Comments
Transcript
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GCLots of talk about the changes that are obvious to many people, but few or no non-obvious insights. Lots of questions, too, but, again, not new ones. Overall, disappointing.
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CAAlways great to hear Dee’s views. Awesome stuff
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SFA very stimulating trip around the various moving parts of a world in transition. However, the one region that is going to see the largest population growth with arguably the greatest amount of headroom for growth, that if navigated successfully will become a major competitor, but if navigated badly will create a level of chaos including unprecedented levels of migration and other outcomes. Both scenarios, and any on the spectrum between the extremes will substantially impact the rest of the world. Africa has to be factored into any review of global macro if we are to have a balanced view of the moving parts that will effect our individual outcomes.
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CCit would be great to get George Friedman on from time to time as well. He's another very thoughtful geopolitical strategist
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KDThe new software that allows the listener to read the conversation along with the video is really useful! BRAVO!!!
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KJI enjoy the great upbeat aspect of the investment world, and of investors like Raoul that causes them to say things like: "I think both you and I are very keen to not look at this and say, well, the world's fucked, to actually look at this and say, the world is changing, there's going to be opportunity. " I think it's also important to look at the other side of the equation very seriously: There's a good chance we all are, unfortunately, doing our part to make this civilization absurdly over-focused on making imaginary money gains while it is literally in the process of destroying itself by radically disrupting the global ecology and setting up major climate instability that will spiral beyond humans ability to control in the next decade or two. I found this humorous, but completely serious 1 hour reasoned argument entitled that civilization is way over its skis and headed toward inevitable collapse soon to be both entertaining and a worrisome antidote to the 'religion of false optimism' too often proselytized in investment discussions. ;-) It's called "How to Enjoy the End of the World" and focused on physics, energy and system-complexity rather than specifically on climate change. A number of people I've referred it to found it interesting and useful, whether they agreed with it or not. A key takeaway: the sooner this civilization and its phony financial world divorced from the real economy collapses in its current form, the better chance humanity and the global ecology have of surviving in some form. https://www.youtube.com/watch?time_continue=3&v=5WPB2u8EzL8
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SBWorth listening to but i am not sure i learnt anything new (unlike most RV interviews). Moreover, i would disagree with the analysis on three key points. Firstly, it is obvious to any researcher that Middle East instability has been driven by two/three U.S. policy goals, namely; to protect/advance Israels security; to protect the petrodollar monopoly and to play favorites on whose natural gas gets to market. There was no mention of any of these drivers. Secondly, it is equally obvious that the climate change we all need to be concerned about is the natural solar cycle, one of the key effects of which is increasing extreme weather events (including colder winters), impacting agricultural production. Thirdly, having done business and lived in Latin America for many years, i can tell you that many latinos would argue that the instability in the region has been largely driven by the CIA, going back over decades. For instance, most Brazilians believe that the fall of (undoubtably corrupt) Lula/Dilma was a covert U.S. led regime change, as Brazil was falling too much under Chinese (and potentially Russian) influence and had to be bought back into the U.S. sphere of influence (i.e. another episode of the "Great Game"). I love Real Vision, primarily because of its objectivity and ruthless pursuit of the truth (much like old fashioned journalism) so feel disappointed when we hear the same viewpoints as we would get from CNN or the BBC.
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GOI have to lister to Dee more than once, just to much great material covered. Very thought provoking Glenn
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RAReally enjoyed this piece and thought this format much better showcased Dee Smith’s knowledge and ability to synthesize than the early RV “World on the Brink” presentation. I got 8 X more out of this one hour tightly produced piece than the former 5 hour presentation. I am now and will remain a huge Dee Smith fan and do hope that he will be back with his curated guests to keep us informed. I think it was important that Raoul handled this interview himself as the former “On the Brink” piece did not really do Dee justice and it was important that we could hear Dee and learn all that he has to offer in a better format. Excellent work here Gentlemen.
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SJWhile this is a good interview, it really comes across as old people discuss old problems with old solutions.
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BAMore of Dee Smith please. A great educator/ explainer of cultures, history and geopolitics. Great job Raoul.
