Even if one person is killed, they'll make a big deal about it and, you know, and the western media will say all sorts of nonsense, Fox News and all that, but, they'll fail. And the same is true in all these other arenas that we've been talking. So The United States is stuck. So all they can do is assassinate. That creates more determination.
That makes our the Iranian leaders more, angry and adamant that we must defeat the enemy because these are friends. These are national figures. They have you know, people will seek revenge when they kill more people. I I just posted a woman who was, a missile struck nearby, and, then she was in panic, and then another missile hit her. I said there you know, people see these these clips in Iran, and the rage grows.
The anger grows. The I was the day I was at the funeral, the huge crowd for doctor Larijani and the naval officers. And I'm not a government official. I'm not in I'm just at the University of town, but people see me on online and or rarely, I'm on Iranian television, and they come up to me and say, you know, the the leaders should protect themselves more. They, you know, they they say they're too courageous.
You saw on Friday on the National Hoods Day, Jerusalem Day, the rally for supporting Palestine. The doctor was on the streets, and the the president was on the streets. The head of the judiciary the head the head of the judiciary was doing an interview when the missile hit. He didn't even blink. The foreign minister was there and so on.
And, of course, The US secretary of war called them all rats hiding in their holes, but people saw the reality. They know who the real cowards are. So, you know, so people were telling me, you know, they thought I have access or, you know, tell them to not to come out on the streets. Tell them not to come to the funeral. They were demanding that the leaders not attend the funeral.
Literally. Glenn, literally hundreds of people said this in one way or another. I was just walking through the crowds, people were stopping me the whole time. So this is a nation that's united. So they can assassinate.
It's not going to help. It's going to make things worse for them. They can bomb Iranian infrastructure, critical infrastructure. Iran is going to hit back, and that's only going to complicate matters further. Because as I said, if The United States meets Iran's demands, then the Strait Of Hormuz can be opened.
And after a period of time, the flow of oil and gas and everything else, petrochemicals can can go back to normal. But if they just if they ask if these the key infrastructure in Iran is destroyed, then it's going to be destroyed in those regimes where they have their bases. So the problem is going to become very long term. So that's not a solution either. So Trump is stuck in a hole, and Netanyahu put him there.
The Zionist put him there. The Zionist and Netanyahu and the Epstein class has created a global crisis.
Speaker 0: Well, it's interesting what you said about the, yeah, the political left and all this. You see this I, yeah, made that point earlier as well, not here, but that, after the Cold War especially, you saw these new conservatives on the right who aspire for, you know, security through hegemony or empire. They more or less, you know, engaged in this unholy alliance with the political left as well under the idea that this is a liberal hegemony by dominating will elevate the role of democracy and human rights around the world. So so all conflicts are now just framed as humanitarian, and then suddenly you see the the former yeah. The the the people advocating for peace on the left.
They're now essentially, well, peace is by well, we we can't support those authoritarians. So this is why Maduro, you know, the Russians, Iran, they're all all regimes, you know, they legitimized. And they they can never be supported, but as you suggested, once they are denounced, then they already made essentially indirectly the the the case for war. And even, you know, even when you sell to people on the left that, well, they they it's about liberating women, then suddenly, okay. Well, then they are on board with war.
You also see this with the Ukraine war. On the political left, the people who traditionally are first ones to take up the cause for peace, they they're not talking about the diplomacy. They're not talking about dialogue, mutual understanding, or peace. They're talking about how do we send more weapons, how do we close down, you know, media of the opponent. And, yeah, this is essentially what they're talking about.
So it's the whole concept of peace has been perverted to a large extent. I I like Jeffrey Sachs for this reason. He went to speak at the UN Security Council, and he opened up this was before the attack on, Venezuela. And he opened up as he said, just saying, I'm not here to discuss any the character of the Venezuelan government. That's beside the point.
We're talking about what The US is planning to do and just to put that whole thing aside. Because once you get, you know, either do you support this and we condemn you or you also condemn and then then make the point for war, he just swept up a this whole thing aside. But, yeah, I wanted to ask about something you said. You mentioned that if The US meet the demands of Iran and I did see the Iranian foreign minister, though. He said that Iran does not want a ceasefire.
It wants a political settlement, a peace settlement. So peace is not the same as a ceasefire. And, again, we heard similar, arguments coming actually from Russia as well. That is a ceasefire's temporary pause that allows the enemy to regroup, replenish, and, you know, get get back to the the fighting, while peace settlement would then address the underlying causes and actually find a solution. So what what is the solution?
What what are the demands that America should must meet? I mean, what is the opening position of Iran versus you know, where do you see impossible compromises coming in?
Speaker 1: Well, first, I just wanted to because I was I was thinking, I was really laughing inside. Whenever these people, like, they talk about Iran or Venezuela, like, they say, oh, do you support the war? And first, they have to for five minutes, they have to bad mouth Iran and say, well, Iran is really evil. They're really bad people. They're horrible.
I don't condone anything. It's like, it's a disturbed, but I I don't support war But and Maduro. So and, you know, I and when I when I look in the Iran neighborhood and then when I look at the West I mean, this Iran that's opposing genocide in the West that support the tribe, you know, and the regional countries, they're all US proxies. But, anyway, I think that, first of all, this is not just going to be about Iran. Iran has said that its allies in the region, they have to be included in any, cessation of hostilities.
Why do we oppose this ceasefire? Just as you said, we've done this before. We had a ceasefire, and they regrouped and attacked us again. We were negotiating. They attacked us.
We negotiated again. They attacked us again. And doing a deal with Americans, especially under Trump, is just meaningless. Nothing that he says means anything. A piece of paper that he signs is just a worthless piece of paper.
So the facts on the ground have to change. So first of all, it has to include Iran's allies across the region. Second of all, the facts on the ground have to change. What do I mean by that? It means that the Persian Gulf must be structured.
The security of the Persian Gulf must be must be structured in a way in which Iran no longer feels threatened by The United States. These countries cannot be used as platforms to attack Iran. And if the Israeli regime attacks Iran, there has to be consequences. So there has to be change on the ground. Pieces of paper are worthless.
And there's the issue of reparations. Iran will demand reparations, and the the security of the Persian Gulf in future will be will be different from the past. These Arab family dictatorships, if they last, they will have to deal with a new reality, and they will be severely weakened. They're all they are already severely weakened. The will never again be the Amrits that it was three weeks ago.
That's gone. All those billionaires, they're not coming back, which is a good thing. I mean, if if in the sane world, there should be no billionaires, but, you know, anyway but, they won't be coming back. And the same is true with the rest of these tiny regimes in the region. So, you know, Iran is here to stay.
And, after almost three weeks, we've seen that the Americans are incapable of defeating Iran. And, ultimately, The United States is going to have to Iran is prepared for a very, very long war. Glenn, as we speak, Iran is producing more missiles. I don't know if it's producing more drones because it doesn't even have space for drones. All of its underground bases are full.
They are more than prepared to go on for years. This is not a war that The United States can win. We fought Saddam Hussein for eight years. And people in Iran are not prepared. Before the war, everyone was concerned What will happen?
Now that there's war, people say, let's do it. Let's finish it. Let's defeat them. We have to get this. Everyone understands that a ceasefire is of no use.
People on the streets know this because this wasn't twenty years ago. This was nine months ago. And both were unprovoked. In other words, people in Iran, just like people across the world, recognize that The United States is I mean, unless someone watches Western mainstream media, especially Fox News and what are the other crazy ones, you know, Usemax or whatever. I don't know.
I just did an interview with one. Don't remember saying it was they were crazy. But, anyway, unless someone watches that sort of nonsense, everyone knows that negotiating with Trump is is useless. So the facts on the ground will have to change so that Iran feels and its allies feel secure in the years ahead. The the Israeli regime can't just bomb Lebanon whenever it wants despite having a ceasefire.
Can't just kill people, Gazans, Palestinians in Gaza every day just because it feels like it. So the facts on the ground, it has to be inclusive, and there have to be reparations. There may be other issues, and, of course, they they can negotiate these issues in different ways. But, ultimately, Iran is not going to accept a situation where it can be attacked again in a few months.
Speaker 0: Yeah. Just I had a thought what you said about this, yeah, the the the the obligatory condemnation of the opponent. I've been in, yeah, many interviews and debates, and it's always almost always starts with the same question. That is, do you condemn Putin? Do you condemn Iran?
Do you condemn Hamas? Do you condemn Maduro? You know, this is the opening question. It's very clever, though, because if one hesitates, then then it's already said, well, you know, this is false dichotomy. Either you align yourself with the moral posturing of the person doing the interview or then you're with the other side.
And then if you fail to, you know, yeah, I I say yes to this opening question, which allows you through the gate as being, you know, legitimate and, you know, now we can listen to you. If you fail to do this, then you're, you know, morally suspect. You can't be yeah. You're already compromised. You're now, you know, Putinist or a total apologist or, you know, whatever words one would use.
It's again, it's it's it's clever because it forces either they are weeded out, so now we can't listen to you, or you have to buy into the premise. And if you buy into the premise, you know, if you condemn, then you say, essentially, which side is a goody, which is the baddie, which is legitimate, who is illegitimate. And, also, at times, it indicates when the conflict starts. So, you know, no one would ask start an interview asking me, do you condemn, you know, the past decades of Israeli, you know, treatment? To condemn US bombing.
You know? This is not how it's intended. It always goes one way, and it's it's manipulative, but it's very effective. It's you know, people have a hard time getting through that starting line. Just a lot final question, though.
I I also I forgot who. There was a spokesperson, I think, from the Iranian government who said there perhaps it was foreign minister. I get things mixed up now. Who said that there's no going back to the things way the way things were in terms of the Strait Of Our Moose. What is that how do you interpret this?
Or I'm not sure if you heard it, but will will the waterways, the accessibility be conditioned in the future? How how what do you think was meant by this? Sorry. A lot of speculation. Right.
You think?
Speaker 1: No. No. No. I think I think you're right. I think the foreign minister said that.
I think others said it as well. I don't think it was just him, but I do vaguely recall him saying it in an interview recently. But, I mean, he's been doing a lot of interviews, and he's been doing a pretty good job. Actually, some people say to me that he he does a smirk, and apparently, I'm known by some for my smirk, and they say he does it better than I. So I'm I should be jealous.
But he so he's he's I haven't watched many of his interviews. I've saw seen bits and pieces because so many things are happening, and the Internet connection isn't great. But I think I from what I'm hearing and some of the bits and pieces that I've seen, he's been doing a really, really good job. I think what they mean is that, there will be some sort of control by Iran, and there will probably be a financial element to it. Whether that would be a part of the compensation mechanism or whether it'll be something else, I don't know.
But, again, we're not going to go back to where we were before. These regimes in the Persian Gulf, they've harmed us for a very long time. When Saddam Hussein invaded Iran under western with western pressure, I mean, they encouraged him. I mean, the Soviets also helped him, but the West pushed him for war. When he invaded, these same regimes in the Persian Gulf, they funded the war.
They gave him hundreds of billions of dollars then. I mean, I think maybe 200, 250, $300,000,000,000, which in today's well, if you you know, in today's dollars, it would be much more. And he was able to develop I mean, he was able to purchase chemical weapons from the Germans, and the the the Germans helped him build a huge, chemical weapons capability, slaughtering so many Iranians. I mean, one of those really hypocritical regimes are the is the German regime that's never apologized, never paid compensation. Once a an MP a number of m German MPs came to Iran, and they visited our university.
And someone asked me to be in the session. And there was this woman from the Green Party, and she was bad mouthing Iran. And I said, excuse me. I'm a chemical weapons victim. Will you apologize for what you've done to me?
And she couldn't say anything. And, actually, afterwards, two or three of the other MPs, they came to me and said she's a you know, these these people are crazy. The Green Party. I I thought the green back then, I thought the Green Party would because I didn't know European politics that well. This was, like, this was 2009.
So, anyway, yeah, it was 2009 when they came back to allegation. So in any case, those chemical weapons, they were, partial you know, part of a lot of the funding came from these countries. So they supported Saddam Hussein. We forgave them after the war and normalize. And, you know, then they began building bases.
Those bases were used in the previous war against us to help the Israelis defend themselves and the Americans just defend the Israeli regime, the radar systems, and, and for the to help with their offensive, actions against Iran. And, of course, we The US attack on Iran. So we have many grievances. But after this war, Iran is not going to allow these regimes, these family dictatorships, if they remain in power, to behave like they did before. That's just not that's just not acceptable.
Won't happen. And, of course, Iran holds the cards. And, ultimately, The United States will have to leave. This cannot go on forever. And when they do leave, these regimes will have to recognize that they have to behave like ordinary countries, not with the arrogance that they did before just because they had gas and oil wealth, and they were dictatorships, and they had American bases there.
They could behave in any, you know, way that they wanted. That's that's no longer going to be acceptable.
Speaker 0: I know things aren't easy over there in Toronto, so I I do appreciate that you, yeah, took all this time, to speak with me. And, yeah, thank you, and, take care, and stay safe.
Speaker 1: Thank you very much, Glenn. I I do what I have to do, and I'm grateful for all the great work that you do.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: Iran is the Graveyard of American Hegemony https://youtu.be/OcqIEJEk4MY https://t.co/iiQYDh2K9F
@Glenn_Diesen - Glenn Diesen
Michael Hudson: World Will Not Be the Same After the Iran War https://youtu.be/htokR5lYvv0 https://t.co/bOBMMjOTT5
Video Transcript AI Summary
Professor Michael Hudson and Glenn discuss how the war against Iran is reshaping the global economy and international order.
Hudson contends this is World War III in the sense that energy, fertilizer, and oil exports are fundamental to the world economy, and the conflict targets these choke points. He notes a recent US stock market rally of about a thousand points, driven by hopes of reversibility, while insisting the war’s effects extend far beyond Iran and are irreversible. He asserts the US is waging a war to maintain control over the world oil economy by preventing any sovereignty that could export oil outside US influence. This includes sanctions on Iran and Russia, and earlier sanctions on Venezuela, with the aim of ensuring oil proceeds flow to US-controlled channels. He argues the US sought to control the Strait of Hormuz to decide who gets Gulf oil, but Trump’s advisers warned that attempting to seize Hormuz would leave troops as “sitting ducks,” yet the underlying goal remains “grab the oil.” He claims Iran’s objective is to guarantee security by removing all US bases in the Middle East and by relief of sanctions imposed by US allies; without that, Iran claims the world will not return to the previous order.
Hudson emphasizes that the war disrupts key supply chains: oil, fertilizer, helium, sulfur, and related inputs. Although Iran allows oil exports via Hormuz for payments, it does not permit fertilizer exports, impacting the upcoming planting season. He forecasts the world entering the most serious depression since the 1930s due to these interruptions and the consequent financial ripples.
On the financial system, Hudson explains that since the 2008 crisis, the US pursued zero or near-zero interest rates to rescue banks, enabling asset price inflation in real estate, stocks, and bonds. He describes a shift where non-bank lenders and private equity could borrow cheaply and buy up assets, creating a debt-led, Ponzi-like dynamic that depended on continued access to credit and rising asset prices. As long as rates stayed low, this system could keep rolling; now, with 10-year treasuries around 4.5 percent and 30-year mortgages above 5 percent, the cost of rolling over debt intensifies. The war-induced disruptions to energy and inputs threaten defaults and a feedback loop of debt collapse, catalyzing a depression.
Regarding the broader international system, Hudson argues Europe is following sanctions on Russia at great economic cost, with Germany already experiencing GDP declines after energy sanctions in 2022. Europe’s shift away from Russian energy, the Ukraine-Hungary/gas dynamics, and the broader energy choke points threaten the cohesion of NATO and the EU. He predicts Europe may suffer consumer price increases and living standard cuts as deficits expand to subsidize heating and energy, leading to a reordering of alliances and economic blocs. He characterizes Asia–Russia–China as increasingly separate from Western systems, with a shift toward Asia as the growth center and Europe/US lagging. He asserts the West’s operational vocabulary frames the conflict as a clash of civilizations, but the underlying dynamic is a clash of classes, where the US seeks to subordinate others through energy and trade controls.
Hudson argues the current trajectory signals not simply a decline but an abrupt systemic change: the end of the postwar Western-led order. He calls for rethinking international institutions and law, including a new framework to replace a discredited United Nations and to organize economic and military arrangements that protect sovereignty outside US-dominated systems. He highlights the need for energy and food self-sufficiency to resist weaponized foreign trade and to avoid being drawn into US-imposed economic chaos.
In closing, Hudson points to Britain’s looming non-viability under deindustrialization and limited energy resources, illustrating how advanced economies may struggle to adapt to a new multipolar order.
Full Transcript
Speaker 0: Welcome back. Today, we are joined by professor Michael Hudson to discuss how the war against Iran is impacting the global economy. So thank you as always for coming back on the program.
Speaker 1: Well, I'm glad to be back, Glenn.
Speaker 0: So we often discuss the deteriorating state of The US economy, as well as the global economy, which is now based obviously on the foundation which is no longer sustainable. The US knows this is the case. Some countries try to adjust to new realities. Others are trying to delay. Others are trying to reverse what has happened.
But this war against Iran, it really seems to intensify all these dangerous symptoms which we speak of, and it seems like the world can't really go back to the way it was after this war. I was wondering how do you assess it, because this war impacts the global economy on so many levels. Energy, obviously, fertilizers are key, but how do
Speaker 1: you see the ramifications of this war? Well, we've discussed before how I think this is World War three precisely because energy, fertilizer, and the other exports of, oil producing countries are so important for the entire world. That makes it a war that has worldwide implications. And despite the fact that in the last hour or two, the stock market in The US has gone up a thousand points because they imagine that somehow, what has happened is all reversible and that, when Donald Trump says, well, Iran is talking about making an agreement and there are signs on the Internet that Iran says, well, all we're trying to do is protect ourselves, that somehow the world will go back to the way it was, not only before the attack, but really back to the nineteenth century, maybe the eighteenth century. The this isn't simply a war in Iran.
This is a war that, as we've discussed, it's a war by The United States to maintain a choke point on the entire world economy by controlling oil because everybody needs it. And, the reason it went to war with Iran is the same reason why last month it went to war with Venezuela and kidnapped the president and, took Venezuelan oil under US control so The United States can can decide who will get this oil from Venezuela and who will get the money from the oil exports, The United States. Now the The United States, as I think we've discussed, realizes that in order to, base its foreign policy on the ability to cut off oil shipments to the world, it has to, number one, prevent any other country's sovereignty from being able to export oil that's not under US control. And so so far, The United States has imposed sanctions, first on Iran that remain in place. Secondly in Venezuela, which are now relieved, and finally on Russia.
So that the only place where America's allies that agree to impose the sanctions on Russia can get their oil is from places that The United States controls. That's why the United States was so insistent in trying to con last week, and trying to control the Strait Of Hormuz through which much of the Saudi and OPEC oil is exported apart from the Saudi pipeline. Well, Donald Trump apparently is listened to his military advisers that said, look, our any troops that we try to grab the Strait Of Hormuz Islands to control it are going to be sitting ducks. And this is not a defensible situation. And any rate, Donald, don't you wanna just grab the oil?
And Donald Trump has said, despite that, yes, the real aim that we're in Iran and have waged the war has nothing to do with Iran wanting to get an atom bomb because it hasn't been trying to get an atom bomb. It has really nothing to do with Iran's foreign policy. It just wants American oil just like it wanted to grab Iraq's oil and has grabbed Iraq's oil. So all of this this fight is an attempt to use oil and control of its exports in the same way that Donald Trump has used his tariff policy of saying, we will create chaos in your economies if you don't agree to follow the what US diplomats ask you to do in the form of what Trump called gives back givebacks for his access to The US economy by reducing tariffs to a a less extreme level. Well, he's saying the same thing, basically now.
He wants to, grab Iraq Iran's oil. And with that, he will complete the long attempt by The United States stretching, for OPEC since, I guess, 2003, to take control all of the OPEC, the Arab monarchy's oil. And Iran was the last country of all of these, Iraq, Syria, Libya, the whole range of oil exporters. So now The United States alone, is seeking control of of the the Near Eastern oil. Well, that's supposed to give it a stranglehold.
The problem is that Iran is not going to allow itself to be conquered even though it said that, it's, willing to permit, oil exports again and to stop locking them, if other countries will supply its guarantee its security. What it means by security is number one, removal permanently of all US military bases in, The Middle East. And, of course, the largest military base is Israel, which, of course, The United States is not, going to do. Iran will also insist for its security that all of the sanctions that have been imposed by America's allies, by Europe, Japan, Korea, and others be relieved. Until these sanctions removed, until The United States removes its its presence, and in effect surrenders and admits that it's lost the war with Iran, the world is not going to go back to the way it was.
And even if somehow miraculously The United States would say, alright, we've given up our foreign policy. We are no longer going to be The United States as an imperial power. We're going to be just another country following the rules of law that the United Nations lay down. You know, we're, we're going to go back, to a normal world Even if it were to do this obviously impossible policy, the fact that the the oil has been interrupted and the helium supplies that were coming out of the Middle East have been blown up. There are no cutters.
Helium is already cut. And so the foreign companies that were obtaining helium before, certainly here in The United States and throughout the world, have all put cutbacks on helium. There are cutbacks on fertilizers. And although Iran is permitting oil exports through the Strait Of Hormuz in payment for $2,000,000 per ship, it's not permitting fertilizer exports. And so you're having the world going into the planting season.
So no matter what happens, the world is going to be in the most serious, depression since the great depression of the nineteen thirties. No matter what happens, there is no way of avoiding this depression. And that's what's so crazy about the stock market and its recovery. It's as if somehow they can't come to terms with the fact that the actions taken by The United States and Israel are irreversible. Who's going to pay for the reparations to Iran for all of the damage done to make them whole?
All of this is going to take probably at least the balance of this year to work out. So the whole world to answer your question, The US economy and the rest of the world are going into a very serious depression.
Speaker 0: Yeah. This the the energy aspect of this whole thing. I mean, it's you see some clear consistency coming from The United States over the past decades, but Trump has been often more, well, call it blatant or honest as opposed to his predecessors, where he very openly said that in Syria, we want their oil. We want their energy. In Venezuela, we want their oil.
And, of course, the latest now with Iran, we want their oil. It's well, you know that other leaders the other presidents are thinking the same, but it's interesting that it's being said in such an open way. How do you see, though, the this impacting the financial system? Like, to what extent would be energy trade linked to The US financial system? Because, again, with such a financialized economy, if something goes wrong there, something, you know, could unravel in The United States, it seems.
Speaker 1: Well, first, regarding your first comment about the fact that Trump's policy is simply following that of, the all the preceding American presidents. There has been no change at all, and you'll notice not a single former president, not Biden or, Obama or either of the George Bushes, not a single president has criticized Donald Trump and what he's doing. And in fact, the German leaders are all applauding Trump even though they're not letting, America use the airspace over Spain and, Italy now blocking the American airspace in Sicily and France, they're still maintaining the the, sanctions. And nobody in the world, no country has come out and accused Trump of being a war criminal, violating the international laws of war. Nobody's it's as if they are all hesitancy even to imagine a world that is not run by The United States in the way it is.
And such was the confidence in The US economy, to answer your question, that, ever since the crash the junk mortgage crash of two thousand eight, the financial sector has been very overburdened. And the solution by president Obama was to say, well, there's only one way to get the banks out of the negative equity that they've fallen into, and that's to pursue the zero interest rate policy. And with low interest rates, that made it profitable for the banks to lend to real estate, to lend to buyers of stocks and bonds, and that pulled the value of their the price of their collateral, their backing their real estate mortgages and their corporate loans to pull not only to pull The United States, financial system out of the negative equity that it was in, but to achieve the aims of, the Obama administration and the Wall Street interests behind him to, greatly provide a bonanza for the financial sector. Since 2008, American wage levels have been absolutely flat. 40% of Americans today don't have any savings at all.
All of the growth in in wealth has been financialized growth in wealth, real estate, stocks, and bonds. And this is the result of the low interest rate zero interest rate policy making it profitable for private capital. All of a sudden, non bank lenders have big firms, Blackstone and others, have borrowed from the banks at a very low interest, like 1%, and they bought all sorts of companies to do, what required a new word to be introduced into the English language, ensifification, to buy the companies and, just sort of bleed them for whatever they could and to maximize the financial returns by debt leveraging and, to buy them on credit on so little credit with 1% or even 2% interest rates that they could get everything that they could make over this minimal low interest rates. And so you have this enormous financial inverted pyramid based built on this bank credit. And the Federal Reserve system, as treasury secretary Bessent has noticed, has extended enormous credit to the banks based on collateral that they've put up from all of this.
The Federal Reserve will create the credit for banks that will then make make the loans to private equity and then, put all of pledge all of this their collateral, with, the Federal Reserve. So it's been a asset price inflation. In the monetarists, Milton Friedman, monetary economists, make this false assumption that creating money is going to increase the price index, meaning consumer prices. That's not what banks lend money for. They lend money for assets to buy real estate stocks and bonds and what and and the value of a home or an office building or a a stock company is however much the bank will lend against it.
And the lower the interest rate is the more money that can the larger the loan can be capitalized on the basis of whatever the buyer or owner of this asset can squeeze out of it. So you you've had The US economy squeezed in terms of the labor force is squeezed, real economy, the industrial economy has been squeezed and to pull out all of these commitments to the financial sector. And, the this financial, asset price inflation has attracted pension fund money and private investment money, all of which is committed to, somehow making this financial debt pyramiding work. And the only way that you can make it work is to turn the economy into a Ponzi scheme, where you lend the debtors the money to pay the interest to keep current on their loans so they don't default. Well, now you've just seen the interest rates on thirty year mortgages, to, this week went over 5% and the ten year treasury securities of four and a half percent.
This is all of a sudden there's no zero interest rate anymore. All of a sudden all of these loans that have to be rolled over, from the large banking institutions that have made these loans to the private capital companies, find themselves unable to recover their cost of capital by lending these companies enough money to pay to continue the Ponzi scheme that is underway. That's the whole problem for the economy. And the fact that the, war on Iran is it has created irreversible for the time being, interruptions in the chain of payments that was based on oil and gas and ammonia and fertilizers and sulfur and helium. All of these thing there these breaks in the chain of payments are going to lead to defaults.
And once there's a default, you have this exponential growth process of debt reversed, and you have exponential shrinkage on the way down. That's what a depression is.
Speaker 0: You know, it's what's hard to predict how it will play out as well given that there's so many variables and so many actors who will be affected by this. Indeed, it's hard to imagine any country in the world who won't be affected, especially due to the energy alone. But if we look at the other great powers, how do you see them being affected by this war? I mean, we we we see the energy well, for example, energy war, it's not just, you know, with Iran, with with the Russian, for example. You know, NATO's tried to cut off or at least limit the reliable access to a lot of key maritime corridors or choke points, as you referred to them earlier on, for Russia.
That is not to limit Russia in the Black Sea, the Baltic Sea, and also in the Arctic. We see the efforts to not just to, well, hijack Russian oil tankers, but now they wanna seize the oil as well. It's, you know, attacks on its refineries. We you know, the Chinese are worried about these choke points. They they're they're also worried that The US going after Iran is a way of targeting China's own energy access.
And, of course, India will also be greatly impacted by this. The Americans had just convinced them to reduce their purchases of Russian oil, and now, of course, all of it has to be reversed and indeed encourage them to buy more Russian oil to keep the markets up. Yeah. How do you see the, I guess, wider international system adjusting to this? Because The US is trying to sell it very hard, that this is Iran's fault, but but this is The United States that had attacked Iran with Israel, of course.
Speaker 1: Well, is the international system is not adjusting. Russia has said, well, Europe has stated, the NATO countries have stated they're going to stop by buying Russian gas and oil, but actually they've been managing to get some, ever since 2022. Europe has already said that, I think by May, they're going to stop, importing Russian oil and gas. And so Russia says, well, why not stop right now? They've all they've already threatened to break all of their long term contracts that they'd promised.
You know, we'll we'll sell our oil and gas to other countries. And, obviously, with Hormuz closed, the Russia has no problem at all finding other countries to import this. Europe seems to be committing economic suicide by following the sanctions on on Russia, and you'd think that it would see the results that have happened to Germany, above all, of, cutting off, Russian gas and oil. The the the whole of Europe is going to end up looking like Germany looked like after 2022, and its GDP has been going down, and probably will continue to. It seems, not it seems not only dead set or not importing Russian oil and gas, but, Ukraine has cut off the, gas the pipeline supply to Hungary, and I think, the Czechia also.
And, this is, this is a non NATO country. Ukraine has virtually declared war on Hungary, and NATO is supporting the attacker, the foreign attacker of a NATO country. I don't see how NATO and the European Union can survive all of this, you know, because the result of this economic, crisis of is going to force the governments either to violate all of the restrictions on how large can a government deficit be as governments try to pay subsidies to the homeowners and the business to heat their homes or office buildings and have a like presidency to turn on the lights at the higher gas and oil prices. Something has to give. And so far, what you're having is Mertz, in Germany saying, we have to cut back living standards.
We have to cut back social spending to spend more on military to fight Russia so that Russia cannot invade us again and take over East Germany like it used to. This is crazy. There's still the this is the enabling myth of, that, Europeans have, been told that they need American support to protect them against this, the fact that, elephants are going to, somehow invade or flying saucers will invade. Anybody. They can make in any kind of an enemy, that the Russians actually have any interest in invading, when, invading Europe.
Or, obviously, Russia has turned its attention towards Asia and some of most countries. You'll notice a change in the vocabulary of the newspapers and television and media over the last year. I think thirty years ago when I was writing archaeology books, we called Mesopotamia, Iraq, Iran, the Near East. Well, then then it changed to the better term, well, Middle East. But in the middle of what?
In the middle of Europe and Asia. Well, now the word that is used in polite company is West Asia. It's not the Near, Near East that's part of it's recognized that this is now and henceforth part of Asia. And this the whole world's growth area is going to be a part of Asia leaving Europe and The United States, leaving the West behind. So it's a it's a polite way of saying Asia is the East, no longer the West.
And that is the division you're having in the world. America's allies, in Europe, the Western Hemisphere, plus Japan, Korea, and Philippines in Far East Asia, that that's part of a whole different economic block. And what we're seeing is something that I think for years the Americans call, well, it's a clash of civilization. But it's not a clash of civilization. It's a class of it's a clash of an attack on civilization by what The United States is doing and its allies and, breaking all of what people think are the laws of civilization.
The laws of national sovereignty, of non interference with other countries affairs. The laws of war where you're not supposed to attack civilians but limit your attacks to, military targets. You're not supposed to go to war without declaring war. You're not supposed to make sneak attacks, and pretend for war. You you almost every international law in the last few years, and I could almost say decades, has been broken by The United States and president Trump and, his foreign secretaries have said, we don't need international law anymore.
International law no longer serves The United States. But this international law was the integument that is was supposed to hold civilization together. The laws of decent civilized behavior. Well, you're seeing the, the ethnic and religious hatred from Ukraine to Israel to the fundamentalist Christians, that are violating, you know, all of these respect for individualism, respect for freedom, and yet The United States calls this class a clash of civilization between democracies headed by the Ukrainian and, Israeli democracies and the end of The US under Trump against, autocracies, meaning countries with a strong enough government to resist this attack on civilization, of which I must say Iran has been even more, strong than, Russia in making this defense of itself. But, to be sure, it wasn't really left with any alternative.
It's fighting for its its existence and its unwillingness to surrender and essentially to follow what Patrick Henry said, in The United States, in the American Revolution against Britain. Give me liberty or give me death. Well, America didn't have the concept of martyrdom, but, certainly, Iran does and, so did Africa in the British and Dutch and European attack on African tribes in the nineteenth century, willing to fight even against machine guns. That was the morality was, you don't, we're fighting for a way of life against, against people who want to enslave us or deny us of any kind of self independence and self support of autonomy, of the ability to make our own future. This is this is what the fight's all about, and it's ultimately a moral fight, as well that is finding itself translated into, an economic fight and a trade fight, and is leading that's what's leading to the the split.
And it looks like this, no matter what Iran may agree to regarding, oil trade from, through, The Gulf and other countries, this split is going to continue because it's the it's the last chance by America to hold on to a power that it can't hold by being a prosperous country, offering other countries a win win scenario and a or any benefit from, joining and subordinating their interests to American interests. American interests are now juxtaposed to those of every other country quite explicitly in American foreign policy. And yet other countries aren't realizing that in order to avoid being subordinated to American policy at the cost of being pushed into depression, closing down their major industries, unemploying much of their industrial labor, and actually deindustrializing while the rest of, the world, West Asia to the rest of Asia is, growing that, this is this is the the world's destiny. There's no attempt to say, oh, what kind of institutional change a structural change do we need? This is not a marginal change.
And I think we need a new word for it. The word remember the Great Depression? When people had coined that word, it seemed like, what's the depression? Well, you have the world going up, and it's just like a little bit of a downturn to go up. Depression was a euphemism, intended to be a euphemism for just a slight interruption.
But, of course, as it became a plunge leading to World War two, it took on a bad word. So then a new euphemism was developed. Well, recession. Recession was supposed to be even less than a depression. Okay.
A recession is, only a slowing or a a bit of a just, you just tread water until you return to your growth path. But the growth path that the West has followed now has ended. We're, not only, stable it not growing, But as you see in Germany and Europe, you're having the economies actually turned down and you're seeing a desperate downturn in the global South countries that cannot outbid the more the wealthier Asian countries from bidding from obtaining oil and gas and helium and other products, fertilizer at higher prices. So something is going to have to give for all of these countries. And it's not only The US market that where you're going to have an inability of many companies to pay their debts to the banks because of the high price of energy, but, you're going to have, the same break in the chain of payment by countries with heavy foreign debts that, all of a sudden also have to now pay heavy trade deficits to pay for the oil and the gas and the fertilizer and the other commodities whose distribution has been interrupted and whose price is going up to crisis levels.
And there's no way of using regression analysis, trend analysis to project this. It's off the charts everywhere. And if you look at how the stock market has done, even in today's recovery on Wall Street, what's up more than anything else are the high technology, information sector monopolies. And yet all of the growth in these seven big companies that have been leading the whole Nasdaq average in The United States have been companies whose expansion requires energy. And I think we've just before, there's hasn't been very much increase in electric utility output at all in The United States.
There's no energy for them. So what did they do? Well, they begin to say, well, let's go to where the energy is. Let's go to Saudi Arabia and The Emirates and let's go to Bahrain and Google and Amazon and other company Facebook. These other countries have been relocating in the OPEC countries.
But now, Iran has said, well, we will not be secure as not only as long as other US military bases there, but as long as the OPEC economies are in a symbiotic relationship with The United States, depending on The United States for all of their investment in this energy and saving all of their oil revenues by investing in The United States. As long as that symbiosis exists, they're going to be a a threat to our security by being part of The US, group that is encouraging war on us and destruction in on this. So this whole attempt to somehow solve the expansion of The US information technology sector by investing in the OPEC countries is being wiped out as Iran has been bombing all of these centers to say, we want you you, other Arab, Emirates and monarchies, sheikdoms. I hate to call them monarchies. That sort of elevates them in in size to we want you to relocate along Asian lines because you you can't remain as part of The US or we won't feel secure because you're going to try to attack us again and again and again to follow your US, controllers.
So this is part of the political sit system, how it is intertwined not only with the financial system in general, but specifically with the, information technology sector that has been, leading the whole stock market boom and all of the array of companies sent around this sector.
Speaker 0: What I find fascinating though is that for decades now, at least over the past forty, fifty years, there's been a lot of work and literature on what you more or less described as a benign hegemon. That is, said The United States, you know, if it it needs to restore this ability to to dominate. And, countries should see this as being a benefit. Well, we had all these ideas of a benign hegemon, but, you know, it was rooted very much in this concentration of power, which meant that there wasn't any competition. But, you know, making that point short is what's been argued since the seventies and eighties was essentially what happens over time when The US power will begin to wane, when other countries will have rival technologies, when other countries will have their own, you know, navies, they will seek to, you know, not be dominated by The United States.
You have other rising currencies, economies. What happens overall when the hegemon is declining? And the argument then will be, well, it wouldn't be possible for The US to be benign hegemon because a benign hegemon would then secure. It would have open access to maritime corridors, would have free access to technologies, free access to, you know, use of banks, currencies, all of this. But once you have a declining hedge fund, it it has two problems.
First, one, of course, it's it's it's less reliable because it's bankrupt, and also likely it would use a lot of its economic instruments of power as an instrument to keep other great powers down. And, essentially, what would the benign hegemon do if it's in decline? It would have two options. Either it could stop being a hegemon or it could stop being benign. So this, you know, more aggressive approach to essentially restore control over international oil supply or, you know, cutting off tech for the Chinese, cutting off oil trade for the Russians.
All of this is was very much predicted by many people, yet it seems to come as a shock. I my my question, though, was
Speaker 1: Let me say one thing before we just on your vocabulary. We need a much better word than decline. The people who you mentioned who we forecast a decline didn't have a clue as to what they were talking about. A decline is something you know, it's like a business cycle. It goes up and down, then it always recovers, up and down.
But, every there's no there's never been any such thing statistically at the cycle. Here's what happened. There's certainly the so upsweep of the psych upsweep of the psych upsweep upsweep of the cycle and then a crash. Upsweep, it's a ratchet effect. It's not there's no decline.
It's a crash. A decline is sort of like the counterpart to an ascent. The ascent is slow, exponential perhaps, growing, peaking, and then a crash. And that's what's happening now. And it would have been a decline if other countries would have thought of, yes, there'll be a decline.
We have to think of what's going to take the place of the system that, we've been working in under US leadership. But they haven't. And so the this ending we're seeing the ending of an era, not a decline, but an abrupt change. And this change is not stemming from without. The ending of the American power did not re result from any foreign civil war or for or other war against American dominance.
The end came from The United States itself in trying to juxtapose its interest to every other country thinking, you know, we're going to put sanctions against, everyone who doesn't agree with this against we we we hate China because, they're more prosperous than us. We hate Russia because Russia's supporting China. We hate Iran because we don't control its oil. We hate, Iraq and Syria because we don't control, its oil. And now Trump in the last few days has said, we're really angry with Europe because Europe didn't send its navy to commit suicide and, all be killed by joining us in opening the Persian Gulf.
He said, hey, Europe, if you want oil, why don't you send your navy to open up the the Persian Gulf and go and come and get it? We don't need it. It's our war, but your problem. That and well, if the it's The United States, all the way from the Bushes, through Obama, through Trump that has given the rest has closed off The United States from the rest of the world and virtually declared war on the rest of the world, leaving the whole rest of the world with no option except to join Iran. That's what's so amazing in all of this, that it's, The US has ended its own empire.
Well, many of the people talking about decline say there are slow processes that change all of this, but they didn't they've never acknowledged the inherently hostile, position of The US to other countries saying, we will not join any institution internationally in which we do not have veto power and any country wanting the sovereignty to pursue its own interest, we will treat as an enemy and call it an autocracy. An autocracy is a country with the strength to say we will go our own way and not submit to The US democracy, Ukraine, and Israel style. I mean, this is what it is. So we're seeing the we're seeing a systemic change, And a systemic change is a changeover. The the world is no longer part of the past trends.
Those trends and the connections that have, created this trend as a matrix are all ended now. And, you're having a new world trying to structure itself, and there's been so little thought about it. The guests that you've had on your show talk about it, but, we're pretty much in a minority and, other people haven't thought, well, in order to have an alternative to The US run International Monetary Fund, World Bank, United Nations, and a control World Court and Army, We need our own international organization and ultimately our own military force to defend ourselves so that what has happened to Iran and the rest of the Middle East and the other countries that America has gone to war with again and so often since the the nineteen fifties. So this will never never occur again, certainly not in the way it has. And so that we can have a world that indeed is supposed to have a body of international law and rules of war so we're never plunged into this kind of crisis again.
That nobody's talking about how to what kind of a monetary system, a financial system, a trade system, a new body of international law, and a meeting to replace the United Nations, which is now as obsolete as the League of Nations had become by World War two time.
Speaker 0: No. This is, yeah, a great point. I mean, it's easy to point out the mistakes and the decline of the existing system, but what should come next? You know, you would hope there would be more debates around this, but that's a, yeah, excellent point. I I just my last question was, I guess, more specific.
I wanted to look at well, just ask when you see this shortage of energy and fertilizers to focus on these two, how do you see the how can we essentially trace the ripple effects through through the timing? No. Not. It's a specific it has a very vague and wide question, I guess.
Speaker 1: Everybody's answer is going to be the same. Without fertilizer, crop yields fall. And when crop yields fall, prices go up is the way markets work is the people with the most money get to buy the crops that are left available when they when they fall. That's what happens in a crisis. Farmers make more money when there's a crash of output, when there's a when the harvest fail and the prices go up than they make when the the harvests are fine.
Well, in America, you're still having the agricultural system give subsidies to farmers to grow corn to make gas a hole from. That's crazy. I mean, you'd think that in a logical society, these American farmers making gas a whole would be growing food crops to feed the population. That's not happening. I'm not sure what other other countries are going to do.
There's going to probably some countries will shift from plantation export crops to food crops to feed themselves. There's going to be throughout the world a recognition that, you need food self sufficiency to, save yourself from The US weaponization of foreign trade in food, in oil, in fertilizer, and just about anything that The United States can create a choke point for and weaponize. You have to stop foreign trade from being weaponized in the first place. So obviously, there's going to be a lot of people. There are warnings especially for Africa and parts of starvation.
For the big countries in Latin America, Brazil, Argentina, they're gonna be okay in terms of agriculture because they have a lot of people can eat soybeans. Their westerners may not like them as much as Asians, but soybeans are very good for you. High protein, there are all sorts of solutions. Brazil and, Latin America, can probably do okay, but Africa is a real problem because of the distorted monoculture economies that Europe, backed by the World Bank, have created there, especially since World War two, where they've gave up the self sufficiency that they that World War two forced them, to do. And now they're back in a wartime situation where, the only way of survival is to become self sufficient, and that self sufficiency is probably going to last longer than a return to the kind of international specialization of labor that you had between the trade surplus countries and the trade and payments deficit countries.
All of that's going to be changed. The whole philosophy of economic growth is going to be changed to reject the World Bank's emphasis on plantation agriculture and US for foreign ownership of raw materials, land, and basic rent yielding resources.
Speaker 0: It's funny how the world is flipped on its head in this way because ever since World War two, the the countries who allied with The United States, they had reliable access to to international trade. They could make they could afford to make themselves dependent on these trade networks, and they could essentially take this, you know, Ricardo's comparative advantage to the extreme, you know, don't have to co make their own food, don't have to do, you know, develop their own fertilizers. They can become completely dependent on energy. But now, meanwhile, the countries who are adversary adversaries of The United States, they have to develop self sufficiency in many ways that that that technology will across the board. Now that The US is, well, struggling, let's say, this, and the system is breaking down, we see that the lack of strategic autonomy of some of its allies is is quite shocking, and Europe, I think, is a great case.
So I'm not sure if you have any final thoughts before we wrap up?
Speaker 1: Yes. Let's look at Britain. And Britain has access to foreign trade, certainly. But what is it going to how is it going to trade? What does it have to pay for its imports in?
It's been deindustrialized by the combination of Margaret Thatcher and Tony Blair and the conservative and labor parties together have deindustrialized it. So how on earth is Britain going to survive? What does it have to offer the world for, for food and essentials and energy and the other things that it needs? It doesn't have the North Sea oil anymore or rather it's, dwindled way down. I guess Norway is all in Scandi is also finding that its reserves in the North Sea are getting sort of low.
How are, what are these, countries going to do now that they followed neoliberal economics and deindustrialized?
Speaker 0: We'll find out shortly, I guess. It's surprising, though, how how quickly everything changed from the nineties. You know, it was more or less consensus around the end of history that this was it until now this massive crisis. And, well, many people did warn, though, that the war on Iran would just exacerbate all these poor fundamentals, but yet here we are. So, thank you as always for taking some, time and to, yeah, share your insights on these issues.
Speaker 1: Well, I'm glad you've given me a chance to talk about, the big questions.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: Iran War Broke U.S. Empire & Alliance Systems https://youtu.be/KJsNuI9VVyI https://t.co/174eTCBbi2
Video Transcript AI Summary
In a discussion with Glenn (Speaker 0) and Professor Jeffrey Sachs (Speaker 1), the speakers analyze the current Iran war in the context of a shifting world order. Sachs argues that two things are unfolding simultaneously: the erratic behavior of the United States (personalized in Donald Trump) and the broader question of American hegemony, alongside battlefield realities that challenge the claims of “shock and awe” and irreversible American victory.
Key points raised:
- The US, under Trump, exhibits “brazenness, lawlessness, the viciousness” in rhetoric and actions, including a statement about sending Iran back to the stone age. Netanyahu’s speech is described as equally shocking, with Netanyahu portraying himself in a biblical, godlike framing and extending “10 plagues” to Iran.
- On the battlefield, the idea that American power guarantees victory is questioned. Counterattacks in Israel and the Gulf region have occurred, downing American jets and showing Iranian retaliatory capability and waning missile defense. This challenges the notion that US military supremacy is unassailable.
- Sachs notes a stark contrast in public opinion: in the United States, there is widespread opposition to the war; in Israel, the public appears to largely support the war and the associated violence.
- He characterizes the conflict as one driven by a “war of whim” with unclear aims, and asserts that the claimed U.S. “shock and awe” does not align with the observed battlefield and morale realities.
- Beyond Iraq/Iran, Sachs discusses broader structural factors: American hegemony is pursued as a policy objective but often unfulfillable; the military-industrial complex and figures like Trump contribute to the propulsion of war; personal traits of leaders (described as psychologically unstable by some forensic psychiatrists) influence decision-making.
- A possible path toward de-escalation, according to Sachs, hinges on dialogue among global peers. He suggests that Trump listens to leaders he regards as peers (Putin, Xi, Modi) and that these leaders need to tell him to stop, though he remains skeptical whether this would be sufficient.
- Sachs emphasizes a multipolar world as the reality: countries should avoid hosting US bases, which he argues undermine sovereignty and security. He advocates neighbors engaging with one another, cooperation with major powers (China, Russia, India), and reducing dependence on the United States.
- He critiques Western and European reliance on US leadership, noting that Europe’s internal politics still echo imperial mindsets and that NATO’s expansion and anti-Russia policies have complicated security. He argues that European and Gulf leaders often pursue “peace through strength” rather than genuine diplomacy.
- Specific regional advice includes: be wary of US hegemonic guarantees; avoid dividing lines that empower a hegemon; pursue regional engagement (GCC-Iran dialogue) and view China, Russia, and India as potential partners rather than adversaries; understand that technologies (AI, data centers, chips) are not substitutes for credible security.
Towards the end, Sachs reiterates that the current approach is producing insecurity and economic crisis, urging readers to adjust to a multipolar reality and to seek regional cooperation over reliance on US dominance. He closes by expressing the hope that governments will embrace reason and adapt to current realities.
Full Transcript
Speaker 0: Welcome back. We are joined today by professor Jeffrey Sachs to discuss what is happening in Iran, but also in the wider world order. So thank you very much for coming back on the program.
Speaker 1: Great to be with you.
Speaker 0: So we see that the consequences of this war against Iran, it's well, it's difficult to measure. We see it on the global economy, the world order, but also the alliance systems. So that is over the past decade, you can say even eighty years, many countries from The Gulf States to Europe, East Asia, they essentially bet their entire security on, yeah, US protection that is linking themselves to The US hegemony. This now, as the head of US hegemony is in decline and Trump appears to becoming more and more erratic, again, we see that the whole order is unraveling very quickly. Of course, a lot of this came the last speech by Trump, of course, is something that also put some shocks through the international system.
I was wondering, how do you assess this?
Speaker 1: I think two things are are going on simultaneously here and in Ukraine and in other crises. One is the extraordinarily erratic behavior of the United States government and personalized in mister Trump. He shocks the world. He shocks most Americans. Nobody can really rationalize the brazenness, the lawlessness, the viciousness of, US actions and of Trump's rhetoric.
His line about, sending Iran back to the stone age shocked everybody in the world, I think. We can add that his partner in this crime, Benjamin Netanyahu, gave a similarly shocking speech that fewer people saw the day before and the start of the Jewish Passover holiday. And in the Passover holiday, which is the story of the Israelite exodus from Egypt, God visits 10 plagues on the Egyptian people. And in Netanyahu's speech, he visited 10 plagues on the Iranian people. It's, again, a speech of shocking brutality, and also a a geopolitics, I would say, of maybe the ninth century BC, the mindset, the the biblical framing, Netanyahu casting himself as god is all so stark, so sharp that anyone that is watching what is happening right now sees that we have a an extraordinarily violent war that seems to have justifications coming out of ninth century BC mindsets or simply psychopathic ideas of sending other nations to the stone age.
We heard Trump chortle about the destruction of a bridge in which nine people were killed crossing the bridge, which was a nonmilitary target and reportedly ninety five people injured at the attack on the bridge and the president was delighted by that. So this is one thing that's happening is all over the world and inside The United States, there is a sense of absolutely violent and lawless regime in The United States. The second is the battlefield. American hegemony ultimately tests on the belief, rests on the belief that America dominates the battlefield and all of the rhetoric of Trump and Netanyahu has been since the start of this operation. But it's true in every US operation that shock and awe will overcome the foe, and that the inevitability of US victory is so overwhelming that, everyone will bow down to The United States.
More and more, that idea is unraveling. One say that it unraveled decades ago in Vietnam. One could say that the same failure was shown in Central America in the Contra Wars. One could argue that the same has been seen throughout The Middle East and Afghanistan, that this overwhelming force doesn't prevail. But each time, the same proposition is put forward, that the might of The United States, the unprecedented ability to project power and force is overwhelming.
And Trump made that claim a couple of days ago, and then the next day, two American fighter jets were downed, and counterattacks, came, in Israel and in the Gulf Region again. So to many observers, many people, you are, meeting with and discussing, the battlefield evidence, is quite the contrary of what's being claimed by The United States. Iran seems to have a continuing massive retaliatory force. The depletion of anti missile systems seems to be real. The breakdowns of morale in The US even reportedly forcing aircraft carrier to return to base because of some kind of insurrection or insubordination or collapse of morale among the sailors as reported seems to show the opposite.
So there's a fundamental question, what is America's power? And ultimately, that turns on its military and economic power. And second, what is America's intention? And that turns on the statements, the goals, the behavior of the US government. On both counts, this is a shocking period to mean, let's say on the question of aims and goals, this is shocking.
We can't even piece together as hard as we try exactly why we're in this war. This seems really to be a war of whim. That's the best description that I've heard of it. And when it comes to American power, debate is open and the days will tell what the real situation is. But at least to this moment, the American and Israeli claim of shock and awe overwhelming the Iranian government is not true.
And quite the contrary, it seems that there's a lot of worry, in fact, beneath the surface that the ability to defend against, especially the Iranian missile attacks is waning and in the Gulf Region almost nonexistent. So this is why the whole world is watching this in in amazement. We are seeing fundamental things play out, and they're also extremely dangerous. They can escalate to nuclear war without question on the one side, on the side of Israel. The, I would say, the level of violence, dehumanization of Israel's foes, the biblical language, which in this case of the Bible, the Old Testament story of the Israelite capture of their promised land is so ruthless, so violent, so genocidal that the rhetoric and mindset coming from Israel suggests no no limits.
That seems to be not just tactical. That seems to be actually ideological. The hatred for the other in Israel seems to be unbounded. And a difference of The US and Israel is that in The United States, the public opposes the war quite overwhelmingly. And, nothing that Trump has done has changed that.
And this unease and opposition is very widespread. In Israel, I'm sorry to say, it seems that most of the public backs, the war and backs the violence, and backs the idea behind the war of the hatred of the other side and the belief that the other side is an implacable foe that must be totally annihilated, which again is maybe ninth century BC mentality, but it seems to be infused in the society.
Speaker 0: Well, common friend of ours, John Mersheimer, he keeps making the point that he no one has told him any story of how this could end in a positive way that is in US victory, and it's a good point. I I just find it difficult to see what the best possible outcome is. The whole idea that if there's just enough death, destruction, and carnage, then somehow the Iranians would simply capitulate. It seems like part of the problem with this strategy, though, is that what The US demands of Iran is the capitulation would then become an existential threat. You know, if they would have to give up even their conventional deterrent, what would stop the destruction of Iran?
And there seems to be some parallels to the to the war or the proxy war against Russia. That is if we just escalate enough, then we'll get a deal. But when your adversary considers this to be an existential threat, there is no bowing down. It's only escalation. So do do you see any possible end to this war?
