A New World Order | Yaron Brook Show
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All right, everybody. Welcome to Your Own Book Show.

On this Wednesday, April 9th, the day that Donald Trump blinked, capitulated, gave up. Maybe not so much. Somewhat. Some of it. Anyway, the day where maybe we realized more than any other day that we're at the complete whim of an authoritarian thug in the White House. It basically is whatever he wants. One day yes, one day no. One day partially.

Don't like Chinese, go after them. Insanity is the name of the game these days. So yes, we are here to give you the latest on what is going on in Washington, D.C. and how all this really adds up to, really does, I think, add up to a new world order. We'll see how events develop in the next few days, hours, days, weeks, months. But the world will never be the same.

after the last few days and weeks, and we will talk about that. And it's going to be interesting to see how events develop in the next few days. The market today, up the NASDAQ today, technology stocks, technology stocks were up, what was it, 12%? 12%, one of the biggest increases on a one day in the history of the stock market. We'll get to that. All right, I'm back home.

Jet lagged. So maybe I'll be a little slow today. I don't know. We'll see how long I last. We'll see how long I last given the jet lag. I'm like, I want to go to sleep. But we'll hang in there and do the show. I expect shows tomorrow and Friday. Not sure exactly what times. I'm still working on those. At times, a little unusual because my schedule is a little bit in flux today.

And then over the weekend, there will be a show on Sunday. I think the show on Sunday is going to be, I think the theme of the show on Sunday is going to be how Trump is the worst negotiator in human history. I think that's going to be the title. Trump, the worst negotiator ever. That'll be Sunday. And it'll be a promised and entertaining show. It's a sponsored show. I got a sponsorship for that one. So it is, it is, it is going to be, is going to be fun.

And I think interesting. I think interesting to see all the ways in which Trump fails in negotiating. All right. Reminder to everybody, Super Chat is open. It was opened by Willie Randall with 100 Australian dollars. And so thank you, Randall. So, yeah, jump in. Thank you, Robert, for the sticker. And Catherine, Catherine said, like, she's going to bed. She's in Europe. It's too late.

But she left some dollars. So thank you, Catherine. That was very generous and nice of Catherine. You can do the same. Come on over to YouTube where you can participate in the Super Chat and also contribute to a sticker. Ask me questions. That basically determines the direction of the show. God, the US, the Australian dollar just keeps sinking lower and lower in terms of American dollars. So yeah, come on over. And...

and uh let people know we're on live right now on on twitter wherever youtube but let people know um that they should come over and participate in the live chat that is going on if you're not a subscriber please subscribe if um if you're on the show and you're listening and and you like it press the like button that'll help a lot all right let's jump in uh

God, what a few days this has been. We saw the stock market react to Trump's liberation day last week where he placed so-called reciprocal tariffs because they're not reciprocal. They have nothing to do with the other country's tariffs. And we saw just the market collapse as a consequence of those tariffs. We saw the market go down dramatically.

And it became, and we saw Trump really say he was committed to these. I mean, I've got to quote some of him saying, I'm not going to change my mind. This is it. We're going to stick with these. We're going to go with them. And indeed, Netanyahu, Benjamin Netanyahu, met with Trump yesterday. And he came all the way from Israel. And he was going to ask for, hey, look, our tariffs on American goods, we have lowered them. Without even asking you, we have lowered them to zero tariffs.

Please lower the reciprocal tariffs because you're invited to Circle K's Inner Circle member celebration. On April 10th, Inner Circle members across Arizona and Nevada will get an exclusive 40 cents off per gallon from 6 a.m. to 11.59 p.m. Want to join the party? Just download the Circle K app and create an account to join Inner Circle. Don't miss your chance to save 40 cents per gallon on April 10th all day.

Sign up now. Terms and conditions apply. At participating locations, visit the Circle K app for details. It's a celebration. Circle K inner circle members can save 40 cents per gallon on April 10th from 6 a.m. to 11.59 p.m. at participating Circle K locations across Arizona and Nevada. Download the Circle K app and join. Terms and conditions apply. Visit the Circle K app for details. House is zero. Trump's reciprocal tax on Israel is 17%.

