Episode 5322: China's Oil Crisis; UAE Credit Swaps Undercutting American Dollar
Stephen K. Bannon hosts Sam Faddison, a former CIA officer, to analyze Iran's Revolutionary Guard as an uncompromising threat requiring strategic pressure over unrealistic regime change, while David Malpass and Eric Bowling detail how U.S. oil draws and UAE dollar swaps defend the petrodollar against Chinese de-dollarization efforts. The episode concludes with Mike Lindell outlining his Minnesota gubernatorial platform, including bans on Sharia law and removal of controversial statues, framing these domestic moves within a broader context of resisting global tyranny. [Automatically generated summary]
Get me out of D.C. By the way, Sam wrote, I think, one of the two or three best books ever in the Central Intelligence Agency after he left.
Sam, like this beauty, as President Trump would call him, this beauty that's now on the front page of the New York Post, New York Times, everywhere, that he's kind of the guy in charge, or they think he may be the guy in charge, or at least he's the one that's kind of told the Speaker of the Republic or whatever to say, hey, dude, you don't have any, I don't know why you're flying to Islamabad.
You really don't have authorities.
I've been saying, let's, we got to find the people that not just can agree to a deal.
In a room, can actually execute a deal.
Because I think we're heading to the place, and Nina, Trina Parsi said this two weeks ago in the show.
As much grief as that brother gets, and look, he's obviously very, let's say this, very close to those folks, at least the opposition internally in the country, as they say, that, hey, you're probably not going to end up with signed pieces of paper.
You're probably going to go there.
But this beauty, I just want to go back and just make sure everybody knows this guy in Argentina, it's got to be what feels like eight or 10 years ago.
I think they blew up a synagogue.
And when you say a Jewish center, I think it was a thing for kids, right?
Or there were a lot of young people and children involved.
I mean, this guy, the thing in Argentina shocked everybody because you had all these rumors of Hezbollahs all over the world, but you really hadn't seen it.
And then you saw it down in Argentina and it was out of nowhere and completely, you know, incredibly savage.
Because this guy's a savage, right?
This is not a guy you want to sit down and have a dinner with.
But this happens when you have a strategic bombing campaign.
And these guys got hammered.
The magnificent of our Air Force, of the U.S. Air Force, the Navy air wings out on the carriers, the missiles we hit, everything was made.
I mean, these guys, so it's logical.
And I heard they took down the Revolutionary Guard down to like the brigade level.
These guys got pounded when we lit it up.
But you're going to be left, this is the kind of thing you're going to be left with.
You're going to be left with disparate groups.
Vying for power and a lot of bad hombres, a lot of bad hombres that think, hey, look, maybe I can seize power here.
I wouldn't mind being the kind of Nick Shah of Iran.
The Shah of Iran is a pretty powerful gig.
It's been around for, I don't know, a couple of thousand years.
Alexander the Great dealt with them, right?
So it's not a bad gig.
And if you're some guy that's been some terrorist down in the organization, you look around, a lot of people are dead.
It's totally disorganized.
And who can come in and play hardball against the Americans?
I mean, isn't that the internal logic?
Is there a logic where they say, how do we compromise with Americans?
How do we actually make a deal to make the region better and to make sure that our proxies are not lighting up Israel or we're not going after the Arabs who we think are lower down the food chain, evolutionary on the evolutionary food chain than we are?
This is my point.
They're not a lot of statesmen that survive in this organization, sir.
Look, if these guys are going to come to the table at this point with somebody like Vahidi running it, it's going to be, from their standpoint, what they're looking for is, okay, let's have a strategic pause, catch our breath, and continue the fight on the other side.
And look, I would love to see these guys go away in their entirety.
I'm all about it.
Let's have a free, liberal, democratic Iran.
That would be wonderful.
Realistically, at this point, I think you ought to take regime change off your list of objectives.
Right.
That's, I don't, unless we are prepared to do things like invade Iran with ground troops, which to me is unthinkable, then you need to forget about that.
