Colonel Macgregor: America’s Collapse Will Create A New Financial System

The discussion posits that international alliances like NATO and the EU, intended to prevent war, are inadvertently causing it, drawing a parallel to iatrogenics where the cure is worse than the disease. The speaker critiques the current White House's predisposition to bully rather than engage in diplomacy, highlighting a failure to understand global markets and national interests. This approach, characterized by imposing terms and threatening nations that don't align, is deemed a dead end. The reliance on China for rare earth metals, a vulnerability known for decades with no remedial action taken, is cited as an example of this flawed strategy.

The conversation then explores the idea that China's actions, like restricting rare earth exports, demonstrate their ability to influence U.S. markets and provoke the administration. This is framed as a shift from the era of presidential tweets moving markets to a new dynamic where a nation's actions can trigger significant market shifts. The speaker asserts that China is not a subordinate state but a peer in a multipolar world, and Western nations must adapt to this reality rather than resorting to threats and military posturing. The decline of dollar dominance is noted, with nations increasingly engaging in trade using other currencies and developing parallel financial institutions.

Furthermore, the transcript discusses how the U.S. is no longer the indispensable market it once was, and its global military commitments are a drain on prosperity. The argument is made that the U.S. should focus inward, restore the rule of law, and rebuild trust in its institutions, which are currently facing significant public distrust. The current approach of intervening in overseas conflicts like Ukraine and focusing on places like Venezuela is criticized as a misdirection of resources and attention, arguing that the U.S. lacks strategic interest and the ability to fundamentally change these situations. The speaker concludes that significant pain is needed for Americans to demand change, as the current system incentivizes war and the average citizen isn't feeling the direct consequences.

• International alliances, intended to prevent war, are argued to be a cause of it, akin to iatrogenics.
• U.S. foreign policy is characterized by a predisposition to bully rather than engage in diplomacy, failing to recognize the interests of other nations.
• Decades of inaction on rare earth metal dependency and other vulnerabilities are highlighted as critical failures.
• The world is transitioning to a multipolar system with declining dollar dominance, as nations increasingly use alternative currencies and build parallel financial institutions.
• A call for the U.S. to shift focus inward, restore domestic order, and disengage from costly overseas military interventions is emphasized.

The Paradox of Alliances [00:00]

• Global alliances like NATO and the EU, designed to prevent war, are claimed to be the cause of it.
• This phenomenon is compared to iatrogenics, where the cure is worse than the disease.

The cure is in fact worse than the disease.

U.S. Foreign Policy and Global Dynamics [01:53]

• There's a frustration in Washington with the world's unwillingness to comply with U.S. directives.
• This leads to a predisposition to bully instead of engaging in diplomacy and discussing solutions.
• China is now the world's principal market, not the United States; most countries want to do business with China.
• China's economy depends to a very limited degree on U.S. imports (less than 3%).
• There's a failure to recognize one's own vulnerabilities and to understand that refusal to align doesn't equate to hostility.
• No country is expected to move beyond its own interests, and the current U.S. interest seems to be harming other nations that don't do business on U.S. terms, which is a dead end.

The only interest we seem to have is in harming China or harming Russia or harming India, harming anyone, any particular nation, state or group of states that refuses to do business with us on our terms. Well, that's a dead end.

Rare Earth Metals Dependency [04:23]

• Rare earth dependency has been known for decades, impacting the Department of Defense and other sectors.
• No significant investment has been made to reduce this sole dependence on few sources.
• The current anger over this issue is described as almost childish, with no future in this approach.

China's Market Influence and Rare Earths [04:49]

• China is demonstrating its ability to move the U.S. market by provoking the administration, a shift from the era of presidential tweets.
• China's restriction on rare earth exports is viewed as a stop order on the American military-industrial complex.
• This restriction impacts high-tech weapon systems and the ability to rapidly develop and field new technologies due to lack of access.

China is not a subordinate state. China is not a backward entity.

A Multipolar World and Shifting Power [06:48]

• Nations like China, India, Russia, and Iran are demonstrating that they are not backward or unimportant.
• The world is multipolar, with peer nation-states capable of fielding forces and competing economically.
• The U.S. must decide whether to live with this new reality or continue to threaten those who disagree.
• There's a historical pattern of the U.S. disrespecting those without the force to stop it, with a first inclination to reach for military power.
• U.S. military power is not unique or unchallengeable, despite assumptions to the contrary.
• Chinese and Russian efforts to avoid military confrontation are interpreted as rationality, not weakness.
• War is destructive and antithetical to business for many nations, a concept the U.S. seems to disregard.
• The U.S. resorts to military power to intimidate, beat down, and suppress, which China and Russia will not tolerate.