Or how how can this be ended? Because at the moment, it doesn't seem that Trump can is willing or her to Yeah. To to to pack up and go home.
Speaker 1: Well, I think that this is the point, the difference of, can, and will. Of course, Donald Trump can and should pack up and go home, but it's very unlikely to happen. And the backdrop of all of this is the continued American assertion of hegemony. That's not only Trump. That is, the dominant American foreign policy idea that America must be and is the most powerful country in the world in every region and must constantly prove that or demonstrate that if there are any doubts.
So a war in Iran is not about Iranian issues. A war in Iran is about demonstrating America's full and unconstrained power, and it must be proved to the whole world that it is full and unconstrained. That's the backdrop. That goes beyond the question of Trump. But on top of that problem, which is the assertion of hegemony, which is a claim that The US believes in and makes, but cannot fulfill because The US doesn't have the predominant power to do that other than in utter destruction.
There is the personality of Donald Trump, and personalities make a difference in wars. Wartime leaders make a difference. And the more we understand the situation in The US, the more, the personality factor plays in. You know, we can give structural reasons for the American demands on hegemony. This is something that goes back decades.
We can also talk about financial motivations and, the pressures, or not even pressures, I should say, the lobbying and the money making from the war profiteers. There's no doubt that a lot of Silicon Valley Palantir being case number one is a great proponent of these wars. By the way, just parenthetically, they want to test their new AI driven weapon system. So this is also for them experimentation, it's lab work, the fact that people are killed and there's a war, all the better. It's very realistic.
We can see how these weapons work. There's a certain madness, greed, tens, hundreds of billions of dollars driving this, saying is true in Israel. So there's a side of this that is very direct. But I was saying that even with all of those structural features, the claims of hegemony, the size of the military industrial complex, the huge money making and grift that goes into this, the personal grift of Donald Trump and his family who are the most corrupt officials in US history mean, corrupt family and and president in US history. There's a personal element of psychological instability here that I believe is is at work, which is that Donald Trump is a is psychopathic.
This is a a clinical judgment that is made by forensic psychologists and psychiatrists since he came on the public scene and made repeatedly. And I think very cogently. This is not a man who gathers information and rationally processes it and maybe vicious, but is highly tactical, closes the deal and so forth. This isn't an unhinged man who is impulsive, paranoid, psychopathic, and a megalomaniac. This is not the kind of person one wants in the presidency of the United States.
Would say that Netanyahu has similar psychological traits. These are very violent, unhinged people, and it means that, stepping back is not easy. Everything is a test for them of their own world, as well as brought more broadly a test of the American political class mindset of hegemony, which despite all the evidence to the contrary of the fact base of hegemony is still believed in Washington. So we have a very big structural and individual problem of getting any kind of de escalation or any kind of resolution. I have one and only one thought about this, frankly.
It's not a very persuasive one perhaps, but it is the one that I've been, holding, which is that Donald Trump, listens to the extent that he listens at all. He listens to those he regards as his peers, and he does regard president Putin, president Xi, prime minister Modi as peers that he wants to be part of and live up to. These are leaders of superpowers. He inevitably, almost without exception, expresses respect for them, for the power that they hold, for their lead of superpower nations, they need to tell him to stop. It's I think it's extremely important.
They need to tell him, Donald, this is not going anywhere. This is not going anywhere good. This is not helping you. It's not putting The United States in a better position. It is not helping any country in the world.
It's dangerous. It needs to stop. I don't know if that is even remotely sufficient under these circumstances, but I think it is important to try. This is not the bluster we're going to enter the war against you. Quite the contrary.
It is to try to explain this has to stop because if it continues on the path that it's continuing, it's going to bring us all to disaster.
Speaker 0: Well, certainly having some, yeah, coordination and more cooperation by the great powers, Certainly something we need. If Putin and Xi are able to do this, it would be great. But what do you say, though? Well, you've been you have advised many governments around the world over the years. And what would you tell the the allies of The United States?
Because it it appears that well, the Gulf States, they very much also have embraced this principle of a hegemonic peace. Also the Europeans, I mean, if we looked to Venezuela, for example, their their main concern was that Trump talked about the oil rather than human rights, but actual actions to work really against. And I I assume as well, if he would have included them from the beginning, they would have been much more supportive of the attack on Iran as well. Instead, he let them, you know, wait until the war had failed before inviting them in, in which they now do not want to partake. But but they they also, especially Europeans, have very much embraced this the idea of peace through strength, which is a nice way of saying, you know, militarism instead of real diplomacy.
That is will be so powerful that our opponents will have to do what they're told, yet they they shouldn't arm themselves to balance our might. So this kind of hegemonic idea of peace, this is something not just the Gulf States have benefited from, but also Europeans still don't wanna give up on as we see in the conflict with the Russians. So how would you how would you advise them today if they still, you know, pick up the phone and call and ask, you know, given The US losing its position in the world, you know, where do they go now?
Speaker 1: Of course, I've been saying exactly for the the last decade at least, be careful of The United States. It's, got a delusional foreign policy. It believes that it runs the show, but it gets, you into deep trouble. I have repeated dozens, if not hundreds of times, my favorite adage of Henry Kissinger that to be an enemy of The United States is dangerous, but to be a friend is fatal. How many times have I said that to governments, or in, the European Parliament or to the Gulf leaders personally in recent years, not just because of this war, but because of all of the circumstances that go back a very long time.
I do not believe, for example, that countries gain any security whatsoever in hosting US military bases. I've argued for years and suggested for years that these countries invite The United States to go home. You don't get security. These bases are a magnet for conflict. But more than that, they suborn your own sovereignty.
European countries remain eighty years after the end of World War II, semi occupied by The United States. And The United States meddles deeply in European politics to a shocking extent, actually. And so my own recommendation has been repeatedly, this idea that you are finding security in The United States is wrong. The United States has its own rather bizarre ideas about the world, which is hegemonic control. If you subscribe to that, you're subscribing to an unreality.
And moreover, if you host The United States Military and CIA on your soil, then you are also basically relinquishing your sovereignty. You cannot speak straight. You will find that if you are in politics and you oppose The United States, you will be knocked out of your politics within your own country. And so generations of politicians arise that can't even find the words to express opposition to even crazy American ideas. And there are so many crazy American ideas because hegemonic dominance is an unreality.
And if everything is built on the foundation of an unreality, there's a lot of craziness that goes along with this. So Glenn, I I was in the Gulf Region last year speaking with leaders exactly expressing this sentiment. This is before the war. This is not an ex post idea that these bases will not protect you. I said to friends in The Emirates, you know, why are you joining this coalition with Israel and The United States?
You think that this is really prudent, that this is correct, that this is accurate, together with Israel that has committed a genocide, before the world's eyes in Gaza, you're part of the so called Abraham Accord. This makes no sense for you. This is no security. This is no realism. Whichever your favorite foreign policy position is, well, I think realism is, if it's done right, means that you are taking a realistic view of the situation.
And the idea that The United States is going to protect you is not exactly realistic. You know what I heard? Oh, but mister Sachs, we're getting NVIDIA chips. We're getting data centers. This is key for us.
This is that actually was the currency of foreign policy, I would say, in the last couple of years. We turn on or turn off the data centers in your country, the high end chips. Well, these are now all being blown up by the day, by, Iran. A data center does not have anti missile defense, systems around it. So governments need to take a much more realistic understanding.
We're in a multipolar world. That's the foundation. The United States political leadership, and by that, I mean the the White House, the National Security Council, the CIA, the Armed Services Committees, the military contractors, they don't accept that. They don't get that. They don't believe in it.
They think, well, AI and NVIDIA chips in our weapon systems, in our, Palantir, based target identification systems, in our AI empowered killing systems. This is still dominance. They wanted to show in Gaza, we can kill everybody. We can level Gaza. By the way, after a genocide, Hamas is still there and still operating.
Israel couldn't achieve its gains even in a small neighborhood that was bombed and leveled over two years. Now we're talking about Iran with almost 100,000,000 people and a formidable technological base and military base. This is also something that is the mindset of The United States cannot understand, which is that there are technologically sophisticated people everywhere. And Iran is one of them. They view Iran again as medieval, if not stone age, But they don't understand that Iran has highly sophisticated technological capacities, and those have been also put at the service of the military.
So I think the advice was right, but not heeded. And today, I say all the time to any government, look at your neighborhood, be friends with your neighbors. Don't let the American empire divide you because your safety and well-being depends on your neighbors. And don't build or think you're going to build the wall, whether it's the Berlin Wall or a new wall to hem in Russia, or don't think in The Gulf that you can be on our side, on, the Western Side of the Persian Gulf, but on the Eastern Side of Iran, that's the enemy. Don't think in those terms.
Look at your neighbors. Make peace with your neighbors. Cooperate with your neighbors, trade with your neighbors, and then on a regional basis, that your safety and well-being depends on good relations with all of the major powers. China's not your enemy. Russia's not your enemy.
India's not your enemy. The United States should not be your enemy. But we also need The United States to get beyond the mindset that, it displays now, which is either you're for us or you're against us. That's, the American mindset borrowed from the Athenians, in, the Peloponnesian Wars when they told the Melians, if you're not with us, we kill you. Unfortunately, that is part of the American playbook as well.
But countries cannot succumb to that without giving up their own sovereignty and their own future. And now in a multipolar world, they don't have to succumb to it. So this is my basic advice in general, which is don't let the American empire divide your own neighborhood. I say it in Japan and Korea, China is not your enemy, it's your neighbor. I say it in the Gulf region, Iran and the GCC should be the first ones talking with each other.
Not only do they share the Persian Gulf and the Strait Of Hormuz, but they share a lot of other things as well. They share culture, history, transit points, ecological risks in a very dry part of the world beset by major water crises. I say this in every and I say it to the Europeans. Russia is not your inveterate enemy. This Russophobia is a historical fiction.
It's a complete misreading of history, but it's also a complete misjudgment about European security, which can only be achieved collectively with Russia, not in opposition to Russia. And so this is the same everywhere. Empires divide and conquer. The United States has used division as a way to extend hegemony. It's always saying the one on the other side is the enemy.
It's always trying to extend to the other side. The US position, ideologically in The Middle East is we already run the gulf. Now all we have to do is, bring Iran back into the fold, which we happen to succeed in doing in 1953, but then lost in the nineteen seventy nine revolution. We need to bring them back into the American empire. So every region faces a divide that The US stokes.
The US tells ASEAN, oh, China's your enemy. It tells Japan and Korea, China's your enemy. It's stoking these divisions. And of course it has stoked the division with Russia because the whole point of the end of the Cold War and there I was present personally at the watching at the highest levels, was that peace had come to a common European home, but The US wouldn't have it. It needed to expand NATO.
It needed to keep an alliance against the country that no longer existed for a threat that absolutely didn't exist, but it needed for American hegemonic purposes to expand NATO, and not just to expand it, but right up to Russia's borders and to put in anti ballistic missile systems and all the rest and to abandon treaties with this that had been signed with the Soviet Union in which Russia was the continuation state. So that was the mindset. Europe fell into it so dutifully, privately uneasy, publicly without a murmur. And by the way, as crazy as this mindset is, let me just add two points. Europe has its own hegemonic mindset that remains even eighty years after the end of the European empires.
So Europe ran the world in a rather vicious way for a long time in Asia and in Africa. That mindset's not gone. So that's why the subservience to The US imperial mindset is not so hard because it's also seen to an important extent as keeping the West dominant. And so the Europeans, yes, they're subordinated to The United States, but in a way, it continues to be a projection of the Western dominance in the world. And they view The United States as therefore, in a way, helping their empires that no longer exist, to continue their international, control.
So that's really part of what's happening right now. Europe goes along because the idea of controlling the Middle East, that's a totally European idea. That's not just an American idea. That has deep roots. The worst of this is the British.
The British absolutely still maintain the trappings and mindset of empire that has gone for almost eighty years, but it's still there. And so we hear the most remarkable rhetoric coming from Britain vis a vis Russia, or, other, showdowns where Britain has no power to deliver on any of this, but to make a lot of rhetorical and political mischief. What's interesting is even in the Iran war, there's been a little bit of hesitation by the British. This shows how completely outrageous this war is because the British elbows never hesitate, to support an imperial venture. I have always said America's basically our successor empire.
But in this one, it's so outrageous that the British have tried a little bit. Don't bring us in. This is, almost, unprecedented. The British jump into every American war, but not this one because it's so completely outrageous what's happening right now.
Speaker 0: Yeah. I think that's inherent contradiction of the hegemonic peace, though. If you wanna be a hegemon, you have to you're very dependent on the alliance system because you divide regions into dependent allies versus the balanced or contained adversaries. And I don't think often European leaders appreciate this that once you one once you are in a conflict then with your opponent, be it Russia, then this is what makes them so dependent on The US. This is why they have to sign all these horrible trade deals.
This is why they end up in this situation. The same with the Gulf States. I mean, their conflict with Iran is the reason why they've become hostage to The US, and I think it was acceptable when The US was more of a comfortable hegemon. But now that it's declining, and it's as Mark Kurutti said, NATO's also not just for protection, it's for power projection. If this is for power projection for The US and so they're being used to go after rising powers, and then The US isn't in the position to defend them anymore, then it looks like a disaster.
It's just shocking to me that there's not more efforts to readjust to current realities.
Speaker 1: What what's so interesting about it is that it does not deliver. It delivers insecurity. It delivers economic crisis and the publics know it. So the politicians that continue their subservience to The US in Europe are profoundly unpopular. They're running strongly against public opinion.
The leaders in The Gulf Region that continue their subservience to The United States and Israel, because this is a US Israel War, are very much facing opposition from what's called the street there, but just is public opinion. The public in the Gulf Region does not want to be an ally of Israel in this, but this is the position that their governments have put themselves into by saying our security is an F-thirty five or our security is an F-sixteen or our security is a military base of The United States. Unfortunately, it's a very naive idea. But it is the idea that got them into this and it traps them not only in their national interest, but it puts them in direct opposition with their own publics. And you can watch step by step as Trump is reviled in Europe right now.
His net approval rating is something like minus 70%, and that was before the Iran war. In other words, maybe 15% approval rating, 85% disapproval rating. The man's despise for very good reason. He's a despicable person. But the governments have continued to try to appease him, try to support him, try to say that we're on side, and they lose support.
We're seeing this in Italy right now where prime minister Maloney basically made her politics as Trump's best buddy in Europe. And that was a calling card for a while, and it no doubt made some people in Italy feel that, well, at least we have The United States, you know, on the inside track. But now it's completely turning because young people are saying, what is this? We're siding with this. This is madness.
Madness. And so you see everywhere in Europe, if you side with Donald Trump, you lose your own political base. That doesn't necessarily mean you lose power immediately given the constitutional order. Maybe you have a parliamentary majority that can last two or three years, but you don't have a political base within the country.
Speaker 0: Well, thank you for taking the time, and, let's hope that governments begin to embrace reason again and, yeah, adjust to realities.
Speaker 1: Very good. Glenn, great to be with you. Talk to you soon.
@Glenn_Diesen - Glenn Diesen
Alex Krainer: After the Iran War - A New Global Economy https://youtu.be/pmiG0Gplu9Q https://t.co/H6Mhs4Gaem
Video Transcript AI Summary
Alex Kraner and Glenn discuss the Iran ceasefire and the market's reaction, along with broader geopolitical dynamics and historical patterns around war and finance.
- On the ceasefire and markets: Alex argues that reading optimism from markets is unreliable, noting that markets can remain irrational for longer than a person can stay solvent. He was surprised by the ceasefire and authored a newsletter piece suggesting the peace was unlikely to hold and that the probability of lasting peace was near zero. He observed the ceasefire narrative already fraying as he finished his article. He emphasizes that the ultimate incentive for war is the conquest of collateral: Iran’s vast natural-resource wealth (estimated at about $35 trillion) could become collateral for Western banking interests. He contends that war is driven by a desire to secure new money-like collateral to prevent systemic collapse caused by fiat money expansion and liquidity injections.
- Narrative and hypocrisy in war discourse: Glenn notes how narratives about values, feminism, or democracy are used to sell wars. Alex adds that wars are often sold by demonizing the other side, citing examples from past interventions (Syria, Gaddafi, Saddam Hussein, Milosevic, Allende, Ortega, Chavez, Maduro, Castro) to illustrate a recurring pattern of manufactured villains and “slaying dragons” to justify action. He also cites Afghanistan as an example where Western intervention harmed women’s rights and long-term outcomes (mass malnutrition and stunting among children) despite rhetoric about protecting women.
- Lebanon and the ceasefire framework: They discuss whether Lebanon was included in the ceasefire framework as communicated by the Pakistani prime minister and why Israel then attacked Lebanon. Alex argues the U.S. may be posturing to present the ceasefire as a U.S.-led result, while Iran shaped the negotiation terms. He also suggests the U.S. was already preparing for broader action, including ground invasion plans and troop movements.
- U.S. strategic posture and global ambitions: They consider whether Trump’s administration genuinely sought to retreat from global policing or if transition plans were undermined by the Iran decision. Alex recalls a shift in 2019 where Trump reportedly resisted war against Iran, then changed course on 28 February, risking severe consequences. He argues Europe may bear more hardship from the conflict, with the U.S. potentially cushioning its own impact, while Europe could face stagflation, currency pressures, and social unrest.
- European exposure and dollar dynamics: Glenn notes hedge funds betting against European stocks and asks how Europe will fare if the ceasefire holds but the damage persists. Alex describes Europe as cornered: cutting off Russian energy while maintaining vulnerability due to limited alternative supplies (Qatar/US), and the potential fragility of dollar liquidity for European banks. He warns that swap lines could be withdrawn, threatening the euro and triggering inflationary crises. He cites Eurostat data showing high living-cost pressures and suggests social revolts or civil unrest could emerge across Europe. He forecasts a possible major war against Russia as a political stabilization tactic.
- Global realignment and multipolarity: They foresee massive fracturing in the Middle East and Europe, leading to a multipolar global order. The United States could retreat to its own hemisphere and rethink its monetary system, with the banking oligarchy remaining a central lever of power. They discuss Gulf states’ vulnerability to Western policy and consider whether Saudi Arabia, among others, will fare better or worse depending on access to U.S. dollars and geopolitical alignments. Alex argues that the broader strategy aims to reconfigure Eurasia by weakening or fragmenting Iran, Russia, and China in sequence, using proxy wars, regime-change efforts, and economic coercion.
- Long-run structural shift: The conversation concludes with the assertion that the current dynamics reflect a persistent pattern: Western powers leveraging financial and military instruments to secure strategic advantages, while portraying their actions as defending democracy and rights. They reiterate that the overarching driver remains financial hegemony and control of collateral, with the war system persistently extending into Eurasia through interconnected corridors, ports, and infrastructure projects. The dialogue ends with the claim that wars are driven by banking and financial interests rather than purely ideological aims.
Full Transcript
Speaker 0: Welcome back. We are joined today by Alex Kraner, a market analyst, author, and a former hedge fund manager to to discuss the Iran war and the reactions in the market. So thank you for coming back on the program.
Speaker 1: Thank you for the invite, Glenn. Always good to join you.
Speaker 0: Well, I said Iran, or I guess, technically, it's peace now or a ceasefire, but it's not upheld very well. And the the chances of this transitioning from a ceasefire to an actual peace agreement, I mean, I I tend to be very pessimistic. That being said, the market seemed to be very optimistic. It's as if the conflict and all the underlying causes have already been resolved. How are you assessing this, yeah, the ceasefire which has been reached and the way the markets have reacted?
Speaker 1: Okay. Let me knock out the markets first. I've spent my life professional life in the markets actively trading commodities, financials, currencies. I would read exactly zero into that. The the fact that the markets feel optimistic doesn't mean a thing at all.
Markets can be very, very delusional in the short term, and they often are. And, you know, that short term, it can last, you know. As they say, you know, markets can remain irrational a lot longer than you can be solvent. So I would read exactly zero into that one. With with regards to the how do you call it?
The very surprising announcement of ceasefire yesterday, I have to say I was very surprised. And yesterday, I I wrote an article for my for my for my newsletter, and it took me, I think, about three or four hours to write the article. And by the time I wrote the thing because, you know, as I was writing out my sentences and paragraphs, I would often go online to check, you know, to to do a bit of research to make sure that I'm not writing out nonsense. And basically, by the time I got to the conclusion, my conclusion was that it's very unlikely that the peace that the ceasefire will hold and that the, you know, I I think that the probability that it will lead to peace is very close to zero. And in fact, before I hit send on that on that article, I I went one last time online to to see where we were, and I saw that the the ceasefire was already being breached, that the the narrative was the narrative was already, you know, coming apart, and that all makes a very poor foundation for peace.
But more importantly, we have to always go back to the ultimate incentives for war in the first place, and that is we we have discussed this before. This is the conquest of collateral. And, you know, if you follow day to day news, you would think that it's about Strait Of Hormuz. It's about women's rights. It's about the veils.
It's about the, you know, clerical regime in in Tehran, freedom and democracy, ballistic program, nuclear program, all these things. All of these are merely pretexts. The ultimate reason is that Iran is fifth or sixth wealthiest nation in terms of natural resource wealth. They are estimated to have about $35,000,000,000,000 in natural resource wealth. And if the Western Empire, which still enjoys the support of The United States as its military enforcement arm, if they could gain political control over Tehran by, you know, installing maybe Shah Reza Pahlavi again on top of the government, then that natural resource wealth would become collateral of Western banking cartel.
And $35,000,000,000,000 could go a very, very long way to refloat the system, which is fraudulent and which is currently imploding upon itself. You know, it's being it's being squashed together by liquidity that's being flooded into the system from from whole cloth. The problem is that for every dollar, euro, yen, or, you know, whatever you have, that's printed out of thin air and put into circulation, it dilutes the currency that's already in circulation. So it's making everybody in the system poorer. And this will continue until they manage to conquer new money good collateral so that the system can be, you know, kind of reinflated and it can take off the ground again.
This is ultimately always the reason for war. This is why all wars really are bankers' wars and why they will never give up because for the bankers it's either bringing new collateral into system or it's their whole system imploding. They don't know how to do anything else. They don't plough field, don't build anything, they don't write novels or symphonies, they do absolutely nothing. They just pull money out of thin air, lend it to us at interest, and then collect services on those debts.
That's what they do. That's the only thing they do. And they will sacrifice every nation that they occupy, like The United States, Great Britain, France and so forth, completely in order for their system to be to survive and to continue.
Speaker 0: Yeah. And I'm also often surprised by how people buy into narratives. Like you said, they're believing that all of this is real. All countries through all history as have always had to sell wars. Usually, you have strategic competing interests, and they're sold as good guys versus bad guys.
I mean, if you look at how things, you know, the the the governments which were rejected, if you go back to the nineties, Russia was so eager to be part of the West. It was willing to turn its back on traditional allies, former Soviet Republics, China, anyone in the East who might slow down its, you know, its sprint towards the West. But, you know, this this was not good enough because, again, it's a certain size of the country. Same as China. Whenever we criticize China, and I was like, oh, they claim Taiwan.
Well, they always did. They they never stopped claiming Taiwan. We recognize that Taiwan is, you know, a part of China. What changed is the size of the Chinese economy. It grew more powerful.
And as you said, with Iran, I think they can open a strip club on every street and follow you know, adopt every law we have in the West. They still wouldn't be accepted. And but that on the other side of that coin, you know, we will back genocide, which we have proven. We will put in ISIS leader in Syria. We'll back actual Nazi groups.
And as Trump suggested, willing willing to kill an entire civilization, and we'll have the NATO secretary general cheer it on. So the the the idea that this is all about values and principles and headscarves, I mean, it's it's quite ludicrous, and it's also a bit frightening, have to be honest, when people actually buy into this this that this is why we are bombing well, not we, why The US and Israel is bombing Iran because they want to liberate women. I mean
Speaker 1: Yeah. They
Speaker 0: every time. Every time. I mean, it's yeah.
Speaker 1: I I have to say that amazes me, you know, because we have seen this film so many times before. You know? They always demonize the other side in order to justify the war. But, you know, it was just a few years ago that they were doing the same with, you know, when they wanted to go to Syria, then Bashar al Assad was the worst person in the world. He was killing his own people.
And then before him, it was Muammar Gaddafi. He was killing his own people. And Saddam Hussein was a madman. He was killing his own people. And Slobodan Milosevic was a madman.
And then, you know, in other parts of the world, you had Salvador Allende. He was, you know, he was a communist, horrible, horrible. We have to go kill him too. And Daniel Ortega, he was he was horrible. He had to be done.
And and Art Benz and Noriega and Hugo Chavez and Emmanuel no. Not Macron. Nicolas Maduro and in Cuba, Justin Justin Trudeau's father. Castro. Fidel Castro.
Sorry. You know, so it's always we always create these villains, and then we pretend that we're going around the world slaying dragons, slaying evils to make the world safe for democracy and human rights and progress and so forth. But it's as if nobody looks back to remember these stories and then to look and to say, well, where exactly did we create this shiny example of prosperous democracy? You know, look at where Syria is today. It's in the hands of an Al Qaeda terrorist who just until recently had a $10,000,000 bounty on his head.
Today he's an honored statesman everywhere in the West. And then look at Libya, which used to be the most prosperous African country with the highest standard of living under Gaddafi. Now it's a failed state with open slave markets ruled by warlords. Afghanistan, Iraq, Yemen, Somalia, Sudan everywhere we went we created mayhem and destruction, And we caused immeasurable pain to the people, destroying their countries, destroying their infrastructure. Yet there are still people who buy the story every single time.
That is just amazing. I suspect that we're arguing with with, you know, artificial bots in bot farms because I can't believe that anybody is that stupid. It it can't be.
Speaker 0: I remember the scandal. There was some CIA papers that was leaked, I think, by WikiLeaks that in Afghanistan, there were you know, the the war was losing its appeal. So the occupation was losing its appeal among the Europeans. So the CIA suggested, let's, you know, frame it as as being about women's rights because that's popular in Germany, France, and the countries where they're losing interest. And and and, you know, you didn't even need the leaks.
You know you know, that's their job. You have to sell a war. I mean, it's just I don't know. I got sidetracked. It's just it always shocks me to see that people are actually buying into this.
Speaker 1: It comes to women's rights, you know, let's go back to Afghanistan. The United States withdrew from Afghanistan in August 2021. They were there to bring democracy and freedom And then when they withdrew, everybody had their hearts broken over the rights of women and girls. And I don't know if you remember, but for a period of several weeks you couldn't even turn on the TV without hearing women and girls uttered a 100 times. It was all about women and girls.
But then when you look at the achievements of Western occupation of Afghanistan, you found that more than 50% of all children born in that time when The United States was in charge of Afghanistan, the children sustained permanent stunting for malnutrition. So more than half of the children were stunted for malnutrition, for life, because the women did not have enough food to give to their children. So what are we supporting women and girls for? To have only fan accounts and to become professionals running I don't know what in their cubicles and to commute to and from office every day and then I don't understand. But you know the frustrating thing is that there's there's always a segment of the West that's willing to swallow absolutely any lie that is thrown their way.
Speaker 0: I remember after this report came out about Afghanistan, you you even saw I remember there was an article coauthored in The Guardian by the NATO secretary general in Stoltenberg and, you know, got some Hollywood celebrity, Angelina Jolie, with something a title, something along the line why NATO is now the leading organization to protect women or something. I mean, you you can't make it up, but but, you know, people want to believe this, and this is important. It's in human nature. You want to see that you're on the good one of the good guys that well, what what you're doing, what you're participating in, what's being done in your name is for something greater. And then just, yeah, some horrible selfish interests.
But let let let me ask about this ceasefire because one of the reasons why we got off to a rough start was obviously Lebanon. That is, you know, the the the main mediator who are facilitating the the or proposing the peace agreement. A ceasefire was the Pakistani prime minister. He confirms that Lebanon is part of the peace treaty sorry, the ceasefire. And shortly thereafter, Israel begins to bomb, like, yeah, the hell out of Lebanon, which is kinda strange that they would wait for this vicious attack onto the first day of the ceasefire.
But put that aside, the Americans also came out and said, well, Lebanon's not part of the ceasefire. What do you make of this? Was this just a way of of allowing Trump to step down a bit after he made these crazy remarks, or or was it the Israelis stringing the Americans along? Or how do you make sense of this? Because this, you know, could be what sinks the whole ceasefire, though.
Speaker 1: Well, again, you know, if I was well, if I was going to be charitable to the Trump administration, which I'm which I, you know, no longer see any reason to be, but if I if I was, you know, thinking from their own point of view and pretended that they have some constructive goal in mind, I would say, well, you know, this has been such an embarrassing defeat for them that defeat for them that it for domestic audiences, they need to pretend that they're in charge, that they're in control, that it was Iran who came crawling to them begging for a ceasefire, and that they are dictating the terms of the ceasefire, of negotiations. We all know that this is not true, that the reality is that The United States has been begging for a ceasefire, and that the Iranians are in control of the framework for any negotiations. So the 10 points are Iranian, they have been carefully formulated, they have been carefully communicated by the Pakistani prime minister to the American side. It has been received as such, there's no doubt about that. And if people in The United States can read and write English, then they understood the message and they know what the message contained.
And there's no doubt about it that Lebanon was included in those communications. So now to pretend that no, no, no, we never said anything about Lebanon, this is very disingenuous and I think that it will only move those consumers of the news cycles that don't really pay close attention to events and don't have an attention span longer than that of a goldfish. Most people can tell that there's a deception. Why? I I I think that because Trump administration has to pretend that they're in control, that they're winning, that this ceasefire is the result of their glorious victory in over Iran, they have to also show to the Zionist elements who have apparently predominant influence in American foreign policy that, you know, they're not putting any constraints on on Israel.
But if I was if I was more critical, I would say that this is very typical, that The United States is treaty incapable. You know, we already know now that while they were negotiating with the Iranians in February, they were sending weapons to the Kurds to infiltrate Tehran and to prepare a color revolution. So they were preparing the bombing campaign, and they were already activating the, you know, Mossad and CIA elements to try to overthrow the government while they were negotiating or pretending to negotiate with the Iranian government. Now apparently, there are reports about a large surge in American troops in the region in an apparent preparation for a ground invasion. I think they're talking about 50,000 troops, which I don't understand.
I don't see what they hope to achieve with 50,000 troops. But, you know, we saw all these videos with with Chinook and and these other helicopters bringing an aircraft bringing bringing American troops from The United States to the Gulf region. For what reason? It's not for picnics. Obviously, they're coming to attempt to wrest control over the Persian Gulf and the Strait Of Hormuz from the Iranians, but they need time for this.
Right? They need time to prepare that ground invasion. And I think that this is why The United States asked for a forty five day ceasefire rather than two week ceasefire. Iranians agreed to a two week ceasefire under certain conditions. But I I don't think this is going to hold.
And I think that at best, we're gonna see a two week ceasefire and then renewed renewed hostilities.
Speaker 0: Yeah. Well, I can't imagine 50,000 troops going very far in terms of trying to seize the Strait Of Hormuz. I mean, this, as Lindsey Graham said, you know, once we get the Strait Of Hormuz, we're gonna make a ton of money. How how do you yeah. We're again, on well, this is what's interesting with the Iran war, though.
That is the the narrative control is quite horrible compared to all the other wars. There, everyone has marched in line. They all made clear that this is about good values versus bad values, civilization versus the barbarism. But on this one, you know, Trump keeps making references to, oh, we're gonna get all their oil, and we're gonna destroy their civilization. It's a little bit like Venezuela.
I think the Europeans would have gone fully along with it if they would just have changed the language, stop talking about the oil and talk more about democracy or freedom or human rights or something, and then they could have, you know, put their full weight behind it. But what is the economic relevance, though, if they see of the Strait Of Hormuz or the, I guess, political economy might be more apt?
Speaker 1: Okay. So that's the part where I'm a little bit confused. I mean, it's it's not confusing what the what the impact of the closure of the Strait Of Hormuz is. That's almost obvious, you know. One fifth of the global oil supply is constrained.
One third of the of the supply of of natural gas no. Sorry. 20% of natural gas. This is much more you know, oil will continue to flow, but natural gas will not, apparently. You know, the the the the the Qatari ability to export gases, I think, is now shut down completely and probably won't be brought back online very, very soon.
And then there's a question of urea, you know, the feedstock for artificial fertilizers. Almost inevitable result will be famine in in large swathes of the world. So, you know, this misadventure might cost millions, maybe tens or hundreds of millions of lives in in the global South. And who knows where else? We'll find out how severe it will be.
So that's not confusing. What is confusing, Glenn, is that, you know, it was not so long ago, it was in January that Trump brought his delegation to Davos, and they pretty much declared war on globalism. They said that globalization failed, that they were talking about implementing the American system of political economy. Secretary of trade, Jameson Greer, in his in his remarks, he explicitly mentioned Alexander Hamilton and Abraham Lincoln and so forth. So to me, I thought, okay, this could not be more clear and more explicit.
The Trump administration has made their intentions very clear, very categorical and so this must be it, you know, which what does that mean embracing the American system of political economy? It means that bring your capital, your resources back home, you impose tariffs to create a protected market for your, you know, manufacturers and mom and pop businesses and you allow your economic system to invest itself at home, to bring prosper to build prosperity, to repair the infrastructure, to create jobs that pay good salaries, to go back to the economy where, you know, one blue collar income could support a family and put children through school and university and so forth. And so I thought that made all the sense in the world. And I kind of believed it because Trump has made those remarks repeatedly over over many years. And then he's been, you know, he's been trying to we know this from insiders whether, you know, colonel Douglas MacGregor was an insider to the previous administration.
And he you know, it appears that Trump definitely wanted to bring American troops back home from Syria and from Iraq and from Afghanistan, which is also part of all this. You want to bring your troops home. You don't want waste the nation's resources policing the world and and maintaining hundreds of military bases everywhere. And then Trump also wanted to bring troops back from Germany even. And we know that there was tremendous pressure exerted on him in 2019 to go to war against Iran and he said no, he declined that.
So I, you know, I was kind of inclined to believe that he was sincere and that he really wanted to turn away from being the global hegemon. So if that were the case, then the Strait Of Hormuz wouldn't matter all that much to The United States. That is, it will be a secondary thing because The United States is very much self sufficient. They have their own oil production, they have Venezuela and Mexico there in the neighborhood, they have Canada to the north, all very resource rich nations. And so, you know, American economy could have restructured in accordance with the American system of political economy.
And I thought I believed in a very bright future longer term for The United States, you know, maybe the following October at least. But something happened on twenty eight February and he did what he knew not to do in 2019 and what every president before him knew not to do because there were all these reports, all these intelligence findings that kind of built a consensus that attacking Iran would be a colossally idiotic thing to thing to do. And if we go back to that famous speech by General Wesley Clark when he said seven countries in five years, right, the timeline for those five years starts in 2001 which would imply that the neocon plan for Iran was to regime change it within 2006. Well, we are twenty years past that point which means that all of this pressure, all of this burning desire to take control of Iran was never realized because nobody dared, because everybody knew it was mission suicide. And I believe that we've discussed it on your podcast as well that it was obvious that it was mission suicide because Iran had all kinds of capabilities to make this a catastrophic endeavor for for for Trump.
So I was convinced that he wouldn't do it because who is that dumb? Nobody. It can't it just can't be. Well, he he went ahead. He pulled the trigger.
And now we are where we are. And I think that the consequences will be very disastrous only I think that they will be more disastrous for Europe and for Great Britain than they will be for The United States. You know, The United States has many ways to cushion the blow. As I said, you know, they are a very resource rich country, they have resource rich neighbors, They obviously have no problem of using their political and financial and military power to bludgeon their neighbors into submission and use them effectively as their colonies. So I think that The United States will not be able to avoid a stagflation from this, but I think that Europe and The United Kingdom will have a much more severe crisis as a result of
Speaker 0: it. I'm glad you brought up the Europeans. I was looking for a segue there anyways. No. But I was wondering how how they will be affected by this because, you know, Trump isn't wrong.
And even though he started the war, it's not The United States that's so reliant upon this. It's Asia and Europe. And I just saw now, was it two days ago or three days ago, the Financial Times, they had an article with the headline, something along the lines that the hedge funds are making now record bets against European stocks. So in other words, they're betting on things going south in Europe fairly soon. So how how are you assessing or what are your expectations?
Because even if this ceasefire would hold, the war would be over, there's a lot of damage that has already been done. And by the way, Strait Of Hermosa is not open. So what it makes how do you make sense of what's gonna happen to Europe now?
Speaker 1: Europe has largely painted itself into a corner. They, you know, cut their access to Russian oil and gas deliberately in spite of the fact that one fourth of Nord Stream pipelines is intact and could deliver, I think, twenty five twenty five million cubic meters of gas per year, if I remember. It's anyway, it's from from a 100,000,000 or billion cubic feet or meters. I forget the exact number, but it's a very large number. Quarter of that is could still be delivered to Europe, but they won't have it because, you know, Russian hydrocarbons are not worthy.
We're too good for it, and so no deal. Even at a cost of destroying European the European economy. Instead, they decided to rely primarily on Qatar and The United States. Now we know that Qatar cannot deliver anything either. And now we know that The United States might blackmail Europeans for access to natural gas.
And so they they've really put themselves in a very, very difficult situation. And but then there's another very, very significant vulnerability to European economies, and that is that, you know, most of the global trade is still conducting in US dollars. And, you know, under conditions of distress, European banks have had a lot of difficulty with dollar liquidity. And The US side, the Federal Reserve has kind of helped them out by creating these very large swap lines so that Europeans can access dollar balances to conduct foreign trade. But, you know, all these swap lines could be could be canceled at any time.
And, you know, they they might not be canceled under Jerome Powell, but we'll we're gonna have a new Federal Reserve chairman that will be nominated by Trump. And so that relationship might become very rocky, and I I know as a fact that European bankers are extremely worried about this. So, you know, if they lost if they if they had to buy dollars at, you know, market prices and, you know, euro could collapse. The euro could collapse, and the the result would be a big jolt to the inflation to to inflation, price inflation in euros. It would be a crash of the euro.
It could be a crisis of stagflation because you would get very sluggish or no economic growth and accelerating levels of price inflation. And so that bring us brings us to you know, that that falls already on a how do you call it? A lot of dry tinder for social revolt because people are already people are already suffering in Europe. I think that according to Eurostat, and these these figures are a few months old so it might be worse by now, but across the Eurozone, about 35% of all households in Europe have difficulties making ends meet. And in some countries, goes beyond two thirds.
So two thirds of all families have difficulties making ends meet. That's not prosperity, that's not economic success. That's a society that's moving closer and closer to the edge of a massive social revolt. And so I think that and then you know like people who are specialists in this area say, like I'm talking primarily about David Betts of I think Imperial College in London who is saying that European nations are now explosively configured for a breakout of civil wars. And so we might be looking at revolutions and social uprisings or civil wars in many European countries.
And I think that the ruling establishment will try to avert this by orchestrating a major war against an external enemy. And I think we know what we're talking about here, and I think that the whole continent is being prepared actively for a big war against Russia. And I think that this big war might take a few years, but I think that unless we push back very decisively against this, Europe might share the same the same destiny as as as Ukraine.
Speaker 0: Yeah. The the language coming coming out of Europe is quite extraordinary. You would assume at some point that the reason would start to kick in, and, you know, if you see that, well, we we don't get the the energy we needed from the Middle East, we don't get it from Russia, The United States becoming more unreliable. At some point, we would seek to diversify and improve some of the relations which have been harmed, but there only seems to be an effort to double down, though, on this continued proxy war against Russia. And I think one of the triggers could be these efforts of seizing Russian ships, which they will now see as a possible flashpoint or even allowing Finland, Baltic States territory to be used to strike Russia in the North or even the Scandinavians for that matter.
Did how do you see, though, the world, I guess, reconfiguring? Because they're not the only ones. The the Europeans, I mean, I hate to say this European, but we are not doing very well on the international's ranking of reason and rationality. I think it was the the foreign minister of Hungary who made that point that we have a crisis of reason in Europe now. But how do you see the rest of the world?
Because the Gulf States paid a very heavy price for being frontline states for The United States. And I hear you know, if you follow some of the media in East Asia, you see that this is also a concern there. Like, why did we bet so much on this partnership with The US? Where will they actually protect us, or will they lead us into trouble? So how do you see I guess, you know, we should this many variables playing out at the same time, one shouldn't make too many bold predictions, I guess.
But where do you see the overall trend going in terms of the world changing? Sorry. Very large question.
Speaker 1: Yeah. Yeah. Look. I I think there's going to be massive fracturing in The Middle East and in Europe, and I think it's going to result in the prevalence of a multipolar global order. I think that The United States will have to withdraw into its own hemisphere and will have to find its identity, whether it's it wants to be hegemon or it wants to be like a pivot power in its own how do you call it?
In its own hemisphere that actually has good constructive and friendly relations with its neighbors. But I think in order for that to happen, you're gonna need a complete reformation of the monetary system because, you know, going back to that saying that all wars are bankers' wars, United States is still completely dominated by the banking oligarchies. And they don't see the world as you and I see the world. They see the world as slave labor and natural resources that have to be turned into financial flows that only accrue to their banking institutions. And they you know, that's their levers of power.
That's all that's all they know how to do and that's all that's the, you know, that's the that's the only plan they have. But, you know, with regards to the Gulf States that you mentioned, I find it very amazing. You know, I think that, you know, Henry Kissinger famously said that it is very dangerous to be an enemy of The United States, but it is fatal to be a friend. And I think that they're now just learning that, this is actually true, and, you know, it's it seems that it's their turn now. I thought that Saudi Arabia would have wizened up to this a little bit at least because, you know, the they have been at the receiving end of some very nasty stabs in the back from The UAE and Israel.
And, you know, they've they've been setting up military outposts in Somaliland and in Southern Yemen, practically surrounding Saudi Arabia and making it very, very vulnerable to being simply cut off from global trade. And then when you look at so many of these IDF soldiers that have, you know, on their on their uniforms, they have these shoulder patches of Greater Israel that includes a very large chunk of Saudi Arabia as well, you would think that they would choose the side of Iran in this war because obviously The UAE, Israel, and The United States will ultimately cost them their kingdom. You know, once let's say once Iran is out of the way, well, the next easy picking, low hanging fruit would be Saudi Arabia. But for some reason, instead, they joined the other side against Iran, which to me is amazing. But I think that the explanation is that Saudi Arabia has I don't know how much money exactly, but I think it's more than a trillion dollars sitting in their accounts with the Federal Reserve Bank of the United States.
And, you know, they've seen what Western bankers will do what they were they would dare to do to Russia even though Russia is a nuclear power. So I think that if they if they chose the wrong wrong side in this war that they would be cut off from their money and they'd probably never see it again. And I think that this is the reason why for them maybe the short term considerations are much more important than the longer term considerations. And I think that the ultimate result is that, you know, a lot of these Gulf kingdoms will disappear, and then Saudi Arabia maybe will be reconstituted in some way. But I think that as far as Iran, Russia, China are concerned, they will they probably have no choice but to push these conflicts all the way to the point where they will create a completely new and different security architecture on Eurasian landmass because this, you know, this British geopolitics where you're constantly fomenting wars everywhere against, you know, any power against any power to keep everybody weak and divided and make sure that they are the clients of Western banks and Western corporations, of Western military industrial complex, I think that that has to end because it's just creating millions and millions of casualties of war, destroyed economies, suffocated growth, suffocated development.
And I think that people now understand that if you allow this to persist, it's always going to have exactly the same results as as it has done over the last two hundred years.
Speaker 0: Yeah. Now what you mentioned before that you were optimistic about Trump because of, well, essentially, what appeared to be economic nationalist policies, which fit into the whole American system. So I'm thinking, Alexander Hamilton, Henry Clay, this whole system followed on with, Friedrich List and others. But the the there appears now that even the Iran war follows a little bit the logic of something different that is going back to empire. Because if you look at all those things that are infrastructure that's being hit in Iran, all the railroads, the ports, a lot of this is the corridor that connects Iran with China, but it's also the international North South transportation corridor, which connects Iran with Russia and India.
So this is it seems that the the way they're prioritizing this infrastructure, which has been built up over the years now, is to essentially take a sledgehammer towards this whole greater Eurasian project. And, of course, if you can't regime change Iran and make it into a new new Syria, just fragmented and chaotic, then at least destroy all the infrastructure. It's I don't sure if you see it the same way. Do you think this is still a war aimed only towards Iran, or do you think Russia and China are also targets here?
Speaker 1: Oh, no. No. It's it this this juggernaut never stops. I think that if if they manage to overthrow Vladimir Putin's government in Russia, that they will use Russia against China in exactly the same way that they used Ukraine against Russia. So, you know, they they take over political power in a country, and then they use that country's economic and military power to turn against the next victim.
You know, they they didn't go fight Russia themselves. They militarized and weaponized Ukraine to fight Russia. And then if they succeeded if if they succeeded, they would militarize Russia against China. And then if they succeeded in Iran, they would probably cut off Russia from its North South international transport corridor. They would force Russia again to depend on the Arctic and Suez trade routes.
And they would continue using their divide and rule until they had complete and total hegemony over the Eurasian landmass. I mean this is the Macandarian politics that goes back to, you know, I would say probably quite a bit longer than a hundred years where, you know, the the the British have perfected this system of constantly using war and intrigues to pit power against power, to keep them all weak, and to dominate everything. And, you know, there isn't a point in time or space that they say, right, okay. So I guess we have a big empire now, we have a bunch of really rich colonies that we we exploit. We can stop here.
They never stop. And whenever any nation becomes a bit more powerful, a bit more prosperous, you know, kind of like Libya that want to be left alone, that they want to develop their economies for the benefit of their own people, It has to be destroyed so that, you know, like that malignancy never rests. It always is looking for targets to attack, which is why we're in the state of permanent warfare now. And all of these wars are coming from the West. They're not being instigated by Iran, they're not being instigated by Syria, by Russia.
It's always the West that is fomenting these wars.
Speaker 0: I agree.
Speaker 1: Yeah. And and the dynamic always always always leads back to the to the financial centers, to the to the banking oligarchies.
@Glenn_Diesen - Glenn Diesen
Jiang Xueqin: The Iran War & the Battle for the Petrodollar https://youtu.be/P_DHMUdOVdo https://t.co/d2wOIE5Guu
Video Transcript AI Summary
In this discussion, Zhang Shuay Shin and Speaker 1 analyze the evolving U.S.-Iran confrontation through the lens of global power dynamics, the petrodollar, and the shifting balance among major powers.
- The war is framed as primarily about preserving the petrodollar. Speaker 1 argues the United States, burdened by enormous debt, seeks to maintain the dollar’s dominance by controlling energy trade through naval power and strategic choke points. The belief is that the U.S. can weaponize the dollar against rivals, as seen when it froze Russian assets and then moved to stabilize oil markets. BRICS and others are moving toward alternatives, including a gold corridor, challenging the petrodollar’s centrality. The aim is to keep Europe and East Asia dependent on U.S. energy, reinforcing American hegemony, even as historical hubris risks a global backlash turning growing powers against Washington.
- The sequence of escalation over six weeks is outlined: after the American attack on Tehran and the Iranian move to close the Strait of Hormuz, the U.S. eased sanctions on Russian and Iranian oil to maintain global stability, according to Treasury statements. Escalations targeted civilian infrastructure and strategic chokepoints, with discussions of striking GCC energy infrastructure and desalination plants. A U.S. threat to “bomb Iran back to the stone age” was countered by Iran proposing a ten-point framework—encompassing uranium enrichment rights, lifting sanctions, and security guarantees for Iran and its proxies. The Americans reportedly suggested the framework was workable, but negotiations in Islamabad stalled when U.S. officials did not engage seriously.
- The broader objective is posited as not simply a tactical war but a strategic move to ensure U.S. imperial supremacy by shaping energy flows. Speaker 1 speculates Trump’s motive centers on keeping the petrodollar intact, potentially forcing China and other partners to buy energy with dollars. Iran’s willingness to negotiate in Islamabad is linked to pressure from China amid China’s economic strains, particularly as energy needs and Belt and Road investments create vulnerabilities for China if Middle East energy becomes unreliable.
- The proposed naval blockade is discussed as difficult to implement directly against Iran due to ballistic missiles; instead, the plan may aim to choke off alternative routes like the Strait of Malacca, leveraging trusted regional partners and allies. Iran could respond via the Red Sea (Bab al-Mandab) or other leverage, including the Houthis, challenging Western control of energy corridors. The overarching aim would be to force a global energy reorientation toward North America, though it risks long-term hostility toward the United States.
- The roles of great powers are analyzed: the U.S. strategy is described as exploiting Middle East disruption to preserve the petrodollar, with short-term gains but long-term risks of a broader alliance against U.S. hegemony. Europe and Asia are pressured to adapt, with China’s energy needs especially salient as sanctions tighten Middle East supply. Russia is identified as the principal challenger to U.S. maritime hegemony, while China remains economically entangled, facing strategic incentives to cooperate with the United States if required by economic pressures.
- The dialogue considers NATO and Europe, arguing that the real contest is between globalists and nationalists in the United States, with Trump viewed as an agent of empire who may threaten the existing globalist framework. The speakers discuss whether this competition will redefine alliances, the future of NATO, and the possibility that a more Eurasian-led order could emerge if Western powers fail to maintain their maritime advantages.
- Finally, Russia’s role is emphasized: Moscow is seen as the key counterweight capable of challenging American maritime dominance, with the war in Iran serving, in part, to counter Russian actions in Ukraine and to incentivize alignment with Russia, China, and Iran against U.S. leadership over the next two decades.
Full Transcript
Speaker 0: Welcome back. We are joined today by Zhang Shuay Shin to discuss the developments between The United States and Iran. So thank you very much for coming back on.
Speaker 1: Thanks, Ryan.
Speaker 0: So I I well, the the first thing I think about is in regards to this war is that the Iranian targets all seem to be very well calculated in terms of economics. And I think this is interesting because usually in all American wars, they there's some economic interests to go to war. But now we see them well, not just shutting down the Strait Of Hormuz, but you see them when they essentially forced Americans to spend their expensive interceptor missiles. All of this has seems to have an economic underpinning. But the really big thing appears to be the possible attack now on the petrodollar.
I was wondering how do you see how do you see the vulnerability of the petrodollar in this war?
Speaker 1: Right. So I would argue that right now, this war in Iran, it's primarily about maintaining the petrodollar. Because these past ten years, the world has become increasingly concerned about the viability of the petrodollar. Right now, The United States is $39,000,000,000,000 in debt. The United States, right after the the Russians, invaded Ukraine froze over $200,000,000,000 in Russian assets, which makes the world question the legitimacy as well as the credibility of The US financial system.
Because if the Americans can weaponize the US dollar against the Russians, they can weaponize US dollar against everyone. So after that, you saw this massive exodus from US treasuries. And right now, China is establishing the, gold corridor. So BRICS is trying to create alternatives to the petrodollar. But for the Americans, the petrodollar is the very basis of their empire.
And quite honestly, it's the very it's a it's the objective of their empire. So The United States right now is in a fight tooth and nail to protect the petrodollar. What this basically means is to use its naval supremacy, its control over strategic choke points, maritime choke points to control trade access, and basically force nations to depend on US resources. So we saw that United States in January attacked Venezuela, and now it's attacked Iran. Recently, these past few days, there was a Ukrainian drone strike on Russia's main export hub, which basically took off 40% of Russian oil from the global market.
And so Europe and East Asia are now forced to depend on The United States, North America for energy. And right now, we're seeing a pivot from Europe and East Asia over to North America. And so that's a strategy in place where The United States basically wants to take take off Russian GCZ oil and force the world to buy from The United States, which protects the petrodollar. But what we know from history is that this sort of hubris will lead to a backlash, and it will lead to the world unifying against America eventually. Because quite honestly, America used to be the policeman of the world and has become the pirate of the world.
And so maybe in the short term, you will see the strategy working out, but definitely in the long term, you will see the world becoming much more aggravated by this piracy.
Speaker 0: So what do they need to achieve then in in this war? Because well, I was wondering if you were surprised that the Americans appeared to have walked away from the negotiations. At least that's what it seemed like in Islamabad. Do you is is this to continue the war then, or or is it simply because they can't or the petrodollar won't survive if the Strait Of Hormuz is with Iranians? Or what is the thinking here?