And you need to start figuring out, out of the rest of the list of objectives, what is absolutely critical to us.
People talk about taking the enriched uranium and shutting down the nuclear program.
That mountain will be big enough to climb.
That's, you know, that's not a small thing.
People talk about that as if it's achievable.
That is not in the bag by any stretch of the imagination at this point.
I mean, you've got a gangster mentality, a pirate mentality down there on those cliffs overlooking it.
And now they say, hey, man, we're getting two million a vessel.
Maybe we can do better.
We've got the United States Navy has blocked everything on the outside, but we've also got the throttle here.
What is it going to take to get their attention?
You're going to have to have another military.
Come along for a couple.
So, can you do it just through telling the Chinese principle to principle?
Say, let's get these guys out of the way and Trump and Xi.
Can you do it principle to principle?
Or are you inevitably going to have to go back and give them a wake up call that we're still here and we can still lay waste to anything we want to lay waste to?
Every small boat put into sea from Iran from this point on is considered to be a combatant.
So, you got about 24 hours to absorb that.
And after that, since that's the way you're fighting, we're going to take out every small boat we see putting to sea.
The Chinese are pumping huge quantities of material into Iran via Tajikistan.
I mean, trade between Iran and Tajikistan has increased year on year 4,000% in the first quarter.
Tajiks don't make a damn thing that the Iranians want.
That's all transshipment.
It's Chinese stuff for their drones and missiles.
They send it to Tajikistan.
They change the manifest that goes into Iran.
Somebody needs to be sitting down, like the ambassador and the chief of station in Tajikistan with the Tajiks, and saying, There's a line on the ground.
You got to get on one side or the other.
You're either with the Iranians or with the most powerful nation on earth.
And you're going to feel the consequences.
We're going to turn the screws on you.
I mean, you have to methodically go down this and just keep.
Shutting doors and increasing the pressure on these guys.
But the big door we got to shut, because Tajikistan is just a throughway from the CCP.
I mean, at some point in time, you got, here's the thing you got Victor Davis Hansen and Mark Thiesen, all these people that were 1 million percent wrong in Iraq.
They're revving up and they're getting revved up that we actually need regime change and you need, and you need, Unconditional surrender.
Victor Davis Hansen put some video out, I think on the Daily Signal, and his last alternative was unconditional surrender.
They're still dangling that out there.
If we want to get to the source of who's keeping them alive with materiel, right, coming through on the land route and giving them cash for every tanker they can get out, and I'm still confused are we letting some of their tankers out to get to the CCP because there ain't no meeting in May big enough to let the CCP get any oil?
And the mullahs get any cash if you want to stop the continuation of this.
So, at some point in time, do we have to turn this into a great power exercise between the United States and the Chinese Communist Party and tell Xi, hey, look, we don't want to be here forever.
You don't want us here forever.
We need you to back off so we can get an arrangement, right, in the Persian Gulf that ourselves and our allies can live with, sir?
Do you think that, do you think, and I'd love you to hold over.
I'm going to get Malpass.
Former head of the World Bank and Eric Bowling is going to be on here.
We're going to talk about the financial and economic situation, the reality of oil, of commodities, and also Scott Besson's testimony yesterday, where he tried to put a little more refinement about this is in defense of the dollar, not bailing out one of these Emiratis, the UAE.
Would you think it'd be better, Sam, that Trump actually goes and gets in a room with Xi and does this?
Are you saying there's There should be actions taken by the CCP that we force now.
You got to stop shipping arms and other material through Tajikistan, and we don't want to see we're going to cut off any type of oil coming out and any kind of monetization of that oil.
Do you think those are steps that have to be taken beforehand, or would you be open if something could be sorted out to meet in Beijing?
There's a whole economic war and financial war part of this that, quite frankly, I think is probably more important than the kinetic part of this.
Um, and you should play these things out to their max.