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ABIt was a grease pencil they used not a graphite one :)
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WMExcellent discussion and more than enough warning and insight to reinforce investment concerns and the potential for unexpected change. Sophie J below expresses that this is just "old people discussing old problems with old solutions". I am going to presume Sophie is a younger reader and so as an older one I can sympathize with her comment. The trouble is, the world has been around for a long long time and much of it well documented. Humans simply rinse and repeat (or rhyme). The massive difference today is the vast improvement in human lifespan and its associated costs that were not properly foreseen (impact on social programs for example) coupled with the fact that our natural resources and being challenged. Like Raoul I believe technology can solve most things, but our social political systems are rapidly becoming outdated and not advancing much at all. So it does feel that the "old solutions" are indeed just waiting in the wings to materialize.
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DSThe independent city state is not a protectable option. In the US we can work toward more state and city rights within a federal and state system. We are already moving into a new political system of rule by the wealthy. It is expensive as the wealthy must convince the electorate to vote for the candidates that they control. This is being done with bipolar tv networks and social media. It will be much more efficient for them when the representative democracy is eliminated. This happened in Rome when Caesar crossed the Rubicon. That was the end of the Roman Senate and the beginning of the Roman Empire. Not sure how it will happen here, but glad I lived during the last 73 years. DLS
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agAn interview with George Friedman at GPF might be a good idea. He really know the geopolitical area.
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MSDamn right there is a rise in nationalism - Dee Smith and his CFR ilk better start building bunkers. Hate this man... stop putting him on Real Vision!
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PNThe old nationalism canard. Just ignoring the fact that it is the globalists that have taken us to war. Wilson into WW1 because he wanted to whore out his League of Nations. Roosevelt with his acts of war against Japan because he didn’t like what they were doing in China. Kennedy into Vietnam to protect the French empire. How about we have more nationalism. A nation where people say that nothing that happens in the Pakistan or France or Iran is worth the life of a single America soldier. A nation that doesn’t want to see their sons die to prop up a corrupt French puppet government on the other side of the world. Just leave other nations alone and deal with the governments they choose. If “leaders” want to send someone over there, wherever there is, let them send their own kids. There is nothing over there that we need.
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ACYou will not be able to have your own opinion very shortly. You will not be able to find people with the same opinion. You will not be able to congregate. 1984 is here https://www.bbc.com/news/blogs-china-blog-48552907
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JDAlso, Doug Casey has literally been talking about this for years and at least a decade before this guy.
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JDDecentralisation is the future and that is through technology
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IOI would have liked to have heard more about what is happening in Africa outside the Middle East region. China is increasingly involved there and the nations of the continent are also forming some interesting alliances. They also seem to have the world's youths. As wars subside, vaccinations increase, and more governments prioritize education to support economies not based on merely extracting and selling natural resources, very interesting developments may come from there.
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IPIf you live in France or Italy and probably other European countries, you have the feeling that public officials are those with the real power, and if you are friends with them you will have an easy life and high earnings with no accountability whatsoever. The politicians come and go, the public officials remain for life. If you don't have the right friends among this group, you get left behind, no matter how much you work or your capabilities. I believe that this is one of the main causes of populism in Italy where the level is very high right now, and one of the main causes for which young adults in theri 20's leave the country for UK or Germany, etc.
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ETThe part where they Dee Smith discusses the concept of virtual communities, "... you can get all oenophiles together, you can get all the butterfly collectors or whatever they all are. And they have these commonalities and their communities. So, it's really virtual communities that you're trying to have."....really reminds me of Reddit.
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WBYes, everyone has opinions even if they do their best to hide them. Only way to increase knowledge is by listening to facts/opinions you don’t know or agree with.
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JFHow do city states win in a fractured world with no real defense ability? How is the EU not the only credible counterpoint to US hegemony? If Scotland & Wales are candidates for breakaway, why would the US remain together?
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NvInteresting take on social media by Raoul....advertising on social media only works at the extremes of emotion (rage, fear). Social media makes the world worse. Bring on the regulation, the taxes and the fines. It's overdue
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WSDee Smith is a consummate imperial propagandist. All of his geopolitical analysis must be viewed through the lens of that understanding.
