June 27, 2025 - Epoch Times
07:41
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| Time | Text |
|---|---|
| For the record, you say that the debt to GDP is the worst in the world. | |
| Can you just lay out the components of that, the debt that you're talking about? | |
| When you look at on-balance sheet sovereign debt and then you add in the local government financing debt, we also give them the benefit of the doubt of conversion into the dollar at a fictitious rate, meaning a rate where they have a closed capital account. | |
| We kind of give them that conversion for kind of gratis. | |
| We don't discount that at all. | |
| Chinese on balance sheet debts to GDP are roughly 350%. | |
| I mean, again, a number that's so difficult to deal with, especially when you're having an economic crisis. | |
| So on balance sheet, when you're talking about yuan-based debt, like you're seeing in their banking system and in their local government financing vehicles that aren't dollar denominated, what you can do is you can just print the yuan, right? | |
| You can print a lot of them. | |
| You can abandon moral hazard and plug those holes. | |
| What you're seeing happen in that market, the PBOC announced that they're going to put in place refinancing vehicles for about $1.6 trillion worth of the, call it $14 trillion market. | |
| So more than 10% of the market. | |
| And it hasn't helped that market at all, which is fascinating. | |
| At the same time, there are still these deep international connections. | |
| And I believe that this has indeed been Communist China's project to basically insinuate itself into the global economy. | |
| You know, if we go down, we're taking you down with us kind of idea. | |
| I don't know what you think about that. | |
| This is this concept of they're so economically interconnected that basically they're too big to fail. | |
| And more importantly, that because we're so economically dependent on one another for various things, that we'll never have a conflict. | |
| How many times did you read that going into World War I and World War II? | |
| That was the talking heads were saying there's no way we can actually go into a war. | |
| The world's too economically interdependent. | |
| We'll never have another big one. | |
| And I hear that again. | |
| I hear that chorus repeating yet again. | |
| And yet we actually share almost nothing in common with the Chinese Communist Party. | |
| We look at the world completely differently. | |
| We value basic human rights. | |
| We value the right to own real estate. | |
| We value law and order. | |
| We value so many things here that they just have no concept of over there. | |
| Everything is for the benefit of the party chairman, Xi Jinping himself. | |
| So it's a very different world. | |
| When we don't share values and all we share kind of economic leanings and we have outsourced just about everything to China, there's a world in which the U.S. can actually turn that around and bring some of that manufacturing back onshore, which I think is certainly going to happen. | |
| And I think the world's going to just be a different place. | |
| Just imagine if Xi Jinping were to leave Taiwan alone, how much better the world would be. | |
| If there was no threat or fear of a kinetic conflict with two of the world's nuclear superpowers, I think we would all sleep better at night. | |
| But in the end, Xi Jinping has told us since 2017 that he's going to do this. | |
| And we have to be worried about it. | |
| And we should be concerned. | |
| And we should also take him for his word. | |
| He said it enough times for me to believe it. | |
| And at some point in time, he's going to go. | |
| And, you know, he's told the PLA Navy and the PLA Army that to be ready by 2027. | |
| And so here we are in June of 25. | |
| I mean, 27 is pretty close. | |
| So let's talk about leverage, right? | |
| The CCP had demonstrated one point of leverage it has against the U.S. and, you know, the free world, which is the control of rare earths. | |
| And they use that, it seems, as part of this, you know, the current deal that we exist in. | |
| And so how do you even view, with everything you just described, what kind of a deal is it possible to make? | |
| But also given the realities that there are these different points of leverage. | |
| And I'd actually like to discuss that too. | |
| Like, what are the points of leverage that the CCP has? | |
| What are the points of leverage that the U.S. has? | |
| Yeah, okay. | |
| So the CCP has some key points of leverage. | |
| You mentioned rare earth metals, you know, as they recently demonstrated rare earth magnets and the magnets that enable the EV engines to run. | |
| So they withheld those in the most recent trade kerfuffle. | |
| And they also, not reported a lot, not reported well, is the lasers that are used to generate fiber optic signals are almost 100% made in China, and they're withholding those from many of the folks that use those fiber optic lasers and things related to communications and computing. | |
| So you've got some real single points of failure there. | |
| That's not rocket science. | |
| It's just us needing to create our own domestic capacity once again. | |
| And that requires the president to enter some orders. | |
| And you think there's got to be some sort of Manhattan project that we can engage in to fix these, to right these wrongs, to balance these imbalances. | |
| And I think another one is like synthetic graphite. | |
| Synthetic graphite is in every single EV battery. | |
| We mine the raw materials in Louisiana and we ship it all to China and they handle 100% of the finishing. | |
| So things go from synthetic graphite to antibiotics to fiber optic lasers and rare earth magnets. | |
| So you feel like they've got a stranglehold on us. | |
| Well, with them, they import 13.5 million barrels of crude oil every single day. | |
| They import nine Bs of LNG every single day. | |
| They import 40% of their food every single day. | |
| And they need access to the US dollar system. | |
| That is a single point of failure on their part. | |
| They have a closed capital account. | |
| They don't have the ability to purchase things around the world in Yuan or R ⁇ B because no one accepts a currency they don't trust or that doesn't trade. | |
| They need convertibility into something else. | |
| So whether you look at dollars, Euros, yen, or pounds, we're really all talking about dollars. | |
| So we hold the Trump card over China and we should be socializing this concept that because again, deterrence is something that we should all be engaging in to try to stop China from being militaristically Belligerent with Taiwan, they should know that one of our first moves in the event that we know unambiguously that they're moving on Taiwan, one of our first moves should be to simply remove them from the system. | |
| And we can do so. | |
| We can do so pretty easily. | |
| Now, it's a difficult button to press because, like you said, it's going to hurt us and it's going to hurt them. | |
| There is no easy button, but there is a button we can press and we will press it if they move. | |
| That is a better first move on our part than sending carrier strike groups of our brave men and women into the Taiwan Strait. | |
| You know, in a kinetic conflict with China, as we all know, tens of thousands of our men and women will die if that happens. | |
| So let's think about the non-kinetic ways in which we can effectuate some real pain on China. | |
| And that happens in the financial realm. | |
| It happens in the space realm. | |
| It happens in the cyber realm before it all happens in the kinetic realm. | |
| And those are things that we as a country are certainly thinking about and socializing right now. | |
| And it's terrible that we are because, again, if she would leave Taiwan alone, we wouldn't have to even talk about this. | |
| We'd be just talking about economic problems. |
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