We are the problem, provoking us is easy because we're easily provoked.

The End of Dollar Dominance [08:18]

• The era of the U.S. having its way and passing debt onto others is ending.
• Dollar dominance is concluding, with countries like India and Saudi Arabia engaging in business with China in yuan and establishing gold-backed economic systems.
• Parallel financial institutions have been built by other nations faster than anticipated.
• The world is heading towards two separate global systems: one dominated by the U.S. financial system (primarily Europe and North America) and another by BRICS.
• A single global system is unlikely because people are fed up with the U.S.

Shifting Trade and Currency Practices [10:19]

• Neutral countries like Saudi Arabia, India, and Japan are buying Russian oil in their economic interest.
• China's halt on new U.S. dollar purchases of iron ore from Australia, leading to a payment structure of 70% USD and 30% RMB, sets a new precedent.
• This precedent allows China to dictate new business terms globally.
• Australia's agreement incentivizes BHP to accumulate RMB, potentially leading to further de-dollarization as they seek to spend it.
• The global concern is the continued availability of cheap Chinese steel, regardless of currency transactions.

This is new precedent that China can take to the world and say, "This is how we do business now."

U.S. Economic Vulnerabilities and the Dollar's Decline [13:18]

• The U.S. is no longer the scientific industrial giant or the indispensable market it once was.
• The dollar is crumbling, and most of the world is actively de-dollarizing.
• The U.S. has effectively debased its own currency.
• The critical question for the U.S. is how it will fit into the future global economic landscape.
• Most people's interests now dictate de-dollarization.

A New Path for the U.S. [15:03]

• A former president should have begun shedding overseas military commitments and terminating conflicts to stop draining prosperity.
• Instead of engaging in a tariff war, China should have been approached quietly to discuss the dollar's issues.
• Diplomacy is largely missing from the U.S. vocabulary; there's a lack of willingness to negotiate.
• The current administration is seen as worse than the previous one in this regard, leading other nations to isolate the U.S.
• Washington is perceived as living in a fantasy world where the U.S. is everything and everyone needs them.

We rule the world. We do not enjoy absolute military hegemony over the planet.

Restoring the Rule of Law and Domestic Focus [18:36]

• There are very few people in Washington who recognize the criticality of turning inward and moving away from unnecessary overseas conflicts.
• A former presidential candidate advocated for focusing on the nation's own hemisphere, defending borders, and regaining control domestically.
• The rule of law is absent in too many places, and trust in institutions like the FBI has vanished.
• There's a significant increase in crime, with governors questioning federal law's applicability in their states, leading to issues like sanctuary cities.
• The U.S. should stop focusing on places like Venezuela or the Middle East, and cease the "nonsense in Ukraine," as there is no strategic interest there.

Americans no longer believe in many of our institutions.

The Need for a Different Framework [21:03]

• The U.S. does not rule the world and does not possess absolute military hegemony, nor can it afford it.
• A serious financial downturn is expected due to the U.S. creating its own mess with the dollar, alienating overseas partners, and engaging in trade wars.
• The speaker prefers this downturn to occur without concurrent military conflict overseas.
• A catharsis is needed for politicians to realize their danger and potentially develop an appetite for change.
• Currently, only a few individuals are willing to advocate for a different path forward.
• The budgets of both Republicans ($2 trillion deficit) and Democrats ($3 trillion deficit) indicate a severe fiscal problem.
• Things need to get much worse before people pay attention, as demonstrated by historical anecdotes.

Things have to get a lot worse before people pay attention.

U.S. Geography and Global Role [25:05]

• The common argument that active military presence globally keeps the U.S. safe is questioned.
• Geographically, the U.S. is buffered by oceans and has natural resources, suggesting it could be safe withdrawing military power.
• Removing the "global policeman" could lead to power jockeying and regional anarchy, potentially a return to a pre-1945 world.

Natural Wealth and Resource Symbiosis [26:36]

• Russia has significant natural wealth ($73 trillion equivalent), and the U.S. also possesses substantial mineral wealth ($43 trillion equivalent).
• Both nations could operate independently due to their resources.
• Russia had to fully embrace independence due to U.S. hostility.
• China, while a production machine, desperately needs Russia's resources, creating a symbiotic relationship where war between them is not valuable.