Speaker 1: Right. So we've seen a very strange sequence of events these past six weeks. The war's been going on for about six weeks, and we've seen a lot of strange event events. So the moment that the Americans attacked Tehran and and killed their supreme leader, the Iranians basically closed off the trip of Houmouz. And in response, what the Americans did, which was very surprising, is they basically removed sanctions on both Russian and Iranian oil, allowing the Russians and Iranians to make a lot of money selling the the oil.
So that was sort of surprising. And Scott Bezin, the the treasury secretary explained that this is to maintain global stability. He's afraid that oil will reach $200 and this would destabilize the global economy. And as this world progressed, we saw The United States escalate to attacking civilian infrastructure like universities, bridges, and railways. In fact, there's real concern that the Americans in Israelis planned to choke and strangle Toronto to death, meaning cutting off the railway system, the roads, which would put Tehran under siege.
They couldn't get food and water from the other parts of Iran. And Tehran, a city of 10,000,000 people, would be in a lot of trouble if that that that were the case. So what we were seeing was constant escalation. Then last week, we were on a brink because Trump basically declared that if Iran did not open the Strait Of Hormuz, then the Americans would bomb Iran back to the stone age. And Iran obviously would would would retaliate by destroying GCC energy infrastructure and the desalination plants.
So last Tuesday, we're really on the brink, and it seemed as though we were heading towards war three. But then Trump did something completely surprising, which is he basically offered an unconditional surrender. Iran had a 10 plan, which included that Iran would be allowed to enrich uranium. It also included that all economic sanctions against Iran would be lifted. Iran will be given sovereignty over the Shreve Hamuz, and all security guarantees will be applied to both Iran and its proxies, the Houthis, Hezbollah, Hamas.
So these were the 10 points that Iran demanded. And Americans, Donald Trump basically said that this is a workable framework. And so they agreed to meet in Somabad to discuss these 10 points and use them as a framework for a possible long term ceasefire. We know that once they reach Islamabad, J. D.
Vance, Dierk Kushner, and Siegf Reykov basically blew off the Iranians. They were not serious about negotiations. The Americans went in with some goodwill hoping to reach an agreement, and that and that's where the Iranians went. But the Americans just just basically said, no. We're we're gonna stick to our original demands, and so the negotiations went nowhere.
And so now we're back to where we were a week ago. So the big question then is, why would the Americans do this? What what's the point of this ceasefire? And so we we can only speculate here. Okay?
So so so let me try to figure out how Donald Trump thinks because he's a businessman. And what does he want? Well, his main objective is to maintain American imperial supremacy by maintaining the petrodollar. And that basically means forcing China and Japan and South Korea and Europe to buy energy using the US dollar. That's what the petrodollar literally means.
And so maybe the point of this war was to destroy the GCC and Iran's capacity to deliver oil to the world market and force the world to rely on North America, Canada, Mexico, and The United States. K. So let's just say that is the main objective. And, obviously, Trump can't announce this because this would piss off the entire world and you have the entire world against The United States. Well, in order for him to pull this off, he would basically need to gauge China's reaction because we know that China and Iran are very strong allies.
China has invested a great deal in Iranian infrastructure as part of the Belt and Road Initiative, and China buys a lot of oil from Iran. In fact, China buys about 90% of all Iranian oil. So, basically, Trump needs to figure out, can I pull this off and would China agree to buy oil from me? Okay? So he's a negotiator, he's his businessman, he's practical, he's trying to figure out what the pressure points on China are.
And I would make the argument that this Iran Iran agreeing to this Islamabad negotiations would not have been possible if China did not apply pressure on Iran. K? I would make this argument because the Iranians have been negotiating with Americans these past few months, and they know that the Americans use these negotiations as a pretext in order to, assassinate leaders, in order to, do surprise attacks. So the Iranians know the Americans have absolutely no credibility at all. The Americans are not serious at all about peace negotiations.
And these past few weeks, the Iranians have been adamant saying, you start this war. We're just protecting our sovereignty and there's some point in negotiations. Let's just fight this to the better end. I think that was the right approach. This is what you this is the attitude you must take against bullies.
So why is it that the Iranians suddenly had a change of heart and says, fine. Let's negotiate in Islamabad. In fact, set a pretty they set a pretty high level delegation to Islamabad, including the foreign minister, to partake in these negotiations knowing that Israel has a history of assassinating negotiating teams. Okay? So they put their diplomats at tremendous risk.
And I think the only explanation is that right now, the Chinese economy is under a lot of strain. China receives about 6% of its oil and energy from The Middle East, including Qatar and Saudi Arabia. With China receives receives about third of its energy needs from Venezuela, Russia, and Iran combined. And China's been very lucky in that these three places have been sanctioned. So China was has been able to receive these these the oil at a very deep steep discount, which has really helped the Chinese economy.
And now and now a lot of this energy is being is moving offline. So the Chinese economy is a lot under a lot of stress. So Trump's trying to figure out, can I when I go to China in mid May, can I propose to Beijing? Hey, man. Let's have a grand alliance where you start to buy energy from North America.
And he's trying to figure that out. And given that Iran agreed to negotiations, I think that he's figured out that the answer is yes. China must agree because of the state of their economy. And this is why we saw right after the negotiations were canceled, Trump announced a naval blockade against Iran. Because he knows that right now, China's a lot of strain and he can bring China into into an agreement and and thus protect the petrodollar.
So so that's my explanation for what's going on. I could be wrong. It's all speculation, but I think this is what makes the most sense so far.
Speaker 0: The naval blockade, this is well, a strange conception because it's it's unclear how it's gonna be upheld because they're not naturally in the strait either. They will be far away. So it's essentially, the blockade is would it entail attacking Chinese ships entering? I mean, it seems absurd. What if they would the Iranians open up for Indian ships?
Are they gonna start attacking Indian ships? It it doesn't really make that much sense. How how do you see this? What is how this blockade actually function, or is it just meant to choke off the the Iranian ships?
Speaker 1: Right. So from a practical perspective, it's actually very hard to implement because if you go close to the Iranian coastline to the Strait Of Hormuz, then you're in range of Iranian ballistic missiles. And so the Americans won't risk that because we we've seen that their aircraft carriers, including the Gerald Ford, Naple, Lincoln have intentionally stayed away far away from Iran's ballistic missile range. So they're afraid of ballistic missiles, and they know that these ballistic missiles can sink their aircraft carriers which would be sorry. Which would be a tremendous tremendous defeat strategically for the Americans.
So I think this is a pretext to choke off the Strait Of Strait Of Malacca. Right? So there are two major choke points for East Asia to receive oil from the Middle East. The Strait Of Hormuz is what Iran controls. And so in response, America plans to choke off the Strait Of Malacca, which is right now basically controlled by Indonesia and Malaysia, both of which are American military allies.
And these these nation have been heavily infiltrated by the CIA. So I think that's the grand strategy to basically use the Strait Of Malacca to chop off East Asia from the from GCC Energy.
Speaker 0: Yeah. But if the Americans actually go through with this attempt to blockade, the the Iranians would probably respond with their ally in Yemen, that is to close off the Red Sea at Bab Al Mandab. So I'm just it it seems that this could be well, it just seems like this plan is weak at many levels. But it kind of begs the question of how what do you see being the likely success of The United States achieving its objective, not just with the blockade, but also with preserving the petrodollar because Iran is quite resilient. And I'm assuming that the Chinese, you know, much like with the war against Russia, that they they know that they could be next on the chopping block or that they at least are the ultimate targets.
Speaker 1: Right. So what America is mostly interested in is trying to sustain its debt. Right now, America has $39,000,000,000,000 in debt. That's not that's not that's not a promise long as nations continue to buy up US treasuries. And we've seen these past few years a movement away from US treasury and more and more towards gold.
The Chinese especially are moving towards, gold. So how do you force East Asia and Europe to continue to buy US treasuries? Well, if you are the only supplier of energy, of oil and gas, LNG, they have absolutely no choice but to sell their gold and buy US treasuries in order to sustain their economies. Right? So, yes, you're absolutely right in that the Iranians have countermeasures.
The Iranians could use the Houthis to close off the Red Sea. They could attack the pipeline that connects Saudi Arabia to the Red Sea. There's many many measures that the Iranians can do, but the influence of the Iranians is contained to the Middle East. Remember, the ultimate objective is to knock off Middle East oil and energy from the market And that is very easy to do as long as long as you continue to provoke this war. Now, I think the next step is a ground invasion in order to force Iranians to attack GCC energy and desalination plants.
Right? So the entire goal is to destroy the Middle East, which will force the world to pivot to North America. So in a long in in a short term, this strategy will work out because there's absolutely no alternative, for the world to, the Middle East energy. But in the long term, this will create a great deal of animosity, towards United States, which will ultimately destroy their empire.
Speaker 0: Well, Romano Prodi, the former prime minister of Italy and also, yeah, former president of the European Commission, he he said something interesting along those lines. He was making the point that, well, at some point, Europeans will have to start getting energy again from the Russians if they wanna thrive. But he also made a prediction that the energy would open once the Americans would begin to control the energy infrastructure between Russia and Europe. So, essentially, the Americans taking over Nord Stream, this is when the energy will start flowing again, which is, well, an assumption, I guess, that that that that Americans want to be in control over the energy architecture. Otherwise, they will not permit it.
But but but beyond this, you know, what what Trump might be planning, our common argument is often that Trump is not necessarily fully in control, that he's all if not compromised, at least under great influence from various interests, be it the neo cons or the Israelis. How do you see this, the extent of Trump's control? Because well, given how different his second administration is compared to the first, one often gets the impression that it doesn't always matter who, you know, sits on the throne in The US.
Speaker 1: I think in the first administration, there was a lot of concern within the deep state and the neocons and the different political factions who were in Washington DC about Trump's capacity
Speaker 0: to be
Speaker 1: a leader because he was outrageous in his speech, in his rhetoric. The Europeans were very much concerned about Trump. Trump started this trade war with China that was hurting the global economy, and it was hurting American consumers. Trump did not seem like a viable leader, and he did not seem as though he can maintain the empire. And people felt that if he stayed in office longer, the Europeans would drift away, China would drift away, the entire world would drift would drift would drift away, and American hegemony would would die.
But then what happened, of course, was that Biden came into power, and Biden was essentially comatose. He did nothing for four years. So Putin invaded Ukraine, and Americans didn't really have a forceful response. I mean, they did do a lot of things like blow up the Nordson pipeline. They sanctioned Russian energy.
They removed Russia from the SWIFT system. They sent they froze 20,000,000,000 in Russian assets. They did a lot of things, but none of these things were actually useful. And the empire decided that regardless of what we feel about Trump, he is forceful. He will act.
Whereas Biden and the Democrats may not act because essentially they're a bunch of pussies. And so the decision was made to reinstate Trump in 2024, and that's why we are here today. So Trump is an agent of empire. He is doing what the empire requires. Okay?
And so what what happened before during the Europolem moment, basically from 1991 up to today, was that America had a lot of goodwill and it was able to achieve the consent of the world, mainly by co opting the global elite. Right? So all these elites in Europe, in Russia, in China, they were mainly concerned about engaging as much corruption as possible so they can basically transfer their ill gotten gains into America. And this doesn't work really well for the elite for a long, long time. But obviously, these nation states are were not were not very happy with the state affairs.
That's why you saw the rise of Putin in Russia and the rise of Xi in China because there was a lot of concern among the nationalists that America was hauling out these these countries. And they were completely right in the matter. So so now you're seeing a direct challenge to American empire. And so the only challenge is you don't have the consent of these nation states, then you must use force to enforce your empire within these nation states. And so before the American military was used in order to guarantee peace in the passage Americana was used to guarantee a national trade.
They were the policemen of the world in order to maintain the rules based national order. And now that's and now that Russia and China and other nations are questioning the legitimacy of the rules based national order, what Trump is doing is he is transforming the military, the American military from a police force into a pirate force in order to extract tolls from, the world. So we are in this situation because Trump's first strategy was to use tariffs, like, on the world, right, to force Europeans to pay tariffs to the American empire. But the supreme supreme court struck that down because they said that the he said that Brantz doesn't have the authority to enforce tariffs only congress does. So Trump's like, well, you know what?
If con if you want me to enforce tariffs, then I'll just enforce tolls. Okay? I'll make the world pay tolls in order to have trade around the world. And and that's why we're seeing the Americans employ went through their navy into the Caribbean to block trade into the Western Hemisphere. That's why we're seeing this war in Iran to block off the world from Middle East energy.
And that's why we're seeing right now the the US Navy basically boarding Russian shadow fleet tankers, basically stealing shadow fleet tankers. And and we'll see more of this as the months go by.
Speaker 0: Yeah. What's interesting with Trump though, there's some consistency here. I mean, many people, I guess, mistook his rhetoric for being, you know, all about peace. But if you listen to what he said all the way going back to the nineteen eighties, he was essentially scolding all the Japanese and others for for, you know, taking advantage of The US the way he saw it. So he he didn't say that we shouldn't have a big empire.
He just said the empire they should pay us for the privilege of being protected. So it's not that he didn't want an empire. It seemed he just wanted a better return on investment. That is, you know, you have to monetize the empire somehow. Otherwise, the the empire will kill off the republic.
So in other words, they should feed it. It looks as this is where his his main difference is, but that means not just extracting from adversaries, but also allies. But I don't think it's limited to Trump. I think overall, The United States will tilt more and more in this direction because as they have said, they exhaust themselves with $39,000,000,000,000 in the hole. This it's not as if you can vote for a Democrat, and suddenly they go back to paying for the security of allies anymore and having generous trade agreements, the the there's no going back after, you know, exhausted to this extent.
Sorry.
Speaker 1: Yeah. So this is a really important point that you make. Okay? So remember, in 2016, when Trump first came into office, he was seeing the same things you're saying which is everyone's taking advantage of us, especially China. So let's impose tariffs and make sure that that it's America first, that America is winning in this in this trade relationship.
But after Trump left office, Biden came in with the Democrats and they institutionalized his policies. Okay? So during the first Trump administration, a lot of it was personal, especially his tariff war against China. And then Biden and the Democrats made it institutional. And so we're sort of the same, process here where maybe Trump leaves office in 2028, the Republicans lose, the Democrats come come into office, and they won't change anything.
All they're do is institutionalize it and make it a long term sustainable policy because this is what benefits American empire.
Speaker 0: So how will the great powers respond then? Because The US, obviously, is shifting the strategy. It's becoming more extractive and more aggressive. Again, it's not going well, it's not going down without a fight. How do you see the the Chinese and the Russians, well, reacting to this?
You mentioned before that China's it's gold corridor in terms of shifting more to, yeah, gold instead of being reliant on the US dollar. But what is it being the overall all strategy here? Because my impression is, at least from the Russians, that they the the interpretation that Trump was someone they could make peace with and, you know, reset relation, it appears to be backsliding. I think they were quite appalled by what has happened to Iran, not just the attack on economic infrastructure, but also the, you know, the killing of its leaders. And it seems, yeah, very much to go against their interest.
And, also, Trump never actually did what he promised, which was to end the war in Ukraine. In all fairness, this could have been done if you would have cut off, you know, the intelligence agencies still working there.
Speaker 1: Alright. So, again, I think we give too much credit to Trump. I think that this is a natural response of empire to its decline. We historically, empires have never have never gone quietly into the night. They have flailed against the wind, and they have tried to destroy the world as they decline.
And so we can see much more hubris. We will see much more thuggery and piracy in America. We have a rule about Trump. And so I think we are in a situation because of the limitations of Chinese strategic thinking. So when China built the Build and Road Initiative, which was proper, with with which was a good strategy of trying to secure resource independence from The United States, the problem was that when these Chinese ships went to collect commodities from overseas, they were escorted by the US Navy.
When they came back, they were escorted by The US Navy. It was the US Navy that guaranteed the protection of Chinese trade. And it never occurred to Chinese policy policymakers that one day, one of these days, America could be like, why don't you steal the cargo? You know? Why are we escorting these Chinese ships around the world?
Why don't countries steal it? And so it never really occurred to Chinese pause pause policymakers of this possibility. And I don't know why why this is the case, but, we we can go into many possibilities. But the the reality is that China is now in a lot of trouble where China has invested $200,000,000,000 into the Middle East in infrastructure. China right now imports 50 to 50 to 6% of its oil needs from the Middle East.
Now that the Strait Of Hummus has been closed off, now that this war is raging in The Middle East, China is in a lot of trouble. And again again, this is all has to do with the limitations of Chinese strategic thinking. And so now China is in a lot of trouble. And in a short term, China has actually no choice, absolutely no choice at all, but to agree to Trump's demands which is that China will become a major purchaser of American American LNG. China has actually no choice in the matter.
Okay? Absolutely no choice. There's no there's something China China can do. Now, in the mid and long term, what's gonna happen is that Russia will start to challenge America in the seas. It's gonna challenge America American maritime naval supremacy.
Basically, what what Russia is gonna do is it's gonna arm its shuttle fleet. And there's no way that that Russia could defeat America militarily in the seas, but America will be forced to fight a war of attrition and over time, the American Navy will be downgraded. It will be degraded. And it'll be very hard for the American Navy to replenish its lost ships. And so that's what what we're seeing in the long term.
In the in the short term, there's absolutely nothing Russia and China can can do.
Speaker 0: Yeah. I often think about the current situation. It resembles a little bit like before World War one. That is you saw Germany building and becoming stronger and stronger in terms of industrial production, steel production, essentially all the key measurements. Meanwhile, the British controlled the seas.
The entire their ability to actually compete against the British was, you know, was in hand of the hands of the British. So all they had to do is is begin to cut off or threaten their supply lines, which is why the Germans also had to find, you know, other other possible corridors, either land or sea. But it's a little bit with the Chinese, I feel. They have all this. Well, probably one of the motivations behind the Belt and Road Initiative that is you can't rival The US as the economic leading economy while the Americans are then organizing their or, you know, organizing their supplier lines and their their physical transportation corridors.
It doesn't make much sense. But this return to, I guess, well, piracy, as you say, or or choking off these different transportation corridors, We've seen, of course, the blockade on Venezuela, Cuba, the hijacking of these Russian ships. By the way, the hijacking of Iranian tankers have happened for some years now before this war as well. So so I I get it that our hegemon in decline will begin to weaponize all the economic levers of power. There's access to its technologies and industries, transportation corridors, banks, currencies, all of this is weaponized.
But The United States isn't all powerful either. I mean, how what is the main challenge for The US to hold out? Because as you said, they're struggling with their own debt. This is all their economic trouble is also translating into social and political instability. So it looks as if, you know, they they they can't afford to play this game with the Iranians for too long that, you know, at some point, they will have to put an end to this thing.
Speaker 1: I think, like, the goal is to have this war continue for as long as possible. And the reason why is that if there were peace in the Middle East, what would happen is that Russia, Iran, and China would get together and form a trade alliance to counter America's control over the seas. And this trade alliance could extend easily into Europe, into Africa. This is what what McKenna calls a heartland thesis. Right?
Where America and Britain, the way for them to maintain their empire is by controlling maritime navigation. And the great concern is that a power would emerge in Eurasia to unite the heartland and basically negate Anglo American naval power. And so this war in Iran cannot stop. If it stops, then Russia could achieve its North South trade corridor and China could implement its Belt and Road initiative. And given the how America is starting to behave, then I think that Europe, The Middle East, Africa would happily join this trade alliance and basically try to try to ignore the Western Hemisphere and Britain.
And so there's no way that Brit that America will seed Iran and and leave Iran alone. It's gonna send in ground troops to create as much chaos as possible and try to disrupt the Belt and Road Initiative. What we're seeing is that the Israelis and the Americans are targeting railways in Iran, which is crucial to the Belt and Road Initiative. And so we can we will we can expect maybe mowing a lawn of Belt and Road in in in infrastructure for years and years.
Speaker 0: Yeah. I couldn't help but to notice the targeting of the railroads as well, as well as some ports in the Caspian. So this entire
Speaker 1: That's right.
Speaker 0: International North South transportation corridor from which have been building from Russia, Iran to India, this is being undermined, but also, of course, Iran's connectivity with with China. So but but I'm just wondering about the feasibility here because how what exactly can boots on the ground achieve? But, also, can The United States get the boots on the ground? Because they're quite overextended already.
Speaker 1: Right. So the boots on on the ground, it's basically to maintain the war. Right? So the problem with air with air warfare, which is what the American syndicators have been using for the past six weeks, is that your your it's gonna be very hard to maintain your your air power. We're already seeing some planes crashing because they're not well maintained.
We're seeing the Iranians adapt very creatively and resiliently to American air power. So you you can only establish air supremacy by having boots on the ground. And so I I think the main objective of of of the boots on the ground is not necessarily to take over Iran. I mean, that's a suicide mission. But it's basically to secure the coastline and try to degrade Iran's air defenses and basically force Iran on the defensive.
The main objective, I think, if if I'm fighting this war, I think my main objective is to choke off Tehran. Basically, to cut off all railways, cut off all roads, and basically force the population into starvation.
Speaker 0: So this is where you think we're going? I think so. Destroying the population or as Trump would say, kill off a civilization?
Speaker 1: That's right. That that that would be the strategy moving forward. Yes. To to basically besiege Tehran.
Speaker 0: Just a such a big country. It seems hard to yeah. Again, if the railroads are undermined. But it it also has his domestic problems, though, the that Trump needs to you know, it's not a popular war among the public, and it has some fierce political opposition only intensified with the political polarization. I I I do wanna ask about NATO, though, because this is was often perplexing to many Europeans because while, you know, in the Gulf States, they're now discussing the extent to which, you know, being frontline states for The US is actually harmful to the security, they're having some of these talks in East Asia as well.
But in Europe, I mean, they must be the most loyal, obedient allies or frontline states of The United States. I I'm I'm convinced they would have possibly joined the war on Iran if you would have asked them before it went south. But but but why why is does it seem to be such an objective for Trump to, I guess, undermine NATO? Because this is the main I mean, the Europeans don't have much political imagination to have security without The United States. So, you know, it looks like a massive resource to have the Europeans essentially buy whatever America wants to to, yeah, use, you know, use their currency, buy their energy, buy their expensive weapons.
I mean, the Europeans will do anything if they believe America will be there for them. So I make this big show out of we're not gonna be there for you anymore, because if there's one thing that would make the Europeans break off and seek an independent path from The United States, it's essentially The US has to shut the door on them because they're not otherwise, they wouldn't shut the door on America. So it's a bit strange how I can understand that NATO's not that the Europeans, they're not really a force amplifier. They're not bringing much to the table. They're a bit of a cost, but still, it's a bit, yeah, strange how dismissive he is of them, though.
Speaker 1: So I think that the real war is actually not between United States and Iran. I mean, the real war is between between the globalist and the nationalist. Right? So in The United States, it'd it'd be a war between the financial elite as as represented by the city of London and Wall Street versus MAGA in America First. And so what Trump wants to do is basically transition America from an empire into something called a technique, which is the idea of a greater North America.
Right? So move away from the world and just focus on consolidating greater North America, taking over Canada, taking over Greenland, taking over Mexico, taking over Cuba, Venezuela, Colombia, Honduras, Nicaragua. Okay? So so these countries that Trump has been pissing off for the past few months. Okay?
But the grand vision is to transition America into greater North America and become a continental fortress that sells resources to the rest of the world because the rest of the world is at war and in in in in desperate need of both fertilizer and energy. And so Trump really sees NATO as part of the deep state, as part of the globalist globalist class, and so he's using this war as a pretext to severe relations with NATO. Basically, Trump would be perfectly happy if NATO were to go into Ukraine and be absolutely massacred by the Russians. That would solve a major headache of his. So, yes, there is this war going on between United States and Iran, but we have we have to forget that there's but we we should not forget there's also a shadow war going on between the globalist and the nationalist in America.
This is also why Washington DC is supportive of Trump's war because the globalist want Iran to be humble. They want Iran to be destroyed so that they can extend the hegemony of the empire. And they think that Trump is a useful idiot, a puppet in order to achieve this goal. And that's why the Democrats have not stopped him. You know, there was recently, two weeks ago, no kings protests in United States, millions of people.
And like, you you you were allowed to say no kings, but you were not allowed to say no war. Right? You would think like that people would be much more governized by an anti war settlement than it is than they are are by like an anti tyrant settlement. But during the protest, which were organized by democratic lobbyist lobby groups, which were very pro Zionist, you you are not allowed to voice any anti war settlement. So it just goes to show you that all of Washington DC is fully behind this war, and they think that Trump will be the scapegoat.
That that that even if this war goes badly, Trump will be the one that takes all the blame. The Republicans will will be wiped out in the midterms, and then Democrats can steamroll back in office in 2028. And then they can implement a globalist agenda and destroy MAGA once and for all.
Speaker 0: Yeah. This language, though, the globalist versus the nationalist, it's fascinating that the the first time I read about this divide was by Samuel Huntington, none other. Back in 2004, he wrote this article Dead Souls, where he was making the point that all this globalization had essentially created a a political elite detached from the nation. So he was making the prediction that the future divisions in the world would be between the cosmopolitans or globalist versus the nationalist or patriots. So I thought it was insightful.
Again, it's 2004. Yeah. It's been twenty two years. And if you listen to a lot of the new populist leaders we have, this is what they're yeah. Marine Le Pen to Afte, this is essentially the same language they also use now.
Let me just ask a last question. How does Russia fit into this? Because all the pieces kinda make sense there. I understand the the rivalry between The United States, China, the the the problem of Iran, but but Russia is, you know, is an energy superpower in many ways. It's not doesn't have to be an opponent of The United States.
It's within this rivalry between the cosmopolitans and the and the and the nationalists. It's it belongs to the the latter, it seems. So how how do you see this, yeah, impacting the thinking in The United States? What is the most partner to Iran and China should have had?
Speaker 1: Right. Yeah. Right now, United States' main adversary is not China. It's really Russia because Russia is the only country that has the resources, the political will, and the territorial integrity in order to challenge American hegemony. And so right now, America's major concern is is Russia.
And this war against Iran is really seen as a way to counter Russia's aggression in Ukraine. Basically, once Russia went into Ukraine, America has actually no choice but to attack Iran in order to counter Russia's possible control over the heartland. And so this is going to be the defining struggle for the world for the next twenty years, not between United States and China, but between Russia and America. And the great question is, where will the world align over the next twenty years? If history is a guide, most countries will start to align with Russia.
Because if you go back go back to the Peloponnesian War, the main aggressor was Athens. And what happened ultimately was that the entire world ultimately aligned against Athens because Athens was seen as the great aggressor. So right now, the great aggressor is America. And we can see that the world, especially Europe, and Iran, and China turning to Russia as the great salvation. And what Russia will do is start to challenge America in the seas.
Again, I don't think there's any hope that Russia will win against America in the seas, But Russia has absolutely no choice but to start to challenge America.
@Glenn_Diesen - Glenn Diesen
John Mearsheimer: U.S. Expands Iran War & Divorces Europe https://youtu.be/8dUsurWcFdI https://t.co/5mRKQONfB1
Video Transcript AI Summary
In this discussion with Glenn, Professor John Mearsheimer analyzes the U.S. handling of the Iran war under Trump, the role of Israel and the lobby, and the broader implications for the international system as power shifts from unipolar to multipolar.
Key points on U.S. strategy and diplomacy
- Trump’s approach is a unique form of diplomacy: he pursued a ceasefire grounded in Iran’s 10-point plan as a starting point for negotiations, then moved to a blockade of Iranian ports and allowed escalation elsewhere. The aim, according to the speakers, was to gain breathing space to rearm and regroup, and to press Iran into concessions.
- The absence of a viable military option: there is no credible American military path to victory in the Iran war. Escalation would be Iranian-dominant, and further escalation would damage the world economy, creating political and economic consequences domestically and internationally.
- The administration’s diplomacy is hampered by incompetence, notably in Ukraine-Russia diplomacy, which erodes confidence in negotiating with Iran as well. The Israeli lobby adds pressure to avoid a peace that acknowledges Iran’s gains.
- Four goals in the war, from an Israeli perspective, are regime change, eliminating Iran’s nuclear enrichment, destroying long-range missiles, and stopping Iranian support for Hamas, Hezbollah, and the Houthis. Israel and its lobby view the situation as existential and push for continued pressure unless Iran is decisively defeated. From the U.S. perspective, this means consensus among allies is fragile and often subordinated to domestic and lobby pressures.
The strategic logic of the blockade and escalation
- The blockade is not a war-winning instrument. The naval option is constrained by ship counts, wear on assets, potential Chinese escorts, and reciprocal Iranian actions (Iran already captured ships in retaliation). Iran’s tolerance for pain is high, and the blockade is not a reliable lever to force compliance.
- Air power failed to defeat Iran, confirming that the war cannot be won through bombing alone. Ground invasion is unlikely due to limited American combat troops, political will, and public tolerance for casualties. Consequently, the U.S. has turned to naval coercion via the Strait of Hormuz and global oil interdictions, but this too is unlikely to compel a definitive Iranian capitulation.
- A ceasefire is seen as essential to halt the fighting and begin negotiations; however, the ceasefire has not achieved meaningful negotiations because the blockade remains in place, and Iran has demanded its end as a condition to return to talks.
Possible Iranian responses and risk dynamics
- If the United States were to resume massive bombing, Iran could launch a “Goderdammerung” response—shutting down the Persian Gulf and Red Sea, attacking energy infrastructure and desalination plants, and wrecking the world economy. This would imply a broader regional and global calamity, with Iran threatening to pull down others with it.
- The Iranians are expected to leverage the Strait of Hormuz and toll revenues, and to press for sanctions relief and ongoing control of the Strait as bargaining chips. The blockade may inflict pain, but Iran has shown a high capacity to tolerate it, making the naval option unlikely to deliver victory.
Europe, diplomacy, and the evolving alliance system
- Elbridge Colby’s remarks suggest Europe should take primary responsibility for conventional and Ukraine support, reflecting U.S. weapon stock depletion and a shift toward East Asia as the priority theater. This signals a “buck-passing” of security obligations and a withdrawal of the United States from Europe at the conventional level.
- The Colby framework implies the U.S. is reorienting away from Europe and toward East Asia, potentially weakening NATO cohesion as American weapons support diminishes. This could push Europe to diversify security arrangements and rely less on U.S. guarantees.
- There is a broader pattern of “divorcing” from allies: as the Gulf, Europe, and Ukraine face continued pressures, the alliance system frays. The U.S. may seek to offload security burdens, while Russia and China adapt by intensifying their own strategic ties and exploiting the rifts within Western alliances.
The multipolar world and regional flashpoints
- The discussion emphasizes that the world has moved from a post–Cold War unipolar moment to a multipolar system, with East Asia (China) as the primary U.S. strategic focus, but with persistent, volatile conflicts in Europe (Russia-Ukraine) and the Middle East (Israel-Iran, and allied networks like Hezbollah, Hamas, and the Houthis).
- The speakers stress the interconnections among conflicts: resolving Israel-Iran involves Hezbollah and Hamas; resolving Ukraine involves European commitments and American supplies; and the evolving alliance structures—where the U.S. may reduce its conventional footprint in Europe—could heighten tensions or provoke Russian reactions.
Final reflections
- The conversation closes by acknowledging the plastic, uncertain moment in world politics: many possible futures depend on diplomacy, leadership choices, and how quickly new equilibria are formed among emerging great powers. The two speakers stress that avoiding a major conflagration will require careful diplomacy, recognition of interlinked flashpoints, and a willingness to rethink traditional alliance structures in a multipolar world.
Full Transcript
Speaker 0: Welcome back. Today is the 04/22/2026, and we are joined by professor John Mearsheimer. Thank you again for coming back on, my friend. It's always good to see you.
Speaker 1: Good to see you, Glenn, and glad to be back.
Speaker 0: So I'm trying to make a bit sense out of The US strategy in the Iran war because it seems to me that Trump was in a difficult spot, and he needed an out. So he accepted the ceasefire conditioned on Iran's 10 points as starting point at least for negotiations. Then he finally had it, but he then moves forth with this blockade on Iranian ports, and then there appears to be a sabotage of the Islamabad talks. I'm trying to make sense of this. I mean, is this was this only to get breathing space to rearm and regroup, or is did the Israelis intervene to keep the war going, or is this just a unique style of diplomacy that Trump is pursuing?
Speaker 1: It is a unique form of diplomacy. There's no question about that. Whether it makes any sense is another matter. And I think it's quite clear it doesn't make any sense. I mean, the bottom line here is that Trump needs an exit strategy.
He he just has to put an end to this war, sooner rather than later. And the reason for that is that he has no military strategy that he can turn to that can allow him to win the war. There's just no military option here. As we've talked about before, if you go up the escalation ladder, it's the Iranians who prevail, not the Americans. So there's just no military option.
Furthermore, the world economy is teetering and the longer this goes on, more damage that's gonna be done to the world economy. And by the way, if you do go up the escalation ladder, that'll really be another hammer blow to the world economy. And this has political consequences inside The United States for President Trump, not to mention the fact that it has huge economic and social consequences for countries all over the world. So he's under tremendous pressure to come up with some sort of agreement with Iran that allows us to walk away from this. The problem that he faces is that he's incompetent.
The administration is incompetent when it comes to diplomacy, and the best example of this is a subject you and I have talked about ad nauseam, which is the Ukraine Russia war. You wanna remember that president Trump promised when he came into office that he was going to settle that war. And in fact, he said that he might even settle it before he moves into the White House. And he's made a complete hash of those diplomatic negotiations with the Russians. It's really quite remarkable as you have recorded in a whole slew of different interviews with a variety of people over the past year or so.
It's really quite amazing. So why would anyone expect him to be any more adept in negotiating with the Iranians than he has been in negotiating with the Ukrainians and the Russians? He's just not a good diplomat by any stretch of the imagination. And to add to the trouble, he's got to deal with Israel and the Israel lobby. And this is a very important issue, Glenn.
The fact is that the Israelis understand that up to this point in time we've lost the war. We meaning The United States and Israel. We had a set of goals going into the war. Four main goals, as you know, regime change, getting rid of Iran's nuclear enrichment capability, getting rid of their long range missiles, and getting them to stop supporting Hamas, Hezbollah, and the Houthis. We failed on all counts.
And on top of that, as everybody knows, the Iranians who did not control the Strait Of Hormuz before February 28 and did not have a toll booth located in the middle of it, control the Strait Of Hormuz and have a toll booth located right there. So the Iranians have won. From an Israeli point of view, this is a disastrous situation because the Israelis view Iran as an existential threat. You and I can disagree with the Israelis but that doesn't matter. They think it's an existential threat and of course the lobby here in The United States goes along with Israel no matter what.
So the end result is that Israel wants to continue the war. It's just very important to understand that. They want us to continue hammering away at Iran to try to beat them into submission. And if we don't beat them into submission, well, we'll just destroy them. Do what we did in Gaza to Iran.
That's the Israeli view and that's the Israel lobby's view. So if you think about the situation in Ukraine going back there and then you think about the situation with regard to Iran, you see inept diplomacy on the part of the Trump administration in both cases. But in the case of Iran, the situation's even worse because you've got Israel and the lobby leaning on him not to come up with a peace agreement that reflects what's happening in the war, which is another way of saying which reflects the fact that Iran has won. So Trump is veering back and forth between two positions. One, which is pushed forward by the economic realities and the realities of what has happened in the actual fighting to work out some sort of deal.
He has powerful incentives because of the state of the world economy and because of what's happened in the fighting to cut a deal. He understands he has no military option. He understands we've effectively lost. And he understands the damage that could be done to the world economy. That tells him, let's cut a deal.
But on the other side, he has the Israelis and he has their minions here in The United States. And they are powerful and they're honeycomb throughout the entire administration to put enormous pressure on him not to cut a deal and instead to play hardball with the Iranians. So what you see him doing is wavering back and forth between these two positions. And in the end, we have been unable to get a ceasefire, much less meaningful negotiations started. You want to understand, we don't even have a ceasefire yet because the ceasefire involved shutting down the fighting in Lebanon between the Israelis and Hezbollah, which has kind of been done.
And number two, opening the strait. And the strait opened for one day and then because President Trump wouldn't take off the American blockade of the strait, the Iranians put the blockade back on. So we haven't even fulfilled all the conditions that were required for a ceasefire, much less began to move seriously towards an agreement. And all the time this is happening, the clock is ticking on the world economy and this is a very dangerous situation.
Speaker 0: Is it possible though with the ceasefire that this could be a way for The United States to get Iran to fight the war on America's terms? Because this appears to be one of the things that has failed since the beginning. That is, when The US attacked, it looked as if Trump would have favored to do a little bit of bombing and then stop, and, the Iranians essentially didn't wanna give him this kind of escalation control, and they made it clear that any attack would get a massive response. So yeah. So shutting down the Strait, Rimuz, attacking the Gulf allies, essentially denying The US this kind of escalation control.
Now, in the ceasefire, it seems to follow the same logic. Yes. Initially, The US appeared to agree to this 10 plan, at least as a point of departure to to start discussions, but then it seems to be this incrementalism. Well, The US should be allowed to put a blockade on Iran. Should Israel should be allowed to bomb a little bit in Lebanon.
US should be able to seize or fire on some Iranian ships and to keep it, I guess, low intensity. Do you I mean, is it is it is it possible that it's just to get the war under control, or is it the ceasefire gone gone wrong? Because I think Iran will probably interpret this as a wider effort. Well, whatever minor escalation there's now, the overarching objective would be the effort to destroy their nation or wipe out their civilization to use Trump's language. So do do you think this is has anything to do with how the war is fought or just to bring it down, the intensity of it, and limit the targets that Iran are, you know, targeting?
Speaker 1: Yeah. I think it's a great question. And let me give you my two cents on it. I think that what Trump wants to do here is he wants to use military leverage to get the Iranians to agree to a ceasefire and then to come to the negotiating table. And he wants to use that military leverage to get a good deal.
Not a great deal, he's not gonna get a great deal. Know, he wants, I think, to get something that's better than the JCPOA when it comes to the nuclear enrichment issue. But but he he needs, he thinks, military leverage to do that. So let's talk about military leverage. My view is that any country has any great power, should say has three levers that it can use, three military instruments that it can use to get what it wants, either through coercive purposes or by fighting the actual war.
And one is air power, two is ground power or land power, and three is naval power. Those are the sort of three instruments that a state has. And we started the war on February 28 and waged it before the ceasefire largely with air power. We struck Iran from the air and we struck them with naval aircraft, but we didn't have a blockade at that point in time. It was all about air power.
And that air power campaign, Glenn, failed. That's why you moved to a ceasefire and that's why we can say today that up to this point Iran has won the war. The air power campaign failed. And by the way, everybody knew or let me put it differently, everybody should have known beforehand that air power alone was not going to defeat Iran. The historical record is clear here.
So that's air power. Then there's ground power. And here we're talking about using ground forces for invading, for the purpose of invading Iran. This is not a serious option. First of all, we don't have many combat troops at all in the region.
You know, there's talk about 50,000 American troops in the region. Only a small slice of them are combat troops. And the idea that even if all of them were combat troops, you could invade Iran and do something to end this war is not a serious argument. We don't have the combat forces there to launch a ground invasion. Furthermore, President Trump is allergic to boots on the ground.
Furthermore, the American people are not willing to tolerate the kind of pain that would be required if you were going to launch a full scale invasion of Iran. Just think about how deeply concerned we were about the life of that pilot who was shot down. The idea that he might be killed was a horrible thought. Our tolerance for pain over the Iran war is not very high. The idea that you're going to launch a massive ground offensive into Iran, suffer lots of casualties, have soldiers coming back in body bags, that's just not possible.
It's just not going to happen. And seems to me that President Trump, although he occasionally hints it may be a tiny ground force incursion, The ground force option is just not a serious option. So what I'm telling you is up to now the air power option was tried and failed. We have no serious ground power option or land force option. And unsurprisingly, what have we turned to?
We've turned to the naval option and we have a blockade on the strait. And furthermore, we're running around the world hunting down ships carrying Iranian oil way out in East Asia or Southwest Asia. And the question you have to ask yourself is whether or not you think this blockade is gonna bring the Iranians to their knees. And I would say to you, first of all, Glenn, if the blockade is such a war winning weapon or is an effective war winning weapon, why didn't we turn to it earlier? Why are we only turning to it now?
And the answer is it's not a war winning weapon. First of all, I don't think the US Navy can sustain a blockade for a long period of time. We have a limited number of ships. The wear and tear on our ships is enormous. I think a lot of ships, based on what I read, are getting through the blockade.
We run the risk at some point that the Chinese will escort ships into the Strait Of Hormuz, which will put us in a very difficult position because then we'll have to face the fact that we might have to attack Chinese ships if we wanna prevent those Iranian cargo ships or oil tankers from going into the Gulf. I mean, there's all sorts of trouble that one can imagine with this blockade. And I think very importantly what you saw today is that the Iranians have captured two ships in the Persian Gulf. They've seized two ships in retaliation for the two ships that we have seized. So they're playing tit for tat.
Moreover, the Iranians have made it manifestly clear that if you want to come back to the bargaining table, you have to put an end to the blockade. So at some point, Trump is gonna have to end the blockade just to go back to the bargaining table. He can't dilly dally forever and ever. We have to get negotiations going here, And that means he's going to have to take the blockade off at some point. But my previous point is the blockade's not going to be that effective.
Is it going to inflict some pain on the Iranians? Yeah. But the Iranians have demonstrated that they have a high tolerance for pain, a much higher tolerance for pain than we do. So the naval option is not a war winning option. We have no war winning option.
You know, President Trump talks about sort of going back to air power and a lot of people say we're going go in and bomb this and bomb that. That's not going to work either. If it was going to work, he would have done it. We tried bombing, it didn't work. What's the new formula that's going to allow us to succeed?
Oh, we're going go in and destroy all of their energy infrastructure and basically make Iran unlivable. That's not going to work, everybody knows that, because the Iranians can retaliate. So we're out of options. And what he has to do here is he has to get a ceasefire in place ASAP, and then they have to start negotiating. And he has to come up with a clever set of proposals that he can work on with the Iranians so that we can work out some sort of deal and shut this down as much as possible and rescue the international economy before it goes off a cliff.
Speaker 0: Well, this tit for tat, so this has been one of the interesting, well, ways this war has developed. That is whatever The US does, it appears that the Iranians can mirror it and go up that escalation ladder with the Americans. But that's why I'm wondering if this is what The US will do. What do you expect on the Iranian side? Because there doesn't seems to be a diplomatic path here.
At least it seemed to be too far apart at the moment. The US, again, it will it might do this heavy air campaign and then, yeah, complemented with the sea blockade. Some people like Keith Kellogg are, you know, arguing for a land campaign as well that is to seize islands and these kind of things. But what do you see Iran possibly doing? I know the IRGC has suggested they that they could do things like cut undersea Internet cables or, you know, they could shut down the Red Sea.
Indeed, Yemen has more or less, you know, has said that they're prepared to enter the war now. But what is the secret weapon you think of Iran if The US, let's say US pursues this strategy of just bombing Iran, inflicting as much pain as possible, and then, yeah, either in perpetuity or just until they decide to leave. What what do you expect to see from the Iranians?
Speaker 1: Well, if you're describing a situation where The United States goes back to a massive bombing campaign, where they're attacking energy infrastructure, bridges, and doing enormous amounts of damage inside Iran, killing many, many thousands of civilians. I think what Iran will do is that it will shut down the Persian Gulf completely. It will shut down the Red Sea, and it will attack energy infrastructure and desalination plants all across the Gulf. It will do everything it can to wreck The Gulf. It's what I call the Goderdammerung response.
We're gonna bring everybody down with us. Right? The idea that you're just gonna inflict punishment on Iran and get away with it and everybody else is gonna be able to stand idly by while our country is destroyed is not in the cards. We are gonna take others down with us. We will take every state in The Gulf down with us and we will wreck the world economy.
And we will do that by shutting down the Red Sea and the Persian Gulf. And this will have disastrous consequences over the long term and surely everybody understands that. That would be the threat that I would make if I were playing their hand. And I believe it is a very formidable threat and I believe the people in the Trump administration and people all around the world understand this is what is likely to happen if The United States turns the dogs loose and really goes after Iran's infrastructure and its population in a major way. And that's why I think it's not going to happen.
This is why I say if you go up the escalation ladder, the Iranians hold all the cards. You can do enormous damage to Iran, but the fact is they can do even greater damage to the world economy and to states in the region.
Speaker 0: But I was wondering, though. I sometimes you get some commentary that, you know, that well, yes, that this could melt down the global economy. But do you think there's anyone that there would be some in the administration who would think, you know, so what? Because The US is independent on the Strait Of Moshe. The US doesn't have to be reliant on energy from the Middle East.
Is it some I guess, based on history of, you know, World War two that, you know, whole world burned down, but The US remained, and now it was the last one standing. Do you think there's anyone who would, you know, maybe not welcome such a scenario, but who would be willing essentially to sacrifice the Gulf States if it meant weakening or destroying Iran and weakening, for example, China significantly, or do you think that's over the top?
Speaker 1: No. I think that Israel and its supporters will be inclined to adopt the position you just described. Again, it's very important to understand that from Israel's point of view, Iran is an existential threat. And they thought that when we went to war against Iran on February 28, that the end result would be that Iran would suffer a staggering defeat. We would win, we meaning The United States and Israel.
And the exact opposite is happening. And what we're talking about here, Glenn, is working out some sort of agreement that reflects the fact that Iran won. We may get certain concessions from the Iranians, but they won the war and they'll do very well in these negotiations. That's just the way it works. The winners on the battlefield are the winners at the negotiating table.
Common sense tells you that, but the Israelis definitely don't want that. So they're gonna push very hard for us to start the war up again, and the Israelis and their supporters in The United States will be inclined, not all will buy this argument, but they'll be inclined to make the argument that we can withstand the response that Iran comes up with after we turn the dogs loose. And I think that at that point, I think President Trump will side with common sense and he will go to great lengths to tell the Israelis that they just have to accept the fact that we lost and that we're going work out a deal with Iran. Because President Trump has a deep seated interest in avoiding an economic catastrophe. I mean, there are all sorts of people who are students of international economics who say that if this one spins out of control militarily and economically that you could end up in a situation analogous to what you had in the 1930s.
You could have a Great Depression. And there are some people who argue and these are not foolish people, these are smart people who argue you could have an economic depression worse than you had in the nineteen thirties. Is that for sure? Of course not, because we don't know exactly where this train is headed. We live in an uncertain world and how it all plays out is very hard to say.
But it just seems pretty commonsensical that if you shut down the Gulf completely, you shut down the Red Sea and you wreck all of those GCC countries that the economic consequences worldwide are just enormous. It's not only gas and oil, it's the fertilizers that come out of the region, out of the Middle East, out of the Gulf, out of the Red Sea. It's the aluminum, it's the helium. It's just hard to imagine us doing anything to create a situation like that, and it would just seem to me that we will go to great lengths to avoid that. But again, I think there'll be pressure from Israel and from its supporters in The United States to really go after Iran and to not reach any sort of any agreement that gives them concessions, major concessions.
Speaker 0: Well, I think one of the reasons why we get locked into this wars and not able to pull out, even now that the war has been lost is, you know, so or even predict the consequences that will come. You mentioned the global depression. You know, we have a possibility of a famine. It's because in human nature, there's always the assumption that the present era is permanent. You know, this has only been thirty five years since the Soviet Union collapsed.
It's it's yeah. The the the current era, it's the conditions of it, it hasn't been here for very long, and the assumption that it would stay like this forever is is quite extraordinary. So you often get the impression that politicians aren't ready to make the necessary adjustments because they don't appreciate or recognize the severity of the situation. But but on that, though, how how willing do you think how long do you think how far do you think Trump is prepared to go to put an end to this thing? Because let's say he goes in, just takes what remains of American missiles and just carpet bomb what they can of Iran, but they can't achieve what they want.
Is it just pulling back then and going home? I I mean, do you think it's possible for The US to leave the Middle East without having the Strait Of Hormuz open? Because this seems so critical if the Iranians can hold the Strait Of Hormuz. We've already seen more or less what they can do to dismantle The US presence in the Middle East. They can, you know, collect their, you said, toll, but, yeah, that that would be reparations as well.
They would be able to I think The UAE already said that they might start to sell some of their oil in Chinese one, or they they're open to it. There could be efforts to pressure these countries to scale back the presence of this US military bases in the region, something that I'm sure some of them are already discussing if that invites conflict instead of bringing security. So it seems like a massive cost for The US to leave without the Strait Of Hormuz being opened. But, again, if if it can't be achieved, what do you do? Do you think it's possible for The US just to leave?
I know Joe Kent advocated for this, but is it possible?
Speaker 1: Well, there's a difference between The United States leaving with the strait closed or open versus The United States leaving with Iran in control and with a toll booth on the road or or in the strait. I think that Iran is going to end up controlling the strait, and it's going to have a toll booth in the strait. I think it's linked to the business in good part of reparations and sanctions. I think that it's hard to imagine The United States and Israel, certainly Israel, but The United States even paying reparations to Iran for all the damage it's done. And in terms of sanctions relief, it's gonna be almost impossible to get the American sanctions off of Iran because that would have to go through Congress, and Congress is anti Iran in the extreme.
They may get the international sanctions off. But given the problem that we're gonna face with sanctions relief for the Iranians and given that we're not gonna pay meaningful reparations, they're gonna want to keep the tollbooth in place for a long, long time. And furthermore, they're going to want to control the Strait just because it provides them with huge amounts of course of leverage. Anytime The United States or Israel in the future start to play tough or threaten to play tough with Iran, I think the Iranians will just remind The United States and Israel that they control the Strait and they will shut things down once again. That's a powerful deterrent.
So I think no matter what, Iran's gonna end up with control of the strait in a very obvious way, and they're gonna end up with a tollbooth in the middle of that strait. And it may be that boats or ships traversing that strait or they're going through that tollbooth will have to pay a new one. Who knows on that count? So I think that's a given. But the discussion or the question that you raise gets at the fact that we're at a very plastic moment here.
And what I mean by that is that there are just so many different issues on the table and how they're all resolved, how they all fit together is just very hard to say. If you ask me, sort of, where is this train headed? What does this all mean for The U. S. Military presence in The Gulf?
And that was one of the questions that you were pushing forward. I don't have a clear answer. I'd be curious to know what you think, but do you think we're going to go back to the naval base at Bahrain? Do you think we're going to go back to any of those bases in The Middle East that have been either destroyed or badly damaged? Do you think that the Gulf states that hosted those bases are going to want us back?
And what about the negotiations? How do the bases play in the negotiations? Do we make concessions on the bases so that we can get a better deal on the nuclear enrichment issue? In other words, will the Iranians be more willing to accommodate us on nuclear enrichment if we are willing to put an end to the bases in the region. I'm not saying that will happen for one second, but this all remains to be determined.
I mean this is what the negotiations will hopefully resolve. And if they don't resolve these issues, this conflict will just go on and on forever and that will not be a good thing, obviously. But what I'm saying here, Glenn, is you raise a great set of questions, but what the answers are just not clear here.
Speaker 0: Well, I think a lot of the conflicts we have today, be it with the Russia, Iran, China, they all many of them have some of the same origin. That is the wider transition of the world order, that is sort shifting distribution of power from a unipolar to a multipolar. Now in the hegemonic system, I think the hegemon will have an interest in building alliances. That is that's a good way of her maintaining a hedge money. That is, like in Europe, divide the continent into dependent, thus loyal allies and the weakened adversaries.
You're see the same dynamic in The Middle East when the Chinese try to negotiate some more well, improved relations between the Saudis and Iranians. This essentially could become a you know, if peace breaks out, then what's gonna happen? Then the Saudis will be less, you know, loyal or obedient, and the Iranians won't be contained. So one does need an alliance system to preserve a hegemonic position. And I think as the world becomes multipolar, many of these states probably have an interest to have a more independent political position, but then you need to to diversify your ties.
That is not to tie yourself too much down with one actor. So I think from Saudi Arabia, Turkey, across the region, many countries now looking to diversify and decouple a little bit from these alliance systems. And especially if you have a declining hegemon, not saying that The US is, you know, finished. I think this people ask me how I compare it to, you know, Britain in 1956, but I think by no means The US will remain a massive power. It's but but relative decline, I think, is important.
Because if a power is in relative decline, the alliance system, of being a form of a well, monopolizing on security. Every everyone wanted to tie their security to The US in the nineties, but if it's a declining hegemon, and it might use the frontline states to weaken its opponents, you know, you see this in the Gulf States. They have to question whether or not this is a good position still to be. I mean, it's not the nineteen nineties. I know they're talking about this in East Asia and South Korea, because whenever one enters an alliance, yes, one gets security, but one can also provoke a response.