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PDDee Smith is a lot better with Raoul interviewing him than in his documentary formats, which are more suitable for the general public. Skip the first 20 minutes, but then, once he is warmed up there are some great insights. 1. The idea that the emergence of city-states - which better align communities and bring governments closer to the people - might provide solutions to increasing efficiencies (though it is not clear whether the Great Powers will allow this) is obvious. We either move to smaller governments or to a growing global bureaucratic nightmare of impoverishment. 2. The idea that America needs the Middle East less as a result of the advent of fracking. (Left out is the uncomfortable fact that America now increasingly has an interest in fostering Middle East wars and instability in order to drive up oil prices demand for American energy). 3. The observation that US corruption - through which businesses buy politicians - is no different than corruption in countries described that way by Transparency International where politicians themselves demand the bribes. Indeed this makes it far easier to understand South America and its Patron system (another interesting phenomenon this reader knew nothing about). 4. The description of the huge threats of instability as systems change .... notably Smith's description of how the 130 years of religious wars wiped out 30% of Europe's population. Chilling. But worth keeping in mind. The real takeaway though is the huge value of having a credible interviewer, whom the audience knows, likes and is comfortable with. Raoul and Grant Williams both meet that test. They need to work more.
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NvThe end game of the US-China trade war is most likely lower steel production. Unsustainable to produce 50% of world steel when it has no competitive advantage (no cheap, high grade ore, not so cheap electricity) Lower trade surplus with US = less Dollars received Thus, need to reduce USD iron ore purchases from Australia, Brazil or reprice iron ore to CNH/AUD/BRL
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SBIf RV would value an alternative geopolitical perspective, my suggestion is that you invite for interview (former Presidential candidate) Ron Paul and/or Tom Luongo (of "Gold, Goats and Guns"). I would also have included David Stockman in this group but RV have already conducted an excellent interview with him. All three are not only capable of providing a first class geopolitical analysis but also able to then focus that analysis onto an economic / investment thesis.
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JHThree words gents: The Fourth Turning.
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PBThis was really unique and fun! Thanks a lot!
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DSGreat interview. I am watching for the second time. I am surprised that this is the first comment. I enjoyed all of Mr. Smith's informational pieces from the beginning and learned a great deal from each one. Mr. Smith's description of splintering feels like a bipolar view of the world to me. (Bipolar here refers to the psychological disorder that can cause a human being to be dysfunctional.) This was brought home again yesterday when I listened to two friends describe the British reaction to president Trump's visit. My friend on the right said it was reported how much the Queen and Brits loved president Trump and were impressed by sincerity. My friend on the left used the same facts to describe the visit in exactly opposite terms. This is what Nietzsche meant by there are no bare facts, just interpretations. This bipolar political point of view will not be resolved easily. IMO a representational democracy cannot function with a bipolar electorate and Congress as we are already seeing. The identifying of the issues is not difficult by either side, the solutions are miles apart and often mutually exclusive. I will be gone long before this is resolved. Best of luck to all of you. DLS
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rrReally enjoyed this Big Picture chat, thanks Raoul & Dee. Hoping you reconvene often. Thoughtful content.
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DRGreat discussion. Well done. Makes me think of the old curse about living in interesting times though. And think wistfully about the simpler, better days when I was a young man.
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DLFascinating discussion. I was especially interested in learning about issues affecting Nicaragua and Latin America.
DEE SMITH: I do think that we've entered a new age, and I'm calling it the age of splintering.
It's infected politics. It has driven politics to the edges. So, you have this centrifugal force that's driving everything to the edges. And there's very little center. And the center can't be heard, because it's not outrageous.
If you go to any military, good military college, they will tell you that nationalism is always a prelude to war. But I do think it's distressing that so many people, including young people, in the US and Europe are looking backwards at these old solutions, which I just think they're in a posit, I think they're not going to work.
RAOUL PAL: There's very few people in the world that walk into Real Vision and completely changed my understanding of how the world works. Dee Smith was one of those. I met him in Hong Kong a few years ago. And we were talking about security because he has a corporate security firm in terms of intelligence, corporate intelligence. And I was talking to him about things. And he started talking about his world framework and worldview. And I understood that Dee was, in fact, an expert on geopolitics, geopolitical structures, and how the world is changing where we're going. And I was mesmerized.
I then asked Dee to come and make a documentary series for us called, The World On The Brink. If you haven't seen it, I really urge you to watch it. For me, it's one of the greatest pieces of geopolitical filmmaking I've ever seen. Yeah, it was pretty raw for us, because it's our first ever Real Vision documentary. It's five parts of an hour long each. But my God, how much is in that. And it doesn't come with any particular angle, it's observational, it's not pushing any particular agenda. And that made it very interesting to me.
