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Full transcript below
Full transcript
everyone today we are on another uh great episode was seven today everything fine here we we have a an interesting um month going on right here in Argentina because we are in the middle of the elections you know we are we are coming election for President then and uh every everyone got like a big surprise when the the the libertarian party one right so it was quite a great surprise um all the the the the previous uh experts or all the experts said that that this guy was going to be the last one and and was not going to to win and
00:46 he won by some point so uh now we are waiting for the general election the last one was like a pre-election then we have the general one and and so we are having some interesting months here in Argentina variety yes I saw that and it was actually interesting because everyone that was expecting this Clash of winter another peronisto and yeah does it mean that Argentina is kind of going away from this uh old uh model I don't know I thought I hope it does um it's uh a long way to go because I mean this candidate
01:37 um the problem with with this candidates is that he doesn't have the the enough boats in the Congress to to pass all the laws he needs so I mean there is a a huge like um question mark about how is he has he going to to to rule the country without being able to pass any loss if he doesn't moderate and and and and make agreements with with the peronists or or with the with the the other party so I mean it's it's um it will be a 2024 will be an interesting year for Argentina definitely um so yeah but let's hope it does I mean
02:16 and now in Argentina we are actually having a totally out of control inflation where we are going ahead towards uh 150 percent annual inflation by the end of this year so yeah as you're here yeah 150 so uh yeah that's a quite a crisis mainly because of government spending a lot of more money than what they should and and printing a lot of money so I mean yeah let's hope that this this uh this new candidate brings a change in in terms of of um of fiscal policy and and and and and it turns to to a more
03:00 um controlled government right or control government spending so yeah that that's that's uh that's our hope that's awesome that's awesome so he uh was it like the first round of the elections or is it like yes we have um like a pre-election where the list voted candidates um are like um I are like uh they cannot present themselves to the to the federal election right it's like a pre-election where they raise the small parties right so um if you don't get like I think that it's five percent or three percent of
03:42 the votes in this first pre-election you cannot present yourself for president in the general election that will be on the 22nd of October so now we have just four candidates for president one of them has really really low votes so I I think that he's he's out of the out of the the equation and the other three are well the parents that are the the ones that are actually um in the government and we have the the main oppositor that is the a party called cambiemos that in English is something like change no right so
04:19 um that is like the the the the main opposition to to the Pyrenees and and the libertarian guy that um unexpectedly got four boats that the other two so I mean let's see I mean we are all like waiting for the general election to see what happened right but um it could be a a change because we're we're coming from lots of years of iranist governments and um it will be a nice change to see something different right so yeah right right awesome yeah I mean that's a good time and from that topic we can jump into
04:56 like the main topic we actually wanted to discuss but we're kind of a couple of weeks late but we wanted to discuss this uh really interesting thing happened uh in South Africa it was bricks uh uh uh I mean lots of things have passed but what it kind of like is it's a disadvantage in terms of the news cycle yes we are later but we also can see from a perspective of like time and we we've seen what happened as a result of it for sure for real so well first of all Argentina was uh invited to bricks
05:31 yes as well as recently Saudi Arabia and yeah yeah mainly there were mainly oil producer or all processing countries and Argentina right so uh all the Middle East oil producing countries um and Argentina were the ones invited to join uh on on this on this new round right so bricks are growing they also added someone from Africa so they added yes I think that yes Egypt and Ethiopia uh yes so that that's an interesting case but uh my question here would be what do you think from the economic perspective I mean bricks 06:12 is somewhat like a political slash economic Union like that's what it should be but um some experts say that this uh Summit and Johannesburg was a failure some of them say that there was a success what's what's your take on it I think that that yeah I mean this is like the plan the Chinese plan to rule the world right so this is the the opportunity for for for China to break with the with the American uh domain over the world economy and and to take place in I like that like in in the in the Throne of the largest economy
06:56 right so why well mainly because if they manage to do what they want to do that is to have a common uh a common currency for for all the bricks uh and backed by gold that that is what they are saying right they are saying that they want to grow to be able to create a currency of their own for international trade um that will be backed by gold um if that really happens I mean it could be the end of the United States as the ruling country in the world right because um if you take into consideration that uh this new currency will be backed by