And at the moment, the security, the gain, it seems to be reducing while provoking, for example, China isn't worth it. And at some point, I think Europeans will talk about this as well. But I think this is a overall shift, I think, in the international distribution of power. So I think at the end of the day, The US will have less interest in the Middle East simply because it has better priorities, and the Middle Eastern countries will have to diversify, and, you know, the Saudis will have to hedge a bit. And yes.
I think there will be no going back to the way things were. I mean, this is historical times. You can't have a country, for example, like China, you know, with this spectacular rise, and then the world order will remain the same. There has to be massive changes, and I think that's what we're undergoing. Some of them will be, you know, born through blood and fire essentially instead of, you know, through diplomacy.
But, no, I I don't think we're going back to where we
Speaker 1: were. Yeah. No question about that. Let me just tell you how I sort of think about the world at macro level to try to make sense of it. And I'm not arguing that this is an approved solution, but it's just my sort of simple framework for thinking about how the world looks today.
Of course, you know, up until about 2017, certainly through all of the nineteen nineties and the first decade and a half or so of the twenty first century, we lived in a unipolar world. And in that unipolar world, The United States was by definition the only great power. That world went away, in my opinion, in about 2017. And we now live in a multipolar world. And what's very important to understand about that multipolar world is that for The United States, the most important region in the world is East Asia because China is a peer competitor in the sense that China is a rising great power that threatens to even be more powerful than The United States.
I'm not saying that will happen, but China is a formidable adversary for The United States. So you now have this multipolar world where East Asia is of paramount importance for The United States. And The United States still cares about two other areas of the world. One is Europe and then the third is the Persian Gulf. So that's sort of the macro view I have at the highest level.
But then if you look at the Ukraine Russia war and you look at the Iran war, what you see is that these two conflicts almost are guaranteed to never go away and to have to create a poisonous security environment in both Europe and in The Gulf. And why am I saying that? It's very important to understand, I think, that from Russia's point of view, the situation in Ukraine is an existential threat. From Ukraine's point of view, Russia is an existential threat. I fully understand why both actors in that conflict, Ukraine and Russia, view the other as an existential threat.
And Europe has piggybacked with the Ukrainians to the point where the Europeans think Russia is an existential threat and the Russians think the Europeans and the Ukrainians together are an existential threat. And when you have two sides that both think the other side is an existential threat, how do you shut that down in any meaningful way? So I think you're gonna have huge problems in Europe moving forward, mainly based on the Russia Ukraine conflict. Turning to The Gulf, as I said to you before, the Israelis view the Iranians as an existential threat and Israel's supporters in The United States view Iran as an existential threat. And Iran views The United States and certainly Israel as an existential threat.
But let's just focus on Israel and Iran. Those two view each other as an existential threat. How are we ever gonna get a meaningful ceasefire between Israel and Iran? Especially when Iran supports Hezbollah, Hamas, the Houthis and has no intention of giving up that support. And the Israelis view Hamas, Hezbollah, and the Houthis as not as dangerous as Iran but almost as dangerous as Iran and joined at the hip with Iran.
So what you're going to see moving forward, even if we get some sort of agreement between The United States and Iran, is a permanent state of hostility between Israel and Iran in the Persian Gulf or in the Middle East. And then back to Europe, you're going to see endless trouble moving forward, a poisonous relationship. You and I have talked about this before between the Russians on one side and the Ukrainians and the Europeans on the other side. So again, just to go back to where I started, you have these three great powers in the system now, right, who compete with each other in all sorts of different ways. And with regard to The US China conflict, from an American point of view, China is the principal threat.
East Asia is the number one area of the world. If you look at the other two areas of the world, Europe and The Middle East, you have this very dangerous situation that doesn't seem to look like it's going to go away in both of those areas. And my final point would be to you, Glenn, you can tell all sorts of stories about how you hook the Chinese up to what's going on in The Gulf. Very easy to do. And the Russians, of course, were already involved in Europe.
They're one of the principal participants in the war in Ukraine. And the Russians, of course, are involved in The Gulf. They're helping the Iranians. Both the Russians and the Chinese are helping the Iranians. And the Chinese, obviously, because they fear an American containment strategy in East Asia, the Chinese have a vested interest in seeing the Ukraine war go on and seeing the Americans pinned down in Europe.
And in a certain way, they even have a vested interest in seeing The United States remain militarily in the Persian Gulf because that means they won't be able to go to East Asia to contain China. So what I think you see with this rather simple framework that I'm putting on the table is that we live in a very dangerous world and there's not much prospect that I can see. I hope I'm wrong, but there's not much prospect of creating a more peaceful world moving forward.
Speaker 0: No. I'm not sure how the new, yeah, equilibrium will be established. But but but I'm I'm curious, though, of what The US goals then would be towards Europe because, you know, if you have a world becoming polar, The US can't be everywhere, has to make priorities. So The US more or less prioritizes the Western Hemisphere and East Asia, where you said its peer competitors. Well, then The US has to get out of the Middle East and Europe.
Again, this is why the Iran war doesn't make much sense in the wider strategy, and but in Europe, it seems even more important to get out of because they consume a lot of resources. But more importantly is perhaps by having a too heavy American footprint in Europe, they're pushing the Russians closer to to China. So when Trump said, wanna put an end to this war, you know, in twenty four hours, which was never, you know, realistic, but at least it seemed to reflect that he recognized how the distribution of power was shifting. But that being said, I kind of assumed that he wanted to put an end to that war. But now we see this kind of this new statements.
I I I did send you an a link earlier on with head undersecretary of war for policy, Elbridge Colby, was you're making some remarks. It didn't sound like you wanted to put an end to the war. On the contrary, you called for the Europeans to essentially step up to the plate. He sounded not to end the war, but to outsource the war to the Europeans. So while the Europeans would like to pull the Americans into the well, deeper into the war, it seems the Americans want to outsource it to the Europeans.
But do you read it the same way, or or do The US want to put an end to it or just to make it a because if it's a European war, then they can continue to contain the Russians, and, you know, it's the Europeans' problems and the Russians for you know, they they signaled they're willing to improve bilateral ties with the Americans even though The US is still involved in in Ukraine in terms of intelligence and sending weapons. But do you do you see a willingness to end the war? Is it, like perpetual war, forever war, which is possibly a strategy just to drain the Russians and, yeah, make sure that the Europeans do it on their own?
Speaker 1: Well, you should put that speech that Elbridge Colby gave in Europe up on your website so that people can access it. Glenn sent it to me. I'm talking to the audience here. Glenn sent it to me earlier today and I read it very carefully. And of course, Elbridge Colby is a very important figure in the Pentagon and his statement that Glenn sent me on April 15 is I think enormously important.
And my interpretation of it, Glenn, is it said nothing about solving the war or shutting down the war in Ukraine. This was all about what I would call buck passing, shifting the responsibility for security in Europe at the conventional level almost completely over to the Europeans, and shifting responsibility for supporting Ukraine in the Ukraine Russia war almost completely over to the Europeans. And this was a case of moving almost completely away from the Biden approach to dealing with Ukraine, where we were fully involved in the process and committed to fight till the end. And I think it's very clear that what's going on here is that The United States is deeply committed in Iran and in the Iran war, and we are using up significant amounts of our weapons inventory in The Middle East in this Iran war and that is weakening our position vis a vis the Chinese. If you look at the numbers of THAAD missiles and Patriot missiles and smart bombs and Tomahawks that we've expended in Iranand by the way, Glenn, just to get off the subject that we're talking about for one second, one of the reasons that president Trump does not want to start the bombing campaign again and start the war up because it would involve Iran retaliating against Israel and The Gulf States is that he would have to use up more of the American inventory of weapons.
They don't want to use any more weapons than they have to in a future conflict in the war against Iran. So we have very powerful incentives not to start the war up against Iran because we have so depleted our inventory of weapons. And this has huge consequences for East Asia, where we're supposed to be in the process of containing China, the principal threat to The United States. So what Elbridge Colby is saying very clearly to the Europeans is we can't provide the weapons anymore for you to give to the Ukrainians. You Europeans have to develop the necessary weapons and you have to do it quickly for Ukraine.
We can't do it because we have other responsibilities. So this is, I think, Colby speech, a clear statement of the Americans divorcing themselves from Europe at the military level. It's basically saying to the Europeans, You deal with the Ukraine war. They're not saying, You shut down the Ukraine war. In fact, I think the document reads like we expect the war to go on and on and that's hardly surprising.
We failed to shut the war down. They're not going to shut the war down. In fact, they have no interest in shutting the war down. The Europeans want this war to go on forever and ever. And the end result is that Ukraine is going to have to be supplied with lots of weapons.
And the question is where are they going to get those weapons? And up to now, it's been pretty much a case with the Europeans by the weapons from The United States and then give them to the Ukrainians. And what Colby is saying is the cupboard's bare. There are no American weapons we can give you. We're running through weapons in The Gulf at an incredibly rapid pace and that's having huge consequences for East Asia which is strategically the most important area of the world.
So in a very important way, what Colby is doing is divorcing The United States from Europe, especially at the conventional level. That's the way I read it. Do you disagree with that?
Speaker 0: No. I think they're yeah. No. They're handing it over or or cutting it cutting their ties further. I think this also could be a consequence of the Iran War as well.
The the fact that Trump has put a lot of all the rhetorical efforts to blame the whole thing on the Europeans, it it that could provide a a a reason or at least to get mobilize some support from decoupling The US a bit more from the from from the Europeans. But that also puts the Europeans in a well, puts us on a much closer to war, I think, here in Europe because with the lack of American weapons, the situation is going more and more in Russia's favor, and the Europeans will have to escalate in a big way, which you see all these drones being made and sent and the very openness about our participation in this war. And at the same time, the reports now of the Baltic States and or Finland allowing their territory be used to be used to strike Russia. At some point, you know, the escalation will put more pressure on the Kremlin to respond, and there is a growing pressure. And all of this is happening at the same time that Americans are divorcing themselves, so now the Russians would have less constraints to retaliate.
I mean, why would they fear striking some German logistics center if if America's not standing behind? Is it the same as the Baltic States? The reason they've been behaving this way is you had always, you know, big bad uncle Sam standing behind you. If if uncle Sam's not there anymore, you know, and instead of toning it down, they have to escalate. I think we're looking at a recipe for war.
But
Speaker 1: Yeah. I mean, this gets to this whole point we were making before about what a plastic moment this is. I mean, just listening to you talk, what about the American security umbrella, the American nuclear umbrella over Europe, especially over Eastern Europe? If something happens in one of the Baltic states, what are we gonna do? We, meaning the Americans.
It's really hard to imagine The United States getting into a fight with the Russians in one of the Baltic states at this point in time. So I think the Russians are kind of flexing their muscles these days vis a vis the Baltic States because they understand that. The other thing is, Glenn, I wonder what's gonna happen when Ukraine finally loses this war. I mean, it's hard to say what the final arrangement is going to look like. But at some point the shooting is going to stop, number one.
And number two, the Russians are going to end up controlling a huge slice of Ukrainian territory, which they've already annexed. I mean they've annexed for Oblast and Crimea. And this is going to be seen as a devastating defeat for NATO. Right? NATO lost.
And President Trump will blame the Europeans. And if you think about Colby's speech, Colby's speech is putting President Trump in a position where it will be easy to blame the Europeans because the Ukrainians have lost not lost now. We're divorcing ourselves, and at some point the Ukrainians are gonna lose. And when they lose, Trump will be able to say, we shifted the burden almost completely onto the shoulders of the Europeans. We were doing well, or the Ukrainians were doing well up until that happened, and then Ukraine fell apart.
And of course it's because of those pathetic Europeans who wouldn't help us in The Gulf, who wouldn't help open the Strait Of Hormuz or who wouldn't unilaterally open the Strait Of Hormuz. Of course this is all nonsense but this is the rhetoric that he'll use. And this will just further tear at the seams of the alliance. It'll just make a bad situation worse. So I think what you're going to get in Europe, and I'd be curious to know what you think about this, I think you're going to get a situation where The United States is much less committed to Europe and to NATO.
And at the same time, the relations between the Russians on one side and the Ukrainians and the Europeans on the other side are gonna be even worse in the future than they are now.
Speaker 0: No. I've no. I agree. I think it was also very predictable. Indeed, on on this podcast, I interviewed the the German general, general Harald Kuyatt.
He was the head of the entire German army, and he also had the highest military position within NATO. Forgot what it's called. Yeah. And, anyways, my my my my point is three years ago, he was May he he made the point that, you know, he was speaking very openly about what was actually happening unlike the rest of his countrymen. He was making the point that, yes, US and the British sabotage the Istanbul agreement, all of this.
But he also made the point, again, three years ago that we're losing this war, as you and I were always saying back in those days. And but the consequences at some point, The US, when it's being lost, they will, you know, have the common sense to pull away. And at this point, we, that is the Germans, will stand to face a very angry Russian or Russia all by ourselves. And I thought that was interesting. That was one of the reasons I wanted to talk to him as well.
And I I think that's where we are now. The the war is being lost. The US is handing it over to the Europeans, and now we're gonna face a very angry Russia. And instead of seeking to make a peace, we're making it much worse because many of the European leaders seemingly genuinely believe that Russia is an existential threat, so they don't have any political imagination for peace, so it's only escalation. And but I think on the wider I think there's also mutual divorce because you mentioned before the missiles being depleted.
Once missiles or weapons are being depleted, people lose trust in alliances. That is, you know, the South Koreans are asking, you know, why did the Americans pull out their thou and the patriots? In Europe, they're saying, oh, all these missiles were supposed to get to fight the Russians being delayed or diverted. And even in the Gulf States, they're saying, oh, why are the the air defenses, they you know, Israel's being prioritized. So you're seeing this side distancing themselves, and on the other side, you see the Americans who are essentially blaming some of the partners.
They're, you know, they're not a force amplifier anymore. They're drained on US resources. They're not gonna be able to look after their own backyard or go contain China. And and, yeah, all of the failings are their their faults. I mean, Europeans, they're the ones to blame in you know, for Ukraine, for Iran.
So I I think you see a a mutual split. And, again, I don't know what would follow, though.
Speaker 1: Just one other dimension to this, Glenn. I I like to say that when you think about the poisonous relationship that's gonna exist between Russia on one side and Europe and Ukraine on the other side, that there's six other potential flash points that are loosely associated with Ukraine. And of course the Ukraine war could start up again. You It, know, we'll get some sort of frozen conflict, that could start up again. But then there are the sort of other potential flash points that I focus on or I have focused on.
One is the Arctic, two is the Baltic Sea, three is Belarus, four is Kaliningrad, five is Moldova, and six is the Black Sea. But you know if you think about it we're talking about not the Baltic or Kaliningrad, we're talking about the Baltic states themselves and potential trouble in the Baltic states. So you could add that as a seventh category. But all of this just goes to show that the potential for really big trouble in Europe moving forward is really enormous. And I would argue that you and I like to say that there's no real Russian threat there and that the Germans and the Europeans in general, especially the West Europeans are hyping the threat.
This is classic threat inflation. But if the Russians were to go into one of the Baltic states with military force or into Kaliningrad, there was a fight over Kaliningrad or something in the Baltic Sea. This would really give the Europeans cause to think that the Russians are coming, this is the second coming of the Soviet Union and that would just make a bad situation worse. Anyway, all of this is just to say you can tell all sorts of stories about how a conflict down the road just takes the present situation, which is very bad, and makes it even worse.
Speaker 0: Yeah. Well, if someone would have asked me a few years ago or only last year if a Russian attack on Estonia is likely or the Baltic States, I would say, you know, it's it's crazy talk, but there is the security dilemma. Now I'm not so sure anymore because Yeah. After all that Estonia, for example, been doing, you know, having its geographical position there as well on the Baltic Coastline, I think it's quite it's become increasingly likely, I think, that the Russians will do something in retaliation. I it's probably gonna be more something something where they can have some plausible deniability, but overall, I I think we're moving in that direction.
But but that goes back to the whole idea, what what is the security? Because Europeans are recognizing that things are all these flash points we're talking about. But their their their well, their assumption, their the cause of this conflict is, well, it's the Russians wanting to restore empire. So, okay, we can have security, but then we have to defeat the Russians. I think it's just the wrong we which would trigger a security dilemma.
We need to to bring it down. I think this is the problem. Anyways, I think we ran out of time. Do you have any final thoughts before we wrap up?
Speaker 1: I just make one final point. It's kind of a big point, but it's just worth throwing out on the table when we're talk while we're talking about the big picture here. And just to segue away from Europe back to The Middle East, If you look at the Israel Iran conflict, in recent times I've focused on trying to think about how you could settle that conflict, and I focus mainly on Iran and Israel. But what I've come to realize over the past week or so is that that's not the right way to think about it because it's not just Iran and Israel that you have to deal with if you wanna come up with a settlement. It's also Hezbollah and Hamas.
I think the Houthis are much less of a problem, but Hamas and Hezbollah are inextricably linked with Iran. And of course, for Israel, Hezbollah and Hamas, especially Hamas, matter enormously. So if you're going to work out some sort of modus vivendi between Israel and Iran, you have to include Hezbollah and Hamas in the equation. And how do you do that? I don't know.
So it just goes to show that these conflicts that we're talking about, you know, whether you're talking about the Russians and the Ukrainians in Europe or whether you're talking about the Israelis and the Iranians in the Middle East, multidimensional. Right? It's not just those two players who matter. They have all sorts of interests and they're linked to all sorts of other flashpoints in ways that make it very difficult to think about how you shut down the conflict either in Europe or in The Middle East.
Speaker 0: I agree. And, yeah, thanks for bringing back to the original point across the Middle East because I think this can be well, can spin out of control. You know, often people assume that the alliances are also written in stone, but a lot of the countries which have been hostile to Iran, be it Saudi Arabia and maybe lesser extent Turkey, you know, if Iran would weaken, they you know, their position would change as well. The Saudis aren't quite comfortable with Israel's territorial ambitions. The the Turkey is also very aware of the hostility of Israel towards Turkey.
So Yes. If you lose your Iranian boogeyman, then suddenly you're next on the chopping block perhaps. So there's a you know, you don't necessarily wanna defeat your enemies. So I think that, yeah, instead of having this zero sum thinking, there might be countries in the region who wants to find a new equilibrium, something that puts a check on the Iranians, but also on the Israelis. So, essentially, move away from this hegemonic vision where of, you know, US global primacy or Israeli regional primacy.
I think this is yeah. I think the alliances can switch more, that the stability we see in the alliance systems throughout the Cold War probably is something of the past. But, again, anything can happen now, as he has said.
Speaker 1: It is a plastic moment as we were saying before, and it it it is hard to predict exactly where this train is headed. But you can what's so depressing, Glenn, is that we can tell just, you know, one horror story after another. I mean, you know, cooler heads will prevail and we won't have any really disastrous conflicts down the road. But it's gonna take a lot of luck and a lot of smart policy making and a lot of diplomacy to avoid trouble moving forward.
Speaker 0: Well, I'm not looking towards our political leadership, least with great confidence. Maybe new people will come in. Anyways, John, thank you so much for taking the time. I know you have a big day there in Chicago, so I appreciate it.
Speaker 1: My pleasure, Glenn, as always.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: Trump's Defeat in Iran & Decline of the U.S. Empire https://youtu.be/8lRC8r8Qzk4 https://t.co/HD0L1FaIY9
Video Transcript AI Summary
Jeffrey Sachs argues that we are witnessing the limits of Western power, including the limits of U.S. power, and that this is part of a long-term trend toward the waning dominance of the Western world as Asia rises. He frames the broader arc as follows:
- After World War II, Europe lost its colonies and the United States emerged to replace European empires, competing with the Soviet Union as the two major imperial powers. With the dissolution of the Soviet Union in 1991, the United States appeared to be the sole superpower, leading to an era some called the unipolar moment. Sachs contends this moment was largely an illusion economically: for about a century and a half leading up to 1950, the West dominated, but the long-term trend was the narrowing of the gap between the West and Asia.
- From the end of World War II onward, Asia began a sustained process of catching up in literacy, education, infrastructure, and industrialization. While Western economic and military dominance remained evident, Asia’s rise gradually altered the balance of power. By the 1990s and into the 2000s, Asia’s relative power had grown substantially, with China emerging as a major economic and technological force.
- The “unipolar moment” faded as reality: Asia has been rising since the mid-20th century, and the post-1991 euphoria in the United States about unipolarity was economically questionable. Sachs notes that even at the height of U.S. power, the U.S. could not defeat Vietnam or sustain European empires, and that China’s rise began well before 2010, becoming evident in manufacturing and heavy industry led by China.
- He highlights the Ukraine war as another demonstration of the limits of American expansion and NATO’s enlargement, arguing that the war marks the end of NATO enlargement and challenges the notion that the U.S. could redraw power on Eurasia at will. He recalls Zbigniew Brzezinski’s idea of U.S. dominance over Eurasia and argues that Putin’s stance showed that such dominance would not be realized.
- Sachs emphasizes that technology and economic growth diffuse over time, making monopolies unsustainable. He cites historical examples: Britain’s early industrial edge, Germany and the United States catching up, and even the limited lasting power of nuclear monopoly due to espionage and scientific advances. He argues that “choke points” are a recurring meme that eventually fail to prevent rising challengers.
- He discusses realist theories: offensive realism (John Mearsheimer) arguing that great powers cannot find stable balance and constantly seek advantage, versus defensive realism (and Kissinger’s Concert of Europe-inspired view) suggesting some stability through negotiation and norms. He notes that U.S. strategists often view China and Russia as destabilizing and dangerous, though he himself advocates cooperative accommodation with China, avoiding confrontations over red lines and arms sales to Taiwan.
- Sachs connects these ideas to ideology, noting that dominant powers often rationalize dominance through imperialist or civilizing ideologies. He references Robert Kagan’s liberal imperialism concept and traces it back to European imperial thought, suggesting that Western mentalities persist even as formal empires fade. He argues that imperial mindsets continue in Britain and the United States, with imperial ideologies shaping how power is exercised and justified.
In sum, Sachs frames the current era as a gradual but undeniable shift away from Western, particularly American, dominance toward a more multipolar order led by Asia, with the Ukraine war and Iran as illustrating events showing the limits of unipolarity and the enduring, complex dynamics of great-power competition.
Full Transcript
Speaker 0: Welcome back. Today is Friday, 04/24/2026, and we are joined by professor Jeffrey Sachs. Thank you for coming on. I'm yeah. I've been wanting to speak with you about this, what appears to be the, yeah, the decline at least of the hegemonic era after the Cold War.
Because after the Cold War, we really saw that the image of The US as being all powerful was very important to shape the international system. That is, states linked their security to The United States as they tended to monopolize the security, and other sorry, other adversaries tried to keep a very low profile, not to provoke The US. But as we know, hegemons become overstretched and exhaust themselves, and it seems this is what Trump wanted to reverse. But with the Iran war, it seems instead it exposed even more so the limits of US power. I was just wondering how how do you see this, or how do you assess the, I guess, the longer term relevance of the Iran war?
Speaker 1: Certainly, we're seeing, the limits of US power. No doubt. I think what we're seeing is is a long term trend. A long term trend actually that is a decline of Western hegemony or an end of Western hegemony, which one can date already back to the end of World War two when most of Europe lost its colonies around the world. The United States, in a way, replaced the European empires to become an American empire.
It competed with the Soviet Union as the two major imperial powers, but The US was within that competition in some way always dominant economically and technologically. That was a very frightening time because these were two nuclear superpowers that were at each other's throats often at least in proxy wars. When the Soviet Union dissolved or disintegrated in 1991, it looked to The US leadership and to much of the world that The US was the sole superpower and was completely dominant. But I would say the long term trend that had led to the decline overall of Western power after World War two was continuing. What happened at the end of World War two with the end of the European imperial age was that the rest of the world and especially in Asia was given new space for catching up technologically, catching up in terms of education levels, literacy, urbanization, industrialization.
And so all the way back from the end of World War two on, there was a narrowing of the gap between the industrialized West, which broadly speaking was Europe and The United States, and the countries of Asia, and at least some partial economic development success stories in other parts of the world as well. So the way I view it is that for around a hundred fifty years, roughly speaking, from the beginning of the nineteenth century to the end of World War two, the Western world and especially Europe dominated the world. That really was a Western hegemony. Basically, Britain in the lead of that, but a number of powerful European countries with imperial possessions around the world. After World War two, the gap between the West and the rest narrowed.
Within the West, The US was clearly the dominant power, but underneath the surface was the year by year economic progress of much of Asia. And that means that on a long term trend, not on a year to year trend, but on a long term trend, the dominance of the Western world was bound to diminish. But I would say two things hid that. The dominance of The US and Soviet Union made it look like it was really a two empire affair battling with each other, and it was easy to take one's eyes off of the rise of Korea or the rise of Taiwan, Singapore, Hong Kong, the so called Asian Tigers, or even the rise of China economically, began in the late nineteen seventies. So it looked like it was two powers battling each other when more fundamental change was underway.
And I keep coming back to Asia as central to this because Asia's home to 60% of the world population and has always been the center of gravity of world population and of the world economy for two millennia or more. And so what was happening was that Asia was slowly coming back from a century and a half of European imperial rule. But that was beneath the surface. It was gradual. It was year to year.
And it looked like The United States and the Soviet Union were duking it out so that when the Soviet Union ended in December 1991, there was one superpower remaining. The end of history was declared. The United States looked like the sole superpower. It was the unipolar moment. US was the indispensable country.
Every superlative one could imagine was given. The neoconservatives in The United States believed their own headlines. And the portrayal that the fundamental change in the world was US dominance became the meme. But I would say the from an economic point of view, the fundamental story was the year by year, step by step narrowing of the gap between the West, again meaning Europe and The US, and Asia. And the rise of Asia was the real story in terms of relative power.
Now one could add a few points that even in the heyday of US power, The US could not defeat Vietnam. The US could not overcome the anti colonial wars and anti colonial sentiments. The US could not keep European empires intact or replace them with the American empires in much of Asia, though The US influence in postwar Japan and Korea was nearly total, we we can say. But all of this means that from my point of view, the unipolar moment after 1991 was an illusion to an important extent. If you were looking at this as an economist as I was during that period, I was rather routinely saying that Asia is rising and that this is creating a different kind of world.
If you were in geopolitics, power projection, and military, it didn't necessarily look like that. And what's interesting, I think, and I think it would be fun to actually go back to look at what the strategists were saying about China back in 1991 and 1992 when the unipolar moment was projected. My memory, which may be wrong, is that they weren't saying much about China, That China was not viewed as a likely important actor. It was a poor country that assembled goods for US markets. It would be good if it rose in power perhaps because it would continue to check Russian influence.
But I don't think that China was viewed as a strategic issue by The United States until after the start of the twenty first century and really until around 2010 when Obama started talking famously about the Asia pivot or the China pivot. So all of this is to say, Glenn, that the broadest trend of all in the world scene, in my view, is that from 1800 to 1950, roughly speaking, the Western world led by the European empires and within Europe by Britain dominated the world. They industrialized. They had the vast preponderance of military power. They had the vast preponderance of technology.
The overwhelming leadership in science. Whether that balance was in Europe or The United States already began to shift by the beginning of the twentieth century, but decisively shift shifted at the end of World War two. But taking the West as a whole, that dominance of the West peaked around 1950. And while there was no well, I'd say the the headline was European empire is over, India independent, People's Republic Of China declared, and so forth. Those political headlines started a deep economic process that we loosely call catching up.
It's not an adequate phrase, but at least for the first fifty years of the period from 1950 to 2000, it's not a bad phrase to think that what was happening in Asia was catching up in the sense of literacy for the first time, mass public education for the first time, basic infrastructure being built that had not really been built during the European imperial heyday. Catching up no longer is the right phrase because China's clearly in the lead technologically in a lot of areas now, and The United States is by far not the hegemon or the sole superpower in the world. On most criteria, economically and technologically, China is at least the peer of The United States. But I would say in manufacturing almost across the board and in heavy industry almost across the board, China's way ahead of The United States right now. So in this sense, the idea that American hegemony is coming to an end, I would say that has been true gradually for decades.
I would say that the post 1991 euphoria in The United States about the unipolar world, and it really was euphoria. I was around to see it, to see it in the think tanks, to see it in the universities, to see it in Washington, to of course listen to it in the rhetoric of every president and so forth. This was always, in my view, economically ignorant. I was also part of a debate back in the nineteen nineties. Was the rise of Asia real or something that was going to collapse.
And there were articles about the myth of the Asian miracle and so forth. And my view all along was we're seeing a a long term real catching up process. And again, after 2010, a going ahead process in many ways. So I never bought into this unipolar story as being real. And having witnessed the Vietnam War debacle, I always felt that America exaggerated its power.
I would say that the Ukraine war is another demonstration of the clear limits of American unipolarity because basically, the Ukraine war was the end of NATO enlargement and the end of The US putting its pieces on the board wherever it wanted. We can remember that in this unipolar moment, Svyniew Brzezinski basically had the idea that The United States would come to dominate Eurasia, nothing less, and that Ukraine would be the pivot for doing that. And president Putin basically stood up and said, no. Not on, my watch. It's not gonna happen.
And the Ukraine war is essentially a war of the limits of American expansion. So the the limits were already demonstrated. The US thought that it would just blow off Russia financially, economically, by sanctions, or militarily, or through subversion inside with some kind of color revolution or something else. And all of that proved to be a complete illusion as well. So long answer to the question.
Yes. We're seeing the limits of Western power. We're seeing the limits of US power. But my answer is that Western power, which is a relative concept after all, has been waning because of the rise of Asia already since seventy five years, since the middle of the twentieth century, and the unipolar moment was never real. It was always a bit delusional to think that The US was riding supreme.
Now having said all of that, The US clearly still has a lot of power and a lot of influence and a lot of destructive capacity. So this isn't the collapse of US power, but it is definitely the limits of US power.
Speaker 0: It's interest interesting or by comparison though that in the nineteenth century, much of the power politics was seen through the prism of Britain versus the Russian Empire. And then as this rivalry was going on, you saw new powers emerging at the periphery, The US, Germany, Japan. And, yeah, to some extent, this is what twentieth century was as well, The United States versus the Soviet Union. And then but, of course, now in this rivalry, you saw especially ace Asia really emerging at the periphery, and there's still this assumption that the the normal state of things, which is, again, the Western hegemony, that will go back to this somehow. But but but I'm This curious
Speaker 1: is a a basic point that and it's a it's a basic lesson of all of history, is that advantages of any one place are temporary. They could be temporary over the course of centuries or they could be fleeting over the course of decades depending on what you're really looking at. But technology, which is usually the key to giving some kind of advantage, military technology or productive technology. And in the case of the nineteenth century, I put the steam engine as absolutely central to that unique advantage of Europe over the rest of the world. Wasn't the only advantage, but it was very key.
Eventually, ideas, technology, know how diffuse. And so keeping a monopoly of power is almost never possible. You can try to hold trade secrets. You can try to limit the exports of high technology, but reverse engineering, copying success stories, understanding the underlying science and technology. This is a worldwide gift.
And so leaders find competitors because the basis of that leadership was typically some kind of real substantive technological advantage, very often a military advantage that had come, but then one that was quickly copied elsewhere. Of course, the whole nuclear age, it was like that when the atomic bomb was developed at Los Alamos and then dropped as a demonstration by Truman, a demonstration to Stalin by killing massive numbers in Hiroshima and Nagasaki. The US planners thought that The US would have the atomic monopoly probably for about thirty years. It lasted four years because the Soviets spied, because they had great scientists, because of a lot of things. But monopolies don't last.
The idea that The United States has choke points is a constant meme. You know, it's almost ludicrous, but you go back to the beginning of 2022. The US talked about cutting off Russian banks from SWIFT as the nuclear option. It was gonna bring down the Russian economy. We had the choke points.
We had the definitive hold on power. It basically meant almost nothing in the end. So this is a a constant refrain of history that if if one country takes the lead, which Britain did in industrialization at the late nineteenth century and then especially after the Napoleonic Wars, other countries innovate, catch up, steal good ideas, narrow the gap, and often leapfrog. And that was true of both Britain of Germany and The United States vis a vis Britain in around 1870 onward. And this is but it was kept within the Western family, I would say, broadly speaking for a long time.
It led to many racist ideas that this is a white people's hegemony, that this is a European cultural hegemony, that this is a Christian hegemony. But the idea was that, yes, even as the reach of technology spreads with Germany and The US, it's somehow all within the broader family. It's the Western dominance. One country and one country only joined that by the end of the nineteenth century, and that was Japan. And Japan began its own imperial adventures on the basis of imitating the European empires.
And very cruelly, Japan invaded China multiple times and other parts of Asia in imitation, I would say, of the European empires. But other than Japan, this was a this this was a a western white Christian hegemony over the rest of the world, and it was taken by and large to be a permanent feature. There were glimmers of insight that this was temporary. Napoleon supposedly warned that when China awakes, the world will tremble. And, you know, he supposedly said that in, I think, exile already in the eighteen tens.
But the point is that the natural dominance of the West was assumed. It became very deeply part of the mindset of The US and Europe. After World War two, Europe accepted that The US would carry the lead baton, but still the assumption of Western dominance prevailed. And I'd say it still prevails till today in some mindset change. China is viewed as an absolutely improper intrusion, as something that can be contained, as something that needs to be contained.
How did we let that happen? Our biggest mistake was we let China into WTO is a constant refrain in Washington. We let them develop as if that's the American choice. But that's also part of this delusion that the natural order of things is the western dominance. In any event, I think that's over.
That's the point.
Speaker 0: Well, in in realist theory, though, it's often assumed that states are security maximizers. That is if we're unbalanced, we'll continue to expand. So NATO expansion, Middle East, all of this until we're balanced. Once once we're balanced, then we'll seek a new status quo in order to essentially maximize our own security. And you would think that as NATO expansion came to a grinding halt in Ukraine as NATO has been balanced by Russia or what we see now with The Middle East or what we see with China, you would assume that there would be a diplomatic effort to shift to new status quo.
Do you see it? But I I I don't see it essentially. Instead, if I look at Iran, I think there this this is part of the reason why there can't be a peace because Trump only wants a hegemonic peace. And, you know, we we saw that The US was quite desperate for a ceasefire. They agreed to Iran's format, then walked it all back once, you know, the guns went silent.
And now The US appears to be marching toward all out war against Iran. Is this based on their reluctance to, I mean, find a peace that's not based on dominance, or or what do you think Trump's place?
Speaker 1: This this is a great question, and I think it comes to the very schools of thought of realism. There is the school of thought of our good friend John Mersheimer, offensive realism, which says that you can't really find an equilibrium among the great powers. They're they're always looking for an advantage. They're always annoying each other. And in John's theory, you end up with what his great book is titled, The Tragedy of Great Power Politics.
John says, no, there really can't be balance of power that's satisfactory. In what is sometimes in in US schools called defensive realism rather than offensive realism, the idea that security is at the center, but you can find a kind of modus vivendi of the great powers and a bit stay out of each other's way and treaties can matter and stabilize things to a bit is the predominant view. I would say Kissinger was somewhere in between the two. Strangely, Kissinger studied the Concert of Europe. This was his great model, the nineteenth century relative stability of the major powers of Europe through a concert of systematic negotiation and basic norms of behavior.
But Kissinger also succumbed to the offensive realism that when the other side is down, take advantage of it. So he was in favor of NATO enlargement in the nineteen nineties even though he knew it would provoke Russian unhappiness. And others argue for that prudence is feasible. I think the I think what one of the things that makes John Mersheimer's work so important is that while I I don't agree with it myself as the the necessary description of international politics, I think it's not a I think let me put it positively. I think it's a very good description of the mindset of American strategists.
So American strategists don't take enough as a basis for stopping. They there there is a problem in The United States, which is if any other major powers are standing, we are threatened is the idea. And so The United States has a and by US, of course, I mean Washington. And by Washington, I mean mainly the security establishment. Has a very hard idea, a very hard time with the idea that Russia is a stable great power.
It has an extremely hard time with the idea that China is a stable great power. It's gonna have a hard time with India being a great power. Because in the American mindset, and I think it is I don't wanna over interpret John Mersheimer's thoughts, but I think he does portray, right, the idea that it's too dangerous just to leave these other powers. You can't really trust them, and you should do what you can to undermine them. So John does generally view China as a threat that we should be doing what we can to contain.
I disagree with that viewpoint, actually, rather deeply because I don't view China as a threat to The United States at all. And so I would like to work on cooperative accommodation in a number of ways and stay out of each other's red lines and stop The United States stopping from arming Taiwan and many other things that I think would make the world a lot safer. But the American mindset is it's a dangerous world out there and we have to push wherever we can. And we have caricatures of that. Our most caricature ish senator who is a warmonger every occasion.
If you want a new war, you trot him out is Lindsey Graham. He's always saying, we need more war. Don't stop. Escalate. Whatever it is, whether it's Ukraine, whether it's Taiwan, whether it's Iran.
And there is a course like that. One theory is they get campaign contributions from military contractors and so they're mouthpieces for them. They're warmongers in other ways. But there's also an idea that America should be the unipolar power and that it should fight its way to do that if necessary. And it should put a stick in the spokes of any other major power to tie that power up in knots and create trouble for it.
And that, to my mind, is an accurate description of American foreign policy making and statecraft, but also a disastrous approach that is unnecessary, destabilizing, and ultimately dangerous for The United States itself, not to speak of all of the rest of the world.
Speaker 0: Well, when there's extreme power disparities, or over the past centuries of Western dominance, it makes often sense for it to generate or be accompanied by ideologies of superiority. So when you address the rise of the rest, as you say, or the rise of China, the reaction one often gets would be, I guess, encapsulated in in work. Like Robert Kagan, he wrote the book, The Jungle America and Our Imperial World, in which, essentially, the answer is the garden, which would be The Us, the civilized Us, would have to go out and trim back the jungle again and civilize it. I mean, this is this is a
Speaker 1: very deep ideology. It goes back centuries. It is it's also very interesting from the point of view of the history of thought. Philosophers, inadvertently, or inadvertently often really are just the scribes of power. And so when countries become powerful, the philosophy arises to underpin that power.
And we had centuries of European ascendance and then a hundred fifty to two hundred years of unchallenged European dominance over the rest of the world. Basically, while Europe lost some battles, it won most of the wars in Africa and in Asia. And a whole ideology developed many variants of it, scientific racism, pseudoscientific racism, I should say, but scientific racism. And and of course, the religious impulse, god's on our side, and many other similar philosophical ideas, the civilizing mission. We have the key to civilization and even the most enlightened subtle impressive thinkers like John Stuart Mill were basically imperialists.
John Stuart Mill worked for the East India Company. He wrote tracts for it and he wrote that it's Britain's mission to bring civilization to backward India. And so it's okay if there's a tutelage period. This is what empire is for. So a lot of ideology developed and it goes away very, very slowly.
You look at British and French behavior, while they don't have empires anymore, they absolutely have imperial mentalities and often even more naive and militaristic than than The United States, which actually has an empire. But British british Russophobia and Britain's drum beats of war against Russia in Ukraine is they're even louder than in The United States and cruder and more simple minded, but they come from a longer period of empire. The the idea that the British dominance is natural, inevitable, that Russia was the enemy of British dominance, and if they still continue that battle even though they're an island, not an empire. And it it it it would be humorous if it weren't so dangerous.
Speaker 0: Well, in the nineteenth century, John Stuart Mill advocated for a liberal empire. Today, we have NATO advocating for liberal hegemony, so there's some consistency in history, though. But
Speaker 1: I say we learned everything we know from the British Empire. Everything America thinks it knows from the British Empire. And and actually the links are very direct. Of course, language, culture, direct education. It's it's all there to to be seen.
And if Bill Clinton was a Rhodes scholar and Rhodes was the great imperialist of Africa, the great in the large at the beginning of the nine twentieth century. Clinton sucked that up at Oxford so that when he became president of The United States in the nineteen nineties, he was filled with American grandiosity that he had somehow learned from the British experience.
Speaker 0: Well, you have a big day there in New York, so I wanna thank you for taking the time to speak
Speaker 1: with us. Anytime.
Speaker 0: Great
Speaker 1: great to be with you. Talk to you soon.
@Glenn_Diesen - Glenn Diesen
Michael Hudson: Iran War Ignites Global Financial Armageddon https://youtu.be/pPvP9ojKmpY https://t.co/zIydkp5Fv8
Video Transcript AI Summary
Michael Hudson discusses how the Iran war is accelerating a global economic crisis and signaling a struggle over what the world economic order will look like after the current system breaks down. He emphasizes that energy markets are central to the ripple effects, since disruptions affect fertilizer and agricultural inputs, pharmaceuticals, helium for hospital and tech uses, and highly refined fuels for transportation. In India, fertilizer prices are rising; in the U.S., farmers face constraints from higher input costs and the need to borrow to plant, risking profits as crop prices may not compensate the costs. He notes that crop traders may profit more than farmers, and that the wider impact cascades into electronics and manufacturing through electricity-intensive processes like aluminum refining.
The broader point is that energy is the linchpin of the economy; a disruption in energy flows threatens production across sectors, raising unemployment and undermining manufacturing. Hudson argues that the Iran threat, and the possibility that the United States and Israel would destroy Iran’s refining capacity and electricity, would provoke a depression larger than the 1930s because the physical flow of goods would be constrained beyond what debt relief or wartime Keynesianism can fix. To avoid this, he says, the world must restructure how trade, payments, and international reserves work, which would require reform—or replacement—of the United Nations, since U.S. veto power and international-law violations hinder cooperation and the transition away from fossil fuels toward atomic, solar, or wind energy.
He characterizes the current dynamic as an economic mutually assured destruction: Iran resists being crushed by U.S. and Israeli aggression, while the U.S. seeks to maintain dominance by weaponizing energy and finance. He attributes extreme risk to the U.S. political leadership, describing the internal White House tensions and the possibility of a nuclear impulse as driven by political personalities who would gamble with civilization rather than accept a loss of dominance.
Hudson then contrasts Iran’s position with the U.S. and its allies, noting that U.S. military capability is constrained: the United States has burned through missiles and bombers and cannot easily invade Iran on land. Iran, despite punitive actions against its navy and air force, retains a resilient defense and decoupled administrative networks, and it wields moral authority by opposing what it sees as American-dominated, one-sided control of oil, food, and the dollar. He argues that other countries confront a choice: align with a more independent, multipolar order or accept continued pressure from the United States to surrender sovereignty or face economic isolation.
He critiques the Western use of the term liberalism as misapplied, arguing that the term in contemporary discourse often denotes neoliberals who favor deregulation and reduced government, whereas, historically, public control of essential services and strategic sectors—transportation, banking, health care, education—guided growth. He compares China favorably for keeping banking under public direction and maintaining state-led credit for productive investment, arguing that Western economies have shifted toward financialization and rent-seeking, fueling inequality and instability. He posits that open, liberal trade and investment are not genuinely open under U.S. dominance, since the dollar’s supremacy and centralized control enable coercive extraction.
In closing, Hudson emphasizes that the real question is what economy and political system will replace the current liberal order, with attention to why China’s model—combining public banking, subsidized infrastructure, and state-led development—has produced higher productivity and living standards. He calls for a realistic redefinition of democracy and economic policy to prevent further polarization and decline, and for an international framework that supports productive investment and equitable growth rather than financial extractivism.
Full Transcript
Speaker 0: Welcome back. We are joined today by professor Michael Hudson to discuss the devastating global economic struggle, which is resulting from the Iran war, and also essentially what is becoming then a, you can say, a competition for the economic world order that will follow well, whatever this world order, whenever this world order comes to an end. So thank you as always for coming back on the program.
Speaker 1: It's always nice to be here because the questions you ask are have to do with the how the whole economy throughout the world is evolving.
Speaker 0: Yeah. And there's so much happening all at once, and these are really, again, historical times when we see the economic architecture from the past eighty years falling apart in front of our eyes, and we wanna I'd like to know what what might follow after this and also explain how the different actors behave. And you wrote you published very recently an excellent article with the name yeah. The sorry. There was the title postponing the world's financial winter for how long.
And I would recommend everyone to to read it, and the link is in the description. So I thought a good place to start would be the energy markets because this is obviously a big hit for the world economy. The US war on Iran essentially plunging all these international energy markets into crisis. I was wondering if you see a silver lining for The US in terms of these energy problems.
Speaker 1: Well, energy markets is just about everything. You have fertilizer, for instance, and fertilizer prices, I'm told in India, have already gone way up. Certainly in America, they're going up to such an extent that farmers are saying if they pay for the fertilizer and for the equipment and for all the other inputs whose price is inflated, they're not going to be able to make money on their crops. Well, course, crop prices may go up because all over the world there's going to be a crop shortage without fertilizer, but farmers need to go to a bank and borrow before they can spend for the spring planting and and the summer and that usually entails selling the crop in advance for a guaranteed price. So the big companies that are the crop trading companies are gonna make a big profit, not the farmers.
So they're really, really being screwed. And, of course, they're the ones who are most loyal to Trump and the and the Republicans. So, of course, they can afford to screw the the farmers because they're, they're his base. But pharmaceuticals are also in there. That's made out of all this, fertilizer, pharmaceuticals.
Already the neon, I'm sorry, the helium, has already been stopped and so that interferes with the, hospital scanning machinery as well as cryogenic freezing of computer chips, then you have just the basic energy for transportation, especially the highly refined, airplane fuels that have already led to huge cutbacks in the airlines planned flights for this summer for the tourist season. So energy is really the whole economy and people, you get the sort of simplistic economic analysis say, well, energy is 10 of GDP, so GDP will go down 10%. But that's not very helpful because if, you have all sorts of things that you need to make a profit, product. And if you don't have energy for it, then that means all the other things are not able to be employed either. And you have unemployment and manufacturing industry.
Aluminum has already been cut back because aluminum's really made out of electricity to do the electrolytic refining of the bauxite. Right down the line, the effect will be more than a 10%. And the genius of Iran's political stance is, if you, the rest of the world, do not stop The United States and Israel from destroying us, which is their explicit threat, They're going to blow up all of our bridges. They're going to destroy all of our refining capacity. They'll destroy all of our electricity.
They'll bring about a regime change and reimpose a police state like the Shah had that led us to have the revolution to overthrow him in 1979 to begin with. If you're just gonna sit by and let the let the world ignore all of the body of international law and the laws of war that the United Nations Charter was supposed to do, then, we're not gonna go down alone. We're going to take the other Arab oil producers with us. That's going to cause such a shortage that it's gonna cause an international depression worse than the nineteen thirties. And the reason why it's worse than the great depression is because that was really a financial, depression, but a cutback in energy and the tangible physical flow of goods is part of the production process itself that that cannot be solved by writing down debts, cannot be solved by saying, let's have a war economy and military Keynesianism to pull us out of the depression.
It's much more serious. So in terms of the world economy, it it's all going going to suffer if other countries do not restructure the way in which all of world trade and payments and finance and how countries save their international reserves is all reformed together. And that requires really a reform of the United Nations or even a it's sometimes easier to create a whole new institution, a new United Nations rather than trying to fix something that is so broken by the United States interference and the corruption not only of the veto power that the United States has to prevent the United Nations from doing anything that The United major that the United States doesn't want, but the corruption of the Atomic Energy Authority acting basically as a spy for Israeli terrorism against Iran or for the fact that the United States is driving the United Nations bankrupt by refusing to pay its bills. And the fact that the United States is blocking any kind of international movements to cope with the global warming, and replace fossil fuels, oil, and gas to begin with with either atomic energy or solar energy or wind energy or, alternatives.
So all of the the entire spectrum has to be changed as a system. It's not just, oh, let's just get the oil flowing again. And that's why I don't I don't understand why the stock markets are saying, well, maybe there can be a a happy medium and everybody can, make a there'll be a position in between global depression and total surrender of Iran and total control shift of international control of the oil trade to The United States to weaponize it to become, basically the world dictator and do to the world what threatens to be the result of destroying OPEC trade today. That's that's the choice, and this choice is seems to be unthinkable as far as the large investments, investors behind the stock and bond markets are concerned.
Speaker 0: What you're describing though is an economic, mutually assured destruction. That is, and I and I can see why, yeah. I think you used that word as well, by the way, in your article, but I can see why Iran is is is is doing this because and no one came to its aid, essentially. That is when The US and Israel attacked in this way, in a very savage way as well, destroying infrastructure, targeting nuclear reactors, talking about killing an entire civilization. Know, what I saw in European papers were, well, now the, you know, the Iranians will have time for will have the opportunity to have freedom now that we you know, now that they have been liberated from, you know, the the dictatorship.
And, essentially, every article, especially in the beginning, seemed to be about how to legitimize this. No one's talking about the international law or pulling back. So, again, if it's only them gonna be destroyed, again, destruction of their civilization, yeah, of course, they wanna push back in this way. But, yeah, it's it does appear to be something that seems like a mutually assured destruction. But if The US you know, it doesn't want the I guess, doesn't want the international economic system to completely melt down, but it doesn't wanna give up its dominance either.
So where do you see this going? Is it
Speaker 1: It would rather crash the whole economy, the world economy, and itself than give up its dominance. It's willing to crash everything. And then you have the personality. Trump wants to be famous. And how, how can you be more famous than ending ending civilization and pushing and taking a thousand years to rebuild it from atomic war?
He will go down as the person that ended the whole, a whole historical epoch of civilization. He he has a motivation for blowing up the world and he's appointed Hegseth is his is the head of the war department who is a Jesus freak who believes that, well, if you end civilization, Jesus will come and he'll save the Christians and send them all to heaven and everyone else to hell. You have crazy people in charge. And so it's not a this is not a situation that you can handle according to all the rational models. It's an irrational model, as you've seen by all of the newspaper reports of the fights that are occurring within the Situation Room of the White House when there are the generals are simply refusing to give Trump the code for the atom bomb because he would they said he would have used it last Saturday.
That's how crazy it is.
Speaker 0: You know, it's, it's just it's incredible that that it's actually gone, to this, distance or length, especially for someone, you know, like Trump was gonna bring Iran who ran on bringing back normality or ending the forever wars. And about the religious dynamic of this, I mean, it's it's quite strange. On on one hand, you see them being overly religious in the way they justify war and try to mobilize, the military and the public, except for when the pope criticizes war, then suddenly there's zero respect for religious authority. I mean, it's it's it's quite extraordinary. It doesn't seem very genuine, to be honest.
But but what do you make of the Iranian defense here, though? Because, again, they're faced with an existential threat. They wanna take down their their their opponents. How how do you see their their ability to withstand all of this? The Economically, this.
Speaker 1: Let's compare the, Iranian and The US ability. The US is, essentially used up most of its available missiles, its bombs, its, missile launchers, it's cut back its airplanes, it's afraid to move its navy within shooting distance of Iran. So The United States has lost its military power to compel. That's why Trump said, well, the army says I can't involve can't invade on land to grab a Karg Island or to grab the uranium. We tried that and it failed.
So if I can't have a military invasion like we we had in such a nice operation in in Venezuela, and if I can't just bomb them because they have their anti aircraft radars that are going to shoot down our planes and the refuel refuelers and, will lose their aircraft. And it's not gonna knock them out anyway because Iran's defenses and Iran's whole administrative network is so decentralized, then we have only one solution, the atom bomb. That's why he asked on Saturday, give me the atom bomb codes. I don't see why the rest of the world doesn't see, where this is is going to lead Because way back in the nineteen seventies, when I worked with Herman Kahn, the Hudson Institute, it was all about working, out what the sequence of political and military responses would be to an atom bomb, and it pretty much means that everybody's going to need one. And, you'd think I mean, the the joke is that in trying to prevent the fiction, the pretense that Iran was trying to get an atom bomb, now everybody realizes we need an atom bomb.
If we don't have our own atom bomb, Israel can bomb us. Israel is the only country in the world that's permitted to have 200 atom bombs to use against whoever it wants, and we can't. So we need 200 countries. Let's we we all need them too. This is the double standard that's occurred.
And, again, countries are not taking steps to isolate The United States and Israel and say, look. If you're going to go down this route of threatening the atom bomb, if you don't get take control of the world oil trade to weaponize it and use it as a choke point to say, can't get oil unless we succumb to, your foreign policy and give and agree to shift our investment, in our major industries into The United States, as a center that you're going to force us into a depression by cutting us off from oil. If if if you're you're you're offering threatening exactly what, Iran has, anticipated for the threat. So, the the US military doesn't have an ability to do anything to really conquer Iran. All it can do is bomb it.