And Trump said, no, I don't think I'm going to lower them below 17%, even though yours are zero, because there's a trade deficit. You see, Trump doesn't care about other countries' tariffs on American goods. Only thing that matters to Trump is the deficit. So if you're running, if Israel is exporting more stuff to America than it is importing from America, which I don't know, maybe they're not counting military equipment or something. I don't know how that works. But

If that's the case, then yeah, you get America places a tariff on you. Because for Trump, again, zero sum mentality. And this is one of the things I really keep repeating, but I want to try to get people to really get. This has nothing to do with anything, the whole tariff thing. It's not 3D chess. It's not tax revenue. It's not...

bringing manufacturing back home. It's not any of those things. It is everything to do with Trump's perceptual level understanding of the essence of trade. A trade deficit for Trump is we are losing somehow. There's no conception of win-win. It's win-lose. So you got to balance the win-lose transactions with lose-wins. And if the trade balances, then at least you're not losing.

So what he wants is with every country in the world, he wants a trade balance. So he wants a poor country like Vietnam to buy expensive American goods in the same quantity as American buys cheap Vietnamese goods. Same dollar amount. I mean, that just can't happen. Vietnamese are not rich enough to buy the kind of things that America actually makes and produces services primarily. It's crazy.

It's stupid. It's insane. It's non-economics, anti-economics even. And it's perceptual level. It's non-conceptual, non-conceptual, anti-conceptual even. But that's the level at which Donald Trump functions, always has. And he really believes this. Again, this is the one issue, the only issue, really, that he has not changed his mind about since the 1980s.

He wrote about this in the 1980s, about trade with Japan. And just the same as he did today. We're subsidizing them. We should have a trade deficit with them. And we need to do whatever we can to bring trade into balance. Or ideally, we sell them more goods than we import. That way, we're being subsidized by them. That's okay. Win-lose, you want to be the win. They're going to lose. So, yeah. So, this is a case where...

There's nothing going on here other than Trump's ignorance. Nothing, really, nada. And again, Vietnam has come over and said, we'll lower tariffs to zero. Will you lower your tax? Will you lower these new tariffs for us? And Trump basically said, well, let's negotiate. But this is not some way of achieving free trade, zero tariffs across the board. This is not some leverage he is putting on other countries to lower their tariffs.

Anyway, what has been happening in the last few days is the first day that Trump and we're going to go through a little bit of financial market stuff. In the first few days, the Trump announced the reciprocal in quotation marks tariffs, which were banned.

Some of them were up 60, 70 percent, which were not reciprocal because it was just a trade deficit divided by exports. So it just represented the extent to which we have a trade deficit with the country, not how much tariffs actually put on American goods. The stock market collapsed 15 percent. And this morning it was going down further. At the same time, another interesting phenomena was going on. The bond market. This is a government bonds market.

that are traded. And in the bond market, initially, people sold stocks and bought bonds. Bonds are usually what's called a safe haven. When people panic, they buy bonds because bonds probably don't default. The US government probably is not going to default on them. And therefore, they're a safe haven. So everybody buys the bonds. When you buy bonds...

You drive the price up, the yield, the interest rate, the 10, in this case, 10-year interest rate that everybody's watching, went down. It went down a lot in the first day after the tariffs were announced. And then something curious started happening, which was completely unexpected, or at least unexpected by most people. Stocks continued to go down, but then so did bonds, very similar to what happened during COVID. Bonds started collapsing.

In other words, bonds, American bonds were not viewed as a safe haven anymore. Or somebody out there was selling American bonds, 10-year bonds and 30-year bonds were being sold in quantities that we just have not seen. In other words, the interest rate, 10-year interest rate and 30-year interest rate suddenly went up a lot. Now, if you remember on my show last week from Israel,

I mentioned one of the ideas that Ludwig or Besset or one of these mindless Trump appointees made on one of the talk shows. And he said, yeah, I mean, if the stock market goes down and there's a recession, you know, interest rates are coming down, interest rates will go down. That will allow the government to raise money at lower interest rates, save money.

interest payments by the government and that'll reduce the deficit and reduce our debt. And that's a good thing. And there was a couple of days there, like Wednesday, Thursday, or Thursday, Friday, where it looked like, yeah, that looked like that might be happening. And then all of that reversed. And suddenly interest rates started going up, the 10-year, the 30-year, all going up significantly. I mean, some of the highest percentage changes in interest rates on the way up

That we've seen in modern times. I mean, one day was higher than any other day since 1982. 1982. Now that means it was doing the reverse of what Bessert and Ludwig were saying. Because now, if the government wants to borrow money, for example, I think it issued $39 billion worth of debt today. Ten year debt. It paid $10.