07:38 gold that is probably the most secure asset in the world right besides the US dollar um and if you think that will the weeks will be probably um in the same level of GDP that as us I mean let me let me see if I can share you the screen for one moment and show you an interesting chart um so let me see if we are sharing one moment I'm sorry but it's not sharing or yes it is loading okay as we wait I continue with with what I was saying okay so if you look at the GDP by country there okay so now we are here right so this is the GDP of the of
08:37 the world right so um if you look at United this is for 2022 right so if you look at um at the United States we are talking about 25 trillion dollars right so and China has around 20 trillion but if you are India to that that it's 3.3 trillion and Brazil that it's 1.8 trillion and Saudi Arabia and Iran right so if you add this this these countries you will be looking at uh um um an economic group right like an economic Alliance that has more GDP than the United States and also more GDP than um the the other big economic Alliance
09:25 that is that is the European Union right um so it could be a a a change in the world order right because most or I mean the the transaction the international transaction I mean exports and imports um for the main GDP countries will be done in these new currency so all these countries will not need um US dollar anymore to do their trade so what will happen is that they will sell they will or they could sell all their US dollars to change them for this new currency uh and I mean that would be but some bad news for the dollar right so
10:07 um that that is like the the the big the big picture right but I mean how probable is that well that is that is what everyone is saying that that this is a crazy idea that will never be implemented right so um I really don't know how how crazy is yes this idea but but there are some things that that made this crazy idea be possible for example um one reason to add all the the Middle East countries is because besides they had the oil that it's very important they are they are the countries that have more gold in the world you know the
10:47 Arabic countries love getting gold and then and and all those those are those guys are are really big fans of gold so they accumulate tons and tons of gold right so if you think that the bricks need gold to create a gold-backed uh currency and they are joining the rigs or they're inviting the bricks all their countries that have their both amount of gold well that like allows some numbers right so if you add some numbers I I mean they seem to be um going towards that goal if they're going to do it or not well
11:25 that's the big question right I think that's a big question because if the risks cannot um cannot get to to one unique currency um it's difficult to think that they will get far in terms of of economic power right because the the Chinese currency I mean of course it's a very strong currency because it's it's China and and the size of their economy but you know there is always like a um a doubt over the the numbers of the Chinese economy right these are the those numbers correct are they lying
12:06 they don't show how they calculate their numbers so they just say okay we're going to be throwing but you don't see how that was calculated so I mean how can you know if they're really growing or not they say one day they say they're they're I know there is their their real estate market is as strong as never and the other day ever Grant broke and then another biggest on my broke so I mean it's it's uh there's always like adult over the Chinese numbers and that is something that that makes the the Schwan
12:42 a little bit weaker than than it should so um if all these countries they show them for for trade I I don't think that that will be a problem for the U.S economy if they really manage to create a new currency but with gold well then we could be looking at us at a potential change in the world order right I mean that is the that will be the deal breaker here awesome awesome yes some some experts are saying that uh India and China are kind of like the split or um splitting those two is basically the objective for the West uh in terms of
13:21 like how to make this uh bricks not actually work and not possible um cool I have another topic yeah so one more thing one more thing to what they are um let's say they go One Step Beyond and they adopt their this currency that they create as the Euro no for a currency for internal use so in that case you will be looking at like half of the population of the world using that new currency right because if you adapt China and um and India and Brazil that has quite a large population then um you will be looking at like half of
14:01 the people in the world you've seen uh one same currency so uh so that is another thing to take into account right no that's so true that's so true um it's interesting so since then well since the brick Summit there was actually June 27th as well which is which supposed to have all of those same guys but uh in a different kind of environment it's funny um it's the same Brazil same China same Russia uh basically just uh meeting with uh some of the European counterparts as well uh uh yeah it happened in India uh uh it's
14:41 actually happened well now they call themselves to harat just for the events I guess but it's interesting scenarios out there as well uh what do you think about G20 and how like was it successful most of the experts kind of agree that this G20 was not successful it was nothing really interesting out of it uh and um yeah because it was basically uh getting people together that do not want to be together so uh yeah it wasn't that successful during decades um the U.