And the Iranians have, main have, despite what, Trump says, their navy is not destroyed, maybe half of it is. Their aircraft is not destroyed, maybe half as it is. The missile launchers are not destroyed. What were destroyed were the balloons that they bought from China and inflated to look like missile launchers, which were, bombed that, Trump said we've destroyed all of their, missile launchers. So Iran is in a a much stronger military position defensively, and Iran's not an offensive power.
The only countries that Iran can threaten are its, Arab neighbors, in the in in West Asia. It's not going to be a world power in in the sense that America, or China is a military power. It's not going to be an investment power itself because it's been stripped of its foreign means of investment. It's not even going to be a major trade power. What is giving it all the power that it has is the moral power that it's got saying, we we are not going to stand up for letting The United States become the world's dictator and using, oil trade, food trade, the dollar as weapons against other countries, to maintain one-sided exploitative control over them.
We're not going to let that happen, and somebody has to draw the line, and it's Iran that has drawn the line. That's what that's what its moral power is, and other countries really don't have any choice except either to tell Iran, you're right. We have to make a change. We have to stop this, aggression by The United States and Israel to say, we will destroy your economy either militarily or economically if you don't do what we want, or they'll, isolate, themselves from The United States and Israel by going their own way. And essentially, that means isolating The United States, until it ends its military and, financial attempt to weaponize everything that it does in every economic and, social, activity.
Speaker 0: It's interesting that this role fell on the Iranians to essentially check The US on this because you and I spoke have spoken before about how a confident hegemon, that is the British in the nineteenth century or or the Americans in the twentieth century, they when when they're confident, have an interest in having an open, liberal, international economic system. That is everyone should have access to technologies, industries. There should be, you know, free access to international trans transportation corridors by sea or land. There should be free access to currencies, banks, etcetera. But but once the hegemon is in decline, it will seek to will reverse its decline by essentially weaponizing all aspects of economic connectivity.
So all the connectivity, which was previously a source for global growth, is now weaponized to restore the hegemonic power. Now, you know, we we see this being used against China, I think, yeah, to to a large extent, not just tech, energy, transportation corridors, but also increasingly Russia. But Iran, it looks like they yeah. They're the one who put the foot down, and but they they also have some abilities to the Strait Of Hormuz. I think this is quite fascinating because by stripping The US of control of the Strait Of Hormuz, I mean, they they can do a lot of other things.
I see now that they set some conditions. They essentially set up a toll booth now, and they said we have you have to everyone has to pay toll, especially the countries who attacked Iran or sanctioned Iran. They have to pay reparations, so that's an additional bonus on top. And, also, they don't want dollars anymore. This is quite extraordinary.
Speaker 1: Well, they that's not possible they have dollars. They had dollars, and The United States has confiscated them. If you have dollars, you The United States will immediately steal them as they stole Russia's $300,000,000,000. The dollar is unusable by any country that wants its own national sovereignty. I wanna say, you used the word liberal, and this is a completely misused term in general.
The takeoff of the industrial nations, Britain, Germany, The United States, they were not liberal. The word liberal has come really means neoliberal. It means no government. Liberal means Mark Thatcher, Ronald Reagan in today's vocabulary. And it means, you you dis you have to dismantle all government subsidy of the economy, instead of the governments running, natural monopolies such as transportation and communications and, providing free schooling and free health care.
All that was nineteenth century. It wasn't neoliberalism. The word they used was socialism in one form or another or social democracy perhaps. But, they did not use liberalism. They rejected the whole idea of free trade in order for governments to shape the markets to so as to prevent rent seeking, shape the markets to prevent real estate prices from going up by taxing away land rent, to prevent monopolies from taking place either by things like the antitrust act of the Sherman antitrust act of 1890 in America and Teddy Roosevelt's trust busting.
Or the but better yet, the government will take all of these natural monopolies into public hands as was done the case from Europe to The United States. United States with the Erie Canal and on. So as to and there was a whole doctrine of looking at government capital formation. Public infrastructure investment was a a factor of production. But unlike industrial capital or capitalist capital, private sector capital and industry capital, the aim of government investment was not to make a profit.
It was to lower it was to provide its basic services for key sectors at subsidized rates or even freely so that you lower the economy's overall cost of doing business. And at the end of all of this, there this this government control was, in finance achieved most clearly in Germany and Central Europe at the end of the nineteenth century where the government and industry, and the banks moved hand in hand to direct the financial system to, provide credit, not to make money financially for financial investors, but to finance capital formation and industry, to build factories largely in the arms producing industries, of course, but to produce actual industry. Well, there was a all of this was what classical political economy was all about. The ideal of the whole political doctrine of industrial capitalism was cap was to minimize economic rent. It was value theory.
That's what Ricardo talked about. John Stuart Mill, Karl Marx, they were all talking about how do you keep prices in line with actual cost of production, the value, and get rid of economic rent, which is the excess of market prices overvalue because of the special privileges that, we inherited from medieval European society. The privilege of absentee hereditary land ownership by a landlord aristocracy, the monopolies that were created by international banks in the fourteenth century on to enable kings to have a revenue to carry their war debts, and general banking to provide credit for economic growth. Well, there was a after World War one, all of that plans for how to develop an industrial economy was essentially put aside and finance replaced industry as the focus of gaining wealth and making a fortune, throughout the West. And if you look at today, the most successful economy in terms of growth of production, living standards is China, and what it's done is exactly the same principle that made The United States wealthy and productive and so dominant in the nineteenth century.
It it's kept natural monopolies in the public hand. Transportation is very inexpensive. It's subsidized. Health care, education is subsidized. But most of all, China's kept banking in the in the hands of the government.
So the bank of the People's Bank of China will create credit for actual tangible production. Unfortunately, lot of this has gone into overproduction of real estate, but the idea is you're not going to make loans for financial speculators to borrow money, buy a corporation, and then essentially loot it, with and, leave it, which is what's happening, in the West. Certainly all week long and for instance, in the Financial Times, Wall Street Journal, there's a discussion to say, well, the major banks and major investment funds that have lent money for private capital formation to take over companies and finance their in the shitification, their downsizing and essentially just looting these companies, were not letting pension funds cash in their holdings unless they take 50%, 80%, lose lose all their money because the whole American economy has become a bubble. So when I talked about what's the effect of the energy stopping before, one of the effects is to bring down this whole highly leveraged financial sector, the whole debt leveraged, buyouts and the debt pyramid, mainly in The United States, as in the depression, The United States was the most highly debt leveraged economy, the whole financial sector will be coming down.
So what what will be destroyed is not only a physical output, it's the whole system of financialization that has led The United States to lag so far behind China, for instance, in countries that, instead of being liberal, say, well, the government has to play a positive role in providing for certain basic needs and to prevent, exploitation. If you don't have a government strong enough to prevent a financial oligarchy from developing, then, you're going to end up like The United States, a failed economy. Or like Germany and most of Western Europe, a failed economy as a result of their neoliberalism. So, I just wanted to be very careful about using that word liberalism. It's a it's a it's an a term against government and against socialism specifically.
That's what caused the whole reaction against industrial capitalism because industrial capitalism itself was evolving into socialism, into a government playing an increasing role in the economy by investing in infrastructure, by preventing monopolies, by taxing away, or preventing land rent and monopoly rent and financial exploitation from occurring. So there there there's a whole ideological superstructure that is gone by the wayside, along with the collapse of, production. Ideology is the last thing to go apparently.
Speaker 0: Yeah. No. That's a good point. Often the word liberal is used because of the openness of the system. But but But it's not open.
No. No. No. I agree. And and and there's nothing else.
Speaker 1: United States says if any if we have open trade, then we can't control it. The United States says there cannot be open trader investment. If we can't grab if, there's if everybody can use the dollar, then we can't grab it all from them and force them to do what we want. Nothing is open. It's a closed system controlled centrally by The United States.
Liberalism is central planning, but it's central planning not by government, but by the financial sector and by the political, military sector. That's a liberalism. You have to realize that central centralized planning, not by the government, not by democracy, but by financial wealth and and the military to protect its dominance.
Speaker 0: No. That's yeah. That's where I was going. I I think the rent seeking rent seeking, not just from the their own public, that is the American public, but also from other countries as well. I think this is why, yeah, the the the assumption of countries who break away from The US led economic system that they would only suffer, but we see, well, like in the Russian case, that they can actually make have have many benefits as well from not, yeah, paying these rents.
But given that this is The US situation, when he was a hegemon, he had, you know, certain privileges in terms of everyone using the dollar, everyone using the banks, everyone using its technologies. How how do you as The US now struggles as a declining hegemon, it seems to be pursuing a very different approach. It's has a very, I guess, extractive approach to to trade. He wants to maximize
Speaker 1: But that's that's
Speaker 0: one of years. If you don't Maybe that's an other story. But who who in who in this situation do do you think wanna invest in The US economy given that it's kind of obvious what they're going for now?
Speaker 1: Well, that's the fantasy of all this. Donald Trump says, well, you know, we we can go one of two ways. Either we Iran you know, we'll attack Iran, to make one last stab to grab its oil, which is how we began. That's nothing to do with Iran wanting an atom bomb. It's nowhere near an atom bomb if America wants its oil.
Or in in that case, will be a world depression. But if there's a world depression, he Trump said, we'll come out ahead. We look at us. We have oil. We have gas.
We we don't need oil oil and gas. Other countries will suffer more and that means we will suffer less than they do and that's what winning is in a shrinking environment, to suffer less than your, opposition. Well, that's his fantasy. But he doesn't realize that, well, the yes. The United States has oil, and gas, but it doesn't have industry.
It doesn't have any means today of being, of producing industrial goods, because it doesn't have an industrial labor force. And even the construction labor force, most of the blue collar work and the dirty work, the low low wage work was being done by immigrants, and Trump has cut that all off. So you no longer have the in immigrant, personal care, restaurants and other things that immigrants do, crop, crop picking that immigrants do, or the blue collar labor working in factories because there aren't any factories now for them to work in. So immigrants have always done, the hard work just like you, is the case in the Arab, Emirates where it's mostly an immigrant population. Same thing in Saudi Arabia.
That's that's how countries recruit the labor force. And the The United States cannot compete industrially or agriculturally with other economies to say, oh, well, we'll export something for you and, for for what you need. You sell sell us what we need, your raw other raw materials, your high, your your whatever it is you produce. Because the the cost of labor is so high in The United States, not because Americans' living standards are high. The the living standards of labor in America have gone down steadily ever since 2008 and really since nineteen eighties or the '19 late nineteen seventy nine was really the key for American labor living standards.
You could afford to buy housing there out of the wages that you had, but especially since Obama's bill out the banks and the junk mortgage fraud that, essentially wiped out a lot of the low income people. And since 2008, all almost all the growth in wealth in America has been, as we've said, to the top wealthiest 10% and its wealth of the finance, insurance, and real estate sector, not the industrial economy at all. So the industrial the American industrial economy has been essentially, dissolved. You had America make it a deal with, Korea and, also with Japan to build affiliates in The United States. And so, Korea said, well, you know, we'd came over here.
We tried to hire American labor. They're not good at construction labor. They're just too, sloppy. We we have to bring our own labor over. Same thing with Taiwan.
They had a multibillion dollar, big, plans to build a computer chip factory, out west. And they found out, well, we have to use our own workers. We can't use American workers for it. They there's essentially, no one wants to be a blue collar worker in The United States, and the only people who do were willing to do the blue collar jobs are now being deported, or under threat of deportation, because they've immigrated and doing a blue collar job is how you get a foothold, in in this country. So, there's this fantasy that somehow if, there is a world depression, America can come out the winner is all of a sudden going to show that America's hollow.
It will be like, like, John McCain called Russia a gas station with atom bombs. Well, that's all that America would be left with under Donald Trump's alternative. To say, okay, we've brought the rest of the world in depression. We have oil and gas, and we have the atom bomb. We don't have any industry, and our agriculture is broke.
So he's turned in he's turned America into a gas station with atom bombs if he goes that route of causing of forcing Iran to defend itself by saying if, we're going to be attacked and destroy our economy, we're going to bring all of the world with us, which is going to force you to make an alternative or just to live in a permanent depression until you figure a way out of it that'll save us along with you. That's that's the political dynamic at work that I see.
Speaker 0: Yeah. This assumption that if the international system breaks down, the global economy somehow, The US will be able to float to the top. It's well, some of it can have some strength in that argument in terms of The US having a lot of energy sovereignty, but their whole similarity one often hears with World War two, it seems a bit, yeah, wrong because, you know, in World War two, there was the the emergence of the big business. There was a lot of technological development, and, overall, after the war was over, The US was the world's factory. It was the world's bank.
These days, it doesn't it outsourced its industries. It's the largest debtor country in the world, in world history. So it's not it's not positioned well as it was back then. So the idea that one can come out strong in a war like this, it doesn't make much sense. But my my my my last question, though, was just on on the partners of of The US.
Because if The US is shifting towards extracting more economic concessions, and you hear that you see this in Europe where, you know, Trump can hand over the Europeans any trade deal they have to sign, whatever. You know, they have to show up at his golf course and sign deal they don't wanna sign. You see some some suggesting that The Gulf States should repay The US for the weapons it has spent in fighting Iran. In East Asia, there's been comments that Taiwan and others should begin to shift their high-tech industries towards The United States. So, again, this very extractive economic, approach, which is now kicking in to reverse the decline.
You know, nobody wants to do this. It appears that the main leverage The US has is that it's a it's the security dependence, The US' security guarantor. But a declining hedge bond often invites insecurity. It doesn't provide security to the same extent as evident in both Europe and and the The Gulf States. So how do you how how durable do you think this is?
Speaker 1: Well, that's just what the Emirates have just said. We we had thought, two things. We thought that when we bought US weapons, they were going to work and the the weapons are only like to have an expensive Rolls Royce in the garage. It looks nice but it's not really the most efficient car. The weapons are not to fight with.
They're not to fight a war with. They're not to attack. They're not to defend. They're just to hold on the ground and to make America happy. The weapons don't work and having a base here, has ended up a threat.
When America attacked Iran, Saudi Arabia and the Arab countries said, well, we weren't consulted. And the European consult countries said, wait a minute. Donald Trump wants now us to die to the last year European was, trying to have a land invasion of Cark Island and Iran, so we'll die when America's not willing to do. The fact is that, America's acting unilaterally by itself in its own interest, and so having a US military base there is, essentially putting yourself as a bull's eye for Iran and, similar all over the world, to, to destroy because The United States military bases are there is a means of attack. They're not defensive.
They're aggressive. And if they're aggressive against any enemy, the enemies the, opponent is going to fight back and wipe it out, and they'll whip out the country that has the military base in it. So obviously, that's not safe. But most of all, I'm glad you mentioned the thought that, Trump has said, well, Iran has to Iraq has to pay us for all the costs that it had for the war we we waged to destroy them, and, we're gonna get pay capture the repayment for that by grabbing its oil. That's he said that explicitly, and so he's grabbed its oil.
And there is obviously, he wants to do the same thing with the Arab OPEC countries. Well, we defended you. Now you have to pay us for the cost of defending you with our military industrial complex of overpriced missiles and aircraft and missile launchers and everything else that didn't have anything like the military effect that we told you it would have. It we're a paper tiger to use Mao's phrase. And, why on earth would any country want an American military base being a military being a paper tiger that's not going to defend it, that just makes it a bull's eye, a target of countries that America is trying to launch a war with as it tries to threaten to destroy them if they don't surrender their sovereignty, to The United States and to Trump personally.
Speaker 0: It seems like a strange time in world history to be banking on US security guarantees. I mean, it's you know, that's it's just it's not in The that The US doesn't have the possibility anymore either. It's I'm I'm so I'm very shocked by when I look around the world how how little adjustment there actually is to the new realities that is this new distribution of power. The assumption that we can still have the hegemonic policies of the nineteen nineties and apply them to 2026 when the distribution of power clearly is now post hegemonic and, yeah, multipolar.
Speaker 1: This security you talk about for seventy, for eighty years now has been a fiction. It's the enabling fiction to say we will provide you for security in case that Russia invades Europe. That's as if Russia is going to invade Europe. Russia has known it's a a fiction to think that Europe needs security against Russia. Russia wants to be left alone by Europe, and it's willing to fight Europe and to bomb Germany and England and France if they try to attack Russia as they're doing or provide Ukraine with missiles to attack Russian oil and refinery production as they're doing.
Russia has already turned its back on Europe and wants to go with the East because Europe is part of a failed civilization. It's going it's going downhill and it's Russia's not only rejecting Europe economically but its social values and its rotten political system. A system that says, if you say that you're against a genocide, we're throwing you in jail. This is a democracy. We're in charge and, you cannot in a democracy say, oh, we're against we're the Palestinians shouldn't be exterminated.
That's against civilization. You go to jail. Germany said that, Britain said that, and France has said that, and they're arresting people to say that. I mean, this is a despicable culture for the rest of of the world, and they're seeing the whole nakedness of, the the the fact that Europe is not a democracy at all and that all of this say saying, we're here to protect you. You have to pay us to protect you is really just you have to pay us to be able to put in place a military system to threaten you with disruption if you don't do what we want and, follow trade policies that are unequal and benefit us, not you.
America has to win as Donald Trump says, and you have to use the dollar that we can just print to get buy up your industry, your raw materials, and other things. You have to pay the debts that are you run up from running trade deficits as a result of following the the pro American investment policies that the World Bank and the IMF produced that say don't produce your own food, buy buy American. The whole system that was supposed pretended to be keeping the world economy prosperous and free turned out to be making it more and more unequal, more and more polarized, less and less safe, and more or less prone to leading to exactly the culmination of this, irrepressible conflict that we're seeing today?
Speaker 0: Yeah. I was I was interviewed two days ago by a German newspaper, and and, you know, I was making the point that if Europe wants to reverse its decline, it has to end the dividing lines in Europe. That is end the conflict with Russia, you know, remove Ukraine from the front lines of of this new war. And and I was asked, well, to what extent is possible because our values are so different, because we have liberal democracy and the Russians are so authoritarian. I was like, this is the same Germany.
I mean, where where again, where you protest against the genocide and they throw you in jail. I it's it's no. It's quite extraordinary that this is still the the very narrow framework we have to interpret the world around us that is simply, you know, good guys versus bad guys. Anyways, any final thoughts before we wrap up?
Speaker 1: Well, the whole question is what is democracy? What seems to be democracy, in the West is exactly what it was in, Aristotle's day in Greece. He said what claims to be democracy is really oligarchy. But you can let people vote for who is going to be the personal leaders and the administrators, but you cannot vote for what kind of an economy are we going to have, what kind of a society we have. All of that is determined by the wealthiest, oligarchic parts of the population.
The the whole purpose of democracy is supposed to be how do you run an economy to prevent it from polarizing and to act on behalf of the population at large, increasing its, living standards and its productivity and its happiness. That can only be done with a strong enough government, in a position to prevent a financial oligarchy from developing and polarizing the economy and dismantling government authority to put the authority in the hands of the creditors and the landowners and the wealth holders. So the whole idea is that the whole ancient Near East, Babylonia, Sumer, they all had rulers who would prevent debts from impoverishing the economy from prevent the land from being forfeited to buyers to centralized landowners who accumulated it all, to prevent the ancient Middle East, West Asia from suffering in the way that Western civilization did from classical Greece to the Roman Empire. And we're still living in the results of that idea of oligarchy creating a government, calling it democracy, and saying government not controlled by the oligarchy is not democratic. When, you and that a country like China whose government is trying to act on behalf of increasing productivity, wealth, and living standards is called, an autocracy.
Well, this is this is the vocabulary of deception that we're, we're living in and that a part of this, resolution of the economic conflict we're having today has to be a resolution of the ideological misuse of language to provide a a more realistic vocabulary to explain why it is that Western economies are polarized and, getting poorer and poorer and other countries, China is not. What is it that China's doing that we're not doing that has enabled it to uplift its population? That, there has to be that discussion, which hasn't even begun yet. It's it's still in the unthinkable phase.
Speaker 0: Yeah. Far away. Well, thank you very much for, yeah, sharing your insights. It's, quite extraordinary what we're seeing. So, yeah.
Thanks again.
Speaker 1: Well, thank you for having me, Glenn.
@Glenn_Diesen - Glenn Diesen
Richard Wolff: Petrodollar Decline Unravels the U.S. Empire https://youtu.be/WEeVlIYXl0Y https://t.co/gqNsRYfETZ
Video Transcript AI Summary
Glenn: Welcome back with professor Richard Wolff to discuss economic fury, the economic weaponization of the US campaign against Iran. How do you assess this effort, given the mix of oil sanctions, open markets for oil, and port blockades?
Wolff: I’ll be blunt: I don’t know how to answer cleanly because the statements keep flipping on/off and have become “herky jerky.” The steps are inconsistent, sometimes increasing supply of oil and pushing down prices, other times constraining it. It’s not clear which way any given move will go, and the sequence is hard to parse. He notes that Gulf states are pressing for dollar swaps—foreign central banks can access dollars via swaps rather than buying them on markets. These swaps have shifted from weekly to daily, signaling worry about dollar access. The Gulf states—UAE and others—allege they depend on dollar-denominated oil revenues to service debts incurred through investments abroad. If dollars tighten due to strait closures and sanctions, they may be forced to sell assets in the US, including Treasury securities, which would lower bond prices and raise interest rates, potentially triggering a US recession. They could also sell holdings in the American stock market, affecting prices. Wolff emphasizes this as a surface manifestation of a broader global liquidity and debt dilemma tied to the Persian Gulf and the dollar’s role in the world economy.
Glenn: So essentially the petrodollar is being unraveled because if Gulf states price and sell oil in dollars, but if they’re not exporting and not receiving dollars, they can’t pay debts or roll them over. They might sell treasuries or assets to cover shortfalls. How far can the US hold this position?
Wolff: I don’t have a crystal ball, but I think the likely scenario is a political and economic squeeze. Trump has lost parts of his base—issues like the Epstein file and the economy’s inflation and job market. He relies on a narrative of victory; his base may be shrinking, while the wealthier 10% who own stock might be more supportive as the stock market stays buoyant. If the Gulf states must exchange dollars for debt relief or to cover losses, the government may have to grant more dollar swaps to prevent a spike in interest rates and a stock sell-off. Steven Bannon has warned that war could cost Trump the election, so the administration may shore up swaps to protect markets. Wolff suggests this is a desperate regime trying to exit a bad position with minimal damage.
Glenn: You describe a broader pattern: the petrodollar’s decline, and the US dollar’s dwindling centrality in global reserves. How does this fit into the larger arc of American empire and capitalism?
Wolff: It fits as part of the decline of the American empire and the corresponding decline of American capitalism. BRICS, China’s rise, and the shift away from dollar-dominated trade illuminate a trend toward reduced dollar dominance. Sanctions in Ukraine exposed the limits of that model, and there’s growing acceptance of payments outside the dollar for oil. The United States remains influential, but the dollar’s dominance is waning, and there’s no clear strategy to reverse that trend. Manufacturing has moved to other countries, notably China, which maintains low inflation and large-scale production. The world is moving toward multipolar arrangements, and the dollar’s preeminence is no longer assured.
Glenn: Given this trajectory, is there any viable way to salvage the petrodollar, or is it beyond rescue?
Wolff: I don’t predict the future with certainty, but I view the larger context as a decline in American hegemony and an erosion of dollar dominance. The war in Iran, like the war in Ukraine, demonstrates the limits of sanctions and the unintended consequences of aggressive confrontation. The dollar’s global reserve role is shrinking, and other powers are willing to transact outside it. He emphasizes this as a systemic shift, not a temporary setback.
Glenn: Any final thoughts on how history and memory shape current policy?
Wolff: History often gets reframed to fit current aims. There’s a tendency to present “victories” regardless of outcome, especially in wartime rhetoric. The dialogue in Europe and the US reflects a mix of nostalgia for past dominance and struggle to adapt to a changing global order. The conversation ends with questions about how Europe and the US should reorient foreign policy toward a multipolar world, where old assumptions no longer hold.
Full Transcript
Speaker 0: Welcome back. We are joined today by professor Richard Wolff to discuss economic fury, which is the, yeah, new arm of The US war against Iran. So thank you for coming back on the program.
Speaker 1: Glad to be here, Glenn.
Speaker 0: So the name given to the war against Iran, Epic Fury, you know, filled Trump with great pride that he picked this name. He mentioned it in quite a few speeches, but Scott Bessent has now complemented it with economic fury, which is the, yeah, the economic war or sanctions policies against Iran. And well, my first thought is it's been a bit confusing because first, there's a, you know, there's a sanction on all Iranian oil, then they open up the Iranian oil to help stabilize the markets, then there's a blockade on Iranian ports. So the consistency is not always clear. How do you assess this new efforts to strangle Iran, which is this project economic fury?
Speaker 1: Well, I know this may be a troubling thing to hear me say, but I really don't know any anything else but to tell you. Along with others, I know I'm not the only one, we have stopped following the kind of herky jerky on again, off again statements because they are so often the way you just described them, inconsistent one with the other. You don't know whether the earlier one is true and the second one an exaggeration, or the second one is the correction of the first one. And before you can resolve that, he has a third one, and then it becomes crazy. And and so I don't know how to answer, basically, your question.
It's a perfectly good question, but I don't know how to answer it. It is inconsistent. Either you are going to take the steps that make oil supply more plentiful and drive down the price or you're not. And anything you do can be interrogated as to which way it it on balance, which way it goes. But if if he does almost at the same time allow there to be less oil and then at the same breath more oil, well, you don't know.
You don't know what's gonna happen. By the way, there are other examples too, not so well, attended to. Mister Besson is now going to have to decide, he may already have done it, on the request of the Gulf States for what are called dollar swaps. This is not unimportant. A dollar swap is usually an agreement between The United States, either the treasury or the Federal Reserve on the one hand, and foreign central banks on the other.
And the reason you establish it is you have reason to believe that the global supply and demand of dollars is going to be disturbed. And mostly, there's going to be a shortage of dollars. I can go into the reason for that. But if you worry about a shortage, you will enhance, you will increase your swaps. Why?
But all the swap means is that a foreign central bank doesn't have to go into the market and buy dollars if it's short of them. It can simply grab a bunch from a swap agreement. It used to be that this was done on a weekly basis. Now it is done with these latest ones on a daily basis, which is already a warning sign. Somebody's very worried about access to dollars.
So the minute you start looking into this, you discover who's worried, which shouldn't surprise you. The Gulf States, you know, The United Arab Emirates, all of them. They I don't know whether each of them is, but many of them have now put pressure on The United States to give them, when they don't have them, credit swap facilities, or do we if they do have them, to make them much larger? Okay. Now why would they do that?
And the the only reasonable answer is that they depend on receiving income in dollar form from selling oil and natural gas. They have borrowed over the years to invest in many countries, so they have dollar denominated debts. Well, they expected to be able to pay off their dollar denominated debts around the world with the dollars coming in from oil and gas. But there are no dollars coming in because this Strait Of Hormuz is shut, and the blockade, if anything, makes it worse. So they don't have the dollars.
So they can't pay off their debts. And they can't pay the interest. They can't pay whatever the portion of the principal is, which means here's my guess. I don't know what I'm about to say, but I'm gonna guess. They have informed the American government, mister Trump, that they must pay off their debts, they cannot sell the oil, they're gonna start selling their ownership of American assets.
Okay. What does that mean? It means two things. Number one, they're gonna sell treasury securities. Wow.
That's gonna if you understand, a fire sale of treasury securities brings their price down, and that raises the interest rate. We are on the edge of a recession right now. If the gold states en masse were to sell lots of treasuries and if that were to stimulate others around the world who don't wanna see the price of their assets as treasuries go down, you're going to see a dangerous spike in interest rates in this country at a time when the the Trump administration wants everything other than that. Number two, you're going to see the American ruling class that invests in the stock market see a significant player in the American stock market, The Gulf States, selling whatever it is they have to get the dollars just like they need to sell the treasuries to get the dollars to cover their debts. Okay.
This is a tangential story, and I'm sorry to bother you with the with the economics of it. But the bottom line is you're beginning to see why a significant number of commentators are waving their fingers warning that this event, which seems to be localized in the Persian Gulf and the the Sea Of Arabia and so on, is in fact dangerous for the whole world economy. And the this swap problem is is the surface manifestation of this global problem, which has a particular salience for The United States because so much of the Gulf dollar business is here in New York with the stock markets and with the treasury.
Speaker 0: So so, essentially, the petrodollar is being unraveled to some extent. Because if oil is priced and sold by the Gulf States in US dollars well, the Gulf States aren't making the money. They're not exporting, which means they're not getting the dollars, which means they're not reinvesting them into The US. Now they have to instead of buying the treasury bonds, they have to sell it. Well, where exactly is this going, though?
I mean, how how long can The United States hold on to this position? Because, well, I know you don't have a crystal ball, but a lot of this is unprecedented. We haven't seen this. But this isn't just a speed bump. This is something, you know, hitting deeper into the system, isn't it?
Speaker 1: Absolutely. I'd let me give you I have no crystal ball. I don't believe in it. No one else does either. But having said that that with that caveat, let me tell you what I think is likely now going to happen.
Mister Trump has lost a great deal of his mass base. What do I mean? Two things. People who voted for him because of one or two or three issues, those people he has now lost. The The two or three issues, in case your your audience is interested, is the Epstein file.
The government is exposed, excuse me, as having not released most of that relevant information, holding it back, redacting redacting it in ways that are protecting the president and so on. So people who expected him to deliver on the promise to open everything about the Epstein files right away because he's committed to, transparency, he's lost those people. You know? That's one. Number two, the economy, the availability of jobs for young people, and the price, the level of inflation for everybody else.
And he's it's a job market here is awful. Young people, my students who are getting master's and PhD degrees in in university here, you know, are talking to me about a lifetime being an Uber driver or a Lyft driver, not because they are simply excitedly upset, but seriously in somber tones, there are no jobs. And the inflation is not over for Americans. He promised to bring prices down. He he explicitly played with the ambiguity that economists, when they talk about inflation, are talking about the rate of increase, whereas the common people, when they talk about it in the media and so on, are really more talking about the level.
And because we had a serious inflation, during this decade, people want the prices to come down. That's not happening. He's unable to do that In one or two sectors with lots of fanfare, he does it. But meanwhile, the cost of living keeps rising currently between 34%. Average wage increases are not even that high.
So the the mass of people are upset about the economy, and the Democrats who have no courage on the Iran issue and have, yeah, not much on the Epstein either are able to to make an affordability the big issue, so they're beating him up, with that. And then finally, Iran. The war on Iran means he loses the people who wanted him to be the president who doesn't have war anymore. He coined remember the phrase forever wars. Alright?
Well, he's he's he's still stuck in Ukraine. Now he's added Iran, and it's clear to the American people, more clear than I've ever seen before, right from the beginning, that that this is not a good idea. This war is not going well. And when you have even little things like the strange firing of the head of the US Navy just at the time when the Navy actually has a major task in front of it, the blockade, that doesn't look good. And who knows what this ex head of the navy, who by the way is not a naval career person, he's a wealthy donor to the Republican Party who got that job as a gift.
So he may not be happy leaving. He may be speaking soon, in a way that the Kelly, the senator from Arizona does and so on. So all of these things are bad for mister Trump. So and why am I telling you this? Because he cannot afford well, I'm telling you, he cannot afford a spike in interest rates.
He cannot afford it. He is, at this point, in my judgment, relying on two things to survive politically, whatever remains of the MAGA base. And, again, notice Tucker Carlson and Marjorie Taylor Greene, two of his former stalwart promoters, are now referring to him, and I quote, he is insane. I am very sorry I ever supported him. Those are quotations from Greene and from the other guy the other guy.
Carlson. Yeah. Carlson. So his base is really in trouble. So what has he got left?
The answer is the richest 10% of The United States. People who look to the stock market are happy. The stock market is very high. It's even high in the last, you know, few weeks. It it took a momentary dip with the Iran war, but it basically it it presumes that this war will be over soon, and it will not cost any rich person anything.
So they can keep their money in the stock market. They can continue to buy and to sell and to borrow money and invest that money in the market. Therefore, Glenn, here's the closest I'm gonna come to a prediction. If the stock market starts to tank, and could an exodus of the Gulf countries, if they didn't have an access to the swamp, could it do that? The answer is nobody knows.
It could. Therefore, my guess is the government will give the Gulf States all the swaps they want. Basically, give them an advanced access to as many dollars as they need to pay off as many debts as they have without selling treasuries or disinvesting in The US stock market because it's too dangerous. His his ability is too small. Yesterday, mister Steven Bannon, a former adviser pretty close to him and a far right wing, personality in this country, was begging for the war to be over because otherwise, and I'm quoting, we will lose power in November.
In other words, he's so worried about it, and there are enough people around him who are that whatever mister Trump says, I don't care. We're fine. None of that should be taken seriously. They are now worried that they are in a fight that they may lose, and and they are very anxiety ridden about it. They clearly I mean, footnote.
They clear and the evidence now is is really pretty overwhelming. They told themselves that they could go into Iran and decapitate, they love that word, decapitate the Ayatollah and kill a few other leading generals and advisers and that the system would collapse. There would be no whatever glue held the country together would be gone, and United States could then dictate terms, for a new government, regime change, and a new shah of Iran replicating more or less what the Shah of Iran used to do for The United States, that was a and that would be a glorious it would allow them to say what by the way, Vance there's an a clip of Vance a year ago talking about war in Iran. I don't know if you've seen it, but it is going around in this country like, when they say viral. It's a viral clip.
It has Vance explaining why going into the war with Iran is a wonderful good idea, a real a a very strong endorsement by the vice president in which he says the following. Previous presidents all knew that Iran was a disaster for The United States, but they were, I'm quoting now, too dumb too dumb to do anything about it. The difference is mister Trump isn't too dumb, and we're going to do it when where Obama didn't and Bush didn't and Clinton didn't and we're gonna do that was their and that's why when Tulsi Gabbard and other intelligence officials told them they were wrong about Iran, They it was too beautiful a story, too wonderful an encapsulation of how they want to appear to the American voting public that they just didn't listen. It was too attractive. And now the herky jerky that we began this conversation with, the on again, off again oil management, this is a desperate government whose plan is shot, whose opportunities in that direction are all gone, and it's trying desperately to to figure out how to get out of this.
And the person that I know you interview from time to time, and I caught him recently on one of your programs, John Mearsheimer, he puts it very, very well. You know? It's a desperate effort to get out of here with minimum damage at this point, and even that is proving to be harder than they can figure out how to do.
Speaker 0: Yeah. So that speech by Vance. I thought that was extraordinary. I was hoping for some deeper analysis why all former press presidents, you know No. Did not do it, and this one did in terms of how the economic situation had changed or something.
But instead, was just, well, those they were dumb. Trump is smart, and this is why we've done it. I mean, it's hard to believe this is really it belongs on some Saturday Night Live or some parody, but, yeah, that was real. I if I would have just seen a quote, I would have to fact check it because it sounds so worth the talk.
Speaker 1: Oh, My students, Glenn, my students raised their hand and said, a speech like that proves that the dumb one is the one who says it. A way of you know, no analysis, no see, they were all dumb. And then now that it's proven that the hesitancy noted in the earlier president sounds now like they were brilliant, that they understood the limits of what they could do, and this one doesn't. It it's it's extraordinary. And it looks very bad.
You know, it's another one of the thousands of misstatements. You know, the the shooting of the boats in the Americans have taken that to heart. Very interesting. You know, for several months, they would kill two or three people in a boat near Venezuela. They would shoot the boat with rockets and kill the fishermen.
No arrest, no trial, no lawyer, no nothing. Just kill them. That lost mister Trump all kinds of support. I remember being on a television program explaining to the American audience that when we arrest people for drug traffic, which we do inside The United States, they automatically are entitled to a lawyer. They automatically are entitled to a trial.
They are automatically entitled to defend themselves. And even if we find them guilty, that it's not a capital crime in this country. You don't get executed for drug traffic. You can get imprisoned. So here we have a complete negation of the entire legal apparatus of it, and that is too much for a significant number of people who otherwise would like mister Trump, but they can't.
They can't go with this.
Speaker 0: Yeah. Well, a bit like Tucker Carlson. I was a bit happy to see a person like Trump come along and, you know, talk about peace again because none of our politicians in Europe talks about peace anymore. And so I was a bit optimistic, but I think this has been all that optimism has been shattered. But I just want to go back to the to to the Iran war because it seems as if if the war continues, The US will suffer immensely as you outlined very well.
However, if Trump leaves as well and the the Strait Of Malacca is is under Iranian control, which doesn't seem like it can do much, then Iran has already now announced its measures. It has already now set up a toll, which it will get its reparations from so it can rebuild from The US attack. And we're told that that those who have attacked or sanctioned Iran, they will pay an extra bonus on top of that toll, and they won't be accepting dollars. So it appears that no matter what The US does now, it's yeah. There's no going back to the way things were.
And I'm wondering if this is what's saying of the desperation in the White House now, because I don't see any good outs anymore for Trump. I mean, I I would I'd probably advise him to, you know, just adjust to the new world. You some things you can't change, but but politically, especially for a person like Trump who always have to claim victory. You know, you can have a plane shut down. It's a great victory.
Everything's a victory. One gets chased out of Yemen. Oh, we won. You know, it's it's he he has a skill for this, though, selling everything as a victory, but I don't see this happening this time around.
Speaker 1: I wish I agreed with you, Glenn, but I don't. So let me tell you why. He succeeds because that's what the American people or at least a large part of the American people, that's what they want to hear. They want their leader to be a great victory. You know?
Americans participate in sport not very much, but they are absolutely entranced by watching major sport events. The NFL, the hockey league, the basketball, they are enormous businesses here with billions and billions of dollars involved because the American people are passionate about their team. They want their team to win. The spectator who is ennobled by the victory of the team he is a spectator of is the way Americans in deal with sports. It's also the way they've come to deal, with politics.
Mister Trump will declare a victory. He already has. He has declared that the assassination of the Ayatollah equals regime change. He's made that simple equation so he can repeat over and over again because the people know that they their their religious and political leader was killed and dead and then they go you know, that that was popular just as the abduction of Maduro was popular because we won, we we prevailed, we you know, the rest of it is murky and disputed. So I don't think he has to worry.
He is going to win no matter what. He is going to overwhelm the media, which it turns out he still can do, again, not because of him, but the media itself does not want to be thought of as unpatriotic, uninterested in victory. You for example, you will not see any expression of sympathy or empathy for anything Iranian. The Iranians are bad. The Iranians are negative.
The Iranians have been killing people. I appeared recently on a debate. There was an America ex American diplomat, and he was going on about the awful things the Iranians have done over the last forty seven years, you know, since since the the mullos took over. Okay. For an American, where forty seven years includes Vietnam, Afghanistan, Iraq, to be an American diplomat to be finding fault with Iran because it has killed so many people.
It's just for me, you know, I I know the numbers. This is this is an achievement. You are the you're the ambassador of the country that is the rogue nation of the world that has 700 military bases killing people all the time, and you're gonna attack little Iran who hadn't killed very many people at all. It's it's extraordinary. So here here's what I think is he's gonna do.
He's probably going to have some dramatic maneuver that he can sell as a victory. There'll be some marines who take over an island somewhere in the Persian Gulf. There's lots of islands. Go take one. Doesn't matter if there's nobody on it.
Just go take it. Photographs, landing, troops raising the flag, whatever. At the same time, you and Israel bombed something, bomb another part of Tehran or bomb, some region you hadn't hit before, knock out a few bridges, maybe, an electric plant, maybe a plant, who knows, and then say the Iranians have asked us to have peace. And now that there's a new regime, we change the regime and we punish them. They, they better or else we will come right back and and finish the job.
But, you know, we we are decent people. We've won what we were we came here to do. And so we're leaving. And that will be the best he can do. He will be attacked.
Tucker Carlson isn't that stupid nor is Marjorie Taylor Greene nor are all the others who are critical. So he will suffer, but that will be the comic book story that will be told, and it will be told to large numbers of people, even those who don't like him because it conforms. Let me give you the proof. When I travel around the country, and I sometimes do, and I'm asked to give a talk about, you know, the twenty and first twentieth and twenty first century US economic development. And I mentioned the war in Vietnam, and then I I use language like this.
And then in 1975, the war ended, The United States lost, and the Communist Party of North Vietnam won. And how do you know they won? Because they're the ones in charge of Vietnam now, and that's a big clue. The students laugh, but I would bet my money that more than half of the students in the room, if asked by questionnaire in the next ten minutes, who won the war in Vietnam, they would answer The United States. And that's what they think.
And it's not because they ever studied the war, they didn't. And it's not because no one ever talked to them about the war, People probably did. It's just that in The United States, America wins and everybody else doesn't win. When the president and so it's important for your European audience. When the president of The United States says, as he has repeatedly, that ever since World War two, the European nations have taken advantage of The United States, cheated it at every turn, and that he's tired of it, and he's not gonna allow that to continue.
That's what most Americans probably believe. And I say, oh, probably only because I wanna know admit, of course, there are people who don't believe that. But that is you know, we won World War two, then the Marshall Plan was our extraordinary kindness in helping you over there rebuild after the war. And some of those debts you haven't even paid back. And, you know, when I explained to people that the Marshall Plan required that the dollars given to Europe be spent on American exports, and therefore, it was a kind of Keynesian stimulus, They know what I'm saying, but they don't want to go there.
They resist. So that's what I think he's gonna do. He's gonna play to the one hand he has left the American desire for a victory. He has to end that, so he's gonna have a victory. And I'm afraid let me push you further.
If I'm wrong, then the way I'm gonna be wrong is he's gonna actually make a serious military effort against Iran, and that will make everything worse. Then then he's then he's gone. Then he's gone for broke. He will lose the American election overwhelmingly. You should be aware that there's a sizable group of Democrats and even a handful of Republicans who have committed themselves.
If they take that lower house of the parliament, the house of representatives in the November elections, they will take power on the January 20, and their first act on the first day will be the impeachment of what will then be ex not ex president. Sitting president Trump will then face his third impeachment.
Speaker 0: Well, I think history in Europe isn't always well, historical memories tend to be manipulated over time as well. There's a very interesting polling which is found in France where they looked in 1945. This is when they asked people, you know, who was mostly responsible for defeating Nazi Germany. And this, again, at the end of the war, you have a over overwhelming majority of French saying, well, that was the Soviet Union. You know, they took out between what is 85% of German casualties was on the Eastern Front.
So, of course, it's the Soviet Union rooted in facts. They they do this they did this polling every few decades, and in 2018, that was the last time, I think, they ran it, and then only 15% of French believed that it was Soviet Union who contributed the most. 15. I mean, so history is has no impact on reality anymore, and I think it was 11% of Americans who recognized it was a Soviet. So we we're living in a very post reality world.
It's but but historical memories are supposed to serve current realities. And, you know, it's Walter Lippmann wrote a a lot about this. The basic foundations of how we see the world, the heuristics. If if if you challenge this, people will go to great lengths to ignore it so you don't shake up their perception of of reality. And
Speaker 1: There's a same just a footnote, Glenn. There's a famous photograph, which I wish I I don't have it, but I have seen it. It's a photograph of a little window, in a in an American post office, and it must have been, I don't know, 1943 or something like that. And there's a person there buying stamps and giving money and getting the stamps. And over the the the counter where the the worker, the postal worker, is giving the stamps are two style they're not photographs.
They're sketches. One is of uncle Sam, you know, with the top hat and the image that we've had of him with the the stripes and all that. Uncle Sam, arm in arm with someone labeled uncle Joe. It was Stalin. Looked like Stalin.
Big mustache. Uncle Joe and then I I used that photograph. I explained to my students we were allied with the Soviet Union in the war. They look at me, my student. They look at me wanting to see if I'm about to tell a joke.
Then they nod, then they listen. We have a famous senator from Alabama. Tommy Tuberville is his name. He ran for the senate and won, having been the coach of the football team that all of Alabama love. K?
When he ran for office, he gave a speech and where he talked about his grandfather and his father and they struggled and that he was mostly proud of his father who fought so valiantly in World War two against the communists. And he had to wait until the reporters two days later because no reporter on the spot said a word. Two days later, the reporters went back to him and said, did you mean and, of course, the poor man said, yes. Yeah. Fought the communist.
Had to be explained to him. Communists were our allies. Fascists were the enemy. Oh, he said. That was it.
He sits in the senate, mister Tuberville, and orates. He's a specialist on military affairs.
Speaker 0: The same in the Canadian parliament or celebrating a Canadian who fought against the Soviets, in World War two. And and you have to ask, well, which Ukrainians were fighting the Soviets in World War two? Like, which ones? Did they they're the ones who are backing now, the ones screaming Slava Ukraini and, you know, doing you know, dressing up in swastika. So this is I don't think people remember the history well at all in terms of, you know, yeah, who was on each side.
But just to yeah. As a final quick question here, do you do you see any ways of saving the petrodollar where we're now, or is this now beyond rescue?
Speaker 1: Well, you know, again, I'm I'm not gonna predict the future. But Yeah. As I have as you and I have discussed on more than one occasion, I believe the the way I make sense of the larger context of what's going on is the decline of the American empire, and that means the decline of American capitalism. And part of that story is the decline of the role of the dollar. The rise of China is part of that story.
The BRICS Alliance that the Chinese have worked so hard to create is part of that story. The the American, deal, Kissinger, Saudi Arabia that set up the petrodollar system back in the seventies is part of what is now falling apart. And so, yes, I think all you're seeing here is a acceleration of the decline. I think the war in Ukraine has accomplished that partly by exposing the ineffectiveness of sanctions. And I think what you're seeing now is, you know, one of the great lessons of unintended consequences.
You go to war in Iran, you think it's a lark. It'll have no more effect than snatching mister Maduro and his wife from their bedroom. You're making unbelievable mistakes. And in my judgment, those are the mistakes a declining empire makes, and those are the the mistakes that then accelerate the decline, which generates more mistakes, etcetera, etcetera. The dollar is not playing the role in global reserves that it once did.
The percentage is clear. The Iranians are accepting payment in not in, dollars anymore for oil. I don't see any reason to suspect that other countries won't do that. I have I don't see any strategy in The United States that can cope with that or is even being put forward as a way of coping with that. There are proud statements that the dollar is still strong.
By the way, that's true. The dollar is still an important part of the world economy. The United States is an important part. I I would never say otherwise. I don't say the empire is dead.
I don't say American capitalism is finished. I say it's in decline, and I'm watching that decline now year by year by year. You know? The promise of the last 10 presidents was to reverse the decline of American manufacturing. Everyone promised it.
None of them delivered it. Mister Trump is not delivering it either. Manufacturing keeps going down, and that's because it moved. It didn't die. Manufacturing is being handled by China and a few other places.
They're doing it, and they're doing it very well, and they're developing new technologies every day and new products every day. They are doing the job, And they're they're very conscious that they're the leader, and they have to keep their prices down. Look. We worry here in The United States about inflation. And what is inflation?
Three or 4%. In China, inflation for the last several years has been less than 1%. You never read about it in The United States, but for obvious reasons, you don't read. They don't have the problem. They are producing enough material that they can go on and on.
That's why they can produce drones forever and missiles forever. They have an immense border with Russia so that they can share all of that with Russia, and Russia has the Caspian Sea, which allows it to share it with Iran. Of course, Iran isn't gonna run out if Russia and China help, which they are. You gotta face that. We don't.
We just don't. We have destroyed their army and their navy and none of this is true. None of this makes any sense. None of this takes into account the support they have. Venezuela had none of that.
Even Cuba doesn't have that. Iran has it. It's just it's fundamentally incapable here. And since Americans, being one, are just as smart and just as careful and just as thoughtful as anybody else, you have to explain why they would be doing what they're doing, why they would elect a character like Trump, why it would be possible for him to talk the way he does, destroy a civilization, go out there and kill the people that are laying mines. What is this?
What is it? Childish but desperate, and that has to be explained. And for me, these are symptoms of a declining empire whose people have never to this day been prepared to imagine that their empire would decline and to ask themselves the question, what is the appropriate foreign policy towards Europe, towards China, towards the global South if you're a declining empire? We we are a hegemon. We deal with these issues as a hegemon.
It's as if history had stopped. Like Fukuyama. Right? History is over. United States is at the top, and so it will be forever.
The decline of every other empire the human race has known will stop here, and ours won't decline. I mean, once you lay it out, it's so crazy that you realize the denial is also a part of the decline.
Speaker 0: You know, that's a great point. One often sees this common trend in decline of empires, even the decline of civilizations, the the the refusal to accept decline itself, this retreat into delusions, something we're not lacking at this side of the Atlantic either in Europe. So but we can address that topic at different times. So thank you very much for taking time.
Speaker 1: My pleasure. And I would like to address particularly something that strikes many of us here, Glenn, as a bit of a mystery. It looks to us as a kind of hysterical demonization of Russia in a way you know, it would have been inappropriate when it was the Soviet Union. But now, just Russia, what in the world is going on? What I need an explanation.
I would like to explore what makes so many in Europe so clear about something which here looks like you've lost your your marbles here with what with what we hear. And listening to Macron or Starmer or Mertz or, Callas, I mean, wow. You know? Something something terribly went wrong. Anyway, thank you very much, and I look forward to our next opportunity.
@Glenn_Diesen - Glenn Diesen
Jeffrey Sachs: Global Economic Meltdown & Destruction of Europe https://youtu.be/J4r9Wo29FzU https://t.co/gVsTG2UPlW
Video Transcript AI Summary
Professor Jeffrey Sachs discusses the precarious state of the global economy amid geopolitical conflict and strategic realignments. He notes that the US–China trade and investment relationship “is never going to be what it was ten years ago,” with the period of dynamic, mutually investing ties effectively over. Europe–Russia linkages are damaged “perhaps to the point of no return in our generation,” making Europe the big loser in this breakup. Sachs identifies a trend toward regionalization, with trade and investment within Asia strengthening, and within Africa likely strengthening, while Europe becomes economically adrift after severing ties with its main natural resource provider, Russia. He emphasizes that the world economy still hangs in the balance in the short term.
If the United States resumes war with Iran, Sachs puts the probability at about 50 percent or higher, warning that the results would be devastating under any circumstance. He characterizes the United States as having “deinstitutionalized” governance and describes Israel as an “out of control” state pursuing continued war. A simmering conflict, if reignited, would magnify short-term economic impacts dramatically. He argues that the US’s attempt to maintain preeminence through regime change and war operations is contributing to the breakup of the previously integrated world economy, and that the digital economy’s dependence on bytes reinforces a US-centred security order that will increasingly separate from China. He predicts Asia will become increasingly integrated, with the United States’ dominance waning as a result.
In discussing Europe’s prospects, Sachs argues that Europe should have recognized that the United States worked to keep Europe and Russia apart, and that Europe’s embrace of expansion into Central and Eastern Europe and the idea of a “new wall” against Russia was misguided. He asserts that Europe’s leadership has pursued a failed economic and geopolitical strategy, leading to economic decline, with industry shuttering and no clear bright spots. He critiques the current European leadership, suggesting that new political entrepreneurship is needed for Europe to regain prosperity, relevance, and security.
Sachs critiques the notion that the war in Ukraine should be ended by arming Europe to take on Russia, contrasting with his view of open, mutually beneficial trade historically. He argues that economics, once framed as win–win and beneficial for global development, has been reframed in Washington as a tool for preserving American dominance. He recounts a shift from open trade as a beneficial system to an emphasis on military and geopolitical objectives, citing Eldridge Colby and Jake Sullivan as proponents of organizing economics for power rather than prosperity. He contends that globalization did not fail; rather, the US share of world output declined as China rose, and the misallocation of economics toward power has harmed both the American public and global economic well-being.
Regarding naval blockades and economic warfare, Sachs notes the shift toward piracy-like practices, with talk of seizing ships and blockading nations such as Iran, Cuba, and Venezuela. He predicts that, while the United States may struggle to sustain broad blockades or confrontations, the farther one moves toward Asia, the less effective US power becomes. He foresees that Europe, if it continues to challenge Russia directly, risks war and devastation, while Asia’s rise will diminish US sway. He concludes that the United States is the most dangerous country in the world when it pursues global dominance at the expense of national well-being, and that Europe must reassess geography and power realities to avoid further decline.
Full Transcript
Speaker 0: Welcome back. We are joined again by professor Jeffrey Sachs, to discuss, what's happening to the global economy. So thank you very much for coming back on.
Speaker 1: As always, great to be with you.