Before you go kinetic, but hey, we are where we are, and now we got to figure out how we extract ourselves with victory and get back to focusing on hemispheric defense and all the problems here with the sovereignty of the United States of America, like the Southern Poverty Law Center and stealing delegates, stealing congressional seats down in the Commonwealth of Virginia.
Jim Rickards on Yesterday, just incredible, incredible guy, one of our best contributors.
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And in the book, I think chapter four talks about some of these issues with Anthropic and the Defense Department, this kind of autonomous targeting.
He uses, I think, the nuclear escalatory ladder in that, but it's very enlightening.
So you get a free book thrown in that you don't want to miss.
And Rickards is just an extraordinary guy.
Eric, you've got a couple of stories, data points you want to get.
Then we're going to bring in Malpass.
We're going to play this Scott Besant at the hearing yesterday because the Warham posse audience, although a lot of blue collar folks, middle class folks, many of whom did not go to college, is the smartest audience in the world.
Media.
The reason is we continue to take on the toughest topics, give them information, and they figure it out for their agency.
What do you got for it?
First of all, I just want to make sure, Bowling, you've done your workout, so you're ready.
You know, every day I I talked to Eric late at night, early in the morning, about getting him on the show and all the information because he's an information maniac.
It just clears the head, puts me in the right place for the war room because let me tell you something about what you just said before that war room audience being the most informed, they're the most informed because of what we're going to talk about in just a second with the Besson comment because you and I had that discussion the day before Besson testified on the Hill yesterday, on Tuesday.
Information agency, which tracks the levels of draw on crude oil and gasoline and distillate, which is basically diesel fuel in America week to week, showed a very large four and a half million draw in crude oil, five million draw in gasoline, and a four million draw in diesel essentially, diesel.
They use it for other things as well, but it was a surprise.
So, a lot of the people who poll and talk to various producers and refiners didn't think there was going to be a draw at all.
So, this is a surprise, puts a bid underneath the oil market.
I will I literally just got off the phone before this with one of the biggest refiners in the world, Lucas Oil.
Probably seen a gas station or two.
And he told me something interesting.
He says, I don't think we're all buying aggressively on the refiner side because they need the oil.
He's worried about down the road, not right now.
He said, the demand isn't really there right now, but we are fearful of not being able to get enough crude oil for June, July, and et cetera.
I'll tell you very quickly.
That makes a lot of sense.
If you look at the crude oil market going forward, right now prices are, you know, in $94 a barrel right now.
But if you go to the end of the year, December, it's $77.
If you go a year from now, it's $72.
So the feeling among the smartest players in the room, oil, is that it will eventually make its way south.
And just no one knows exactly when.
Last point China demand is, he told me China demand is way down, way down, which is telling me the blockade is working, Steve, because if the blockade is working, that means the China economy is A, probably shrinking, and B, they're probably conserving their use of fuel.
And there's a huge, huge undercurrent of positivity to that.
China wants to be the global winner, leader in AI.
It takes a lot of energy.
One of the biggest draws, one of the biggest issues for any AI.
Program is energy.
How do you provide energy?
So, if we're starving them of their energy, then we're starving them of the ability, number one, their economy to grow.
But, number two, more importantly, we will take the lead in AI further and further because we have ample oil.
So, blockade works for very several different reasons.
Up more, and the gasoline prices are about a dollar five higher than a year ago.
Diesel prices are about a buck thirty higher.
Jet fuel is forty percent, sometimes fifty percent higher than a year ago.
So, you're going to start seeing surcharges on airline tickets.
The whole point is the higher the price for any of these fuels because diesel is what we use the truck product east to west in the country, even trains use diesel fuel.
So, diesel is a very important economic indicator.
Diesel fuel prices up twenty, twenty five percent, thirty percent are going to be a real drain on the economy at some point.
But what you're telling me when you look at the structure of the market, the smartest guys in the room think that the price is going to drop and drop pretty precipitously in the out months, correct?
So they think there's going to be a, the smart money that the thinks there's going to be a resolution to all this, correct?
Senator, I would dispute much of what you earlier said and any linkages.