15:24 S has been the the country of ruling the world and no one wanted to be the ruler of the world right so the US was the one that really ruled the world they manage all the politics you know the world they they controlled everything so um the G20 meetings who are meetings were like they all met and and discussed things but mainly the decisions were taken before the meeting and and everything was uh was like more harmonic because no one was trying to be the world leader right so now the world is is going into a an era where where it has already
16:01 started right but um were there are some countries that are discussing this world order right so China Russia India are discussing this world order right so um being in in that agreement is far more difficult than it was before right because um what will be in interest for some countries won't be the interest for another ones and and what will be good for some countries won't be good for the other ones so um I think that that G20 is as you say I mean it's a group of people that don't want to be together and that doesn't
16:41 have and they don't want to make any agreements because they really are they what they really want is to make the agreement that they will be or that will benefit their countries and not the whole world so no one is caring about the world now I mean everyone is caring about who will rule the world in in the next you know 10 to 20 years but no one is caring about the world right now so um in in that sense the G20 that was created with that with that sense I mean the G20 was okay let's get the top 20 countries in the world together to
17:18 discuss a stuff that will be to improve or or that will remain to improve the world um I mean that spirit is dead so as that spirit is dead because no one wants to improve they want to rule um yeah I mean I think that that we will see that we will in the future we will see G20 meetings being more boring with less with less agreements with with less important news and and yeah I mean that that's the the name of the game right now right because also I mean you're inviting countries I mean that that are in in a new Cold War
17:59 right I mean Chinese China and USA are like a special like a kind of of old world where they are not fighting with guns but they are fighting with with Commerce um USA ban Chinese uh semiconductors uh China Vans um us iPhones or right so they are like they are like in in a world that is not not being fight with guns but but it's been fine with with Commerce and so I mean it's like going to to cancer that really hate themselves together in a room hoping that they will agree on something I mean that it's really weird and and
18:40 very little problems that they can agree on on something right yeah that's so true because uh um especially with uh yeah with uh the the kind of cold war as you said going on between China and other states yes um Cold War in in 2.0 right it's called word 2.0 right so yeah instead of guns they use Commerce um yeah so there was actually news about that um the hallway the Chinese uh telecommunication giant uh was able to do some breakthrough in semiconductors and and implemented seven uh nanometer uh uh chip
19:29 inside the phone uh there was a clash right after which resulted in iPhones presumably being banned in China yeah in China then an iPhone present iPhone 15 presentation without Tim Cook uh was like and Apple stocks just crashing uh in the last couple of weeks uh yeah yeah what do what do you take on that what what words is this semiconductor where it's going to take us I mean again there is always a an idea of trying to make things trying to make things for the good reasons when there are really bad reasons right so what did you say Okay
20:17 us said Chinese is getting very empowered for military so we cannot let um China to get more semiconductors since they will use them for military actions in Taiwan right so okay if you look at it like that way you say okay that's something good I mean you're trying to avoid the war in the end what they are trying to do is to to freeze the the technology industry in China right because I mean I mean yeah semiconductors are used for war and for for war Machinery it's true but they are not mainly used for that
20:55 they are mainly used for for electronics for cell phones for so in the end it's just another another move of the U.S trying to freeze the the the Chinese economy and and the other side I mean and from the other side the answer is okay um what we will do okay we sell through Singapore for example so uh Singapore buys semiconductor Singapore sells to China and everything like gets in the in in in in in a in a space um like in a moment where where no one is getting benefit out of this right because U.S companies are now
21:39 worse than they were before because the technology company is right because they are getting problems or maybe they cannot export the semiconductors to China that is their first customer so you are destroying the the US producing um the U.S technology producing companies um Chinese are trying to now make their own semiconductors they can get in some breakthroughs because they have a lot of money and they can use it to that um but at the end they still have problems with um with with their industry and they are
22:16 freezing also their Industries and at the end what I think of of this kind of of Wars is that nobody thinking about the people that work in all those companies right because um if a chinese Semiconductor Company cannot get the semiconductors they will produce less and they will fire people and people will be starving because someone doesn't want or because us doesn't want China to get rule in the world and the other way then there were around those right China says okay no more rifles here in China and and
22:50 Chinese one of the top buyers of iPhones in the world so it's probably that Apple will fire people they will reduce their production if they can not sell iPhones in China so and people again will be fired and will be without their their jobs and and and and everything that that comes with that so um I think that that these these guys are like fighting a war over the world order without thinking of the of them consequences that that's that this world is having for the rest of the world and for the people right so
23:27 um but you know it's all about power it in history it has always been about power so um I mean it's just about that yeah that's so true that's so true and this technological war going on in between I mean it was about 3G like a 5G networks remember yeah like when Trump was in the office they banned Tollway from uh being able to using the 5G yeah yeah yeah yeah in Europe and now it's just gotten into semiconductors so yeah the whole stuff is just going in between places um and that being said this really
24:08 interesting thing happening uh with the German economy you know on the other side the Germany's economy is not doing well as well that is really bad news for Europe you know for the European Union I mean um the European Union is mostly mostly sustained by Germany right now right because um if we look let's say we look at Arena at this chart right so let me um share the screen again uh so if you if you look at Europe right so here you have it um and and you take out the UA the UK because after the brexit they don't
24:48 belong anymore to the European Union it's all about Germany and France right I mean um the other countries are quite small right so Spain one point for trillion Italy a little bit more but but it's everything about Germany and France and made mainly about Germany right so um and so Germany being in in in in the verge of of uh of a crisis I was looking at some news yesterday that said that um for 2023 it's expected to the the German economy is expected to shrink uh about 0.