It wasn't paying less. It was actually paying more than it would have a week ago or a little bit more than a week ago, but much more than what it had dropped in those first two days. So why did that happen? And why is that what ultimately, I think, forced Donald Trump's hand in pausing some of the tariffs? We'll get to that in a minute. You remember, I think I told you a story once of a

During Bill Clinton's term in the 1990s, everybody talked about the bond market vigilantes. And every time the government did something the bond market didn't like, they drove interest rates up and that forced the government's hand. And James Carver said that if he was going to be born again, he wanted to be born as the bond market because the bond market had the real power in the world, not presidents, not political advisors. It was the bond market that drove the world. And that's what we saw this week. That's what we saw today.

The bond market basically spoke. And the bond market said, what Donald Trump is doing is insane. It's driving up risk. It's driving up the prospects of higher interest rates in the future, potentially inflation. But really what it drove up is not inflation, I think. It's risk. It's risk of either the federal government defaulting or more likely the federal government having to inflate in order to pay off its debts.

given the insane economic policies that are being followed. It's also the case that a lot of our politicians

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It's a celebration. Circle K inner circle members can save 40 cents per gallon on April 10th from 6 a.m. to 11 59 p.m. at participating Circle K locations across Arizona and Nevada. Download the Circle K app and join. Terms and conditions apply. Visit the Circle K app for details. Bonds, government bonds, U.S. government bonds are being held by foreigners, the Chinese, the Japanese, the Europeans. And you know, suddenly all these people are

might be losing their appetite to invest in the United States, partially because the U.S. is just behaving like a thug and they just for political reasons might think, why should we put our money in an economy whose president is treating us like shit? And secondly, because they might be looking at the U.S. and saying, the U.S. is heading towards a recession potentially because

These tariffs are not good for the U.S. economy. Why would we want to invest in an economy in a downward spiral? And add to that the fact that in spite of all the doge, it looks like the Senate is going to pass a budget that is going to dramatically expand the deficit and increase government debt. Why would anybody want to buy government bonds, U.S. government bonds under those conditions? There is reason to believe that

Over the weekend, Monday and Tuesday and going into this morning, when again, the stock market was down this morning, either Japan or China or both were basically dumping their bonds, were selling. Part of the problem there is if they sell their bonds, who's going to keep buying them? And the people who buy them, aren't they going to expect a higher and higher interest rate? So

What you saw over the last couple of days is a significant spike in interest rates, in long-term bonds, again, the 30-year bonds, the 10-year bonds. You also saw a massive increase, again, almost unprecedented in terms of the speed at which it happened, a massive increase in the implied yield of high-yield bonds, of junk bonds. That is the risk premium. The premium people are demanding to hold on to risky assets right now is...

Very high. It's similar to what it was in March 2020 during COVID. All of this, I think, caused the people around Trump to panic. I mean, really panic. You saw elements of this over the weekend, particularly last couple of days, where Elon Musk came out against the tariffs, came out against Peter Navarro, started calling Peter Navarro names. Peter Navarro started calling Trump names. And there was this whole public debate

you know, attacking each other publicly between Navarro and Musk over these tariffs. In this case, Musk was right. Navarro is a bigger idiot than his boss. Navarro is like the worst economist in the world. I think he owns that title now. But worse than Paul Krugman. There's something for you. There's a statement for you. Worse than Paul Krugman. So you could tell that there was already friction within the administration, but

The various Trump representatives going on to the new shows were finding it more and more and more and more difficult to actually defend these tariffs. A number of academics, you know, when they came out with the tariffs, they cited a bunch of papers saying that this is where we got our numbers for the, you know, for these new tariffs. This is what we got the theory behind why we're doing these new tariffs. Basically, the authors of those articles, one by one, came out and said, OK,