Speaker 0: We see that the wars against Iran, Russia, and, well, the economic war against China, as well as The US seeking to dominate its own backyard, it's pushing the global economy towards the edge. And we see that a lot of the economic dependence set up over the past decades in terms of reliable access to maritime transportation corridors, natural resources, technology, currency banks, it's either severed or, you know, being weaponized, it seems. I was wondering, how do you see the current state of the global economy now? I mean, is this a temporary disruption, or do you think there's risk of a complete breakdown?
Speaker 1: Well, there's clearly been some important breakdowns. The US China trade and investment relationship is never going to be what it was ten years ago, dynamic with confidence, with the mutual investments in both directions. I think that period is over. Clearly the Europe Russia linkages are damaged perhaps to the point of no return in our generation. That's very significant.
Europe is the big loser in that breakup. Clearly, there is regionalization taking place because there are simply more risks of anything related to long distance trade and logistics. So trade and investment relations within Asia are strengthening. Trade and investment relations within Africa are likely to strengthen. Europe is rather bereft because it broke relations with its main natural resource provider supplier, which was Russia.
And all it looks to is a completely unstable, nasty, and disdainful United States right now. So Europe is completely adrift economically. These are deeper trends that are not going to be changed by any of the events in the next weeks or months. But I think it's very important to say at the outset that the world economy still hangs in the balance even in days and weeks. Sounds melodramatic, but I think it's true.
If The United States resumes the war with Iran, which I think we have to put it 50% or higher, the results would be devastating under any circumstance. And we're at that precipice. We have completely deinstitutionalized United States government. We have a a absolutely out of control Israeli military state. It's become nothing more than a war state, it wants continued war.
If the war that is on simmer right now turns back to boil, then when we meet after that if that happens, will be dramatically accelerated, magnified and made horrendously worse in its short term economic impact. But the point is because of essentially US efforts to somehow maintain a kind of preeminence that The US no longer has, but the attempt to maintain it through regime change and war operations, the breakup of what was an integrated world economy is real and unlikely to return anytime soon. I should add that the very nature of the digital economy, the interpenetration of bytes in the digital economy means that The United States from a military and security point of view is determined to create a US centered part of the world that is separate from China's. And that also means that by nature of the technologies, The US is going to break the trading system in one way or another for many years to come. And that's not just Trump's petulance.
That will be a national security perspective in The United States that's widely shared in Washington. So we're in a fragmented world, but I think the fragmentation leaves Europe really outside of everything. It leaves The United States probably aiming mainly to control what will be an increasingly unruly Americas which will not accept the the increased US dominance that The US is trying to impose right now. And I think Asia will become increasingly integrated, and the winner of all of this will be Asia.
Speaker 0: Yeah. I agree. It seems that, well, at least Europe will be the big loser here. My concern always after the Cold War was that with NATO expansion, we redivided the continent, which makes Europe weaker in terms of the security, economics, also politics, and now we see this manifest itself as some mass hysteria and very rational war enthusiasm. So, you know, Europe cut itself off from Russia.
We see Middle East being reorganized, and essentially, is now putting all its eggs in The US basket because this was the source of stability over the past eighty years. But even The US now is very openly losing its interest in a less relevant Europe. How do you see the possible pathways now, though, for Europe? I mean, is there a way to restore its prosperity or relevance, security, or or do you think it it's already played all the cards it could?
Speaker 1: Well, I the Europeans should have reflected on the fact that it was The United States that worked very hard to keep Europe and Russia apart. And so for decades, it was The United States that was warning against Nord Stream and against the closer relations between Germany and Russia. Meaning that those links were good for Europe, especially good for Germany as the main economy, main economic motor of Europe, I should say. And The United States viewed that as a risk to America's own preeminence and its own political sway in Europe. So Europe should have noticed that they had the leverage.
But Europe played along completely with The US. It became enamored of the idea that we will expand into Central And Eastern Europe. I like that idea, but I did not like the idea of building a new wall to exclude Russia. This is an absolutely absurd idea from Europe's point of view. Europe should reverse this.
This is geography. They will wake up. Somebody will look at a map again and ask how did we bring this about on ourselves. This is really complete self harm. But if you look at the current leadership, of course it's not going to happen with people like Vanderleijn or Kayakalas or Starmer, god forbid.
Maybe the British will never come to this idea. But the point is that the European political leadership has bought into a completely failed economic and geopolitical strategy and now is a failed political class. And until that changes one way or another with new political entrepreneurship in Europe, Europe is just going to be in decline economically. We see it. Industry is shuttering up, and there is no bright spot in the European economy right now at all.
Speaker 0: Yeah. I recently, you know, read the speech of Elbridge Kolby, the undersecretary of defense for policy. And what I thought was remarkable was it didn't really suggest that the war in Ukraine should come to an end. The the speech more suggested that the Europeans should just, you know, arm themselves and and take over. So in other words, outsourcing the war rather than ending it.
And as we've seen, the Europeans now just approved this $90,000,000,000 to Ukraine. They called it a loan, but I think that's more to deceive their own public because this money is not coming back. But at the same time, there seems to be growing preparedness to also or get more directly engaged in this war with Russia. But as we see this, we also see opposition growing in Europe as well because, as you said, the political elites and the public, they're not necessarily on the same page. Do you do you see any any shifts here, like people waking up among the public, or do you think that the current political elites are too entrenched?
Speaker 1: Let let me say something about Colby and something about the funny thing that happened on the way to our current disaster. I've been teaching international trade now for forty six years. And when I studied as a student, we studied international trade and why it was good, why it was mutually beneficial. And we spent about fifteen minutes in the semester on what was called the national security exception. And I remember my professor who was a learned professor of international trade saying, well, you know, all the good things we're talking about trade, we should remember that there might be exceptions if national security is at stake.
And it was about a fifteen minute aside. Now this is the way that economists, I would say good economists, view the world. And good economics in this regard goes back to Adam Smith. We celebrate the two hundred and fiftieth anniversary of the Wealth of Nations this year. Adam Smith's idea was that an expanding world market is mutually beneficial for all of the participants.
And he was a great humanist and he said everybody will benefit. Even today's bereft and colonized peoples will gain strength through international trade and the flow of ideas and there will be a rebalancing of the world so that all parts of the world will benefit from open trade. And Smith advised the British monarchy and parliament of his day in 1776, give up the American colonies. You don't need military control. Just trade with the America.
You don't need to have an imperial policy. Eventually, or soon enough actually, the American Revolutionary War broke out. By 1781, The U the British colonies were now independent of Britain. But the point was that economics as a discipline has recognized that open trade is mutually beneficial. Of course, trade under colonial imperial imposition is not.
But open trade among sovereign nations is mutually beneficial. What happened in The United States is that as The US lost its nerve with the rise of China in particular, but more generally with the catching up of many countries so that The US dominance or share of the world economy was going down, was that economics was taken over, I have to say, by the international relations people who view the world not as win win, but as win lose. And suddenly, the idea that economics should be ordered to preserve American hegemony became an increasingly interesting discussion in the American scene. I found it never very interesting. I found it absolutely ignorant of basic economics and also wrongheaded.
Because fundamentally for me the rise of China was not a threat. It was a benefit first to the 1,400,000,000 people of China and ultimately a gain for the whole world through trade, through China's innovations, and so forth. But from the American point of view, conceptual point of view, people like Eldridge Colby or people like Jake Sullivan in the Biden administration, economics became the instrument for continued American hegemony. And the last twenty years has been spent on honing the instruments of economic warfare, that we should think about trade and the flow of technology mainly from a military and geopolitical point of view, not from an economic point of view. So the main idea was, now we have to remake the economy to suit American dominance or to protect and extend American dominance.
Jake Sullivan who was the national security adviser for Biden now teaches at Harvard University, my old stomping grounds. And he's written a piece in foreign affairs recently, our important journal for discussion of geopolitics. Again, basically about how economics should be run for the sake of American power. Well, to my mind, all of this is mind boggling in its economic ignorance and its economic destructiveness. But this kind of discussion dominates right now.
Economics is no longer about economic prosperity and well-being in The US, even I would say university context. It's about power. And it's about how we can head off China's rise. And how the information technology world should be organized so that China is not a beneficiary. Or how the NVIDIA chips are kept out of China's hands, and so forth.
All of this has reoriented our thinking in an extraordinarily destructive way. Because we are taking down the basic scaffolding which made the world economy achieve economic growth and development for the developing countries to a large extent. And people in The US say globalization failed. Globalization did not fail. Globalization provided the basis for worldwide economic progress that happened to be especially rapid progress in the developing and emerging economies.
That's success, That's not failure. But what economic growth did was diminish, in particular, the share of The United States in the overall world output. And that is what is unnerving to these strategists, so called. They wanna keep American dominance, not American well-being. So the American people are suffering from this absurd war that we're in because this Iran war is tragic but also completely absurd.
It never should have happened. Any sane president would have known not to do this. Trump brags in fact that since 1979 all the presidents of The United States refused this war but I did it. Which is a testimony to his complete lack of understanding and insight not a tribute to his bravery. It's a tribute to his impulsivity, his recklessness, his absence of process, his ignorance.
Not to any prize that he has But it's part of this idea that we're playing with the world economy for the sake of American power. Not even for the economic well-being of the American people. So Glenn, as you said, everywhere in Europe, the public is disgusted. And they're going to be more disgusted in the coming months because their living standards are going to go down further. They're disgusted in The United States.
Trump's approval ratings are plumbing new depths each month now. He's down to 34% approval rating and I think it's 62% disapproval rating and a couple percent don't know, few percent don't know. But this is happening all over the so called Western world which has turned economics into a weapon aimed at Russia and at China rather than as an instrument for well-being that might actually help Russia and China as well as helping ourselves. So this is basically what's happened. And that's why it doesn't surprise me that mister Colby in in the Pentagon would view an ongoing war as a good thing.
Because from their point of view, they're not looking at what's good for the American people. They're looking at the question of what is good for this conceptual idea of American dominance?
Speaker 0: Well, when we look at this weaponization of economic connectivity, of course, blocking Chinese access to technologies or stealing the sovereign funds of Russia, that's one thing. But one area of economic warfare that has historically been a source of war has been naval blockades. And, yeah, this restriction of access to maritime transportation corridors, it's it didn't seem like it was a key challenge over the past few decades, but now we see you probably saw the a recent speech by Trump where he kind of brags that, well, we are we are essentially pirates now. We can seize ships, take their cargo, and it's not just talk. We've seen the blockade on Venezuela, Cuba, Iran, just random also hijacking of tankers over the years.
So we see going after Russia's commercial fleet, the Europeans now. The UK plus nine other countries are setting up naval alliance to contain they call contain, which means confront Russia. We also see the threat of possibly The United States seeking to intercept Iranian vessels all the way to the Strait Of Malacca, which would then be essentially war on China. Did do where do you see this going? Is this is this, again, back to history of, you know, if you want to trade, you need to have a powerful navy to, you know, make sure commercial vessels are supported by guns?
Speaker 1: This is all shocking because some of the most basic principles of international statecraft have have been freedom of navigation on the high seas And for The United States to be championing piracy, well, at least Donald Trump says out loud what others try to not say out loud. I think this piracy of The United States will prevail in the Western Hemisphere. It won't be challenged from outside, certainly. And it will be challenged from inside the Western Hemisphere. In the end, Latin America, though it is under the sway and military dominance of The United States, will not accept what is happening right now.
But it will take some years because The United States is not only putting on blockades, not only directly overthrowing governments and it will do so with Cuba most likely very soon. But it is also intervening in the political systems and elections of almost every country. So it is in the short term turning The Americas into a bastion of US dominance. And this will probably succeed in the short term because I don't think Russia or China or anyone else from the outside will challenge this. But the farther away you go from The United States, this becomes unworkable.
And The United States will not succeed in the end in blockading Iran. The US doesn't even have the naval capacity to do so. It doesn't have the staying power to do so. It can't even keep a comprehensive blockade from a strictly military point of view, but from geopolitical point of view and with China and Russia and others that oppose this, I don't see this lasting. If Europe is stupid enough to take on Russia and Russian shipping directly, there will be war between Europe and Russia, and Europe will Europe will be devastated.
The European current class of political leaders, with a few exceptions that a few people who are honestly thinking about this, but I'm thinking of the main characters of Mertz and Macron and company. They will in their short period remaining in government possibly lead Europe to destruction not just to economic decline which they've been doing for a number of years. The further one goes towards Asia in this, the ability of The United States to have sway diminishes fast. I think one of the lessons of the Ukraine war and the Iran war is that The US military dominance is not impressive anymore. This is a matter of change of technology.
It's a matter of the rise of military power of Russia, of China, of North Korea, of Iran. It's the nature of technology itself that the big expensive US weapon systems are not especially tuned to the kind of warfare that we have now. So I think the closer one gets to Asia, the less relevant The United States becomes. And that's why I said at the outset of our discussion today that I think Asia as a whole will become more economically integrated. The US will not have choke holds that it can hold.
China has a formidable Navy already and it has a very sophisticated AI empowered military that it's building very rapidly. And it's not naive about US intentions, to say the least. So I don't see The US being able to prevail in its overall strategy or aim of hegemony, nor do I think it can project power in Asia. And if things really get tough and China acts in its own neighborhood the way that The United States is acting in its neighborhood and say that China decides for whatever reason and I hope it never comes to this and it doesn't have to but China blockades Taiwan. The implications for The United States are extraordinarily devastating actually.
Yes, we're building semiconductor fabs in The United States, but nowhere at a speed or depth that can begin to replace the supply chains that come from Taiwan, Japan, and Korea. And if China asserts its regional power like The United States is doing, The US does not have a military response. Every war game in recent years has shown that. And that change is accelerating and we're seeing the limits of US technology actually because they're expensive and they're poorly tuned to the changing world, which is why the Pentagon is scrambling to come up with some kind of new technology model. But that's years and years and years ahead.
So all of this is to say, I don't believe that The United States can impose its will even in the Iran war. I think that it may well try to do so in the coming days or weeks. And then let's talk again because the whole world situation in the short term is going to be dramatically worsened. And everything we're saying will not fit the reality even in four or five or six weeks of a renewed outright war in which the physical infrastructure of the Gulf Region is heavily damaged. And that's the likely outcome.
So all of it is to say The US is on the wrong track. Irrational, very poorly led, rather desperate to keep control over what it no longer controls. And therefore, as I say often, The United States is by far the most dangerous country in the world because it's a it is trying to do what it can't achieve. And when you have that gap of aspiration, which is global dominance and the reality, and you try to pursue your delusion, you end up creating a great harm. And all to add that it is spurred by its junior partner in all of this, Israel, which has even greater delusions, biblical delusions, biblical scale delusions that are absolutely bizarre and that prod the American delusions.
So it's a it's quite a quite a dangerous situation, but there's no good outcome for The United States. And until the European political class changes and understands the basic realities of geography and of changing power and technology, Europe is just going to be completely out of this whole scene.
Speaker 0: No. I agree. The Europeans should realize geography is destiny, but with The US, though, it's certainly it's a resilient country, but I wonder how much stress it can absorb because this whole idea that it can replace energy supplies to Europe, East Asia, all of this assumes that the other great powers will just sit by and not respond, and that its vessels will simply also remain obedient. It's, yeah, well Yeah. And I'm not sure
Speaker 1: how the the The US is isn't so resilient. The US has a shiny a a shiny and very bright dominant technology sector. So Silicon Valley hats off to a lot of accomplishments, no doubt. But if you travel in the mainstream of America, there's a lot that's broken down and people are very unhappy for understandable reasons. And the infrastructure is decades out of date.
The difficulties of working day people are very, very significant. And none of this is being attended to by this political class in Washington, which is out of date by at least thirty years in its understanding of America and understanding of the world. It's a completely money driven corrupted political class to begin with. And the things that are said in The United States have very little resemblance to the reality of the world right now. So I don't think The US is so resilient in in any way and the unhappiness is very great.
I think people could look at the question that's asked by Gallup of the American people are, is the country on the right track? And this hovers around one out of five Americans saying yes and the vast majority of Americans saying no. And that reality has been with us for a while and nothing that's happening, nothing, not one element of Trump's delusional world is putting America on the right track. So Europe and The US share basically this decline. They were the privileged part of the world.
They're not anymore. They're both flailing around to try to understand that and they're both failing to understand that. Europe by clinging to The United States which has no interest in a political way in Europe. And The United States by clinging to the delusion of dominance that it proclaimed thirty four years ago at the end of the Soviet Union that wasn't even true then, but is completely delusional today.
Speaker 0: I agree. I think, yeah, that's a perfect description of where we are now. But I've already taken too much of your time on a Sunday morning, so thank you very much for taking
Speaker 1: my with you. Let's talk soon. Thanks.
@Glenn_Diesen - Glenn Diesen
Yanis Varoufakis: Europe Entering a Century of Humiliation? https://youtu.be/jW3RnY_7GYk https://t.co/HBILUiC3zG
Video Transcript AI Summary
Yanis Orofakis and Glenn critique the trajectory of Europe and the European Union, arguing that Europe is on a path of long-term decline and stagnation financially, ecologically, and morally. They contend that the roots of current problems go back to the 2008 crisis, describing the response as a coup that bailed out banks and shifted losses onto weak taxpayers, with austerity imposed on the majority and “socialism for the bankers” justified in the name of European solidarity. Orofakis recounts his experience negotiating with the European Commission during Greece’s debt crisis, noting that the Commission was sidelined by a bureaucracy led by figures like Thomas Wieser, and that decisions were driven by a cabal aligned with Berlin to protect the taxpayers, especially in weaker economies. He asserts that this approach caused a collapse of aggregate demand, a lack of private investment, and a rapid rise in asset prices while wages and pensions fell, contributing to deindustrialization, including in Germany.
He identifies the 2008 episode as an inflection point that began a broader European decline, with the ECB’s trillions not translating into productive investment. Instead, funds were used by corporations to buy back shares, while real investment stagnated. This dynamic, he argues, has fragmented the eurozone and undermined its viability, with Germany’s deindustrialization and a political class unable to articulate a coherent strategy for the Eurozone’s future. He points to energy and industrial policy shortcomings, and stresses that Germany’s pursuit of a higher value-added economy is undermined by a lack of demand for such products in Europe, leading to production shifts into arms manufacturing (e.g., Rheinmetall) as a stopgap for deindustrialization.
On Germany specifically, Orofakis argues that German leaders realized austerity would wound their own economy, yet persisted, revealing a self-inflicted wound that could empower far-right currents. He cites Volkswagen’s production shifts and the use of Leopard tanks as evidence of a war-driven economic distortion, and he contends that ongoing war in Ukraine is leveraged to justify rearmament and a stalled industrial policy with no robust European plan for peace or diplomacy.
Regarding Europe’s cohesion, he distinguishes between popular support for a common European space (freedom of movement, Erasmus) and the EU’s actual creation as a cartel of big business under U.S. influence. He argues the EU’s DNA is tied to NATO and U.S. strategic interests, with the Bretton Woods era and the dollar’s dominance providing macroeconomic stability that Europe increasingly lacks as a consequence of the dollar-based system’s erosion. The post-2008 decoupling from the U.S. is highlighted, with Trump’s tariffs framed as evidence that Europe can no longer rely on a seamless U.S. security and economic framework.
Orofakis contends that the EU’s governance is characterized by clueless leadership and a lack of a credible industrial or strategic plan. He cites the absence of a banking union with a common deposit insurance, and the failure to implement a central fiscal mechanism like a European Investment Bank-supported growth program using ECB-backed bonds. He emphasizes the need for a peace-and-security agenda with Russia and Ukraine, criticizing those who demonize Russia and call for endless war without proposing a path to peace.
In conclusion, while optimism is cautious, they argue that collective rational action could avert a century of humiliation. They advocate overthrowing current leadership to pursue a rational, united European strategy that prioritizes peace, sovereign economic policy, and a viable security architecture, rather than allegiance to a failed status quo.
Full Transcript
Speaker 0: Welcome back. We are joined today by Yanis Orofakis, a professor, former finance minister of Greece, and also the founder of DM twenty five that is the democracy in Europe movement. So thank you very much for coming back on.
Speaker 1: Always a pleasure, Glenn. Always a pleasure.
Speaker 0: So well, we're both Europeans. I think we both share some concern about the future of the continent. My list of grievances tend to be somewhat long, though. I I often look towards the redivision of Europe in the nineteen nineties with NATO expansion. I look at the management of the 2,008, the failure to develop technological sovereignty, the excessive dependence on The US, and but I would say over the last few years, something else has begun to go terribly wrong, it seems.
That is we're seeing this economic stagnation, if not decline, much more authoritarian EU warmongering, and I think eventually disintegration. But, again, I've been told I'm often too pessimistic, so I was wondering what is your view? What do you see happening to Europe as well as the European project?
Speaker 1: Well, I'm very much afraid that we are on the same boat. It's not just pessimism. Pessimism is a is a question of expectations. I don't think it's a question of pessimism. It's a question of hard nosed, particularly rational assessment of where we are.
And where we are is at the trajectory which is leading Europe to a very long period of decline and stagnation. Decline financially, ecologically, morally. So, you know, in the sense that, you know, we are more or less on the same boat. But now why why has this been happening? Well, you know, you spoke of the authoritarianism and the fragmentation that results from it.
Look. When when, you know, when when the French and German banks went baby up immediately after Wall Street's collapse in 2008. We had a coup d'etat effectively in Europe. When I was involved, I was as finance minister in the Euro Group and European council, it was clear that during that emergency it was a true emergency. The whole of the banking system of the at least the eurozone had gone under.
And the powers that be were frantically trying to refloat it and to bail out bail it out. Not in a way that happened in the Scandinavian countries in 1992, because back then, as you know better than anyone, the banking system of the Scandinavian countries, Sweden in particular, but also Denmark, Not sure about Norway. You have to tell me about that. They they they went bankrupt. And what happened was the state stepped in and bailed them out, but they didn't bail out the bankers in 1992.
They were nationalized, and then eventually, they were reprivatized. But what what happened in Europe was all the losses of the criminal bankers of Frankfurt and Paris, but also of Rome and others, were shifted onto the shoulders of the weakest European taxpayers part of a coup d'etat because, you know, parliaments were not involved. The people didn't know. No one was consulted. It happened overnight.
This was socialism for the bankers and austerity, harsh austerity for everyone else. And to affect that transfer, Glenn, I I witnessed this up close and personally. Essentially, European Commission even the European Commission, which nobody can accuse it of being a democratic body. Right? I mean, it's a bureaucracy.
But even the European Commission was sidelined. Glenn, when I was traveling to Brussels to negotiate for our right to negotiate, we didn't even negotiate. We negotiated for the right to negotiate the basic parameters of Greece's political economy. I can tell you that the European Commission, it was presided over by mister Gunker at the time, the economics commissioner of Europe, but back then was Pierre Moscovisi, the former finance minister of France. They were irrelevant.
They were actually quite both of them were quite sympathetic to our case and to my case. They don't say they they don't admit it now, but back then, can assure you they were quite to me, they were telling me that I was right. But they were totally sidelined. There was a bureaucracy, a cabal, essentially, that had been appointed primarily by Berlin. And I'll be very specific here.
So they they they there's the euro group, which is the finance minister's body. And then under it, at least hierarchically, was the so called Euro working group. And the head of the Euro working group was somebody appointed, God knows how. His name was Thomas Wieser, an Austrian national. And he had more power than Inker, than Moskovici, than the real European Commission.
And he was there actually as a as a as a a person who was equidistant between the German chancellor and the German finance minister because these two, Merkel and Scheuble, were at odds with one another. So Wisser was the only man man who was close to both of them, and he was running Europe at the time. You know? You could tell. I mean, Moscow VC would have ideas about how we will resolve the debt disaster that was Greece, and they were very close to mine at some point.
And I remember, Hildeye thought that we would go and walk into the Eurogroup, and that's what he said to me, and put forward a joint proposal that would have been actually quite good both both both for Greece and for Europe. And it turns out that five minutes before the meeting, I witnessed the utter humiliation of the European commissioner for the the economy and finance, because good Moscow VC, by these underlings, by people like Wieser and Eiselbloom. The complete humiliation. I mean, the guy who was actually in Moscow, he was in front of him, was almost in tears. So that's something that Europe Europeans are not familiar with.
When the proverbial thesis hit the fan, the Europe even the European Commission was side sidestepped in favor of some people that nobody had heard of who were actually running the show. And the way they ran it, was intended to to achieve one one objective and one objective alone, to make sure that the taxpayers, especially the weaker, the working class taxpayers of Germany, of Holland, of Greece, of Slovenia, Slovakia, so on, took onto their shoulders the vast know, the the the largest percentage of the burden of the banking sector. And that was all done in the in the name of European solidarity and European values and democracy. There was no democracy. It was just utterly, utterly dictatorial and corrupt.
So, you know, that was back in 02/1415. So it's a mistake to think that, you know, everything was going swimmingly. We were a democracy up until a couple of years ago, and then something happened. And democracy fell by the wayside. No.
This has been part and parcel of the so effectively, Glenn, what my point about the European Union now is that the chickens have come home to roost. Because, you know, once you transfer cynically these gigantic losses of the bankers onto the shoulders of the weakest of taxpayers and you impose austerity upon the majority, harsh austerity upon the majority while practicing socialism for the bankers and the financiers. Okay? Socialism in inverted commas, of course. Then some two things happen.
The first thing is that aggregate demand falls massively. While aggregate demand falls, industrialists are not investing because why would they invest on high quality value added goods when the many are in pecunias. They just can't grab a few pennies together, a few euros together. And at the same time, you have the European Central Bank printing trillions that they pass on to the industrialists who will not invest even those trillions, but they will take these trillions because they are given to them for free, almost zero interest rates, and they will use them to buy back their own shares. So asset prices go up.
All other prices go down, including wages, including pensions, and, you know, you end up with with stagnation. And, you know, this is the reason why even Germany is deindustrializing as we speak. And when you have Germany deindustrializing in a Eurozone, which is predicated upon you know, it is founded on the German business model, you know, the whole thing starts fragmenting, collapsing. And, you know, you end up with a political personnel that is absolutely incapable of articulating a position which is consistent with the viability of this Eurozone.
Speaker 0: Glad you mentioned Germany because well, as we know, Germany was the locomotive driving Europe forward as well. And beyond the economic power, it also, you know, was held up like a country that had learned from its history, transcended history was argued, and, you know, never war again and, again, embracing democracy. But now we also see at the heart of the EU, the Germany itself has reversed in many ways that is is deindustrializing, becoming more authoritarian. I think you've been banned from speaking there, even over Zoom, if I'm not mistaken. And and again, also much more warmongering.
We saw this from, yeah, from what's happening happening in Gaza, the genocide. They had no opposition in the attack on Iran. Maersk made the point that Israel is doing a dirty work, And, of course, no one seems to want to put an end to the war against or war with Russia, and indeed, they seem very much intent on escalating. So I it just, how how do you explain this huge switch switch in Germany as well? Does it also have the same, I guess, common source from back from 2008?
Speaker 1: I remember a conversation. One of my first conversations with Wolfgang Schauble, the then the late Wolfgang Scherbler, who was the finance minister of Germany at the time. And, you know, he was talking to me as if the problem was Greece and that, you know, we simply have to take the tough medicine and, you know, that receive the tough love from Northern Europe. And I was trying to explain to him that, listen. What you're doing is not just detrimental to the Greek people.
It's detrimental to the German people. Because, you know, I know you're imposing austerity to us in Greece in order to bring austerity to Germany. And he agreed. He said, yes. Absolutely.
Because, you know, we can't compete with the Indians, with the Bangladeshis, with the Chinese. We have too generous a social system, social pension system. Our wages are too high. So he was imposing he agreed that he was imposing hysteria upon the Greeks to bring it back to Germany. I said, no.
This is going to be, you know, a self inflicted wound for your own country because, you know, with this austerity, you're going to have less and less investment, and you're going to end up with discontent. And the only people who are going to benefit from that discontent are the far right neo Nazis. And this is exactly what is happening. Why is Germany de industrializing? Why can't Volkswagen produce cars that are competitive vis a vis BYD or even Tesla in The United States?
Well, the answer is because they haven't really invested in the last fifteen years. And why have they not invested? It's not that they didn't have money. They had plenty of money. They had their own money.
They had surpluses, and they had the money that the European Central Bank printed and gave it to them. The reason why they didn't invest was because the level of in of demand for high value added cars was very low in Europe. And why was it very low? Because of austerity for the many and socialism for the bankers. And the result now is that, you know, Volkswagen cannot compete.
They're shutting down factories, and they, in a desperate attempt to reduce the rate of deindustrialization, given that they can't sell cars, they pass on whole production lines to Rheinmetall, the German arms manufacturer, to build leopard tanks on those production lines of Volkswagen. Now these were leopard tanks, as you know, they are completely useless. The even the Ukrainians do not want them because they are death traps. But this is what Rhine metal can produce that uses a lot of metal and a lot of labor. So they are desperately trying to slow down the process of the deindustrialization by producing these leopard tanks.
Now the only way that they can justify producing these leopard tanks and, you know, pass it through the Buddhist tag and convince, you know, even members of their own party, the Christian the Christian Democrats, that it's it's it's a good idea. It's to say, well, you know what? We have we have a war happening in Ukraine, so we need to rearm. Now firstly, any expert on warfare and geostrategic dynamics will tell you that these days, the leopard tanks that Reimmetall are producing are useless in the field of battle. They're not even producing the drones which are necessary, but that's what Reimmetall can produce.
And and secondly, far far more importantly, the, you know, the the point of doing this is to find a stop gap for the deindustrialization process, and therefore, the continuation of the war in Ukraine is functional. Because let's say that tomorrow morning, Zelensky and Putin kissed and made up. Yeah. Just assume. Hypothetical.
Then why would they produce more leopard tanks and sell them to the German army, to the Greek army, and so on? They would lose the excuse for doing it. And given that they have no industry policy, they have no plan for arresting the rate of deindustrialization. You know, the war in Ukraine and the perpetuation of the war in Ukraine is some sort of solution.
Speaker 0: Yeah. Well, that's why I also wanted to ask, what is it that whole what's holding these 27 EU member states together today? Because the EU is a geoeconomic project. I I can see great potential. That is with the collective bargaining power, the EU could, well, essentially represent Europe, where you could stand, you know, next to The US, Russia, China, India, you know, as as one of the great powers.
But but it seems like the EU has shifted now from this geoeconomic to a geopolitical project. And the geopolitical project, it seems our unity, as you suggested, is dependent more on, well, balancing Russia in a military sense. But this means that the economic benefit of the EU is gone. That is we cut ourselves off from the Russian market, especially energy. We send our money and weapons to Ukraine, and whatever remains of money, you know, has to be wasted on horrible trade deals with The United States, because as long as the war goes on, we have excessive security dependence to on The US, which it knows how to convert into loyalties.
For example, when Wonderlane had to show up at Trump's golf course and sign that awful trade deal because they know this is what you have to do. But, again, if anyone can be stuck in a horrible security situation where this is a necessity, but given that the EU doesn't even wanna pick up the phone and talk to the Russians and trying to find a diplomatic off ramp, some way of reforming the European security architecture, something. I mean, what is it that brings us together now? Because all I'm seeing is, you know, the EU celebrating themselves for, you know, fake victories. All conflicts are framed as good versus evil, so we won't dissent too much.
You know, anything any dissent will be populism or people simply voting incorrectly and have to do it over again. I mean, there's more narrative management than open debates. I was just wondering, do you see this? What is it that's what what is it that's gonna hold the EU together in the years to come now that the EU is, well, officially a geopolitical project?
Speaker 1: Well, there are different levels, Andre. So most Europeans like the idea of a common European space. Students love the Erasmus program where you can spend six months in a different country, in a different institution. They like freedom of movement, and that's totally understandable. I happen to like that.
But, you know, we Europeans live under a myth. The myth that the European Union was a European creation for the purposes of ending war and for the purposes of bringing together, uniting Europeans. Now that that aspiration is absolutely real, but this is not how the European Union was created. The European Union was created as a cartel of big business, and it was done under the supervision of The United States. The New Dealers after the nineteen forties and even the Republican administration of the nineteen fifties were responsible for actually designing the European communities of coal and steel like cartel, and, you know, it was utterly intertwined with NATO.
It was a project for making sure that The United States maintains control of Europe. It was a colonial project to a very large extent, to which, of course, the ruling classes of Europe were very, very happy to participate. And their dependence on The United States was the be all and end all of the European Union. So the lack of European sovereignty vis a vis The United States, the total subservience to The United States, to NATO, and so on was embedded, ingrained into the DNA of the European Union. So the first if you look at the first two decades of the European Union, the nineteen fifties and the nineteen sixties, that coincided with the Bretton Woods system.
The Bretton Woods system was a system where effectively the dollar was our common currency. We were part of the dollar zone. We had fixed exchange rates, and everything was managed by Washington DC. So the if you look at the German industrial miracle, it emerged because the The United States provided the macroeconomic framework within which the, you know, the German industrial machine became one of the pillars of the American dollar. Similarly with Japan on the other side of the world in in the Eastern Asia.
And then you have the Nixon shock in 1971 when The United States ceased to be a surplus country, and therefore, they decided that in order to to restore competitiveness of the American industrial sector vis a vis Germany, but also Japan, They will devalue the dollar. They will destroy the fixed exchange rates regime. And then and and, you know, that transformation from the Bretton Woods system to financialization and neoliberalism, What it did was reversed the manner in which surpluses and deficits were recycled between The United States and Europe. But nevertheless, again, The United States was providing the macroeconomic stability and environment win within which German industry and Dutch industry, and to some extent French and Italian industry, could, function. So Europe was always absolutely determined on the kindness of The United States to create the circumstances for the European industrialists, for the European ruling classes to be able to reproduce themselves as a ruling class.
And, you know, that's when 2008 comes in. Because with the collapse of Wall Street, a process begins by which essentially you had your exit. By your exit, mean the throwing out of the dollar zone of Europe. It took them a long time to realize that. But with Wall Street's collapse, again, The United States, through the Federal Reserve and its swap lines, saved the bacon of the of the European banking system, of the European Central Bank, and so on.
But, nevertheless, the decoupling of Europe from The United States begins, something that the European elites, the European ruling classes were simply not ready for, and they are still in denial of it. Now Donald Trump is being portrayed by centrists all over Europe as being the man who destroyed the special relationship between the European Union and The United States. This is not true. What what happened was, you know, Donald Trump is just ruder than previous presidents were. I remember very well under Obama.
I was having a conversation with Jack Lew, who was his finance minister, The US treasury secretary, and he admitted that, you know, he he and I agreed on very damning interpretation of of the European position. I mean, I remember them saying that Europe is exporting deflation to The United States because of the great trade surplus that the European Union is having vis a vis The United States. That was the Obama administration saying it. Very politely, of course, and sort of in in a very quiet voice. But, you know, it's more or less what Trump has been saying, except that Trump has been shouting it from the rooftops.
And he has been clamping down on that with his tariffs. Now the the European elites are simp especially the Germans, are they're in denial. They want they they refuse to acknowledge the fact that the macroeconomic environment that between 1945 and 2008 was being managed on their behalf by The United States as long as they played the role that The United States wanted for them. That's gone. And because they were always, always absolutely dependent psychologically as well as as well as financially and institutionally with NATO with The United States.
They just cannot even envision a situation where where the European Union develops its own geoeconomic or geo geo strategic position. So if you look at Ukraine, for instance, Angela Merkel was never in favor of demonizing Russia and and pushing NATO all the way into Ukraine. When the Obama administration under secretary of state Noland were doing that and were, you know, concocting various administrations in Ukraine, and they were there were all these machinations that led to Maidan and an effective coup d'etat against Yenkovich. The the Germans were not in favor of that. And indeed, Noland herself has been quoted by wiki wiki WikiLeaks saying, you know, f the Europeans.
So yeah. But very gradually, the Europeans got on board this idea that Russia is, you know, the new Hitler is a new enemy, and we need to define Europe's sovereignty or bid for sovereignty, inject opposition to Russia, and therefore, you know, to justify whatever needs to be done in order to create, you know, a move towards more authoritarianism within Europe as a necessary reaction to the Russian bear, to the Russian threat. And, you know, in the end, that has become functional to Rheinwetel, to their attempt to slow down the industrialization. It's the raison d'etre now of the European Commission. It is the raison d'etre of the European Union Council.
But, you know, there's also a degree of utter cynicism here. So I'll just give you an example, Glenn, and it will be very close to my heart, to my home, the Greek government. The Greek government of prime minister Mitsotarakis. Now he's completely on board the NATO position, the dominant position in the European Union that Ukraine has to win the war, and it has to join NATO. Now if you ask him, okay.
So how is Ukraine going to win the war? He's got no answer. But he doesn't even care to give one because he doesn't care about any of that. He doesn't care about what's happening in Ukraine. He doesn't care about the future of Europe.
All he cares about is to maintain his own power base in Greece. Now you and I and our audience have been witnessing now for years the way that Orban was presented in the quarters of power in Brussels, in Frankfurt, in Paris, in in Berlin. Now I have no love lost with Orban. I politically, I am completely opposed to his ethno nationalism, to his quasi fashion novel. But there is this observation which I want to come to.
Orban was lambasted by Brussels for corruption, for circumscribing the freedom the freedom of the press, for misappropriation of European Union funding, all those things. Right? Now, Mitsotakis, my prime minister here in Greece, has done exactly the same and actually worse. The degree of corruption of this government is worse than Orban's. He was caught red handed eavesdropping on conversations of his own cabinet members of opposition leaders, of even members of the armed forces.
He was caught. This is not an allegation. He admitted it in parliament, and nothing happened. And no one from within Brussels, whether it's NATO or the European Union, criticized him like they criticized Erdogan. Why?
Why did they not criticize him since he's been doing, you know, doing exactly what Erban has been doing domestically? Well, the reason is because he said, okay. Look. I'm all in favor of Ukraine joining NATO, and, you know, we should all back Ukraine until it takes Moscow or whatever ridiculous statements are coming from Europe regarding the war between Russia and Ukraine, this tragic war. So what I'm trying to to get at is this, that the there are interests like Rheinmetall, very hard nosed financial interests that want the war in Ukraine to continue forever in order to keep getting money to build tanks that nobody wants, not even the Ukrainians, on production lines that Volkswagen doesn't need anymore because it can't compete by selling cars.
Then you have the people who actually you know, there's an ideological inertia and an ideological momentum when you'd tell a whole population for many years that, you know, Russia needs to be defeated, it will end up at some point, this is a self reproducing ideological position. And then you have the cynicism of people like the Greek prime minister who don't give a damn about either Zelensky or Putin or anything. They just want to maintain their hold of of power in their own little jurisdiction, which happens to be Greece in this on this occasion, but it's not just Greece. You know, Malone in Italy. They they they just want to control their own little world.
And if that means going along with a narrative from from Brussels that Ukraine must win, even though they are not helping Ukraine win in any particularly tangible way, they'll go along with that. So it's complicity. It is an ideological self perpetuating framework, and there is the cynicism of, you know, we will just replicate and reproduce all the rubbish that comes from Brussels as long as they they as long as they let us plunder our own people.
Speaker 0: So if you, yeah, fall in line, you're protected. And if you oppose Brussels, then you'll be held accountable for it.
Speaker 1: Exactly.
Speaker 0: Well it it seems as if the issue of rationality is something that should be addressed because you mentioned president Obama, and he was the one who first advocated for or called for this pivot to Asia. And this seemed implicitly like a recognition that a multipolar world was coming our way. That is if The US can't be everywhere, it has to prioritize, you know, where is it gonna be? I think Trump, in his own rude way, has focused hard on this. That is The US has to focus on the Western Hemisphere, its own backyard, and East Asia where its pay rival is.
But it seems as if what they wanna do is to adjust to multiple multiple realities to reduce their footprint in Europe and The Middle East. But for the Europeans, though, it seems like the logical thing, if it wants to become more autonomous, would be to, at some point, find a way of working with Russia again to end this division of Europe, both for its own economy and security, but also to reach out more to other great powers. I mean, China, India still is should have good relations with The United States, but it can't put all its eggs in one basket, especially when that country doesn't really wanna be in Europe that much anymore. It it doesn't make much sense. But again, the assumption here is that all states are rational, that they act according to this international distribution of power.
But, you know, you were the finance minister, you engaged with the European elites there. What is your in what is your impression? Because when I saw for example, you mentioned Orban trying to push for diplomacy, met with Zelensky, Putin. You know, he was punished. The EU seems to define energy security as cutting off a key supplier instead of getting as many suppliers as possible.
It just it's it's very hard to see the rationale the the strategy behind the whole thing here. Do do you get that impression when you speak with people in the EU, or or is there, you know, some other objectives I'm missing here?
Speaker 1: No. I don't think there are objectives. I think that they are completely clueless. And they are clueless because when your industrial base, when your economic model, your business model is failing, and you don't have the levers which are necessary to pull in order to bring it back together. Because usually, this is the the what we did in Europe.
We created federal money. We federated our money without the federal treasury. And then we had, you know, 20 national treasuries without the central bank to have their back. And these federal treasuries have to look after banking systems and industrial systems and electricity networks without having a central bank to, you know, to to backstop them. So this is a disastrous design.
During the good times, at the beginning in 2000, February, 2002, when it was first created, it was all plain sailing. So it's a bit like you know, imagine a beautiful riverboat that you try to use in order to cross the Atlantic. When the weather is nice, it looks splendid. But then the the moment the first storm comes, it starts leaking water, right, and starts sinking, and then you panic. I think this is the stage state of Europe.
They didn't think think it through. They didn't have a plan for what would happen if Wall Street collapses as it did in 2008. Why who's going to bail out the banks? Under what conditions? Is there going to be a banking union?
They were resisting it, they're still resisting it. You know, we have a banking union without a common deposit insurance. It is pathetic. It is just, you know, it's mind boggling. Can you imagine a banking union without a common deposit system?
And so in other words, let me give an give you another metaphor other than the fine riverboat. It's like taking the shock absorbers out of your car and then driving it to do a pothole. It's going to be a catastrophe. And then, of course, you will panic because you will you will be left with a wreck of a car. This is the situation we find ourselves in.
And, you know, Glenn, from an economic point of view, this was completely and utterly predictable. Nicolas Calder, the famous Cambridge economist who has died a long time ago, in 1970 wrote an article in The New Statesman. And it was back then, 9070, remember, was a time when it was clear that the Bretton Woods system was not going to last forever, the fixed exchange rates would go. And therefore, Europe was was going to be in trouble because the European Union had to have a fixed exchange rate regime because it was a cartel of big of big business. And cartels need a common currency or at least fixed exchange rates.
Otherwise, it becomes very you know, if currencies start going up and down, that destabilizes the cartel, which is all about agreeing to quotas and prices. So in order to prevent these fluctuations of prices that destabilize the cartel, that was the European Common Market and then the European Union, they needed fixed exchange rates. So Nicolas Cauder foresaw that the Europeans would try to fix the exchange rates, that that would fail, and therefore they would create a euro a monetary union, a common currency like the euro. And he wrote in '97 in the news statement that if you make this mistake of thinking that you're going to create a monetary union as a stepping stone towards a political union, that's a big mistake. It's not going to work.
Because the monetary union is going to create such a toxic crisis that then it will be politically impossible to unite, to create a political union. And this is exactly what happened. So now if you take Emmanuel Macron. Emmanuel Macron wants a political union. At least he told me once that he wanted it and that he was desperate for And there were there are some people in Germany as well that they want a political union, but try to go to the people of France or the people of Germany and talk to them about the political union because to when when, you know, effectively tell them that you need more Europe.
Well, every time they hear more Europe, it's like Iraqis hearing the words from Westerners, you know, more democracy. They hide under the table because for Iraqis, when Westerners promise them more democracy, the bombs start falling out of the sky. So similarly, Europeans, when you tell them you want more Europe today, they say, okay. More austerity, in other words. Right?
This is what you're telling us. Less degrees of freedom, less democracy. Because this is what happened as a result of having created the monetary union first and then suffered the repercussions. So I don't think they have a plan On Ukraine, you know, I talk to people who genuinely think that Putin is the new Hitler, genuinely think that, and they're really scared. So I said to them, okay.
Look. I'm not going to try to dissuade you. I personally don't like Putin much. But, you know, if you think that Putin is the new Hitler, why aren't we sending troops to defeat him, to push him down the bunker, and to force him to commit suicide or to drag him to Nuremberg? If you think he's a new Hitler, you're not sending troops in there.
Okay? You're not sending any money, not any serious money. I mean, they borrowed now 90,000,000,000. It took them a year and a half to get that agreement amongst themselves. And that that 90,000,000,000 has already been spent.
What are they going to do next year? Borrow another 90,000,000,000? They don't want to. It is not as if they're saying, oh, look. We have Hitler, the new Hitler in the form of Vladimir Putin, and we're going to take, you know, 500,000,000,000, 600,000,000,000 and give it to the Ukrainians.
So they have no plan for winning the war for Ukraine winning the war, but they have no plan for peace. You you know, I have been struggling politically now for years, yeah, four years now, to put forward a peace and security agenda for Europe, Ukraine, and Russia. And every time I put this forward, I'm being demonized and being painted as Putin's handmaiden, and Putin's servant, as Putin's client. So, you know, anybody who dares talk about a peace and security agenda with Russia that would resolve the war in Ukraine peacefully is immediately thrown out of the room, demonized, taken to the cleaners like people like me, and I suspect you as well. So no plan for war, no plan of be for peace.
Now why would the Chinese or the Indians or the Mexicans for that matter take Europe seriously? Because, you know, the Chinese, the Indians, the Bangladeshis, the Africans, they they want an end to the war in Ukraine the same way they want an end to the war in Iran because it is impacting their livelihoods negatively. But they see that Europe doesn't have a war plan. It doesn't have a peace plan. So why should they care about you?
Speaker 0: Great question. Now this is one of the things that confused me in Europe as well. The the, yeah, the the the suspending diplomacy, essentially, like like they have. But I feel like everything in Europe now is normative arguments. They keep referring to how they wish the world was instead of, yet taking actual steps in terms of how it is.
I I just wanna address what you said about the EU being now a cartel of big businesses because what you're describing, I think, has been referred to as, you know, the EU as a half built house. That is because usually, you want to have a political union, and then you can have a fiscal union, and then you establish a monetary union, along what The United States did. But we kinda went the EU went the other way. First, a monetary union. Eventually, you would have some conflict or problems building up, which forces a fiscal union, which would then force a political union.
But all of this would assume that the EU would be, as you suggested, born in crisis almost. And but then here's the problem, though. You can't really sell, you know, more Europe, as they call it, when it's not performing. So given that we now have these problems which have been built up, and, yeah, we have the war in Ukraine, and we have war in The Middle East, we have The United States losing interest in Europe, the banking crisis. How how what is the future now for Europe?
I mean, is Europe done, or do you see any way out, any recovery?
Speaker 1: Unfortunately, I don't see a way out. That's why I was progressed prognosticating earlier that we are entering a very long period of stagnation, a very long period of decline. I think the historian of the future, especially the economic historian of the future, is going to identify the two thousand and eight crisis as the beginning of a half century or even a century of European decline. This is you know, I hope I'm wrong. I really truly hope I'm wrong, but I don't see how it can be diverted.
I didn't go straight into that kind of pessimistic, negative mindset. Immediately after 2008, 2009, 2010, I struggled. I fought my corner by tabling proposal after proposal of how the attack can be averted. There were many ways of doing it. James Galbraith and I and other economists had put forward the so called modest proposal, and Stuart Holland, a British politician and economist, great economist.
So Holland, Galbraith and I were putting forward, since 2008, 2009, the so called Modest Proposal for the resolution of the Euro crisis. It was a very simple idea that we should simulate a federation, given that we didn't have one, by using the European Investment Bank as a major pillar of growth and investment in the research and development and so on, by means of bonds that the EIB, the European Investment Bank, would issue to be supported by the European Central Bank, yeah, that would have given us an opportunity to arrest the decline, the fragmentation, the bailouts, in order to create a space for having the conversation about the political and the fiscal union, which was necessary. And the parts that we said, nine nine und nine. And then when I was finance minister, I put forward the same proposal as along the same lines at Econfinn, the economics ministers economics and finance ministers meetings at the Euro group. The people from the European Investment Bank, including the German head, Werner Heuer, were very enthusiastic about that.
But the German government said, no. And the people in the European Commission or around the euro commission the European Commission that I mentioned before, people like Thomas Wieser and Dieser and so on, you know, this bureaucratic, shadowy government of Europe, they were absolutely determined to kill these ideas and to impose austerity instead. Austerity is a bit like a huge dose of cortisone in a cancer patient. You know? It it makes it seems to work.
The patient recovers a little bit, becomes more alive, but the cancer continues to do its evil work under the skin. And this is exactly what happened. So, you know, they're celebrating the end of the euro crisis. The euro crisis never went away. In my country, for instance, even though the the financial numbers are fantastic, if you're a financier, you're laughing all the way to the bank in Greece.
You buy nonperforming loans, 5% of their value. You sell them for 50%. You made, you know, 10 times what you put in. You buy Greek bonds. Well, the European Central Bank is supporting them.
But all that has happened at the expense of 80% of the population sinking into greater misery now than ever and, you know, negative net investment. So, you know, this is what they're doing. They're doing everything they can. They will change everything to make sure that nothing changes in a Europe Europe that needs change. And that that brings about what we you and I have been discussing, this constant decline.
You know, we are falling behind everything. We are not not producing green energy. You know, solar panels, used to be a great German invention, they're not produced anymore because the Chinese are producing them so much better and so much cheaper. And it's it's not that it's dumping. They have fun they have quite high profit rates.
It's just that they have developed technologies that Europeans have not invested in. We can produce electric cars, so we produce leopard tanks instead. We have no investment whatsoever in whatsoever in what I call cloud capital, in algorithmic capital, in AI. So all the technologies of the future have bypassed us. And simultaneously, you have political dwarfs ruling the roost.
You have Ursula von der Leyen that has been given the you know, a free rein, and she's doing things that are absolutely detrimental to the interest of Europe. Let me remind you that when Donald Trump was elected, she flew soon after that to Scotland and met him met Donald Trump, the president of The United States, in a golf course owned by Donald Trump and signed a ridiculous trade deal with The United States where, you know, Europe gave everything and took nothing. And not only that, but she made an a promise, a solemn promise to Donald Trump. You know, if you promise Donald Trump anything, you better deliver because if you don't, then he gets really peeved, and he can be very nasty when he gets peeved. And she promised him €700,000,000,000 of investments into The United States.
Now the European Union commissioner or president of the European Commission does not have that money to give. She doesn't have the budget. She cannot send a check for 700,000,000,000 to The United States to be invested in there. She doesn't have the mandate to do it, and she doesn't have the funds to do it. So she was making a promise that she could not keep, hoping the German industry would, fearing tariffs, shift production lines, like, you know, Bass production lines, Mercedes Benz, Siemens production lines, Krug Thyssen production lines, to The United States.
And this is, you know, the European the head of the European Commission doing that. So when I say that we've entered the period yeah. Just like the Chinese went through through one hundred years of humiliation and decline. I think that's where Europe is. We are at the beginning of that.
Speaker 0: Central humiliation.
Speaker 1: That's humiliation.
Speaker 0: Yeah. Well, it was only economic stagnation, but, you know, all of this economic collapse, political failures is happening also at a very critical time in human history with this new industrial revolution, the emergence of a, you know, for for the first time a truly, yeah, global, multipolar world. It's it's it's not a great time to to fall behind in this way. Anyways, I think we already, yeah, over gone over time. Do you have any final thoughts before we wrap up?
Speaker 1: Well, look. I don't want to leave people with a very bitter aftertaste in their mouth. The fact that the way things are today are pointing towards a hundred years of humiliation doesn't mean that it has to be that way. The beauty about, you know, human societies is that they are very much unlike the weather. With the weather, the weather doesn't give a damn what we think about it.
But when it comes to social outcomes, to historical outcomes, we are the determinants of them. So if we change our mind and we act collectively and rationally, then we can prevent that century of humiliation. That's why I'm still an active politics. That's why even though I'm not optimistic, because only fools can be optimistic under the circumstances, I don't lose hope, and I hope that others don't lose hope, and we come together. And maybe, you know, by means of some kind of collectively created miracle, we can prevent that.
Speaker 0: Yes. Well, with the current political leadership, I remain pessimistic, but I I do agree, though. I shouldn't
Speaker 1: That's why we need to overthrow them, Glenn. Sorry? That's why we need to overthrow them.
Speaker 0: Yeah. So I'll I was gonna ask as well if we live in pre revolutionary times, but that might be answering my question already. So thank you very much, though, for taking time.