25:26 4 percent of the GDP um and inflation is around six percent uh that it's a really high inflation for for a European country like the Germany um so that that's is really bad news for Europe right if Germany Falls it's uh quite probable that that the rest of the European economies will fall along with Germany it I don't see a scenario where Germany could fall and the other countries would keep on growing right um maybe France because it's it's quite big but but anyway I mean Germany Falls all the European Union will fall so
26:06 um that that's really bad news for Europe and yeah and lots of Germany's business model was about cheaper energy right so and with the lack of dependency during during years during decades I would say they they all relied on the cheap energy that that um that Russia provided right so um and and it was like giving the the the keys of your house to uh to your enemy right so um because they they they all relied on the cheap energy of Russia and and and Russia has always been and always will be an enemy of the United States so if
26:51 Europe wants to be an ally of the United States um then it was a matter of time till Russia invaded a country or or or or or or did something like this right I mean the the conflict in in the in the in the zone of of the the the border of the Russia with Europe it's uh I mean has decades I mean see this since the the Soviet Union uh they have been trying to recover on those territories right Russia has been trying to recover territories since since you know was he solved in I think that 91 I think it was um so it was a matter of time to Russia
27:34 invaded the country right and and the same was Ukraine so um but Europe decided to rely in in in in cheap energy from from Russia and now they are paying the price of of that decision right I mean it's uh it's like that so true so true right before our uh previous podcast uh oh some doggy is barking over there sorry yeah yeah so uh uh right before our previous podcast we had this uh you gave a prediction that uh that Powell is going to increase I mean that the Federal Reserve is going to interest increase the interest rate they
28:23 did uh well things are uh it seems like the US economies it's not actually like it's it's it's there it's just I mean um there's not much news coming in from like political or I mean like economic news coming from the states mostly political stuff going with Biden and so on and Trump obviously uh I'm gonna look not the case against him but from the economic perspective uh what's happening what what do you think is happening from the economic perspective everyone is like um like waiting for the final scenario
29:06 right so the U.S is facing basically two scenarios one is the soft Landing that that China Challenge talks about all the time self Landing means means controlling the inflation without recession right that that's of Landing uh and the recession scenario right that's the other the end scenario um the experts are quite divided in this matter there are people that think that um that U.S.
29:37 will enter into a short recession I mean it will not be like 2008 but but it will be like a short recession maybe one semester of of recession maybe first semester of 2024 some some experts say that that there will be the the recession um and some experts says that they are that the the numbers are are quite strong especially the the the mark the labor market you know the unemployment is in the lowest levels in the in the Border history of of of uh of the U.S.