That's not what our article says. And by the way, you're using the formula wrong. You're putting the wrong numbers in. In other words, you guys don't know what you're doing. And every single one of the arguments that the Trump mindless zombies were saying on TV was falling apart. And there were even Fox, even Fox propaganda channel, the Trump propaganda channel, that's what we should call it. The Trump propaganda channel, Fox, was starting to have doubts about Trump.

the tariffs. Of course, we know Ben Shapiro was, of course, doubting them. And I think there was there was just ever increasing pressure going into this morning about this. And what happened this morning was stocks went down again and then bond yields went up again. And I think Trump's economic advisers went to him and said, this is a disaster.

A few days ago, I can't remember when it was. It was Monday or I think it was Friday. There was a rumor in the market before the market opened that Trump was going to pause tariff for 90 days. And stocks went up on the rumor. And then the White House denied the rumor and stocks collapsed. So Trump figured out how to make stocks go up. And today at around noon, actually 1.19 p.m., you can tell because he posted this on social, 1.19 p.m.,

Trump came out with a statement basically for a 90-day pause on some of the tariffs. In other words, the pause is only on the portion that he called reciprocal. It's still true. The 10% tariffs on everybody go into effect immediately. It's still true. The 25% tariffs on cars and car parts...

are in place. It's still true that the 25% tariffs on certain goods from Canada and from Mexico, the fentanyl tariffs, are still in place. And this morning, it was still true that tariffs on China were in place. Indeed, as part of his announcement for 90-day pause, Trump raised the tariffs on China. This is what he wrote. Based on the lack of respect that China has shown to the world's markets,

I am hereby raising the tariff charged to China by the United States to 125% effective immediately. In other words, in other words, China didn't come and grovel. They didn't kiss the ring. And therefore, they're the bad guys. They actually imposed reciprocal tariffs of 84% or something. And now he's up to the 125. And who knows what they'll do tomorrow? This isn't him being tough on China. This is him just being his regular boss.

mindless, reactive, tit for tat. They didn't kiss the ring. They insulted me. They're not nice to me response. She picks up the phone tomorrow and and talks nice to Trump and pats him on the back a little bit and kisses the ring a little bit. Even if it's a mild kiss, Trump will immediately lower the tariffs.

There's no substance here, in other words. It's not like the 125 tariffs is increased on China because China is a potential enemy of the United States and we want to bankrupt them because we don't want them to get strong and successful. No, this is just they didn't kiss the ring. He continues, and here's exactly the point. At some point, hopefully, in the near future, China will realize that the days of ripping off the United States and other countries is no longer sustainable or acceptable.

Conversely, and based on the fact that more than 75 countries have called representatives of the United States, including the Department of Commerce, Treasury, and the U.S. Trade Representative, to negotiate a solution to the subjects being discussed relative to trade, trade barriers, tariffs, currency manipulation, and non-monetary tariffs, and that these countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States,

I've authorized a 90-day pause and a substantially lower reciprocal tariff during this period of 10%. Also effective immediately. In other words, they kissed the ring. They came groveling. Now, notice that this is all BS because Donald Trump basically paused the tariffs because financial markets were penalizing him and the economy for raising them. He blinked. He folded. He failed.

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Gearing up for an Arizona OHV adventure? Do your part to keep the fun rolling. Commit to preserving our habitats and keeping Arizona's trails open and accessible by treading lightly. Learn more about responsible OHV recreation at TreadAZ.com. As a consequence, stocks shot up. I've never seen such an upward movement. Now, I think, I don't know, I think it's nuts. Just my personal opinion.

Are stocks, does the market, the technology stocks, are they really worth 12% more than they were yesterday based on 90-day pause by our strongman leader? I don't see how. I don't see how this affects it that much. Yeah, they should have been up 3%, 4%, 12%. At the same time, note, and this is why I don't think this rise in stock prices is sustainable. At the same time, bonds continue to go down.

That is, the yield went up not as much as it had this morning. So after the pause, bond went up a little bit relative to where they were in the morning. But they still ended the day down. In other words, interest rates went up. The 10-year interest rate went up. I think the 30-year went up as well. And generally, when interest rates go up, long-term interest rates in particular stocks should come down. So mixed messages here.