To this swap line, many of our Gulf allies have requested swap lines.
You would have just read about the UAE and swap lines, whether it's from the Federal Reserve or the Treasury, are to maintain order in the dollar funding markets and to prevent the sale of the U.S. assets in a disorderly way.
So the swap line would both benefit the UAE and the U.S., and as I said, numerous other countries.
Including some of our Asian allies have also requested them.
So you and I texted Monday morning, and this Wall Street Journal article had just come out that the UAE called it a bailout, looking for a bailout.
Let's be honest.
We lit them up for it.
We were talking about how Dubai is the Las Vegas for the rich fat cats around the world.
And you and I both said, that's insane.
But, Steve, I got off.
And I read into what the UAE was asking for.
I did some homework on it, and they weren't.
They weren't asking for a grant or a loan.
They were simply asking for access, almost like greasing the wheel to the transaction, the currency transaction.
We would basically buy their currency and give them US dollars at almost no loss to us.
It's the fair value of both of the currencies.
They just wanted it, as Besson pointed out, they wanted the mechanism to be more smooth.
And I really, and then we came back on.
Tuesday, Steve, on Tuesday, and we said, look, this is the smartest move we can make.
It won't cost the United States a lot of money.
We're not going to drain any treasury, not giving a loan or grant.
We're just providing them liquidity with the US dollar.
And I would say, yes, guys, you know what, Saudi Arabia, you want it to, Oman, you want it to, any ally in the region, as long as you stay with the US dollar to trade the petrodollar.
Scott Besson dropped a bunch of bombshells on that one.
First off, you notice the little, he couldn't quite get it out when he said the orderly, the orderly, you know, the orderly money.
What they don't want.
Let's talk.
We're going to get, we're going to take a short commercial break.
Now, more than ever, folks, why did we start this six years ago?
The end of the dollar empire.
Because of mornings like this morning when the folks in charge have to make big fundamental decisions.
On defending the US dollar, defending the empire, right?
And my point to this is that it just, we are where we are.
We can finance this entire thing because people need dollars.
And what they're saying is that, hey, we may, we're going to have to dump your treasuries to get dollars.
Maybe you don't want that.
The orderly versus disorderly.
The former head of the World Bank and Eric Bowling, one in the trenches, one in the clouds.
We're going to talk about all this because it's quite important, and it's quite important for us as a nation, and particularly the working class and middle class people in this audience, fully understand exactly what is going on.
Okay, David Malpass, define what the issue is here.
And because Scott defined it much differently than the New York Times reported, it sounded like a total overall bailout when they reported it, but the Wall Street Journal is quite different.
Explain exactly what's happening and why you're supportive of Scott Besson, Secretary of Treasury, getting on top of this, sir.
And we have tools, economic tools and finance tools, and we should use them.
I was happy to see them cut off Iraq from getting the currency.
The $100 bills had been flying into Iraq, and they were squishy on their position with Iran.
So we've got to use the tools.
In this case, you know, I'm against bailouts in general, but UAE is part of the dollar system.
They've been pegged to the dollar.
Their currency is one to one with the dollar since 1997.
Saudi Arabia since 1986.
So, when we need to be pressuring China, but look, when China went into Hong Kong, the Hong Kong is pegged to the dollar since 1983, and China knew to leave it alone.
They've left that peg in place because it's so valuable.
So, as we look at UAE, they're an ally of the United States.
They basically are connected to the US dollar.
So, we should do whatever it takes.
To protect that, and I think we will.
It's like Europe in 2011 when Greece was threatening Europe and saying, We're going to pull out of the euro, and Draghi stepped in and said, What the ECB, the European Central Bank, will do whatever it takes to protect the euro.
We've got to do that, defend the dollar with our friends, and we should be doing that.
Is he implying that if we don't give these credit lines?
And he said other nations had approached us.
So, I guess Qatar, the Saudis, he said even some Asian nations.
Is it it's not that Scott's threatening us, but is the reality these guys are coming to us and saying, Hey, we're gonna have to dump U.S. treasuries because we need dollars?