30:12 so um some guys say okay we have a strong labor market we have a strong consumers okay our consumers are strong uh so if consumers are strong and labor market is strong um there is no no reason for for panic and and the US will be able to control inflation without recession and on the other side what what people say or whatever things that that um or the reason why some experts think that that there will be a recession is mainly because um I mean uh the consumers are strong or what these people say is that consumers are strong
30:51 because they still have some money from all the good money printing of the of the pandemic right they still have some Savings of the of the pandemic so and that is running out right I I I listen the other days to uh of an interview I think that that was the president of I don't know with what um of Chase Bank or I don't know a big bank I don't I don't recall now which one that says right that separate that he said the US
31:20 economy is still um enjoying we have the U.S consumer is still enjoying all the money that the government gave them during 2020 and 2021 but that money is running out and when it does uh U.S consumer will have to um adjust their spending and and that will be the reason for recession um so when they start consuming less companies will start producing less and that will lead to unemployment and that will lead to recession right so that that's uh that's the the the the the the the the theory right behind that so
32:00 um I think that now everyone is like looking at okay what will happen right because power's strategy now is clear he's uh determined to reduce the inflation no matter what if they need to continue Rising interest rates they will do it uh is if they think that this level of interest rate is enough they will keep it until uh inflation rate is on two percent that that will take several more months so power status is clear um so now it's a matter of reasons right so what will happen I mean the the doubts over that that was that that was
32:42 what what happened some months ago right some months ago we had some doubts regarding power strategies right so when some banks started to like um Silicon Valley Bank another bank started to crash um there were some doubts regarding okay what will Powell do right we will he avoid a banking crisis and and stop Rising interest rates or he will sustain the the the the the strategy and keep on fighting inflation power made it clear that his intention is to fight inflation until it reaches two percent right so um so that now is quite clear I mean there
33:19 is there is no doubt that that power is determined to do that so now everyone is waiting for the result right so everyone is waiting for some Landing or um or or short recession right there is there is no other scenario in the middle so I mean it's just a matter of waiting to What scenario will be uh in the next month great great point so the world economy is waiting so it's basically just waiting what's going to happen yeah what's going to happen I mean everyone is well I mean if you see for example if
33:51 you see the markets they are now um all the markets in the world are now corrected right so SMP is going it's a big 500 it's going down if you look at Nasa it's going down if you look at cryptocurrency Bitcoin is going down right because um they have got all the money that they wanted out of the market now they are going to wait and see and now it's the strategy is wait and see so they are taking their profits they are selling and and waiting for the for for the for the crisis right so yeah they are just waiting for
34:26 that cool and my last question today would be about that then so um since uh US economy has so much influence over the world's economy yeah but IMF IMF just recently uh gave a little bit of a positive or optimistic view of the economy saying that the world economy seems to get be getting better uh including like uh turkey and uh yeah and even yeah some some other states as well um so uh what What's your prediction or what's your what are your thoughts about uh what's gonna happen in the next couple of months uh was uh world's
35:08 economy yeah turkey specifically or uh I mean European Union isn't a little bit of a state yeah I think that that it all depends on on on the U.S on on the main on the main point here I mean if U.S economy falls into recession we are looking at a global recession without a doubt there um China obviously Chinese economy um you know Chinese don't speak much about recession they don't want to talk about it but if you look at the real estate market that is like a thermometer of of the economy of the rest of the
35:46 economy uh in China the the the real estate market is being destroyed with large enormous companies being bankrupt and so I mean it will depend on Chinese economy and in a in a less um in a less um critical uh standard point it it also share money it's uh it's important for Europe right I mean Germany for Europe is quite important for the rest of the world the German economy is not that big for Europe it is a a huge problem is if the if the German economy goes into recession right so I think that those are the the key points
36:30 it's hard to know I mean it's hard to to tell um what will happen because um if if this um if this um the theory of of the money related to post-pandemic uh running out is true uh then the outcome will be recession definitely I mean how much um how how much money how much more money can Americans spend when their salaries I mean is uh it's negative I mean if you look at real salaries they are being they have been negative for months right so uh so the the the the Americans are running out of money they are getting
37:17 even more and more debt if you look at Great candidates for example exactly it's exploding so how much death can they take and how much um real salary can they lose before they stop consuming so um the theory of they are still consuming the money the that the government gave to them during the pandemic could be true I mean it that could be true and if that is true and they run out of money they will start spending less I mean it's uh um a natural process I mean if you if you cannot get more money out of your
37:52 credit cards and you run out of your savings and your salary is losing a purchase purchase power well I mean the outcome is obvious you will consume less I mean it's it's inevitable so um and in that case I think that that recession recession will be inevitable I I think that that we are still on a path of a global recession um again not a last recession right we are not looking at a 2008 crisis um but we are looking maybe for a a sure that a soft a soft and short recession for first semester of next year maybe or
38:33 something like that um I think that that that scenario is still the most probable one I mean looking at a Chinese real estate market looking at is spending uh of consumer spending in the US looking at Germany with projections of 0.4 negative GPS hcpd sorry HTTP sorry um looking at those those uh those facts I think that we are looking to a global recession um for for next year but in it all depends on on the outcome of of the US mainly China and Germany in a in a smaller piece of the pie right so yeah cool well great Point great conversation
39:20 today so well thanks a lot let's step on for uh jumping on a call today what I can tell for sure China is not gonna have a recession at least on paper because they'll never say the truth right but that's a problem I mean if they say the organization is it will be a worse recession that will that the one that they will really have right so they will always soften the numbers right so um yeah yeah I mean it's it's like that cool awesome well nice conversation nice job all right thank you very much bye
39:54 see you
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