Speaker 1: Well, thank you.
@Glenn_Diesen - Glenn Diesen
Richard Wolff: Collapse - Iran Is the Graveyard of the U.S. Empire https://youtu.be/XTM0CxB0Mus https://t.co/HSTPsGYM4A
Video Transcript AI Summary
Richard Wolff and Glenn discuss the implications of the Trump–Xi meeting in Beijing for the US economy, the global economy, and the political economy underlying the encounter. Wolff frames it as part of a broader transition in human history: the decline of American “empire” dominance that has existed since at least World War II, and the rise of China. He argues the US is pulled downward by the end of its dominance and that China has outperformed the West in economic growth over the past thirty to forty years, citing China’s GDP growth about three times the US average (about two to two and a half percent annually for the US).
Wolff claims Trump and Xi’s meeting reveals asymmetrical timing. He says one side wants free trade, multilateralism, and open cooperation, while the other side tries to “smash the Chinese down every chance they get,” without success. He also argues China’s approach is distinct: a developmental hybrid combining roughly half of the economy as private capitalist enterprises and the other half as state-owned and state-operated enterprises, all managed by a powerful government supervised by the Communist Party of China. Wolff presents this as “sui generis,” neither the US/Western model nor the Soviet model.
He describes a decades-long contest among “private capitalism,” “state capitalism” (including the Soviet system), and China’s hybrid system, saying the Soviet socialism collapsed, leaving Scandinavian/Western European socialism and a Chinese form of socialism. Wolff asserts China “won” at least at this point because China achieved rapid development from extreme poverty to a highly developed standard of living and strong economic dynamism, in spite of receiving little direct external development help compared with other countries. He says China supervised and regulated the process even as private capitalists played an important role in later decades.
Wolff then argues the strategic logic of the meeting centers on avoiding war. He says China benefits from time on its side and wants to avoid “rocking the boat,” while the US leadership seeks freedom to resuscitate an imperial order and expects Chinese cooperation. He presents Iran as a “microcosm” of this clash: US aims include removing the Iranian regime, replacing it with a US client, and subdividing Iran, while Wolff says China wants Iran left in place so it can manage the Strait of Hormuz as before and remain aligned with Russia and China. He states China is not driven by oil urgency, citing large Chinese oil reserves, and says the US project fails and has cascading consequences.
Wolff extends the argument to propose that the US attempts to revive dominance through energy control (he mentions attacks related to Russia’s energy, Venezuela, Iran, and other oil-related efforts) reflect “empire fantasy.” He argues these actions reveal a broader phenomenon: a decline in US control rather than an ability to impose outcomes. He adds that American public opinion is largely opposed to war, noting that unlike earlier conflicts where patriotic support faded over time with costs and casualties, he says there is already no appetite now, and that domestic economic concerns matter more than grandiose foreign projects. He also references the controversy around a White House “ballroom” as an example of political symbolism amid economic priorities.
In response, Glenn asks about how shifting power should change ideological assumptions about development and about what each side wants from the other. Wolff says China’s position is to resolve problems and prevent explosive issues, potentially including disputes such as Taiwan, while the US cannot hear or accept China’s appeal to avoid warfare and instead wants room to restore the empire. He concludes that major issues are at stake even if reported discussion points seem limited, and he expects further efforts by a “declining empire” to preserve its sense of remaining time.
Full Transcript
Speaker 0: Welcome back. We are joined again by professor Richard Wolff to discuss the developments in The US economy, the global economy, and also we how we can make sense of the meeting that has just taken place between she and Trump. So thank you. It's great to see you again.
Speaker 1: Thank you very much, Glenn. I'm very glad to be here.
Speaker 0: So I was wondering what what your main takeaway was from this, yeah, from this meeting in Beijing between the American president and the Chinese because, I I think, of course, Trump wanted to come there from position of strength, but instead, it it does reveal that The US is in a weaker position now. And, again, it's not stable either, not for The US or the world. What do you ex yeah. Again, what what did you see from this from this meeting, and what what what can we expect to come from it?
Speaker 1: Well, I think everything now is coming together, in my mind anyway, to underscore that we are watching a transition moment in human history. It's a transition from the dominance of the American empire, which has been pretty much the case since at least the second World War. That's now over. The American empire is in decline. I would argue that the American economy is being pulled down by that fact also, but whether or not you agree with with that, and that the Chinese are riding the upswing rather like The United States rose, the upswing of its capitalism in the second half of the nineteenth and much of the twentieth century.
And it it it became the dominant one with World War one because all of its potential competitors, including the British, destroyed each other. It is a cautionary tale that if you allow a system to develop the way Western capitalism did, you culminate in a destruction of all by all, a kind of Hobbesian horrible moment, in global history. The United States escaped it because it had the protection of the Atlantic on one side and the Pacific Ocean on the other. Absent that reality, they would have been caught up as fully in World Wars one and two as all of their potential competitors were in fact destroyed by that. So that empire now, which should have been clearly advertising its temporariness when it happened, in other words, Americans and others should have understood this can't last.
The United States standing and everybody else is is prostrate on the ground. The United States should have known. It didn't. The second half of the twentieth century will go down historically, I think, as a moment of an almost hysterical pro Americanism in which The United States led the way for many around the world to begin to believe that hooking yourself up to The United States was betting on a horse you knew would be the one that won the race, when you should have known that this horse was doing very well, but pretty soon the other horses would catch up. You didn't see it, and you're gonna pay a heavy price for that.
And now the next winner of this game, the Chinese, are showing you that for the last thirty years, or forty maybe, they have outperformed in terms of economic growth the West by a lot, two to three times. The American average rate of growth of GDP, about two, two and a half percent annual, and the Chinese, three times that annual. Okay. I mean, that's then only a matter of time. And if the meeting of Trump and Xi showed anything, it showed that one side knows that it has time on its side and the other one doesn't.
One one side now wants free trade, multilateralism, open everything, nice guy, let's work it out, And the other side is trying to smash the Chinese down every chance they get and is undeterred in that project by the failure of every effort to slow or stop the Chinese. So, I mean, it is glaring. That's one level. Here's the second one. And stop me, Glenn, if I'm talking too long.
Here's the second level. China is a and here I put on my hat as an economics professor. Okay? China is a unique developmental program. That has to be understood.
Whatever the phrase socialism with Chinese characteristics means, and it means different things to different people, it has meant for me watching the following: that they are not capitalist in the way that we normally define The United States, Britain, Western Europe, and all of that. Why? Because the private enterprise is not the nearly universal form of producing and distributing goods and services. On the other hand, China is not the Soviet Union. It is not the government owns and operates all industry and much of agriculture.
No, it is not that. It is determinately neither the one nor the other. Well, then what is it? The answer is it is a hybrid. It is a hybrid because roughly half of its economy is private capitalist enterprises, both Chinese and non Chinese.
And the other half is state owned and operated enterprise, China. And the whole thing is managed by a very powerful government, which in turn is supervised by the Communist Party of China. That is a remarkable structure, not like the Soviet Union, not like The United States or Western Europe. It is sui genera. It's its own thing.
Just like Scandinavia could call itself socialist because of the government programs and so forth, for decades, that's one kind of socialism, The Soviet Union had every right to call itself the Union of Soviet Socialist Republics because of what they did, and the Chinese have every right to define a socialism in yet another form. Why is this important? Because what we have seen, without it being called that, is a contest over the last seventy years between private capitalism, state capitalism, if you allow me, the Soviet Union, and then this bizarre hybrid, or if you like the Soviet Union, another kind of socialism. Nobody has the right to that name. There's no central bureau that decides whether you qualify or not.
So Scandinavian socialism, Soviet socialism, Chinese socialism, and yet others. But what we have seen, whether we want to face it or not, is that they're in a struggle, each of them. In that struggle, in that race, in that competition, the Soviet socialism collapsed. Alright? It left Scandinavian socialism, if you like, or Western European socialism, if you like, or the socialism of Bernie Sanders and folks like that if you like, and Xi Jinping, that kind of socialism in China.
And they have been competing. And now I have to say what my economics teaches me. The Chinese won. At least at this point, they have proved proved that the economic development out of a condition of extreme poverty to a condition of extraordinarily, well developed standard of living and incredible economic dynamism that the Chinese have done it. And I want to remind people, and here's a personal note, when I was getting my PhD here in The United States in economics, the most popular subfield of economics that graduate students like me were attracted to was called economic development.
And it was all about how poor countries in Asia, Africa, Latin America, and so on could find their way up. And we had the extraordinarily arrogant approach without being aware of it. Our teachers should have been, but we were the students, that we had the monopoly of knowledge on how to do that. And we would be trained, and we would then go off and be UN consultants or development specialists. Many of my colleagues in the graduate school went on to do that, you know, and they became experts in it, which we thought we were.
And The United States helped a lot of countries this way in Asia, Africa, Latin America. As you know, you know, people from Norway and other ones did that also. We didn't go to China because China was communist, So there was no Marshall Plan for China. There was no economic development missions sent by my university or or a governmental none of it. The Chinese got no help, and they did it better than all the countries who did get help.
Wow. What are we saying? We're saying that China won despite being basically on their own. Even the early help they got from the Soviet Union kind of petered out when they came to disagree in the in the nineteen sixties, the the Chinese and the Russians. So the Chinese really did most of this organizing, planning, structuring on their own.
And however you understand the role played by the private capitalists who come, you know, in the last thirty years and who play an important role and have much credit for the growth, two, you can't take away from the Chinese that they supervised the whole thing. They controlled and regulated the whole thing. And so the bottom line is mister Trump goes to China and is confronted by the defeat of the American model and its replacement by the Chinese. If I were an activist economist in Asia, Africa, Latin America, or for that matter Eastern Europe, it's the Chinese model I wanna look at, borrow from, adjust for our circumstances, but they're the they're the great example, not The United States. And that is changing the whole even if there weren't a BRICS alliance, and there is.
And it's interesting that it gets very little attention in India today while the big meeting in China gets all the attention. But in the long run, those bricks are bringing the Chinese everything to the rest of the world. And probably in the long run, that is their historic function. So I think enormous issues are at stake in this meeting, even if the actual things they discussed given what's been reported so far are relatively much less important.
Speaker 0: What's interesting what you point out, though, essentially, well, political economy, I think, has became an ideology. It's conceptually, it can either be more like us or more like them. I think this was cemented in the Cold War as well. That is one side is capitalist, one is communist, one is democratic, the other is authoritarian, and it kind of cemented itself in terms of identities. But, you know, there were some some some conditions around this.
That is, you know, after World War two, The US was a massive economic power. The US was militaristic. I mean, this is just the way it was, but but these are not permanent states because I'm thinking, you know, Alexander Hamilton, he once made the point that if Britain had been a land power in Europe, it would be as authoritarian as the Germans or the Russians. And, you know, for some, they would say the reason makes sense. Well, that it makes sense because, you know, if you're a land power with huge borders, a lot of neighboring countries, you have to have a huge standing army during during peacetime.
And if you have a huge standing army during peacetime, that that army can also be used against your own public. So there's not that much need for having not that much push for reforms that benefits the public, but the whole thing was premised on on The US and Britain, essentially, as de facto island states were more has stronger proclivity towards liberal democracy and freedom of the people. However, what happens if they would militarize? Then, you know, there's not no reason why they should still remain the same. So so over the past decades, when you see the heavy militarization of The United States as well, it I think it will be predictable that some of the freedoms would then begin to melt away.
You can't have this massive military industrial military industrial complex and still assume that the voters will be able to dictate the future of the country. So I guess my my my my point is it seems more now like the the roles have been switched a bit. That is, of course, you that China has its own problems with authoritarianism and all, but but still that, you know, they they essentially pushed a a policy of peace not to disrupt their development. Well, it's The US that has militarized too much, and even the economic model. The the Chinese economic economic model now seems more like the American one in the nineteenth century as opposed to what what America looks like today.
So, again, one doesn't wanna overstate this, but, how do you see you see the the shift in power now between The US and China breaking up some of these ideological assumptions about, you know, what you define more or less as a the assumption of a universal path to development that for China to develop, they have to become more like us when it seems that, you know, they have essentially found a good formula?
Speaker 1: I I I am persuaded at this point given what I've experienced and what I'm looking at with as you are looking at it, I think the Chinese have demonstrated this hybrid state private, enterprise governed by a socialistically self defined governmental and political party apparatus is a very unique construction, but it has delivered the goods. You know? And that is going to be very is already very persuasive around the world as well it should be. We are all groping in the end, how to do things, how to fix problems, how to move into the future. And the Chinese are saying, with all the confidence now that goes with it, we've figured it out.
Maybe there's a better way, but if so, nobody's offering it. What alternative to our development is there out there that can boast what we have achieved? The president of The United States goes home, and in his crazy way, writes in his his little, you know, account there, social, that he wants a ballroom as big in the White House as the lovely, room in which he was entertained by Xi Jinping. It's like a script written by a not so good playwright to have that. It's I would like to have what he has.
Okay. The whole world would like to have the economic growth that China has shown in the last thirty years. Not a single other country can do that. Even India, which wants to be that again, has to show that. It hasn't done that yet.
It's made some progress, but it's China that sits there, and they can be very comfortable. I wanna hammer home also that China achieved this under the umbrella of the American empire. One of the reasons it is in no rush, does not wanna provoke The United States to do anything catastrophic, is because what's the hurry? We we Chinese are doing spectacularly in a world in which the US dollar is the universal currency, in which The United States has 700 military bases around the world. And we have one in Djibouti, you know, it's silly.
They they have no reason to agitate the global situation because they are doing very well within it. You know, if BRICS doesn't develop its own currency, and I I don't mean to be critical of China, but it's because there's no great pressure from China who dominates the BRICS economically speaking. What's the rush? We're all doing pretty well. And if The United States were to decide to opt out and not be an empire, it's not so clear we would have the same smooth sailing.
My guess is in the in in the decision making halls of the Chinese, they are very aware, but I have certainly spoken to enough Chinese intellectuals in my life to know that they understand what I just said. I got it from them. I had to be shaken into an awareness that it's precisely their experience that teaches them, take it easy. Oh, let's work out so we don't get caught in the Thucydides trap here. Let's not replicate that story.
You know, Britain had to fight two wars. I know I've mentioned this to you before, Glenn. Britain had to defy the War of Independence and then the War of eighteen twelve, trying to squash the independence of The United States. They failed to their own surprise. They had a big British army and navy.
The United States didn't have anything or hardly anything, and they lost the British. After two wars, they no more. For the next century and plus, no war, they escaped the Thucydides trap, took them two defeats in two wars. And the Chinese, what is their hope? To be able to achieve the same thing minus the two wars because we can't afford the wars now.
And in The United States, war against China is an assumption of our political leaders here. They simply assume it. It is sort of automatic. Otherwise, they would have to admit that the time and the history and the economics are meaning that the American empire is now over, and that maybe the real issue that we as Americans should engage is the discussion, is the next phase of human history another empire, in this case, the Chinese? Or will we finally be able to have the multinational, multilateral global regime that you saw foreshadowed in the League of Nations after the horror of World War one or the United Nations after the horror of World War two?
Will those horrors help us this time go in a new direction? I noticed the Chinese have discussions about that. We don't have any discussions about that here because the notion that those are our options is so difficult for Americans that they still wanna hold on to denial, to imagining that the American empire is still alive and kicking. So that if you wanted to know why does the leader of this country act the way he acts, I know it's popular to ascribe to him narcissism and mental deficiencies of one kind or another. I don't believe any of that.
I mean, may be true. I don't think it matters. He is playing a role that we are at. If it weren't him doing it, the other one would have done it. By the other one, by the way, could be mister Biden, could be Kamala Harris, or any of the others.
We're gonna take Greenland. We're gonna take Panama. We're gonna make Canada a a fifty first state. We're gonna this is the be the gestural dynamic of someone whose ship is sinking and who has to flail around with imaginary, conquests and expansions because the real ones are not available. The best he can do is snatch mister Maduro and his wife out of their bed at night and put them in a jail here in New York City.
I mean, it is it is a pathetic effort of desperation.
Speaker 0: That's an interesting way of framing it. But well, given that the two sides have this different interest, is China sees that, you know, time is on its side, the long The US holds on to this, you know, exorbitant privilege that is to to rule the international system. The you know, the more it will weaken on its own. So the so China sees, you know, all it has to do is manage essentially the two cities trap. That is, you have The US as this declining, at least relative declining hegemon while China's rising as the challenger.
You know, mother time will essentially take care of this, that the world will shift into multiplarity. So their main objective should be let's not rock the boat. Let's not make sure make sure this doesn't result in any warfare. Again, it's a delicate time in history to manage. While on The US side, you see more the objective being to to restore the empire that is to but I'm not sure if that's I'm wondering if yeah.
No. Probably, they do think that this can still be achieved. But but given that you have these these different views about where the world is heading, how how do you see this essentially producing specific demands in this in this talks? Because well, if you're looking at this meeting between Xi and Trump, what would each side object like, specifically want from the other?
Speaker 1: Well, I think what the my guess is and and I see the logic of your question. My guess is what the Chinese want is what you just said. No rock the boat. Let's try to put a damper. Let's try to resolve our problems.
We if we can agree that it would be better to have the Strait Of Hormuz open than closed, Let's agree. That's what our goals are. You work on your side to try to get us closer to that. We work on our side. What's out of order, and I think the Chinese said that perhaps in relationship to Taiwan, but it covers many more issues, we don't want warfare.
We don't want an issue that is explosive in either because you wanna reconstitute your empire or on our side that we are gonna hasten history in the sense that we're not satisfied with our rate of growth now, we want a bigger one. You know, the kind of logic that lies behind Lebensraum, if you're a, you know, if you remember the German argument, we need a larger space to live, so we need or or the Israeli version of Lebensraum. You know, we're taking Southern Lebanon and that kind of thing. For The United States, I'm afraid, looking at our leadership now and the way they talk, taking them at their word, they cannot hear that message, and they cannot hear that appeal from China. They do not want to work at that level.
What they want is the freedom to try to resuscitate the empire, and they want the Chinese to help them do that, and the Chinese won't. The Chinese will not provoke them. The Chinese will not attack them, but it will not allow them. And let me give you as an example, Iran. What's the issue with Iran?
Well, in the fantasy life of the American leadership, Iran is a problem because, a, we don't control who they sell their oil to. Number two, we don't control who they ally with. And so they ally with, the Houthis and they ally with Hezbollah and they ally with Hamas, and that's a problem for our ally Israel. We don't want them to do that. Then we would like them not to be the ally of Russia and China, which they are.
And so here's what we would like: we would like to get rid of the regime that's doing all these things, replace it with a client of The United States, and subdivide Iran into three or four other countries. If you know your history, you'll know that Iran was much bigger than it is even today once upon a time, and that there are quite a few countries in that part of the world which if you look at their history, they were once part of Greater Persia. So The United States wants to take what it already did with Britain, get rid of parts of Persia and make them the Gulf States and so on, but they wanna go further. So they want to do all of that, and they thought they could. And so they went ahead and they did.
And the Chinese are looking there saying, we can't we can't allow this. And it's not just because of the oil. That's a mistake. China has oil in reserve ever since 2018. They have the largest reserves strategic reserves of oil in the world, significantly more than The United States, which has reserves too, although they're about half used up now or more.
So Russia I mean, China is not in an urgency about the oil, but they don't want a long term disruption. But they don't want any of what this United States wants in Iran. They want Iran to stay there, run the the Strait Of Hormuz the way they did before, be a good ally of Russia and China, blah blah. They they just want leave it alone. That's what they want.
And The United States has its I think that's a microcosm of where we're at. And so the question becomes, where else in the world, once this Iran thing is put to bed and notice, we kind of all know what's gonna happen even if we can't predict the details. The United States cannot move forward on that project. That's over. They don't have the military means.
They don't have the economic, the political, nothing necessary to win the fantasy that they had. So they're gonna have to go find their fantasy somewhere else. For example, in Cuba, they may make a nice theater of erasing the legacy of Fidel Castro and redesigning Cuba so it's the offshore gambling paradise that it was before 1959. Okay. I don't know what China will do then.
China has already hinted it might protect Cuba. That's the big decision. And it's not just about Cuba. It's wherever else The United States decides to make its effort. But the one it just tried in Iran, that didn't work.
That was a mistake. They misunderstood. I don't think they'll learn the lesson. I don't think I hope I'm wrong, but I don't think I see in The United States the awareness of what happened even with the defeat, which, by the way, almost all political perspectives other than mister Trump's hard base of support, even the neocon conservatives in the this country led by mister Kagan, for example, have said it's a defeat. I mean, they they get that they blew it.
They will make a scapegoat out of Israel if they have to. They will make a scapegoat out of mister Trump if they have to. But have they learned the lesson, the larger lesson I'm trying to draw here in which China and Iran are important moments? I don't think so. So I expect there will be more efforts of a declining empire to do things that will allow it to believe that it's got a few more years.
Speaker 0: But, in this effort, though, to revive the empire, what would be the strategy? Or how how can this be achieved? Even if it's not achievable, there has to be some battle plan going on. So for example, one gets the impression that well, just looking at some of the activities over the past two years that controlling energy is seen as being a important source. I mean, you see this from the attacks on the Russian energy.
You see it from the, yeah, the the the attack on Venezuela, the attack on Iran. And even now, there seems to be some recognition of some among some European politicians that gas exports might reopen again from Russia to Europe after The United States gets control over that energy infrastructure because, again, this is, you know, this is are the ones who destroyed Nord Stream, and now they want to essentially take over that infrastructure, and and then gas can begin to flow again. But is is this besides the energy aspect, how how else could The United States revive the empire?
Speaker 1: I don't see it any I don't see the energy either. It seems to me the mistake overreaching trying to control Iranian oil has had the utterly unexpected consequence of putting Gulf State oil into question. I I wanna make sure everybody knows. During the height of the war, Benjamin Netanyahu went to The United Arab Emirates during the war trying desperately, and I have this, you know, from The Wall Street Journal and and and, you know, not left wing sources or anything like that, went to The UAE to line up The UAE to join Israel in pursuing the war against Iran. And then the Israelis tried to line up the rest of the Gulf states to join.
And the rest of the Gulf states said, no, absolutely not. We will not do that. Okay. That means that the rest of the Gulf states have discovered, a, that having an American base on your soil is not a protection, but in fact makes you a target of destruction. You can't you can't continue with that.
You can't rely on The United States with that. You can't. And they also see what what China is. They're already selling oil to China, these countries, in many cases. So the the if The United States even understands it not only did not get Iranian oil, it lost the influence it had or a good bit of it on the Gulf States.
They're gonna end up having, you know, The United Arab Emirates. It's not even clear they'll hold on to Saudi Arabia, which you can see is putting its fingers in the air, trying to figure out which way the wind is blowing and and diversifying its partners in the world because it is adjusting to what you and I have been talking about here. If I'm right and if, you know, it's Thucydides' trap, then the whole world, every country, has to rethink how it relates to The United States on the one hand. So that I would argue that this this Iran misadventure is a crucial moment because it is that effort of The United States which not only didn't work but comes at a moment in which the results will cascade. Let me put it another way.
The war in Vietnam, The United States pursued, and then the war in Afghanistan were both lost by The United States, cold stone loss. Right? The war in Vietnam was fought against the Communist Party of North Vietnam under the leadership of Ho Chi Minh. And who runs Vietnam today? That political party.
The enemy of The United States is in charge. That means they won, and we in The United States lost. The war in Afghanistan, the other side, was the Taliban. Who rules Afghanistan today is the Taliban. They won, we lost.
But because the world history hadn't evolved in the way it is now at the time of, nineteen seventies for the Vietnam War and and then much later in Afghanistan, those defeats could not play the role of shaking the consciousness of the world the way this defeat does. It's not that this defeat is larger or smaller. Those those adjectives really don't apply. It's the context that makes the text speak the way it does. So it's the context, which was more on display in the visit of Trump to Xi Jinping.
It's that context that gives us the meaning of the defeat in Iran, and that will survive no matter what mister Trump says that he has a victory because of the regime change, which he tries to use as a euphemism for the assassination of one Ayatollah who is then replaced by another one with the same policy. This is gonna be called the regime change. It's a joke, and it's a joke that doesn't work. And that's the worst joke. The worst joke is the one where the the person telling it expects laughter, and everyone looks at that person because no one got the funny that's involved here.
Speaker 0: I remember on the when the in the early phase of this war against Iran, Lindsey Graham came on the you know, was on the news. He was part of the, you know, the crowd was doing the same talking point. That is going be a short term pain for long term gain, you know, everyone saw those, you know, those talking points being repeated every day. But he was making the point, are we going to make so much money once we're in control of Iran's oil? And the the assumptions they seem to have had in terms of how this war was gonna end up, collapse of Iran, all the all all the oil ending up in the hands of The United States.
I mean, it was it's quite remarkable. I'm not sure how one ends up with those assumption, but but overall, what it achieved instead, as you said, it burnt down the Middle East as a region, including The United States' own allies. And this is being seen by the Europeans, the East Asians, all now questioning to what extent is a good good strategy to make oneself frontline states. But but but this seems to undermine a wider strategy for The United States, a way it could have positioned itself after the rise of China. Because I assumed The United States would try after globalization as a process, you know, of Americanizing the world that as China rose, if they can't defeat the Chinese, then split into, you know, this exclusive geoeconomic block.
So tell the Europeans, you know, you're not trading with China anymore. You're buying our technology and essentially trying to divide the world along these lines. But but but now that seems to be failing as well if, as you said, if this is really the lesson that comes from the war in Iran that the Arab states should not have bet everything on The United States.
Speaker 1: Yes. They shouldn't have, and the Europeans shouldn't have done it either. But that's always the wisdom, you know, of hindsight. That's the wisdom that's imposed on you by what has happened. Let me go back, though, a little bit on that oil.
Lindsey Graham is a is a good person to turn to. He really doesn't know or care or understand much about international affairs, but he's a good spokesperson for the most aggressive we are the empire, the most aggressive nothing has happened to our empire. We are the dominant and becoming more so. And it's important because he's he speaks for, as mister Trump does, a very significant, excuse me, portion of the employer class here in The United States. So, yes, their expressions may be over the top.
They may, exaggerate, but what they're saying is what is believed by an awful lot of people. So it's not an accident that you had the seizure of the oil rich Venezuelan government, then the attempted seizure of the Iranian oil rich Iranian government. And I wanna remind people that there was this bizarre bombing of a little corner of Nigeria between those two events. Nigeria is an oil. What you're seeing there is what you said a moment ago, Glenn, this energy for we can we can become the corner of the world's oil.
That's a kind of empire fantasy. We are gonna become able to control the world, in this case, by controlling its energy, and in the particular case, the oil, because look, we could do this and we can do that. You know, Canada, that's another chunk of oil. Doing stuff in the Arctic Circle, that's another attack on oil. And then maybe our allies, the Europeans, can have a war with Russia, and we can dismember Russia and control its oil.
Then we've got enough to these kinds of fantasies are crazy, but they're crazy in the way you wouldn't be surprised if it's actually the obverse that's happening. It's a decline of their control that is the actual phenomena we're living through, and it has to be offset. You know, in psychology, it's reaction formation. It's it's an attempt in the world of fantasy to compensate, to offset what is actually happening, and then to have your brain focused so you can have a bombing in the middle of Nigeria at a time when that makes to most of the world no sense. You can't tell the world what you're doing, obviously.
So you have to say we're intervening to protect Christians. You know? What? Yes. Christians in Nigeria.
Because anything is is crucial if it can be used to sustain the implant. So for me, and for many like me in The United States, our worry is what The United States will do and what the, quote unquote, allies of The United States will do. I think, for example, that if there is much more European warmongering against Russia, you will you may be surprised, you Europeans, that mister Trump will be backing away from you and be hostile to you more and more, but he doesn't want that. He that's not anymore a priority. When they thought that they could win in Ukraine and it would be the way to break Russia up, that fantasy, that play the game.
But when it became clear to the Americans, this is not gonna happen, And I think they'll do that in Iran too. They don't have a stomach for war, and that's not because of their lack of the fantasy I just described. That that is unfortunately very strong. But they have this problem. The mass of the American people are not in it.
I cannot overemphasize that, Glenn. People should understand, particularly Europeans. This is the first time that from the first day of this war, the majority opinion in The United States was against it. It didn't take months or even years. It did in Vietnam.
It did in Afghanistan. It did in Iraq. But in the early weeks and months and even the early years of those wars, American public opinion did its patriotic song and dance. Only over time when it cost too much money, when too many young men and women came back dead or hurt or wounded, then you began they they understood. This time, there's no stomach for it.
The demand of the American people is that the government help them economically, and they don't see it. So they have no patience now for grandiose. The president is in trouble about the ballroom, the ballroom in the White House. That's a that's a question of a few $100,000,000, which in The United States today is nothing. It's like a coin in your pocket.
If the coin falls out on the ground and and you don't bother to pick it up, it will not change the experience of that day for you. Why are Americans? Because it symbolizes that the money they would like to have spent on their problems is going to something what? So they don't want that. And for sure, if they don't want a a $500,000,000 ballroom, they certainly don't want a $2,000,000 a day war in Iran.
I wanna remind you, most American, my students here in New York City where I still teach, if you give them a map they can't find in Iran, most of my students. It's not part of their universe. They're not interested. No one has ever interested them. It's too far away.
It's it's a murky, very murky. They don't want government money spent on that. They don't. And and that if anything loses the midterm elections to mister Trump and the Republicans in November, that will be the issue.
Speaker 0: Yeah. No. I think this will go down as, well, not to plagiarize, Robert Kagan, but one of the, the greatest strategic defeat for The United States. There's so much going down the drain with this one, though. But again, I tend to look at The US standing in the world, its economy, the empire, but of course, domestically as well.
There's a lot at stake, which is never a good thing though, when this much is at stake. Politicians tend to do desperate things. Anyways, well, thank you very much for coming on and sharing your thoughts on this. It's yeah, it's hard sometimes to follow. The world is spinning very fast now, so thank you for putting some perspective on it.
Speaker 1: And, Glenn, it's my pleasure. And I know I speak for many people, including many of my students who watch your programs, learn a lot from them. It's a very important service, and I I on behalf of all of us, thank you.
Speaker 0: Oh, thanks. Appreciate it.
@Glenn_Diesen - Glenn Diesen
Trita Parsi: Iran War Marks the End of American Primacy https://youtu.be/7QUx7GjIOBo https://t.co/0VB4hRSi9y
Video Transcript AI Summary
The Quincy Institute’s executive vice president Trita Parsi discusses the risk that the U.S. goes to war with Iran again and how the dynamics of the last round may shape a new one. He says the risk of war has significantly gone up, though it is unclear whether it is above 50%. He argues the Beijing meeting between Trump and Xi delivered very little to the American side, noting that the Chinese statement about wanting the Strait open is described as “vanilla” and not meaningful because it depends on definitions of “open” and Iran’s control versus traffic flow. Parsi contrasts U.S. desires to “regionalize” the mechanism with China’s arrangement to get its ships out.
He links recent increases in hostile rhetoric to a pattern of failures: the blockade of the blockade failing after the blockade itself and war threats failing, suggesting the Trump administration is being pushed toward another escalatory move. He also says Iran is “almost counting on an attack” while negotiations remain far apart on key issues, and he describes U.S. inflexibility in meeting “maximum demands.”
On nuclear and related Chinese positions, Parsi says China’s stance aligns with the NPT and that China and other P5 states seek to preserve privileged status as nuclear weapon states. He contrasts China never saying Iran should not enrich with a hypothetical supportive signal that would have been made by calling for no enrichment.
Discussing what could differ in a second round, Parsi critiques how Trump handled Iran’s “10 plan”: Trump publicly claimed the ceasefire would be based on Iran’s 10 proposal, but once negotiations started, he pursued a different approach. He then outlines U.S. hawks’ pushes for attacking Iran’s power grids and oil installations and even potentially destroying the state. He says assassinations and limited actions have not led to regime collapse, and that what has not been done is going in with ground troops, taking an island, or going after energy infrastructure.
Parsi argues that targeting energy assets would prompt Iranian counter-escalation against GCC oil infrastructure, shifting the crisis from a bottleneck to a production problem that would drive oil prices above $180–$200 for a long time and throw the global economy into recession or depression. He says Trump has threatened these actions but did not carry them out. He adds that Iran expects retaliation at a higher level than before, including targeting the UAE for its role during the war and its increasing strategic partnership with Israel. He claims Iranian targeting could include companies and industries connected to Trump, such as AI and data centers used by Palantir, potentially harming the UAE’s investment as an AI hub.
He also says Iran may close the Strait of Hormuz and the Red Sea, and explore targeting undersea fiber optic cables that handle 99% of internet traffic in GCC states. He compares potential impact to a “second” Strait of Hormuz, noting Iran’s existing reliance on internal networks due to Iran’s internet being cut off.
When asked about Iraq, Parsi says he has not followed it as closely but notes revelations that Israelis may have set up air bases in Iraq with U.S. pressure, and that GCC states and Iraq territories were used in attacks against Iran, whether voluntarily, without full knowledge, or under coercion. He argues this fits a broader view of Iraq becoming weak and unable to resist U.S. demands. He says it is plausible that Iran could use Iraq as a theater for horizontal escalation, though he does not know if it is likely in the first or second round. He says the U.S. underestimated Iranian horizontal escalation and attributes part of the miscalculation to Israeli efforts to depict Iran as weaker than it is.
Parsi further explains Trump’s worldview: he says Iran’s refusal to talk directly with Trump reinforced an American belief that Iran was weak and would not escalate. He argues that Trump expected the war not to last more than four days, though he was mistaken.
On U.S. primacy and multipolarity, Parsi argues that the U.S. did not achieve a military or political win in Iran: the U.S. “lost it,” with Iran establishing escalation dominance and the U.S. begging for a ceasefire. He says global repercussions include fuel shortages and energy crises across Australia and countries in South Asia and East Asia dependent on Persian Gulf oil. He adds that if the U.S. cannot establish escalation dominance in the Persian Gulf and is not willing to pay the price to open the Strait of Hormuz, this undermines questions about U.S. ability to sustain primacy and hegemony.
In diplomacy, he emphasizes that military options are limited and costly, because defending islands and taking control of the straits would require actions and troop presence the U.S. is not willing to sustain. He claims diplomatic options are more promising, arguing Trump may be in a better position than previous presidents because he is willing to put all sanctions on the table and lift primary sanctions, which he says are executive-order based and do not require Congress, unlike secondary sanctions imposed by Congress.
Parsi says sanctions relief beyond the JCPOA matters, and notes that in Iran’s last proposal Iran became open to a “moratorium” framing of not enriching for 12 years, a “remarkable shift.” He says the talks are currently deadlocked over Iran’s 60% stockpile but that both sides have shown some flexibility on other points. He also says Iran needs sanctions relief even more after the war, citing $300,000,000,000 in damages.
Addressing Iran’s trust and the Strait of Hormuz, Parsi says Iran is unlikely to give up control, arguing it can reopen and reclose the strait due to assets along its coastline. He discusses a GCC proposal for an “environmental management fee” that he describes as functioning as a toll. He says any such payment would not compare to the scale of investments Iran could attract if sanctions were lifted.
Finally, Parsi argues that peace depends on shifting rhetoric from zero-sum, hegemonic messaging toward diplomacy-based expectations of mutual concessions. He says Trump’s counterproductive social media rhetoric can disrupt breakthroughs and raises Iranian questions about his discipline and trustworthiness, while also claiming Trump is uniquely capable of making statements that break political taboos, including saying he wants Iran to flourish.
Full Transcript
Speaker 0: Welcome back. We are joined today by Trita Parsi, the executive vice president of the Quincy Institute for Responsible Statecraft, who is an, yeah, award winning author and the wash Washingtonian magazine for five years in a row, named him as one of the top 25 influential voices on foreign policy in Washington DC. So make sure to follow his substack, and I will leave a link in the description. So thank you very much for coming on. It's a great honor to have you on the program.
Speaker 1: Thank you so much, Glenn. It's my pleasure.
Speaker 0: Well, I I wanted to ask you about the war in Iran because this is something you follow quite closely. And I was well, I guess a good place to start is how likely is it that we're going back to war now? Because from what I what I understood, nothing was really resolved or achieved that with the meeting in Beijing between Trump and Xi. So is this essentially a return to war?
Speaker 1: I think, unfortunately, the risk of war has significantly gone up. I'm not so sure yet whether it is above 50% or not. There is still a bit of a time to be able to find an exit and it's also not clear to me whether some of this rhetoric is part of the theatrics that Trump is putting on in order to pressure the other side and just kinda sharpen the choices. But if we break it down a little bit, you mentioned the Beijing Meeting. I think indeed the Beijing Meeting delivered very little to the American side on this issue.
You may have noticed that they made a big deal out of the fact that the Chinese said that they would also like to see the Strait open, which is a very vanilla statement. It is actually a rather meaningless statement. Every country in the world would like to see the strait open. The question is what are you gonna do about it and what is your definition of open? And the Chinese idea of open is not necessarily that the Iranians do not control it.
It's just that the traffic flows. The Chinese themselves have made an arrangement with the Iranians in which they are getting their ships out, so from their standpoint, it is open. But from The US standpoint, there's been a desire to not necessarily end the mechanism that the Iran is putting in place, but actually regionalize it. So their definitions of open are very different. But the larger point I'm trying to make is that if that is the best they got out of the Chinese, that tells you how little they got out of the Chinese at that meeting.
So now you're in a situation in which for the last forty eight hours, there's been a significant tick up of very hostile language that in and of itself, let's assume that war actually is in the cards, is an indication that the blockade of the blockade was a failure. And the blockade of the blockade was an indication that the war was a failure. And the war was an indication that the threats of war back were a failure. So what you have is a series of escalatory moves that all have proven to be failures and that are only leading the Trump administration towards the next escalatory move. I do think the Iranians are more or less almost counting on an attack taking place because in the negotiations, even though they have moved closer to each other on several different issues, they're still very far apart on a couple of key issues.
And, Trump has shown very little flexibility and seems to be very adamant about certain things that he needs to get his maximum demands on. Now the Iranians are quite ready for that war based on the conversations I've had with them. Happy to go into detail of things that they're planning to do in such an escalation and why the second round of this war would be quite different in some aspects than the first round.
Speaker 0: Yeah. No. That was actually what I want to ask you about as well. But, yeah, regarding this vanilla statement, as you said, from the from the Chinese, I thought this was quite interesting because the open straight, it can mean a lot, and it can mean nothing, as you said. The idea that this signals support for The US military activity, I would say, will be, on the contrary, not because they if The US was able to defeat Iran, destroy it or conquer it, break it up or whatever the victory would look like, it does mean that open access would be a given.
I mean, there's no open access to Venezuela, Cuba. So the the idea that this would be a statement of support for The US, I think, again, people would read into that statement what they would want. It seems a bit the same with nuclear weapons, though, wasn't it as well? Because China said Iran shouldn't get nuclear weapons, but that's what Iran says as well. So it doesn't sound like an anti
Speaker 1: Iranian statement. Not at all. Exactly. And this has been the Chinese position for a very long time and it's the position of every p five states. They're all signatories to the NPT.
They wanna keep their privileged status as nuclear weapon states within a treaty that prevents the others from getting it, so there's no meaning in that at all. If the Chinese had come out and said Iran should not have enrichment, that would be a very different statement, a statement that would be in support of the American position. But the Chinese have never said that. I don't find it likely that they will ever say that. That is simply and I think it's important to understand, the Chinese are looking at Trump and his decisions, and they're recognizing that at least one element of Trump's calculation was that he wanted to go to the Beijing meeting, having taken control over Venezuela's oil, check, and now also taking control of Iran's oil, not checked.
And that in that effort, he has created a massive mess in the region with repercussions for the global economy as a whole, and he has still not managed to get control of that situation, and he has no plan on how to win or how to actually just get out of this. There is no incentives for the Chinese to step in from an instrument of what they see as Trump's failing strategy. So why would they come in at this point and in support of The United States? It makes absolutely zero sense for them. Now if The US had put a reasonable proposal on the table that was based on a genuine compromise that the Chinese believe is viable, and they believe that the Iranians should accept it in order to get out of this situation because the Chinese would like to get stability, of course.
In that scenario, I can see the Chinese coming in and nudging the Iranians towards an agreement, but they're not gonna do it if the proposal on the table is a nonstarter, and then by that, make themselves part of America's failed strategy.
Speaker 0: Yeah. Well, I I want to, yeah, get back to your your former answer. That is what might be different in the cards this time? Because if if The US goes back to war now, surely they they can't do more of the same because Trump seemed quite desperate to get the ceasefire last time. You know, he said the Iranians begged him, but given that The US accepted the Iranian 10 plan as a point of departure for negotiations, it it sounds more credible, the the they had the position from Tehran, that it was the Americans who are desperate for this.
But what is each side planning to do different this time you think? Will The US just go let the dogs out sorry, loose and they go all out, or how will they run this differently? Will they be less restrained this time?
Speaker 1: Before I go into that, let me just say something about the 10 plan. So, yeah, on Twitter, Trump came out and essentially said that the the ceasefire would be based on Iran's 10 proposal, which he said is workable or we can work with it. Once the negotiations started, Trump pursued a very different approach, however. So he kind of signaled acceptance of Iran's 10 points in order to get the Iranians to agree to a ceasefire, and then it just completely went in a different direction in the negotiations themselves. Now what will happen in the next round?
So from The US side, you're absolutely correct. There's few things that one can imagine that they could do differently that would really break the situation. What you have the hawks in Washington and in Israel push for is attacking Iran's power grids and oil installations and just try to destroy the state altogether. They recognize that the assassination of leaders, even though that's a very significant amount, a 135, has not led to the collapse of the regime or the implosion of the regime, nor is it likely to do so. The one thing they haven't really done is to go in with ground troops, take an island, or go after the energy grid.
Now if they had done that, of course, if we take the energy grid to begin with, this would have led to an Iranian counter escalation that would be even more dangerous for The United States because the Iranians would go after the energy and oil infrastructure of the GCC states. What they've done so far is very limited. What we have at the core of it when it comes to the oil crisis right now is a bottleneck problem. There is tons of oil sitting on tankers in the Persian Gulf waiting to get out. And oil can still be pumped out because the installations themselves are not destroyed.
If, however, The US were to go after Iran's power grid and oil installations and the Iranians were to retaliate against GCC oil installations, then you have a production problem. That means that oil prices are gonna shoot above 180, $200, and they're gonna stay high for a very long time because you have a production problem. It's not just a bottleneck problem. This means that the global economy will be thrown into a recession, perhaps even a depression. And I mean, it will be just simply devastating.
And this is part of the reason why Trump kept on threatening it, but never did it. But for completely insane people like Lindsey Graham, warmongers, you know, I don't know if there's good enough adjectives to describe them, they're pushing for this. They're willing to risk everything, the entire global economy, knowing very well of course that they're gonna destroy Trump's presidency, but they're still pushing for this. Now the Iranians do expect that whatever this may be, whether it's taking an island, going in with some grand troops, or whether it is just a massive bombardment campaign on the same scale or larger than it was before, they themselves will also try to retaliate at a higher level than they did before. This means, in particular, that they will go after The UAE because of the role that The UAE has played during the war in terms of pushing Trump to restart the war, but also because of its increasingly open association and and strategic partnership with Israel.
Within The UAE, the Iranians are likely going to target companies and and industries that are connected to Trump himself, such as AI, data centers that are used by Palantir and all of these different companies that the Iranians involved in the war anyways because of their support for the Pentagon. This could then also lead to a scenario in which UAE's investment as an AI hub actually gets destroyed, which would and this is outside of my field of expertise, have some implication for The US's AI rivalry with China. But it would also mean that they're actually deliberately going after things that are of value to Trump's businesses because of a perception that he doesn't care that much about US interests being compromised, but if his business interests, his business empire's interests are being compromised, that will be more painful for him. And they're looking for targets that would impose that type of a cost. But beyond that, it seems like this time around, they will be closing the Strait Of The Gulf Of Aden and the Red Sea.
And moreover, they're also looking at these undersea fiber optic cables that are handling 99% of all Internet traffic in the GCC states, including billions of dollars of daily transactions. And see that, or they're exploring to see if that could end up becoming like a second straight of hormones for the Iranians, mindful of the fact that the Iran's internet is already cut off and they're relying on an internal intranet that they created several different years ago. So we're talking about massive escalation on both sides. And whatever the implications have been so far for the global economy is likely going to be very little compared to what what is is about to come. Yeah.
Speaker 0: I think that's was one of the most interesting parts of the of the war was how Iran was essentially mirroring the escalation ladder, how they were willing and also capable of going up up the ladder, but that also suggests if the as you said, if The US decides to destroy its energy infrastructure, there's no reason anymore for the Iranians to hold back. So yes. I've heard a lot of signals come out, everything from shutting down the Red Sea, essentially, yeah, destroying some of the Gulf states, not just the energy facility, but desalination plants. They could cut off their Internet. But with the comments that Iraq could play a greater role as well, seizing Kuwait, for example, or just kicking out what remains of Western troops, Do you see this as a likely scenario?
Speaker 1: On the Iraqi side, I I have to say I haven't followed it as closely. And as you know, we have a new government, but there's also these very, very embarrassing revelations of how the Israelis set up one potentially two air bases in Iraq under the guidance of The United States and with The US pressuring the Iraqis to accept it, although the the New York Times story suggests that the Iraqis did not understand that these were Israeli bases. But bottom line is it's there's more and more evidence that most of the GCC states as well as Iraq, their territories were used airspaces were used for these attacks against Iran. Now whether that was to a very large extent something that they did voluntarily, whether that is something that was being done without their full knowledge, or whether they were just simply coerced into it. I mean, one thing we have to remember is that from the standpoint of someone like John Bolton, this is evidence that the Iraq war was a success.
Because it was never about democracy, it was never about human rights, obviously. It was about eliminating Iraq as a geopolitical player on the chessboard and turn it into such a weak state that The United States could force it to agree to all kinds of things such as opening up two bases for the Israelis to use for attacks against Iran. So Iraq has essentially become so weak that he has no ability to push back against these type of things. Now whether the Iraqis would, in the midst of all of this, go after Kuwait, again, I've I've not heard any of that with any credibility, but the fact that Iraq itself could become one of the theaters of the war in a horizontal escalation by the Iranians is a very very plausible scenario. I don't know if it's likely in this first in the second round, but it's definitely plausible.
Because we saw how the Iranians used horizontal escalation to really throw off The United States. The US side did not expect that the Iranians would target all of the GCC states. They really were surprised by that. They were also surprised by the taking of the Strait Of Hormuz even though US Intelligence had already predicted most of these different things. It's just that Trump has now become into a habit of not listening to US intelligence, but instead listening to the Israelis.
Speaker 0: Yeah. I was surprised by Trump's how surprised Trump was, to be honest, because, in the weeks before the war as well, I had done, my podcast interviewed quite a few times, professor Marandi, is quite influential also in the media. He was always making the same point. If if or when The US attacks, the first day we're gonna shut down the Strait Of Moose and attack all their bases. And at least it should have been considered as a I mean, it seemed quite reasonable that they wouldn't allow the opponent to to dictate the the conditions of how this war should be fought.
Speaker 1: Just to explain a little bit why The US side, as well as the Pentagon, really underestimated Iranians is that there was this massive campaign by the Israelis to depict Iran as much weaker than it was. The Israelis recognized that if he need if he wanted to convince Trump to go to war, something that he's unlikely to agree to because he's he doesn't take huge foreign policy risks usually. The only way you could convince him was to by convincing him that it was easy because he's very much in favor of doing easy things. Things that are easy, low risk is his forte. So they really went at trying to depict Iranians as very weak, incapable of doing something, afraid of having a direct confrontation with The US.
Iran's own behavior had also reinforced that. Everything from strategic patience for the last couple of years in which they were taking hit after hit after hit from the Israelis and never really struck back hard until the June twelfth war. Every time they struck back, it was kind of polite, it was kind of aimed at showing that they could, but without escalating. It was actually a deescalatory move in some ways. All of this just reinforced a very strongly held view within the American system that the Iranians simply do not have the guts to face The United States.
Then there's another element that comes to Trump's own psychology. It's it's one of the biggest mistakes in my view that the Iranians committed prior to all of this, which is that they refused to talk to Trump directly. There are numerous opportunities that they could have just engaged with Trump directly, and I personally believe that had they done so, this war could have been averted altogether. And part of the reason why this reinforced Trump's view of Iran as weak is precisely because of Trump's own belief that he is willing to talk to everyone. You saw him coming in as president and said, I'll talk to anyone.
I'll talk to Kim Jong un. I'll talk to the founder of Al Qaeda in Syria, I'll invite him to the White House. And you know, I do all of this because I'm strong. Because I'm strong, I'm willing to talk to everyone. And this is a very significant shift in the American political culture because for years, the very idea of talking to various leaders was taboo.
Trump is a key reason as to why a lot of that has been broken, it was also broken to a certain extent by the Obama administration. But in Trump's world, he is capable of doing this because he is strong. So when the Iranians refuse to speak to him, and they think they're doing it and showing strength, they're refusing to talk to this to this superpower of the world, that's not how Trump sees it. Trump interprets that as weakness because he is talking to everyone because he's strong, if someone else is not willing to talk to Hill, it's because they are weak. So Iran's own conduct also reinforced the American view that Iran is weak, it's incapable, it will never dare to escalate in this horizontal way, it actually doesn't even dare to have a direct confrontation with The US.
That's part of the reason why Trump thought that this war was not gonna last more than four days. Of course, he was completely mistaken, but I think it's important to understand that some of Iran's own behavior had reinforced that view in Trump's mind.
Speaker 0: Yeah. I referred to Trump before as, yeah, the president of low hanging fruit because he does like the easy, low risk, in and out Yeah. Ideally, one day operations. That is, for example, the threats against Panama that and they and then they folded, and then gave him something for nothing, and that was a one day achievement. And same with Venezuela, in and out, some price to show off.
And and if something goes wrong like Yemen, I thought his strength was that he could just say, well, oops, that didn't work, and claim victory and go home nonetheless. It appears the problem with Iran, though, is there is there is no going back to the status quo. There is no claiming victory and going home because as long as Iran has the Strait Of Hormuz, that changes The US position, not just in the region, but, yeah, possibly in the entire world. So and, well, I guess this is something you have argued as well, that is that Iran essentially threatens the, well, as already undermined, the global primacy of The United States. I was wondering if you could, I guess, unpack that argument.
Speaker 1: Sure. So I think when we take a look at some of these important events in the world that have kinda moved us closer and closer into a more accepted and internalized multipolarity, oftentimes, we're looking at the impact and the strategic folly of the Iraq war as a very important inflection point that really moved the world faster towards multipolarity because the manner that it dramatically weakened The United States, destabilized the region, all of these repercussions from the creation of ISIS, etcetera. But when you would take a look at that war and what The US has now done in Iran, I think it's quite striking that, nevertheless, in the Iraq war, The United States was militarily tremendously successful. The entire country was taken in three weeks, and even the political objective of overthrowing Saddam Hussein was achieved. Now, of course, every all the other problems came afterwards because The United States could not stabilize the country, could not control the insurgency, it ended up becoming a ten year occupation, and then of course, you also had a twenty year occupation of Afghanistan.
But in Iran, The United States cannot even point to these things. It did not win this war militarily, in fact, it lost it. It's been a strategic defeat. The Iranians escalated horizontally, established escalation dominance, the United States had to essentially beg for a ceasefire. It got out of the ceasefire, then committed a major mistake, was to impose the blockade of the blockade.
Had it not done so, The US would actually be in a stronger position now, because the ceasefire disproportionately favored The United States. But that favor, the manner in which oil prices were lowering and that gave Trump a rep a reprieve was erased by his own blockade of the blockade, and we see now that we have higher oil prices during the ceasefire than we did during the war. And the ten year yield is now at 4.6% or so, so bond markets are now in a very bad shape as well. All of this during the ceasefire because he nevertheless escalated and made a very contentious one. Had he not, he would have been in a good position because he had achieved the key thing he wanted to do is just get out of this war, whereas the diviners had still not achieved their key objective, which was to get sanctions relief.
But nevertheless, in the Iran situation, you have a situation in which the The US lost the war militarily. It did not achieve its political objective. The repercussions are not just regional, they're global. We're seeing how in Australia you have fuel shortages, how there's energy crisis in India, in Pakistan, in Bangladesh, in Philippines, how countries like South Korea and Japan are in a very dire straits right because so much of their energy is coming from the Persian Gulf and they're not getting any oil right now. So the global economic repercussions are far far greater as well.