I don't think the rally in stocks is sustainable. There's not enough here to sustain that rally. 10% tariff on all imports into the United States, in addition to the imports that already exist, means a 5x of the existing tariffs. Tariffs are about 2% right now, and they're going to 10%. That's 5x the tariffs. And then, of course, the big issue is one of our big trading partners is China. We export a lot to China. We import a lot to China.

Basically, China trade is dead. And what exactly this means is hard to tell. Amazon, I read today, Amazon is suspending all purchases from China because they can raise prices by 125%. So they're just not going to buy anything. And that's, of course, what happens. It's not that they sell exactly the same volume of goods at 125% tariff. They land up selling zero goods at 125% tariffs.

And indeed, many, many, many companies out there, many, many small businesses, large businesses, medium-sized businesses who buy goods or buy materials or buy anything from China. Many of them are going to go out of business. They're going to try to source material from elsewhere, but it's going to be rough. They can't buy it from China anymore. They can't. By the way, China has very low tariffs on U.S. goods, very low tariffs on U.S. goods.

So it's not we're not penalizing China for having high tariffs. They don't. And it has been declining for the last 30 years. Steady, systematic decline. And they're very low, lower than 10 percent. So 10 percent tariff on everybody is already higher than what China tariffs U.S. goods. This has nothing to do with how other countries tariff the U.S.,

Israel has a 10% 0% tariff on U.S. goods. Now, under this new scheme, Israeli goods coming into the United States will be tariffed at 10%. There's no relationship between the two. Trump has no conception of what trade means and why trade deficits don't matter. We talked about this last week. So here we are today with a pause for 90 days. But of course,

Trump has already said that this doesn't mean that we won't have tariffs on other goods. He is probably going to impose tariffs, specific tariffs, on a number of different goods being imported into the United States from various places around the world, just like he did on automobile and steel. Note that the Trump zombies out in force today saying,

Look what a genius Trump. This is a Trump win. No, this is Trump giving into financial markets. This is Trump loss. Trump got nothing of what he wanted. There's not going to be trade balance, not in 90 days, not in a thousand days. He ain't getting a balanced trade deficit, a zero trade deficit. And that's all he cares about. And the groveling, the kissing the ring. He got a

So they're going to be more tariffs in the days to come, but just more targeted. So they came out and spun this as this is a big Trump victory. But Trump himself didn't say that. I've got a quote from Trump somewhere here. Let me just find this, see if I have it. Yeah. So Trump was asked outside the White House why he decided to institute a 90-day pause. And this is how he responded. Note that he's not saying he won at all. This is how he explained it. Quote,

Well, I thought that people were jumping a little bit out of line. They were getting yippy. You know, they were getting a little bit yippy. A little bit afraid. Yeah. Markets were collapsing. People were afraid. Bond markets were collapsing. People were afraid. Elon Musk was flipping out. People were afraid. I'm speaking for Trump. I'm quoting Trump. Trump is saying he did the 90-day pause because people...

were a little bit afraid. In other words, he paused, he paused because of the fear in the markets. Not because he won, not because he got what he wanted, not because other countries gave in, not because they surrendered to him, but because financial markets were afraid. A little bit afraid is a direct quote from Donald Trump. I didn't make that up. So, you know, you can play the 3D chess all you want. Trump actually says it like it is.

He knows he's incapable of 3D chess. Therefore, he just tells you exactly what it is. Yeah, I caved because the markets were afraid. All right, I titled today's show A New World Order. And I think it is a new world order in a number of different respects. I think the last few, the last week or so, have basically made real the fact that the United States now is in many ways more similar now to Putin's Russia than it is today.

to America. We have a president who can basically sign executive orders in an unprecedented manner, raise taxes on Americans by hundreds of billions of dollars with no checks, no balance, no input from Congress, no input from anybody. Can basically challenge the world like a little dictator with the only checks and balance is the stock market and the bond market. You know, Edward,

I'm just going to do an aside for a second. Edward, you should stop posting comments on the chat and you should listen. You'd learn something. You're very ignorant and you would really learn from the analysis. You might not agree with all of it, but you would learn something. You really would. I'll get to Netanyahu's visit in the White House in a little bit. Because what you're doing on the chat is, it's ignorant and silly. So we now have

really a strong house, a strong man in the White House. As we said, raising tariffs, deporting people. The courts are trying to hold him up, but it's difficult. It really is difficult. It's slow. And on tariffs, I don't think the courts know exactly what to do. And we'll see what actually develops. There might be, I know there are going to be some more lawsuits around tariffs. And it's going to be interesting to see how the courts deal with that.