And I want to get Dee back into the studio. I get him in periodically just to check in with where we are. His core thesis has been about the world fracturing, tribalism, and the breaking apart of the structures that we know and understand of the world, the geopolitical world in particular. And I think he's been on the money, all the way through pre the changes for Brexit and Trump, Dee was onto this, and he saw it coming. And so, I check in with him to find out where this is going and how it's developing.
So, sit back and enjoy a great conversation with Dee Smith, I'm sure we're going to go around the world, we're going to learn some new things. And we'll get a deeper understanding of where the world might be going, and what it means and particularly, where the opportunities lie. A lot of these things seem scary at first. But the reality is, change is good.
Dee, good to get you back. I think it is a truly extraordinary time. And we've been talking about this for a while now for several years, actually. And the story of the rising importance of geopolitics is becoming more and more obvious by the day. And it seems to be- I always discounted the geopolitical world as something that was in the dark and in the backgrounds and didn't always worry of me and wasn't something I need to be involved in. And now, it's clearly everybody's involved in everything. Geopolitics seems to be run on Twitter right now as well.
What is going on? And I know that's a difficult question. But at a top down level, it feels that everything has changed, which is something that you identified back in The World On The Brink, and had been ongoing, but talk us through it a little bit.
DEE SMITH: Well, it's great to be back and great to see you. It is a big question what's going on. And I think there are a number of elements that are interacting. But I do think that we've entered a new age, and I'm calling it the age of splintering. It's an age of fragmentation. And the age we were in before was an age of things coming together, an age of larger structures being built. And I think that we've exited that. I thought two or three years ago that it was fragile, but I think now, we're in a new age.
RAOUL PAL: Yeah. Because when you did the documentary for us, The World On The Brink, it was talking about the fragility of the old-world order, the rules basically of the old-world system for want of a better expression. And you identified how fragile it was then, and it looks like that was right. And that fragility has led to a breaking point.
DEE SMITH: I think it has. And I think you do get these ages of the world and things change and the ethos, that idea of the conceptual framework changes. And I think you see it across the board. You see it in rising nationalism and populism, mercantilism protectionism. You see it in the fear of supply chains, you see it in the fear of technologies from one place to the other, like 5G from Chinese sources. You see it in the breakdown of the large-scale multilateral institutions, they're still there. But their influence seems to be less and less than the world in which sovereign nations are asserting their independence and even groups within sovereign nations are now wanting to be independent. The catalogs, the wealth- they're just everywhere.
And so, it's a global tendency. It's not just- we don't just have Brexit or just have Orban in Hungary or just have Trump in the US or Modi in India. It's ubiquitous, it's everywhere. So, then the question becomes, what is causing that? Why is that? It's not in one country, it's in almost every country. Why?
RAOUL PAL: Yeah, and I guess everyone has a different answer to that. And it depends on the lens that you want to look at it through. And I don't think for us really, it's necessary to talk about our lenses, I think there is a broad perspective that people want change. I think that's always the interesting point is, regardless of what it is, people rejecting this order. So, the question is, how does this play out? Let's assume that that is now de facto, that is how happening. How does it play out? We're starting to see a splintering. How do you see this evolving? What are the next steps that we're going to be looking at in the next year or two as this whole situation evolves?
DEE SMITH: Well, I think it's a very dangerous time. And I think it's for several reasons. But what I think we need to do is to pan out, go back a little bit and try to understand what are the fundamental driving forces of this fragmentation, the splintering? And I think they're three. And I'm sure there're more but I think there's a coherent explanation.
First is technology, which has evolved at a speed and in directions no one ever anticipated. And that has ramped up dramatically in the last 20 years. The second one is just the size of the population. It is literally at a level that humanity has never seen before. And I think that as one dictator once said, quantity has a quality on all its own, you do have a different qualitative thing with a quantity of people. And I think the third element is our legacy human attributes- our fear of change, our nostalgia, our need for simple answers, our desire for a level of understanding that really escapes us and the complexity of things, and how those elements interact with the previous two.