But it also then points to another thing which is, if The United States cannot establish escalation dominance in the Persian Gulf, and it cannot actually assert its military domination there because, yes, it could technically open the Strait Of Hormuz, but it's not willing to pay the price for it. Because what we're talking about is the occupation of all of Southern Iran in order to be able to open the Strait Of Hormuz. And that will require more than 500,000 troops, it would take more than a year to amass it, etcetera. And the entire premise of America's military organizing principle has been that it's able to fight two wars in two continents at the same time. But right now, it cannot even win one fight in one continent.
All of this is now putting under question the ability of The United States to assert primacy and hegemony in various corners of the world. And in the past twenty years or so, you've had a scenario in which the American public has turned against American primacy to a very large extent, and you have pressure from the American public against these endless wars, no longer a strong belief that global hegemony provides security to The United States, it's just not cost feasible any longer. But now you may also have a scenario coming from the very states that used to lobby for this global primacy, who benefited from America's security umbrella because this security umbrella has proven itself to neither be reliable nor effective. So if the public is turning against it and the external benefactors of it are also abandoning it, that in and of itself I think will put a new type of a pressure on America's grand strategy of liberal hegemony that we have not seen yet. And it's all coming down to the fact that if you cannot win that war militarily against Iran, then again, really, what is the basis of American primacy?
What is how is The United States going to be able to conduct itself in the South China Sea vis a vis China in case of an invasion of Taiwan or whatever? Bottom line is this is putting a tremendous amount of question marks about the capability of The United States to sustain privacy.
Speaker 0: Well, it seems though at some point, it would make sense for The US to reconsider this strategy altogether because a lot of the conflicts it has now seemingly could be resolved by walking back the objective of global primacy. Well, essentially, because if you look at a lot of the conflicts The US is in at the moment, a lot of it seems unnecessary or could be challenged. So, again, if The US wants to face its threats, they can look at both capabilities and intentions, but the intentions of many of its adversaries have shifted. That is, if you go back to the nineties, the main objective of the Chinese and the Russians were to be as close as to The US possible. Even the Iranians were seeking to improve relations.
But if you look shift to the aspect of capabilities, if they're growing more powerful, this is a threat to global primacy, so they would have to be balanced. But it just seems like The US hasn't been able to take yes as an answer because if they they they could have had very different relations with all these countries, but all of it is premised on the idea that The US would then have to accept them to to, I guess, be peers or, you know, to to to to reside in a multipolar world. But is is this
Speaker 1: And and and I have to say something something very interesting. Again, you know, during the Biden administration, you could not talk about multipolarity in Washington. It had become a dirty word. It had become a Putin talking point, which was bizarre, mindful of the fact that in 2010, Hillary Clinton as secretary of state already cleared that the world was becoming multipolar, but ten years later apparently became a Putin talking point. But one of the first things that secretary of state Marco Rubio said when he came in in February is that he not only said that the world is multipolar, he also said that unipolarity was an aberration, and it was a historical accident.
And this is a very important statement if this is truly what the administration believes. First of all, if it's an aberration, it tends to then suggest that restoring unipolarity should not be an option because you're not gonna try to. It's just not worth the cost of reestablishing an aberration. But also it means that The United States then absolutely needs to get on get serious about adjusting itself to that multipolarity and see what is it that The United States needs to do and its conduct has to change. One of the question marks that was never really addressed is in a multipolar world, how should The United States relationship with the UN and its attitude towards multilateralism perhaps be revised because it may have a far greater need for those type of instruments than it did during its unipolar moment.
None of those things happened. The only thing we saw was that an NSS came out that suggested that The United States should not give up hegemony, it should just give up hegemony globally. It should redefine the parameters of hegemony and just focus on the hemisphere. And that was in and of itself a shift, that document was the strongest language I've ever seen in any American government document denouncing global hegemony. But nevertheless, it seems to have had absolute zero impact on American strategy because he also said that The United States should deprioritize the Middle East or some of the strongest language as to why The US should no longer be that active in the Middle East.
And three months later, The United States starts a war with Iran. So clearly, that document was not instructive in any way, shape, or form for the actual decisions that the president was gonna make.
Speaker 0: Well, that's why I thought that this could be a victory if they go back to this document because the national security strategy of December 2025, it essentially put the Western Hemisphere and East Asia as, well, the the focus. So and then, essentially, then what they would have to deprioritize Europe and the Middle East. Now I'm thinking if The US would then more or less come to an agreement where Iran does hold on to the Strait Of Hormuz, where they essentially recognize that it's an important regional actor, The US could do many things. It could distance itself from the Middle East. It could blame the Europeans for things going south and pull out of Europe as well.
This could be a major motivation to actually do what that security strategy suggested, but but it seems to be quite strong, this impulse just tried to revive revive the empire, which begs the question how serious it was to begin with. But besides leaving the Iranians the Strait Of Hormuz, what what are the other options for The United States diplomatically at this point or militarily for that matter?
Speaker 1: The military options, I I just cannot see them being any good ones. Again, The US could try to take one or two islands. It would come at a huge cost not because it's difficult for The US to take the islands per se, but because at the end of the day, defending the islands is going to cost The US a lot because then suddenly you would have a lot of US troops on those islands and those islands are static and the Iranians would just rain down missiles and drones on them and get a lot of American casualties, something that they have not been able to do on a large scale precisely because of the fact that most US bases were emptied. And most of the US Navy has been keeping itself 3,000 kilometers away from the Iranian shores in order to avoid being struck by any of the missiles. All of that would change.
So you may take an island, you're gonna lose a lot of American soldiers, and eventually you will have to give up that island and you achieve nothing. So again, this is part of the reason why The US never did these things despite the fact that they were threatened, and Trump seems to have seriously considered them. And again, if you want us to open up the Strait Of Hormuz militarily, it's not about just demining the place and taking one or two islands. The entire control of the Straits is coming because of the manner in which the Iranians have put so many assets, military assets throughout its entire coast, 1,500 kilometers, and you would have to essentially invade the country and take control of of the entire Southern Coast of Iran in order to be able to truly open the Strait Of Ramos, and The US is not gonna do that. So military options, I see very limited.
Diplomatic options, there are actually plenty of them. And in many ways, Trump is in a better position to actually strike a deal than previous president, not because he's trustworthy, he clearly is not from the perspective of the audience, not because he knows how to negotiate, that's another point it seems like he's not really achieving because he's dictating more than he is negotiating, but because he actually is willing to put all sanctions on the table as part of a deal and really lift sanctions, particularly primary sanctions. It's important to keep in mind, in the JCPOA, no primary sanctions were lifted. Those are the sanctions that prevent American companies from going into the Iranian market. The sanctions that were lifted, or were not even lifted, they were waived, were secondary sanctions.
These are the sanctions that target European, Russian, Chinese, Indian companies going into the Iranian market. And that was also part of the reason why it was easy for Trump to walk out of the JCPOA afterwards. There were no business interests in The United States that had any stake in the survival of the JCPOA, with the exception of Boeing that was bought that was written into the deal. But Boeing was bought out because the Emiratis made an order of I forgot how many $42,000,000,000 or something like that of airplanes from Boeing as a way of just replacing the Iranian contract. But other than that, there was no pressure.
There was no real cost of pulling out of the JCPOA. If Trump puts primary sanctions on the table or if there's a deal in which that becomes part of it. First of it's important to understand primary sanctions on Iran are primarily through executive orders, which means Trump can lift them himself. He does not need to have to go to Congress to get those sanctions lifted. It's the secondary sanctions that are imposed by congress, which is the flip of the Cuba embargo in which the embargo itself, the primary sanctions there are through congress.
So Trump can do this with the stroke of a pen, and that would have a profound impact on the Iranian economy. It would be much much more effective than the secondary sanctions relief. In fact, in many ways, sanctions will start withering away once the primary sanctions are lifted. So he's willing to put all of these things on the table, but he wants much more on the nuclear front. And the Iranians have offered much more on the nuclear front.
The fact that they are now open to they won't call it a moratorium, that's the American language, of not enriching at all for twelve years is a remarkable shift in the Iranian position. They never agreed to that since 2005, not even for a week of actually stopping enrichment. And part of the reason is precisely what happened between 2003 and 2005. In 2003, the e three negotiated with Iran. They were terrified that George W Bush was gonna start a war with Iran, and they were they knew that as long as Iran was enriching, that risk was there.
They managed to get the Iranians to agree to voluntarily suspend enrichment. And that voluntary suspension was connected to continuation of negotiations for a final deal. But once the Iranians suspended, the Europeans had no incentive of actually concluding a final deal because they had already achieved their main objective, which was to make sure that the Iranians were not suspending. So the Europeans dragged down on the negotiations. And this is then part of the reason why by August 2005, the Iranians announced that they're gonna restart enrichment because they feel that they had been fooled, that this was a trap.
By January, they restart enrichment. By February their file is sent to the UN Security Council, and eventually several UN sanctions are imposed on Iran. So there was a very high cost in their view of agreeing to that suspension because once you broke the suspension, you were heavily punished, perhaps heavier than you would have been had you never suspended enrichment. This is part of the reason why they've been so adamant about not agreeing to this in previous negotiations. But now they have agreed to, at least in their last proposal, for a twelve year moratorium.
They're the way they're framing it is very different. I can't go into the details of that. But that is a significant concession from the Ivanian side. And it's all aimed at being able to get to a deal. So both sides actually have shown some flexibility, but they're also very maximalist in some other variables.
And right now, both sides are very maximalist on the issue of Iran's 60% stockpile. And as long as that is the case, these talks are currently deadlocked over that issue, and we're now even seeing this murmur of a potential return to war. But in many aspects, they've actually made significant progress, and if real sanctions relief is put on the table that goes beyond the JCPA, in many ways, it will be tremendously valuable to the Iranians. They absolutely need sanctions relief. They needed it before the war, But after this war, with $300,000,000,000 in damages, they needed even more.
Speaker 0: But I I was in Iran in May and before the bombing, and I also went to one of the nuclear facilities there, and they were they were they were making the point. I forgot who who we're speaking to, and he was making a point that the the nuclear deal, it had included very intrusive inspections by the IEA, and they essentially didn't trust them because they were handing over information to the Israelis and Americans. At least that's what they claimed, all this appeared to have been correct. But also there was some frustration that, as you suggested, that the American side didn't deliver on the JCPOA. So if they come to an agreement, sanctions relief, one could expect that it would be simply replaced by other sanctions later on.
In contrast, if they can hold on to the Strait Of Hormuz, they would be able to extract by force almost a lot of the things they want. So but but, of course, the sanctions are an important deal. So
Speaker 1: yeah. No. I I think what what you're what you're pointing to is very important because there is a very significant lack of trust. Everyone's seen how easy it is for The US to impose more sanctions. I mean, this is what congress does better than anything else.
And there is a very legitimate concern that, you know, once these sanctions are lifted, they're just replaced by new sanctions that are imposed at a later stage. But I think it's also important to understand, the control of the Strait Of Hormuz, I don't think the Iranians are gonna give that up at all. It's just gonna be what type of an arrangement will there be, and how regionalized will it be. Even if the Iranians open up the strait altogether, they've already proven their ability to reclose it and take control of it again. They're not losing that as part of a deal.
Because again, the reason why they have that control is because of the way that they're using their entire coastline. So it's no longer mining the strait as it was twenty years ago, it's the combination of mining, using drones, using missiles, etcetera. So they're not they're not really losing that ability whatsoever. But also it's important to understand that if there is a mechanism that ensures some sort of a payment system, there is one proposal from one of the GCC states that says that it would not be a toll, but rather it would be an environmental management fee. A fee that is paid to whatever countries are part of the mechanism because of the amount of resources they have to put into managing the environment of the Persian Gulf and the Strait Of Hormuz, given the fact that there is this ridiculous traffic of oil tankers going through it all the time.
At the end of the day, it is a toll. It's a fee, but it's just a different way of framing it that also then prevents it being replicated elsewhere in a manner that could have very problematic implications for other straits. But even if that were to take place in that manner, that money is not going to be able to compete with the amount of investments Iran can attract if sanctions are lifted. Yes. The fees coming in from the state of Ormuz may not be negligible.
It may be in the billions of dollars. It's not unimportant. But the billions and billions of dollars of investments it can get over a course of a long period of time if sanctions are lifted or just simply there there there's no comparison there. So in my view, it would be quite a significant mistake for the Iranians to have managed to get so many chips through this war, but then failing to cash that in by securing a new order in the region, a new uncontested order in the region in which their position exist is accepted, but also sanctions are fully lifted on them. That would be the true victory in my view, to be able to translate that military victory into a new peace that is beneficial to them.
Speaker 0: Oh, that's a good great point. No. I often, I don't hear much optimism about possibility of a peace, but this of course, it it makes a lot of sense. Our concern though is the rhetoric, think, because when I hear from the Trump administration, this insistence that, you know, they're destroyed, they're weak, we kill their leaders, their military, you know, they will they they're desperate for a deal. Whatever we give them, they will take.
If if there's also a possibility to walk this back a little bit and and shift a little bit to because this is a this is a hegemonic rhetoric. That is we the piece is what what we dictate. If we can shift this to a multipolar rhetoric in which we recognize that while the other side have some security concerns, we will meet some of theirs. In the return, they will give some concessions to us, and we'll meet halfway. You know, diplomacy as we used to have before the post Cold War era, yeah, it might be achievable.
So do you have
Speaker 1: to And and if I could just say something on that. I mean, some of the rhetoric that Trump uses is just so counterproductive. And it there's been key moments in the war in which there were actually breakthroughs that were being worked out in the background, and then he comes out with a tweet and he just completely ruins it. So I think in many ways, his social media handle has been his worst enemy during this war, and his lack of discipline of controlling, this has also been noted on the Iranian side that they're looking at his inability of controlling himself on social media, particularly with some of these angry four AM tweets that he has, and they're asking himself if he can't control his own social media, how can he control and be trusted to live up to an agreement? They're just not seeing the type of a discipline.
At the same time, it's also very fascinating that the spectrum of Trump is just complete. He just covers the entire three sixty because he can be absolutely terrible on social media and counterproductive, but he's also a president that doesn't have any inhibitions and can go out and say, I want Iran to be a completely and an amazingly successful country. I want them to flourish. No other American president would ever say something like this. It's very important to remember that.
The idea that you would say, I want Iran to be successful, was a complete political taboo. Even if you wanted to get a deal, even if you wanted to have a win win deal, you would never say something like that because it would seem as being too costly politically in The United States. Trump doesn't seem to have an understanding of the concept of political cost and just says these things. So he is someone who actually could shift towards a narrative or a rhetoric that could be win win and that could pave the way for this. But when he is losing, that's when you see him become as win lose as possible, as zero sum as possible, which ultimately, in my view, was counterproductive to his own objectives.
Speaker 0: Yeah. No. I I thought that was all his always his strength. That is a breaker of narratives almost. That is Mhmm.
Only him could meet with the North Koreans. Only him would be able to break this boycott of diplomacy and talk to the Russians. You know, this is important, the fact that he doesn't Yeah. He doesn't have to conform to to narratives. I remember he was speaking with, I forgot, Sean Hannity on on Fox News, and he was saying, oh, how can you talk to Putin?
He's a bad man. So, hey. We've done some bad stuff too. I mean, no one else could say this, and and and that's important because you do have to It is. Once you demonize your opponent for so long that you're fighting evil, it's very hard to walk this back and
Speaker 1: then Exactly.
Speaker 0: Return to diplomacy. So I think this is his strength. He's, as you say, 4AM tweets, that's probably not his strength. So Yeah. Anyways, thank you so much for, yeah, sharing thoughts.
I I love your articles, and, of course, the responsible statecraft also excellent. So, yes, everyone, please make sure to check out Substack as I do. So thanks again.
Speaker 1: Thank you so much. Really appreciate it.
@Glenn_Diesen - Glenn Diesen
Larry Johnson: Defeat in the Iran War Will End the U.S. Empire https://youtu.be/b9gN6iguB1M https://t.co/YCauovqm2b
Video Transcript AI Summary
Larry Johnson, a former CIA analyst and State Department counterterrorism official, discusses the ceasefire and the possibility of renewed war between the United States and Iran, arguing that U.S. military options are constrained while Iran’s readiness and ability to disrupt regional logistics have increased.
Johnson says the United States has been prepared to launch strikes for about six weeks since the ceasefire declaration around April 15, but that its remaining operational flexibility is limited by Gulf state access. He emphasizes that Saudi Arabia has not allowed U.S. air operations from Saudi territory. He describes an episode in which, after Trump announced “project freedom” to open the Strait of Hormuz, Saudi leadership shut down the ability to conduct air operations from its territory, even after Trump spoke with Mohammed bin Salman. With Saudi Arabia, Qatar, and Kuwait affected, Johnson leaves Bahrain out due to its size and says it has been “decimated” by Iranian airstrikes. He also links timing to major religious and diplomatic periods, saying that with the Hajj beginning on Sunday and Eid occurring about next Wednesday or Thursday, Saudi Arabia does not want to be positioned as a target during those activities.
He argues that Iran has rearmed faster than U.S. intelligence expected and that Iran can use multilayered air defense and missile capabilities to threaten any entering ships. Johnson highlights a U.S. constraint: U.S. air refueling operations have been largely confined to Iraq airspace, which he says creates additional risk and also forces attacks through narrower routes rather than across wider fronts. He suggests this narrowed channel makes it easier for Iran’s air defense to concentrate. He also cites testimony by Admiral Daryl Caudle, who said the U.S. lacks the capability to open the Strait of Hormuz due to cost and risk, and says Iran’s arsenal can be brought to bear against ships that enter the strait. He further claims the CIA briefings to Congress align more closely with Iran’s increased capabilities since the ceasefire than with Trump administration claims.
Johnson connects this situation to negotiations. He says reported negotiations are taking place in Tehran and Islamabad and that Pakistan has stepped up with backing from China and Russia. He suggests a possible deal may not necessarily involve the United States if Gulf states and Iran agree, potentially including Turkey and possibly Egypt, in a broader security arrangement. He argues that if Gulf states shut down U.S. operations on their territory, the United States would have limited options, including for sustained air campaigns. Johnson also proposes a possible window before the World Cup begins, saying he does not see renewed action before the first two weeks of June, with international pressure expected once the World Cup starts.
On the substance of talks, Johnson portrays Iran’s negotiating positions as: sanctions relief “up front,” return of frozen assets, and continuing to charge ships entering or leaving the Persian Gulf to comply with rules implemented by the Persian Gulf Strait Authority (PGSA). He says nuclear issues are being framed by Iran as a “red herring,” and he cites a claim attributed to Moshe Saba Khamenei (the new Ayatollah) that nuclear material is not even on the table. Johnson also asserts Iran has signed the NPT and allowed IAEA inspections, and he describes Iran as having faced persistent attacks including the “murdering of nuclear scientists,” using this to explain why Iran would assert sovereignty rather than comply with demands he says are being made.
In response to a question about how war could happen if the Strait of Hormuz cannot be opened, Johnson reiterates U.S. capability concerns and says Iran’s ability to disrupt logistics remains a central factor. He also argues that markets are reacting in a way he describes as abnormal: over day 84 since the war began and day 22 of a “complete cutoff,” he lists reductions affecting “20% of the world’s oil,” “10% of the world’s access to liquid natural gas,” “35% of the world’s urea,” “30% of the world’s sulfur,” and “44% of the world’s helium.” He claims the U.S. is emptying its strategic reserves and selling them overseas, calling it a “charade,” and says economic effects are likely delayed and could translate into recession or depression, with shortages becoming more apparent later.
Johnson argues that Russia and China are pushing an inclusive Persian Gulf security architecture rather than an alliance system aimed at containing Iran, and he says Iran could be pragmatic and flexible on concessions with Gulf states for ship passage in exchange for broader security guarantees. He suggests the most likely outcome is ongoing negotiations producing partial progress rather than an abrupt halt, especially if Saudi refusal to allow unfettered U.S. air operations continues to limit U.S. sustainment.
Finally, Johnson ties the likelihood of further U.S. strikes to economic constraints, saying he cannot conceive of strikes strengthening the world economy or the U.S. financial position, and that further escalation would have the opposite effect. He also predicts that by around the end of June the United States will suffer greater economic consequences. He ends by saying the economic situation will ultimately determine whether military strikes continue, and that there are real obstacles preventing a straightforward transition back to major attacks, while pressures for renewed action remain.
Full Transcript
Speaker 0: Welcome back. We are joined again by Larry Johnson, a former CIA analyst who, also worked at the US State Department's, office of counterterrorism. And, by the way, who is also an author at Sonar twenty one, and I'm leaving a link in the description. So it's great to see you again, Larry.
Speaker 1: Hey. Thanks, my friend. I I keep watching you too. You know? You're you're you're everywhere.
Speaker 0: Yeah. Good to know. Yeah. I I wanted to ask, about, where because I keep hearing that, Iran and The US will likely go back to war now. And during this ceasefire, which The US really wanted to, I guess, rearm regroup, make itself ready for a potential well, another round of warfare.
But we also learned that from US intelligence services that Iran has rearmed much quicker than they had expected. Mhmm. How how are you assessing this? How how ready are each side now for war?
Speaker 1: Well, The United States has been prepared to launch strikes for, you know, six you know, since since the declaration of the ceasefire. Good lord. Was that back on April 15? So now we're towards the end of, end of May. The problem The United States now has is basically Saudi Arabia and tending to that Qatar and Kuwait.
Leave Bahrain out of it because a, they're so small. B, they've been basically decimated by Iranian airstrikes, and they're not much of a player in terms of oil or gas or anything. They're But the the we saw the Saudi flex its muscles now three weeks ago when after Trump had announced project freedom to open the the Strait Of Hormuz. The Saudis basically said, you're not gonna conduct any air operations from our our territory. Shut them down.
And that was real. Trump got on the phone with Mohammed bin Salman trying to talk him out of it, trying to cajole him, and then the MBS said no. He was firm. So that shut down that military operation. So here's Trump already to go again, and yet it appears the Saudis have not backed away from that prohibition.
And now with, the Hajj starting on Sunday, and then you've got this, you know, influx of two to 3,000,000 Muslims from around the world, the last thing the Saudis want to do is put themselves in a position where they're going to be attacked by Iran. And and the only way they'd be attacked by Iran is if they allowed Saudi territory to be used to launch strikes against Iranian infrastructure and Iranian civilian targets. Because Iran is valid. If that happens, you, you know, Saudi Arabia, you Qatar, you Kuwait, if any of you are involved with facilitating these attacks on us, you're gonna get hit. The UAE, same goes for UAE.
And I I think Iran Saudis have reached a point where they don't wanna go down that path. So with Eid in the way, and then so you got the Hajj on Sunday, Eid is like next Wednesday or Thursday, but you have a number of this entire journey to Mecca. You know, it's an obligation of every Muslim to do that once in their lifetime. And it is, you know, they go through a variety of rituals and activities to commemorate, to sort of re reenact the lives of the prophet Ibrahim and the prophet Muhammad. So, you know, this is it's very important.
And the last thing Saudi's wanna do is get in the middle of a shooting match with Iran, during during this activity. So, you know, that's why I see see this is whatever Trump wants to do. He's now constrained. I I I have heard that The US air refueling operations have been largely are confined to Iraq airspace, which, you know, that creates some additional risk. But without with The United States not able to transit both Saudi Arabia, Essentially, if they can't transit through Saudi Arabia, it really hampers US military capability as well as Israel's.
Basically have to go up through Iraq. And what you know, once you force them into, if you will, a more narrow channel, yeah, it makes it easier for air defense operations. They don't have to be focusing over a 2,000 mile front. They get to focus over a a 200 mile front. Big difference.
So, you've got that underway. There are reported negotiations taking place in both in Tehran and in Islamabad. The Pakistanis have stepped up. They've got a they have sort of a the back full backing of China and Russia to play a lead role in trying to bring about a peace agreement. If nothing else, it may not necessarily involve The United States.
If they get agreement with the Gulf Arabs and Iran, and then Turkiye is also involved, and possibly Egypt, then all of a sudden The United States is irrelevant. If The Gulf Air shut down US military operations in their countries, The United States doesn't have a lot of good options. Certainly doesn't have the air power from aircraft carriers to sustain any kind of campaign to speak of. So this is this is in flux that I I I could make a case that despite the threats, oh, we're gonna restart, we're going to attack. I don't see anything happening until, you know, the one window would maybe be the first two weeks of June before the start of the World Cup.
Because I think once the World Cup is underway, there's gonna be tremendous international pressure against The United States to stop attacking Iran.
Speaker 0: Yeah. I can imagine a lot of the Gulf States being a bit cautious now about joining in on the war against Iran because if, as it appears now to happen, that Iran is coming out victorious, that it is Right. Coming out on top, controlling the Strait Of Hormuz, and The US might be pushed out of the region, it's not a great idea to, yeah, to be on the losing side. So I can imagine a lot of the countries would want to begin to strike a bit of a different well, balance between The US and Iran, essentially adjust to the new realities which are coming. Yeah.
But if we are if if negotiations still, you know, have a chance of succeeding, what's, Like, where where did this stand at the moment? Because the it's it's hard to get good information coming out. I think Trump referred to the Iranian's last proposals or one of the last proposals as garbage. And but but is this about mainly the the where the stock is Iran's right to enrich uranium, and, of course, what should happen to the Strait Of Hormuz? Because, again, on these issues, it doesn't seem like The US have a lot of negotiation power.
But what I was thinking is even if the Iran becomes out, you know, victorious, it still has an interest in The US removing sanctions. So this is kind of the the the great card that The US holds on its hands. Of course, any deal with gradual removal of sanctions, probably, that's all nonsense. That's not gonna happen. So Right.
But but how do you see this? What can be actually achieved in these talks?
Speaker 1: Well, the the the Iranians have not consulted with me about negotiating strategies, but I put myself in their shoes. The the it's no longer acceptable to say, well, with the as you pointed out, gradual relief on sanctions. No. We tried that before with JCPOA. It didn't happen.
We've had repeated broken promises by the West. So going forward, the sanctions come off now up front. That's number one. The frozen assets, those are returned to Iran. That's number two.
And the other non negotiable point is Iran is going to continue to charge ships that want to enter the Persian Gulf or leave the Persian Gulf. They're gonna have to abide by the new rules that the Persian Gulf Strait Authority, the PGSA, is now implementing. And in fact, yesterday, 36 ships went through despite despite Trump's claim, oh, we got a blockade. It's ironclad. Nobody's nobody's coming through.
The the fact of the matter is otherwise that the the ships are starting to move. So we're we're this will provide some relief on the international economic front. Not not much is still still two thirds of the ships that normally went through are not going through. So this is you've got only one third of the activity of normal. But the the whole nuclear issue, maintain it's a red herring.
It is The United States has now tried to make that its central claim. Yeah. Well, that's really our concern. That's what we got to get rid of. It is if if if Iran didn't have a nuclear program and if they had never enriched one ounce of uranium, The United States is still be trying to destroy Iran.
That's the point. And it has nothing to do with whether Iran is in, quote, a quest for a nuclear weapon. I I watched, the this organization in Canada, the Monk Society. They did though. They host debate.
So they did a debate on Wednesday feature that pitted John Mearsheimer and Stephen Walt against Victoria Nuland and Mon Mike Pompeo. And, I mean, what is what caught my attention was this narrative, the neocon narrative that is built up that, you know, like Saddam Hussein was a monster because he had chemical weapons without any acknowledgment whatsoever from Pompeo and Newland that we, The United States, were the ones who provided, who facilitated those chemical weapons by providing the precursors. And not only that, we provided biological agents as well, bioweapons. So there there is as The United States approaches these negotiations, there is no historical memory. I mean, from from Iran's perspective, it's like they're negotiating with an Alzheimer's patient.
The United States can't remember what the hell it did two years ago. You know? They barely know where they are now. So this this claim that, oh, yeah. We've it's it's a deal stopper unless Iran gives up its enriched material.
Now reportedly yesterday, Moshe Saba Khamenei, the new Ayatollah, said, no. Are nuclear material. It's not even on the table. And, you know, frankly, Iran's standpoint as a sovereign nation, why should they give it up? They've they've signed the NPT.
They've allowed IAEA inspections. They they but but they've been they have been the victim of persistent constant attacks, terrorist attacks, murdering of nuclear scientists, not only what took place last June, but what took place before. So I I can see Iran just asserting its sovereignty and saying, no. The the West is not going to dictate to us what we do. We we are a sovereign country and have every right to do this.
Speaker 0: Yeah. No. It's a great point. But I I also hear that, well, that The US intelligence are not just making, you know, the point that the Iranians are rearming, but they're also apparently telling Trump now that the Strait Of Hormuz is, well, it's it can't be opened, that it's yeah. It can't be done.
So I'm not sure who else has been whispering in his ears, probably Netanyahu, that they should have another go nonetheless. But if you can't open up the Strait Of Hormuz, if you can't defeat the Iranians, what is the point of going back to war? Because it appears that this is becoming a very real possibility. Or, again, I'm not sure how likely you think The United States will attack Iran again.
Speaker 1: Yeah. The well, just to reinforce the point, it's not just The US intelligence community. Admiral Daryl Caudle, c a u d l e, testifying for congress yesterday who said, hey, we we we don't have the military capability to open the Strait Of Hormuz. That was his message. It would be too costly, too risky to try to send ships in there to attack Iranian positions because Iran has such an arsenal, multilayered arsenal that can be brought to bear on any ship entering the strait that The United States isn't capable of destroying those.
So the an honest assessment of US military capability, and there are some in the military that have pushed this forward, but it appears that admiral Brad Cooper, the commander of CENTCOM, the boy the boy lacks a spine. Yeah. And I'm calling him a boy because he's, you know, he's about 20 younger than me. And, god, what a what a cowardly bureaucrat this cat is. You know, he was being questioned by before Congress the other day by Congressman Seth Moulton.
Seth was a marine, served in the marine corps. Left Harvard to go serve in the marine corps, so not your typical marine. And Seth was asking just to define the difference between degraded and obliterated. And, you know, he he played word games. He wouldn't oh, I can't I can't talk about the nuclear program.
And Malden goes, I'm not asking about the nuclear program. I'm simply asking about your word usage. What's the difference between degraded and obliterated? And he he wouldn't answer the question. So when you when you've got a military commander playing those kinds of games, and being more of a politician than a military leader because what you need is a military officer that doesn't give a damn about the politics.
And frankly, could care less whether he gets promoted, whether he gets fired, doesn't care that he's gonna come in and tell it exactly as he sees it. And then to say the reality, know, Congressman Moulton is we have not abraded Iran's military capabilities. As the CIA, the CIA I was pleased to see has been briefing Congress at least, something that it appears to be much more closer to the truth than anything that the Trump administration is saying, noting that not only have we not destroyed the majority of Iran's ballistic missile capability and air defense systems and their their ability to construct new ballistic missiles and launch them. But they they appear to have enhanced their capabilities in the since the ceasefire was declared. Now, what is it?
Eight weeks ago? So The United States is caught between Trump's rhetoric and between what The United States actually can do. The only thing we can do going forward would be to launch some some new set of airstrikes. And if we're prevented from using Saudi Arabian airspace, then we have to go through Iraq, which then creates a new security vulnerabilities for the attacking force. Because Iran's no longer Iran with the support of Russia and China, they're gonna know exactly where to focus all their intelligence assets to collect.
They'll know what's coming, where it's coming from, and we'll be able to mount some defenses accordingly. Plus, they can deploy groups with shoulder fired surface to air missiles into theater. All they've gotta do they don't have to take out an f 35. They got all they have to do is take out the tankers like they did before, you know, five you know, three or four weeks into the the start of the war.
Speaker 0: Well, it seems though that as well, we've seen that Russia and China, they've been pushing for a different format for a peace agreement instead of just having a ceasefire and, you know, wait for war to break out again or end up in a situation where either The US will dominate or Iran will dominate, they seem to favor the development of a new inclusive security act architecture in the Persian Gulf that is Right. In which the countries and the regions seek security with each other instead of this alliance system where they seek security against each other. Now such a system which would include not just Iran, but also the other regional actors, be it, yeah, Turkey or the Saudis, to to what extent do you think this could succeed? Because on one hand, yes, it would be an inclusive one. It would mitigate security competition.
On the other hand, it also then puts an end to US influence in the region. So it wouldn't necessarily be anti American, but it would definitely dismantle the well, let's call it here, the US empire.
Speaker 1: Yeah. Well, I this is where I see the I I I think there's this it's a viable solution. It's one that's actually being seriously entertained by all the relevant actors in the region. Russia and China are pushing hard for it. And Iran appears to, you know, even though the rhetoric in the West tries to portray Iran now as this fanatical Muslim state of these ultimate hard line radicals that have no ability to compromise.
No. No. No. No. No.
That's they couldn't be further from the truth. The fact is the Iranians are pretty they're they're they are very pragmatic, and they're actually operating now from with with more confidence from a position of strength. They demonstrated we could take every blow that The United States wants to throw at us along with Israel, and we we stood up to them. You know, none of those other Gulf states can say that. And so Iran, the rapprochement between Iran and Saudi Arabia started two years ago as a result of Chinese intercession.
And so the Chinese are still working that angle, and they're using Pakistan. You know, I I had forgotten this. Colonel Wilkerson mentioned this during my conversation with Nima a little bit ago, that when they had one of the uprisings in Mecca, you know, several years back, the Pakistani troops were actually used to help quell that uprising. So there is a good relationship between Pakistan and Saudi Arabia, and so the that's why the packs are playing sort of the leading role in this. So I I I could very much see Iran willing to make some concessions with the Saudis and Qataris and Kuwaitis for passage of ships through the Strait Of Hormuz in order to secure their cooperation in a new security arrangement.
I don't see them being so hard line to say, know, I don't care what you do. I don't care what you're how much and how sorry you are, you're gonna pay the damn fee regardless. You know, I think they've got some flexibility on that. And so I'm hoping the most likely outcome is that these negotiations behind the scenes are gonna bear some fruit and the continued refusal of the Saudis to allow The United States unfettered air operations against Iran will prevent The United States. The United States may absolutely want to attack, but the the the, you know, the general in charge of the aviation forces is gonna say, look, if if we can't use Saudi territory, ability to actually sustain these attacks is very limited and it's going to create a greater risk.
So this thing could actually be sort of it's not going to come to a halt because, oh, hey, got an agreement. Both sides have sat down pieces at hand. Instead, it's just sort of gonna sputter out like a dying dying fire.
Speaker 0: Yeah. Well, you have a good point with the Iran is often criticized in the West for taking a hard line position. But the hard line position in terms of holding up to the straddle or moves, setting up the toll, there is the reason they're they're not compromising on this is because this is the the source for security if they Right. Put tolls on countries that either sanction them or put host American bases that threatens them. So it's a it's a way of making sure that they're not going back to the old status quo of, yeah, economic coercion and military threats.
But, again, if proposals such as put forth by the Chinese and the Russians of an inclusive security architecture, something that could provide security, I mean, that would that would be the ultimate goal of the Iranians, then they they they might soften the stance on needing to, I guess, control the Strait Of Hormuz all all on their own, because I don't think that will be the ultimate objective in itself. But but this kinda goes against the hegemonic security model, the divide and rule, because as long as you have the Gulf States in a conflict with the Iranians, then, you know, The US has an ability to weaken the Iranians and also make sure that the Gulf states remain dependent, thus obedient. It's a bit like the system we have in Europe. After the Cold War, we actually had agreements for an inclusive pan European security architecture, and, yeah, they recognized that's not the same architecture that would have brought The US into Europe, which, to a large extent, is correct. So instead went with NATO expansion.
So, again, we revived the Cold War logic. Russia's marginalized. The Europeans remain obedient. And but at but at some point, of course, if the hedge fund is declining, it's an interest of the frontline states to also seek an alternative. So I'm I I I think it could be a good solution, but, again, they will be very difficult to hammer it through after especially right after war.
However, how long if they don't come to peace, how long can this continue? This because now there's no war. Well, there's a little little bit, but there's no peace either. But the markets, surely, this is this is unsustainable. I think this is what the consensus is as well that this can't continue.
Speaker 1: Well, that's that is the other very curious and disturbing aspect of this. The markets are not acting normally. I'm sure in your as an undergrad, you had to take like introduction to economics, something like that. And I don't know if you took any economics courses. I did.
And, you know, you learn the simple concept of supply and demand. That if if you've got a supply of something that people need, you know, it's called a inelastic good that no matter what the price is, you still need to buy it, you need it. So if the price, if the supply of that goes down, boy, the price is gonna go up because the the the demand is there if for the same amount and there's less of it to go around. You know, that this is I'm simplifying, but you know, that's how it works. Well, here we've witnessed now, we are on so today is day 22.
So 83, we're day 84 since the war started. And in those eighty four days, that's almost three months, there has been a complete cutoff not only of 20% of the world's oil, 10% of the world's access to liquid natural gas, 35% of the world's urea, 30% of the world's sulfur, 44% of the world's helium. So those are not just, you know, nice things to have. Those are essential commodities for industrial production and of a whole variety of applications. That's gone.
So you would think the markets would be going, oh heavens, God Almighty, we particularly with oil. You've got, Assuming that demand has not fallen off the charts, that demand remains stable, if not slightly increased, you've got a decreased supply. Inevitably, the price has got to go up. But what we've seen is both a suppression of oil and as oil suppressed, stock market in The United States keeps going up like, hey, things are great. Things are not great, but the markets are pretending that it is.
And we saw during during COVID when the price of oil went up to a $150 a barrel, we didn't have any actual shortage. There was it was not like the supply got they stopped pumping oil and they stopped running filling tankers and the tankers stopped selling on the seas like has happened now. But yet the price of oil went up to 150 for what? Now when we have an actual shortage, they're pretending, oh, no big deal. We got this under control.
One of the ways they've been mitigating the rise in oil is The United States has been emptying its strategic reserve and selling that reportedly selling that strategic reserve so it's going overseas. So it's all it's all a charade. At some point, that parade's gonna come to a halt. The the actual economic impact will arrive. The shortages will become readily apparent.
The price rise will no longer be managed. And this this will translate into not just economic recession, but probably an economic depression. And then it'll be at that point that The United States will finally have to be honest with itself about negotiating an end to this. So I can see that Iran is in a position to continue to limit the flow of goods out of the Persian Gulf, continue to disrupt the global economy. And yet the irony of this is if you go back and start asking the questions on who are the alternatives to the Persian Gulf, the two two countries most commonly that come up are Russia and China.
So Russia and China actually benefit from this. The United States to a lesser extent because The United States is a major supplier of liquid natural gas. And but but beyond that, The United States is not a major supplier of oil. Certainly not a supplier of helium, sulfur, and urea. And, you know, the the entire shortage of fertilizer, the global impact on that.
Again, we're six months from seeing the full impact of that start to be apparent, where it's gonna be translated into fewer crops have been produced, shortage of food, etcetera. So this I I see this thing able this this can drag on for quite a while. I don't I don't see the Iranians ready to just say, okay. Yeah. Let's open everything up and never mind.
We don't mind having been attacked. They no. They're look Iran is looking Iran's objective in this is to get a firm security guarantee that this is never going to happen again. And I think China and Russia are willing to provide that. And a key to that is enlisting Turkiye, Saudis, Egypt, and getting on board with that kind of broad agreement where, if you will, they come up with the equivalent of a West Asian NATO without Western involvement.
Speaker 0: Well, it seems that the well, the war against Iran and also the war in Ukraine, it it seems to be two you know, it appears to be the same war, and it would also have the same solution. This is hegemonic system which has broken down, and it requires some multipolar solution. In other words, it can't be one side dictating the terms that is peace through strength as NATO loves to say. But but, again, a way in which we also have to accommodate the security concerns of the opponent. That's not something we've done over the past thirty years.
That is to discuss what are the security concerns of the Iranians, the Russians, the Chinese, and what how can they be respected in a security arrangement? Again, it's very different from the block politics we've been pushing, which kinda makes the question of if if The US can't defeat Iranians in war and they have to find a settlement, what will the world look like after such a defeat?
Speaker 1: Well, it would be better off. Here's the problem. The the the Western approach, not only to Iran, but to China and Russia. It was it was on display with this it's called the monk debate. It took place Wednesday between John Mearsheimer, Stephen Walt on one hand, Victoria Newland, Mike Pompeo on the other.
And the question, the way it was framed by this is a Canadian group and hopefully they'll have it up available online for people to see on YouTube. Right now, it's you gotta pay to see it. The the attitude of Victoria the underlying question of the debate is goes back to John Adams saying that The United States should not be going out looking for monsters to destroy overseas. And the entire premise of the well, we gotta deal with these monsters. Well, let's start with what's the definition of a monster, and a monster is an imaginary creation.
It's not a real thing. It's it's, it's, you know, Frankenstein, a monster. Shelley, you know, that wrote the book Mary Shelley was it that wrote the book. It was it was a fictional creation. So we got these fictional creations, but they describe as Iran is a monster.
Russia is a monster. China's a monster, we gotta stop the monsters. That mentality, unfortunately, is I would say dominates still in The United States. That anybody that comes out to try to argue that this is completely ridiculous. And and let me just give you one data point.
Here's Mike Pompeo, the former head of the CIA and the former Secretary of State. He's a moron, an imbecile, a cretin. Let me find some other demeaning words to suggest his lack of intelligence because he talked about the thousands of Israelis that have been killed by Hezbollah. And I thought, really? So anybody that's out there watching, go use Grock or use Claude.
Go in and type in how many Israelis have been killed by Hezbollah since 1982. The number that Claude came back with was 872. Oh, you know, forty four years, 800 and 72. But, gee, how many how many Palestinians have the Israelis killed? Well, that number would be in excess of a 100,000.
You know, right now, Claude came back and said, like, 92,000, but that that's being very, very, very generous with assuming that, all these bodies buried buried beneath the rubble in Gaza. But my point is, here are the actual facts. The country that's been the country or entity that's been killing the most of another is the is the Israelis, not the Palestinians, not Hezbollah, not Hamas, and the country that's been killing the most foreigners in the world over the last sixty six years is The United States. It's not China. It's not Russia.
But yet we we we want to see the monster's exterior. We're the goddamn monster, and we fail to accept it.
Speaker 0: Yeah. I I often make the point that whenever we look at these international security issues, I I'm, like you, quite critical of what we're doing. And I'm often well, the accusation often thrown against me would be then, well, why are taking the side of the Chinese or the Russians or the Iranians? But this is not about taking one side or the other. It's about recognizing that the hegemonic system we set up, it's it's not working, and it's not great for us either.
I mean, we've been in perpetual war now for decades. Yeah. It's weakened our security. It's weakened our economy, our political culture. Indeed, it's draining the soul, I would say, out of our nation.
So and there's no going back to the nineties, especially that's what the European politicians keep draining of. But in the nineties, the political West was all powerful. It's also had political stability, economic, social stability. The main foreign policy of countries like Russia and China was to get along with the West as much as possible. Countries like Russia in the nineties even ignored all their traditional partners in the East because they had this dream of integrating into a common Europe, and they didn't want, you know, rushing to the West that they would leave behind the that they would be held back by countries in the East.
So and same with Iran after the September eleven attacks. They were open to using this as an opportunity to get closer with The United States. They were you know, solve some of the historical problems. All of this this this was a perfect condition, and and we couldn't pull it off. We instead went into perpetual war.
Exactly how is this still gonna work? I mean, we exhausted ourselves. Look at the debt, political climate, all of this, and rising powers are balancing us. This is this is why America had a offshore balancer strategy. Don't don't remain in Europe after the war is gone because then the powers will balance The US pull back.
They will instead balance each other. I mean, it's it's hard for me. It is just people, I think, they they confuse the continuation of empire and the global dominance with, yeah, with taking the side of their own as if the only future of the West is to dominate others. This was was frustrating with Marco Rubio when he came at the back in February to the Munich Security Conference where he said, listen, Europe. You used to be great until World War two.
You lost your empires, and, you know, and we can still dominate the world. Is this really all there is to the political West? You know, it became a bit offensive. Anyways, I'm getting a bit off the point. I my my I guess where I was going is, how do you see this kind of settlement which you are describing with The US pulling a bit out of the Middle East?
How would that impact the broader world order, though, you think?
Speaker 1: Well, I mean, I I think it's gonna it's it's gonna be accompanied by war. The no no hegemonic system surrenders its control without a fight. But the the the challenge that The United States confronts and refuses to recognize is we do not control our destiny anymore. That what used to be an economically powerful country, because we had this robust industrial base, we were largely resource independent. We didn't need to go out and conquer other countries in order to get resources like rare earth minerals.
We do now. We could be self sufficient with energy. We're certainly not self sufficient with fertilizer, a critical component for our agricultural industry. And increasingly, the very technology that's driving modern society, it's being produced in China, not here in The United States. So it's going to be it will be the you will, the economic collapse.
It's gonna be the final wake up call for, the folks in Washington DC. They they can't continue with this fraud that they have been perpetuating. And, you know, because, you know, in in Donald Trump's you know, we are see, we had twelve months in 2025. We're now into the fifth month. So let's call it sixteen months that Donald Trump's been in office.
The the national debt has grown $2,000,000,000,000. So he's added he's added more to the national debt into sixteen months and was added in by Joe Biden in say three years. And so this debt accumulation is increasing. It's not decreasing because The US obligations, spending obligations are going off the charts because of the war against Iran. And we've got all these forward deployed assets, etcetera.
At the same time, you step back and look and say, what's happening on the global front? Are more countries lining up to buy US Treasury bills or are more countries getting rid of US Treasury bills? The answer is the latter. And just this week, we've seen Turkey do a sell off, Japan sold off a number, China's continued to sold off like $41,000,000,000. So the nations, particularly in the global south, they're not rolling around saying, how can we buy more US treasury?
How can we lend The United States more money so it continue its hegemonic activities around the world? That's not happening. Well, at least the petrodollar is still intact, sort of, except again, more countries are making purchases in oil and like these shipments coming out of the Persian Gulf or going into the Persian Gulf through the Strait Of Hormuz, the Iranians are saying, hey, you're gonna pay in real, you're gonna pay in our currency and or you're gonna pay with Chinese Yuan. Dollars forget about it. Russia itself made a statement about three weeks ago that it was gonna start accepting payments in yuan as opposed to the dollar.
So again, you got to shift away from the dollar. So those those two pillars that for The United States have been critical for, you know, its capital flows to to maintain its economic dominance. They're crumbling. The petrodollar is crumbling. The the US Treasury bill is crumbling.
Now is it it's not it's not gonna come to a crashing end here in the next few weeks. And this this may perpetuate for another, for some time to come. But it's certainly, it's not The United States building strength, it's just the opposite. It's getting, it's bleeding out maybe a little bit at a time, but nonetheless, you keep bleeding out, eventually at some point you run out of blood.
Speaker 0: Yeah. Well, something has to give, though, because I understand the pressure that Trump is under. And from what I'm being told, the Gulf States have now well, like, explained to The United States that they believe that time is on Iran's side. So and I get it. There's a lot at stake.
It's not just how to end the Iran war. Indeed, as you said, the entire world order is more or less at stake here. So I can understand, on one hand, the pressure to have another go at attacking Iran. On the other hand, if you can't win militarily, what what what's the point of this? And from what I understand, the Iranians have plenty of other ways to escalate if The US decides to restart the war.
But my my last question was we heard we heard about this spat now between Trump and Netanyahu. I'm not sure the credibility of it, but Yeah. Apparently, Trump was considering putting an end to the war, accepting some something of a defeat, which, well, would not be good for for Israel, which made Netanyahu quite angry. Again, I'm not sure how much we should believe the news these days, but I want to ask you, though.
Speaker 1: Yeah. Yeah. Yeah. Well, I mean, just the simple fact that you have to say it that way tells you tells you everything you need to know. That you can no longer the news you always have to look at the news as it's being presented with a a a point of view or or it's I call it intelligence with a purpose.
It's designed to elicit a particular reaction or to manipulate. It is very much manipulative. Go ahead. Sorry to
Speaker 0: No. No. No. I haven't. So if if I read The Guardian, I I it's to know what the Guardian wants me to think.
It's not because you believe that you're getting a reality there. I think, especially over the past few years now with the war, the focus on elevating the war narratives is always, yeah, pushed to the forefront, you know, prioritized above reality. Yeah. I think one should be a bit cautious, but but if it is true, do you do you think Israel would be in a position to essentially deny Trump or influence Trump to reject the peace? Because I always thought if the core US security interests is at stake at some point, he would have to distance himself a bit from, the pressure coming out of Tel Aviv.
Speaker 1: Yeah. No. I I I think they yes. They can influence Trump to try to make decisions that will be inimical to The US interest. But even though they may get Trump convinced that he needs to do this, the reality is The United States may face constraints on what it can do.
In other words, you know, okay, yeah, we're gonna re relaunch the attacks on Iran, but we're going to have to go through Iraq. We can no longer go through Saudi Arabia. Yeah. Because, you know, what the Saudis and Kuwaitis and Qataris are particularly concerned about. UAE is not concerned about it, but they they would end up taking the biggest blow is that if they get back into facilitating these attacks, they are gonna suffer some devastation beyond what they have experienced already.
And the Iranians have taken the position that, you know, they recognize that we can handle a first strike. It'll be our retaliatory follow-up that's gonna be devastating. So I don't discount that Trump can still be talked into renewing the attacks, but he's also gonna come up against the practical realities of what what can the United States Air Force now do with the constraints if if, again, if Saudi Arabia continues to say no, you're not gonna use our aerospace, then that limits US options.
Speaker 0: So given this reality then, also, if The US attacks, how much worse it can get if the Red Sea is shut down, if some Internet cables are shut off Yeah. The Gulf States have ceased to exist if their desalination plants or energy infrastructure gets blown up. With all of this different consideration also weighing up with the interest of Israel, how likely do you think it is that The US will now attack again? Because when I look at the force buildup, I keep I keep feeling that, you know, if you're gonna build up that much forces, you can't bring them home again in this that they're built up for war. But, again, I'm not a military man.
Speaker 1: So Well, no. I I I you're just you're you're you're you're plagued with logic and rational thought. So yeah. No, you're absolutely right that we have not seen the order come down to say, let's start withdrawing, let's start drawing down. For that that simple reason alone, I would say, yes.
The United States is going to renew the attacks on Iran. But the ability of The United States to sustain that will be extremely limited. And the damage that will be inflicted on US forces in the area as well as Israel. Israel is the one that really I think is grossly miscalculating the kind of damage that is that Iran can inflict on it. And so, you know, this is I'm hopeful that this, you know, this thing continues.
Let's call it the non combat portion of this continues to drag out. Because of the Hajj, well, okay, no attack now. And then the Hajj ends and, okay, we're now at the World Cup. So let's get through the World Cup. That takes us another month.
So that that can give, you know, a couple of months of negotiation. That would be a better outcome. But I think Trump is gonna come under enormous pressure to attack. And so I I can just say that it's not gonna surprise me if the attack comes again. I'm not considering predict all it's gonna happen next week or I I don't know that.
I mean, I don't have privy to access to that information. All I do know is Trump's under pressure to do it, but
Speaker 0: he also faces some real world obstacles that prevent it. Now how those two get bridged, I don't know. Well, as the months will come and go, if there's no war and no peace, the markets will nonetheless suffocate. So the the clock is ticking nonetheless. So I yeah.
I don't see a good outcome out of this. Well, for for The United States, I think for Iran, they they can come out very strong, I guess, if they finally shake off twenty seven no. Sorry. Forty seven years of crippling sanctions and perpetual military threats. If they can get something new, it can be great.
But for for The US, though, it's there's no going back really, which is yeah.
Speaker 1: Well the way you phrased it and I think you bring excellent insight to this, is that the economic situation will ultimately determine if The United States will go forward with military strikes. And I cannot conceive of a scenario in which US military strikes against Iran are going to strengthen the world economy, strengthen The US financial position in the world, increase desire to purchase dollars, make the petrodollar more universal. In fact, I would argue that any further military escalation by The United States will have the exact opposite effect. And once there is that realization I think that argues against, you know, we shouldn't do this because the economies are too fragile. And you know, we're starting to see the full effect is to happen in Indonesia but it's gonna be hitting Europe with greater intensity.
And ultimately, you know, probably by the end of June, The United States is really gonna be suffering the economic consequences.
Speaker 0: Well, Larry, as always, I appreciate your insights. So thank you very much for your time.
Speaker 1: Hey, Glenn. Always a pleasure, my friend. Keep up the good work.