There's some noise in Congress about taking back the authority, the responsibility, the responsibility, the constitutional responsibility.

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Your next unforgettable experience can happen anytime. Take an Amex card with you for rewards wherever you go. Morning coffee run with an old friend? Earn cash back. Weekend getaway? Earn miles. Amex rewards your inner explorer. Learn more at AmericanExpress.com. Terms apply. Owning tariffs, but I just don't think they'll get enough votes in order to do it. It won't even... In the House, Speaker Johnson won't even come to the floor that you won't let it even be discussed. So...

We now have, for the first time, maybe since FDR, maybe really ever, a president that can get away with, on an economic front, refrigering the U.S. economy and refrigering the global economy, really, without any consultation, without anybody's input. It's whatever Trump wants this morning. The whole U.S. system of government is built around

To prevent this, the whole system of government is organized around the idea that the president doesn't have this power to just wake up in the morning and dictate what should be the order of the day.

That if he wants to change things, he has to go through Congress. He has to have bills passed. And there are two houses of Congress. So it's not even enough to have control over one. And in the Senate, you need 60 votes to get anything done. So the whole point of our system of government is to slow things down, to make change difficult, particularly when it comes to increasing taxes.

or dramatically changing the world economic order. You want to slow things down, to deliberate, to discuss, to think it through, to get consult from experts. But no, we live in an America, a new America, America that did not exist yesterday. I mean, did not exist three months ago. An America where the president wakes up in the morning and decides, hmm, I don't like Canada.

I'm going to impose 25% tariffs on Canada. And somebody might say, but President Trump, you signed an agreement with, a tariff agreement. Who cares about the agreement? I want 25, I will get 25% tariffs. What about Congress? Who cares about Congress?

I want 25% tariffs. And therefore, I will get 25% tariffs. And by the way, I don't like the Chinese. They're pissing me off. They're like not playing the game the way I want it to be played. So I'm going to raise tariffs on them for 125%. I'm basically going to stop trade with China. Now, that's a game changer in American politics. And you can't put this genie back in the box. This is now going to be the standard for whoever comes after Trump.

It's going to be the standard for the next four years. The president will decide, the president will determine, and everybody else will obey. Gone is the American system of government in many respects. Now, there are only some areas in government where, as of now, the president can get away with that. But that's going to expand. You know it's going to expand. It's not going to shrink.

Unless there's some kind of counter-constitutional revolution. I don't see where that comes from. Where does a counter-constitutional revolution, a revolution that brings back the Constitution, where's that going to come from? Who's going to initiate that? Who's going to launch that? The left? Democrats? Republicans? This Republican Party? You've got to be kidding me. This new world order also signifies, I mean, is signified by a complete,

rejection by the United States of what has been taken as its role in the international order since World War II. Gone are America's alliances. Trump has indicated exactly what he thinks of NATO, of Europe, of the UK. No respect for them and no interest in any kind of alliance that signifies mutual defense. I don't know if Trump will leave NATO.

But Trump's commitment to NATO is insignificant. There is no way any of European countries now rely on Trump, on America, to defend them. We're seeing a complete breakdown in trust in America. And it's not just in Europe. The way he has treated Japan, the way he has treated South Korea, the way he's treated Vietnam, the way he's treated Pacific countries, who are necessary allies for us confronting China,

makes alliances with those countries unlikely. And if we do have alliances with them, they will be very, very, very cautious. They're going to be very, very, very suspicious. They have seen how he will turn on a dime on a country like Canada, a member of America's defense alliance, basically forever. America is now reneged on the virtue of free trade. Not that long ago, America was

was responsible and committed not just to free trade in theory, but responsible and committed to the defense of the shipping lanes in the world, to facilitating free trade. We saw that, by the way, we saw the turning away from that in J.D. Vance's response that was captured in Signalgate to going after the Houthis. What did J.D. Vance say? Why should we do it?