Is that is that what they're talking about?
Is that the fear that you could have a major disruption in the bond market at the exact same time we're in the middle of a war?
And oh, by the way, we have 39 trillion dollars of debt and two trillion dollar deficit every year that Scott's got to refinance a third of that.
Here's what I care about this is a great power struggle.
The Chinese Communist Party, in back of everything they're doing with the BRICS nations, they ultimately want to get, they would rather their currency at some point in time, obviously not now, to be the reserve currency and not the U.S. dollar.
Used with great increase in international transactions and in local transactions around the world.
That would be very good for the United States.
I think, as a microcosm, think how good it was for France to be part of the euro because they could associate with Germany, which had a stable currency.
And so we can do that around the world and get lots of advantage for the United States.
And this swap line with UAE could be part of that.
I think it's.
It's right for the U.S. to say we're going to defend the dollar and protect our friends.
I'll make one difference, Steve, from the Senator Van Hollen you had on before.
He was saying, Why do you want to do bailouts?
Remember, the biggest bailout of a currency was the Mexican currency in 1994 95, where Clinton and the Treasury used the Exchange Stabilization Fund to do that after poverty had already settled in on Mexico.
So, David, I'm going to jump in here because Steve is having some issues with the technical side.
So, I'm going to jump in for just a minute until he's back.
So, let's talk a little bit about the global dollar, the de dollarization, so to speak, of the dollar, which we know China and Russia are actively undermining daily, weekly, monthly.
In fact, they're transacting a lot of their trade between the two countries, something to the tune of 90% in yuan and rubles.
And it's a slow chip away.
This feels to me like they're maybe using the opportunity, this opportunity, to make a bigger play for that, you know, de dollarization across the board, which you cost dearly, Americans dearly, rising interest rates to combat the inflation.
So is this not, you know, it's not a drain on Treasury.
Is this not an opportunity to lock in the oil exporting countries that are at least our allies to stay on the dollar, which would likely keep us on the dollar at least for the near term future?
And if they're using the dollar, we're going to help that process along.
And China definitely is trying to extend itself.
You know, they've gotten the yuan as part of the IMF currency or the script that comes out of the IMF, the SDRs.
And so they're trying to expand that opening.
In Africa, what they're doing is getting countries to swap their debt from dollars into yuan.
And so that's, and the U.S. is allowing that through its management of the international, of China's Belt and Road debt, the international debt that China keeps putting out.
China's been very successful in itself defending that through globalism.
So I think we need to make this strong distinction between a swap line in UAE, which defends the dollar, versus globalism, which often is being used to undercut the dollar and support China.
I told Steve earlier, I spoke with a major refiner, US refiner, global refiner, and he said the Chinese demand for the global state pull on the global oil market was way down from China, which tells me it's probably a slowing of their economy or they're conserving or they have some national program to conserve.
But it's also draining their SPR, which I, going forward, I think any country that drains their SPR, developed country or developing country, drains their SPR.
Is at major risk.
So, your thoughts on the blockade working in almost a secondary positive effect from the blockade?
Sam Fattis said that given the situation right now, President Trump should not go to Beijing.
I think it's March 13th and 14th.
Would you think right now, with everything you just said, that President Trump should go and get in a room with Xi and try to figure this out mano a mano?
Very quickly, I'll just tell you, I think the blockade, Trump should slow walk any negotiation.
The blockade's working, especially against our greatest adversary, the CCP.
Follow me wherever, at Eric Bolling on social media, but right here in the war room, because like I said, Steve, you're telling people what's going to happen next, not what happened yesterday.
Sound like a broken record, but that's why they are the most informed audience in all of news.
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I wanted to get on here.
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We've got uh, We're doing about seven events a week, and we just did a little town of Waseka, Minnesota the other night, and they said, no one's ever even bothered to come to our town.
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Steve, thanks for playing that clip.
That's helping me right away with the governor run, because we need change in Minnesota.