Historical European Conflict and Neutrality [28:10]

• General Eisenhower warned that NATO should not exist for more than 10 years, seeing no reason for its continued existence.
• Eisenhower believed the Soviet Union was not hellbent on invading Europe and suggested exploring Austrian-style neutrality for Eastern European countries.
• Europeans are identified as historically the most warlike people, with a long history of internal wars and exporting conflict.
• The idea that China wants to go to war with Taiwan is questioned, as both seek a Singapore-like model for society and commerce.
• The notion of a massive Chinese mobilization to invade others is not supported by evidence; they are not a seafaring nation and prefer their own society.

If this organization still exists in 10 years, then we have all failed because there's no reason why it should.

The European Union and Regional Groupings [41:55]

• The EU's attempt to become a Holy Roman Empire of the German nation has not worked due to its meddling in other countries' affairs.
• The EU's model is contrasted with the old Holy Roman Empire, where local laws and ways of life were largely untouched.
• Europeans need to become more tolerant, and the EU model hinders this.
• The EU is expected to fade, with other regional groupings emerging.
• U.S. involvement has distorted the natural dynamics of the European continent.

The Inevitability of Change and Pain [44:01]

• Regime change operations are tied to the notion of globalizing everything and making everyone the same, which has led to catastrophe.
• There are individuals in the West, though a minority, who profit from interventions and are disinclined to stop.
• The U.S. needs to change its money flow and stop incentivizing war.
• War has become something that happens in other people's nations, not on U.S. soil, because Americans haven't endured enough pain.
• The focus on Venezuela is a distraction from potentially more material issues.

We have to change something that nobody wants to disrupt. It's called the money flow.

U.S. Interventionism and Economic Consequences [46:16]

• The rationale for attacking Russia is not just to remove Putin but also to divide Russia and exploit its resources.
• There's a desire to control Iran's oil and gas wealth to recapitalize banks and escape economic doldrums.
• The U.S. has a history of intervening militarily because it has the capability, not necessarily the need.
• Examples include interventions in the Dominican Republic, Vietnam, and World War I.
• The argument that the U.S. is the best and should be in charge is seen as three big lies.
• Americans are beginning to realize they are paying for global military endeavors, leading to currency devaluation and division between asset holders and income earners.
• The administration's spending spree and investment in critical materials, while potentially strategic, is expected to be massively inflationary.
• The pain of this economic situation needs to be connected to military adventurism.

The Logic of U.S. Intervention in Venezuela [51:28]

• The U.S. government should not be involved in the private sector making investment decisions.
• The notion of the U.S. acting like Vikings, stealing resources from Venezuela, is not a good idea and will further alienate Latin America.
• Venezuela could become a rallying point for a regional crusade against the U.S.
• Maduro's offer to give the U.S. a stake in the oil and gas industries, benefitting both parties and improving the quality of life in Venezuela, is presented as the logical outcome, though it appears to be a minority opinion.
• The U.S. Army trying to govern Venezuela is not a viable solution, as people dislike being governed by foreigners.

I don't want the United States Army down there trying to govern the country.

Escalation and Misreading Restraint [54:39]

• The rationale for attacking Russia includes dividing it for its resources.
• There's a push to control Iran's oil and gas wealth to recapitalize banks.
• The potential for conflict in Ukraine to escalate rapidly if Russia crosses the river west is a concern.
• Russia's prudence, not weakness, has prevented further escalation; they know western Ukraine does not want Russian administration.
• Mistaking Russian restraint for weakness could lead them to escalate, such as with Tomahawk missiles.
• Strikes on major Russian cities would be an unambiguous act of war.
• The high number of Ukrainian casualties (1.7 to 1.8 million dead) is described as horrific.
• Washington's inaction on this human cost is criticized.
• In the Middle East, the Israeli government's objectives remain unchanged, suggesting further war, particularly against Iran, is likely.
• The U.S. has proven incapable of isolating itself from these conflicts, risking adding a third war to the existing ones without fully examining strategic implications or its brittle financial system.

They have not taken these heavy casualties because they don't need to to be successful.

The Future of Resource Security and Transition [58:18]

• Global regime change presents challenges regarding control, ownership, and proactive measures.
• During transitions, the supply and security of key resources become less certain, leading countries to pay more for certainty.
• This dynamic will be discussed at the Vancouver Resource Investment Conference.
• The focus for commodity investors is shifting, with gold being a significant consideration.
• The speaker looks forward to the conference and hopes to "warm the place up."