So, you have this spiral of things going on. You have technology that's changing faster than ever in making the world both incredibly more complex, but also bewildering to a lot of people. You have a level of population where you can't avoid bumping into other people. And you have our Stone Age minds where we evolved in small groups, we all knew the same people all the time, most of the environments that we lived in were stable over long periods of time. There was abrupt change, but you would go centuries with essentially very little change.
And so, that's how we've evolved in our legacy attributes are not really in tune with the world we created. And so, I think that has created an enormous level of stress among people in the world. And I think that is partly or substantially underneath what we see going on.
RAOUL PAL: But there's also where this fits in is that the abuse of power by the ruling elite is a prevalent theme that comes and obviously, the bifurcation of wealth, where very few get all of it. Is that a manifestation or is that a thing in itself? And again, on Real Vision, you'll see there's a lot of anger about central banks and how people are dealing with our money. There's a sense that all of this is not within our control. And we're just mere pawns in that whole game. And we're the losers in that game. Where does that fit into that framework?
DEE SMITH: Well, everyone's angry. You're absolutely right. And it's at a level that has not been seen within our lifetimes. And I think they feel betrayed because I think they feel that the promises that the social contract as anthropologists, sociologists call it. If you do certain things, you'll be rewarded by society in a certain way- that's broken in country after country, it doesn't work anymore. And I think that people feel that they can't rely on the systems to take them into the future. But I have to back up and say, there is nothing new about income disparity and wealth disparity inequality. And there is nothing new about the elite.
RAOUL PAL: Abuse of power?
DEE SMITH: -abuse of power, it has always been that way. But what's new- and this goes back to my emphasis on technology. What's new, is in this case, the technology of communication, of connectivity, hyper connectivity, I sometimes call it- and because what that has done is it has made things more transparent. It's made it more visible that we now know how the wealthy live much more than we did 200 years ago. And even then, there were certainly revolutions, revolution being a good example. But it's now much more obvious. And so, there's that awareness that I think was not as prevalent in the past.
But also, there is the ability to connect to other people who share your beliefs, and to do so across time and space. And so, used to be if you had some outlandish belief, you probably would have a hard time finding anybody who shared it. Now, you can find many people who do, and that reinforces this belief. So, this echo chamber effect just keeps amping up. And we've been looking at this for two or three, five years, and nothing has been done really to ameliorate it. It's just gotten worse and worse.
And so, you have a country like India, where is the latest manifestation, which is WhatsApp, allows people to create mostly impenetrable networks. And as one Indian commentator recently said, it's no longer enough to be nationalist, you've got to be ultranationalists. It's no longer enough to be upset at what the Pakistanis do, you got to be outraged. Everything is just amped up to this, because people keep it going.
RAOUL PAL: That's right. And we've seen that within social media as a whole. The shift in social media went from getting attention by, hey, I'm here, to, hey, I've got something interesting to say to, hey, I need to say something more outrageous. So, you read me first. And then I have to be more outrageous than the other person being outrageous. And you just had this nuclear arms race of outrage that leads itself into the Daily Mail or whoever creating more and send those headlines all the time to get the click, to get the advertising dollar. And that seems to be writ large globally, and it's the same in politics we've seen.
DEE SMITH: And it's infected politics. It has driven politics to the edges. So, you have this centrifugal force that's driving everything to the edges. And there's very little center. And the center can't be heard, because it's not outrageous. And the algorithms are designed to do this. So, you've got this model that the social media companies have developed where they have essentially an almost addictive- has been called addictive by psychologists- that addictive structure, inbuilt structure of reward.
And you then have the mining of information on individuals based on this constant flow of data that the social media companies use to fund to- essentially, that's their business model. They use that to sell advertising and to sell information on people to sell advertising and so forth. And then you have the result of that, which is these algorithms that get more and more refined to focus on the more and more outrageous things. So, it's a spiral.
RAOUL PAL: And the offense of big data has a lot of behavioral economics, which we talked about before. The rise of behavioral economics has to manifest itself primarily on Facebook first, and it's happening all across social media, is when you got big data and human emotion all put in the same place, you can affect emotion. So, whether it's affected election outcomes, or whether it's just in selling products. At Real Vision, we'd lived this. So, we decided at one point, with the help of Google to start trying to advertise Real Vision within social media. And our competition there had been in the financial world, with people like Agora, who's a publishing business.
Now, Agora sold