Most of the trade up the Red Sea through the Suez Canal goes to Europe. We have no interest in trade, so why should we care? We have no interest in European trade. A complete reversal of the idea that the United States, which it has done since World War II, and the British did before World War II, certainly before World War I, is maintaining the shipping lanes, maintaining free movement of goods across the planet.

not allowing pirates, not allowing Houthis and others to stop the trade. It's gone. So not only are we not committed to free trade anymore, on the contrary, we're committed to, quote, balanced trade, which is BS nonsense. We're committed basically to producing all the goods within our country and trading only minimally with the rest of the world. We're not committed anymore to the free passage of goods. Remember Ayn Rand said that the only...

The only the primary function of foreign policy and the primary function of our military was free trade, was the preservation and expansion of free trade. That is gone. That idea is gone. I mean, it's even true that we live in a world in which the people in power and the people who support the people in power have also completely rejected any kind of trust that

in science, and particularly in modern medicine, the world is different. Maybe the change already started under COVID, but the world, the new world that Donald Trump has brought forth is different. It is basically a world where the United States is dramatically diminished. It's a smaller America. It's an America that doesn't trust its allies, that doesn't value relative freedom, doesn't value trade.

It is an America that has lost interest in the world, but has also lost interest in freedom, in liberty, and in its own economic success. Now, it could be that the stock market and the bond market will save us from this latest Trump irrationality, but it's not going to save us from the fact that we have now created a presidency which is imperial, which is authoritarian, which is strongman-ish, which

We are moving now in the direction of a Putin's Russia with nominal elections, but not that important because whoever gets elected is going to rule as a strongman. Nobody has an incentive to give the power back. In the short run, we live in a world of massive uncertainty. Markets swinging wildly with an authoritarian's whim. Whatever the autocrat feels like this morning, we don't know how to plan. Business is not going to invest.

Long-term planning has gone out the window. What we have is a presidency committed to power, the flexing of muscles. That is not good news for business. It's not good news for economic growth. It's not good news for investment. And by the way, you remember I told you the story of how, well, not a story, the economic fact of how people sell America stuff to get dollars so they can invest it in the United States? Who's going to want to do that?

Who's going to want to invest in the U.S.? Why would they want to invest in the U.S.? Maybe that's what the bond market is telling us. Our foreign investors are running away from us. They're leaving. You know, Germany is going to be issuing a lot of bonds soon to build up its defenses. They'd rather buy German bonds than American bonds right now. America cannot be trusted. America is run by the whims of a strongman. Why would we want to invest in that? Now, one of the things that is dramatically changing here

is one of the most beneficial, one of the most mutually beneficial trade relationships in human history. The trade relationship between China and the United States is now broken. Not a little bit. It is broken. Now, you could argue that the United States needed to back off a little bit from trading with China, certainly with certain goods.

But 125% tariffs basically means the United States is buying, Americans are not buying anything Chinese, and the Chinese are not buying anything American. What it means is a massive lose-lose scenario. It means Chinese ships are not coming to American ports. By the way, all Chinese-built ships, this is irrespective of tariffs, all Chinese-built ships are going to have to pay a fine,

to enter U.S. ports and unload goods in U.S. ports. China today produces more than 50% of all ships. So a massive number of the world's shipping is Chinese built. And yet those ships will not now enter U.S. ports because they'd have to pay a huge fine. China has massive industrial capacity, manufacturing capacity. They're going to sell those goods. They're just not going to sell them to America. And China is not going to be buying many American goods.

Chinese are not going to be buying many American goods. And again, this relationship now is broken. The core of globalization is broken. And this will have spiraling negative effects globally. It will shift trade to new places, to new countries. It will retard trade in many areas and in many places and for many people.

And again, this is lose-lose. You know, maybe some people gain, but for the most part, everybody loses. America, with all these trade barriers, is going to be relatively marginalized in the world. Investments are going to flow elsewhere. Why would you invest in America, given the uncertainty that's involved? Why would you invest in America when other countries have great tariffs and goods made in America? So why would you invest in a country where the leadership is driven by whim?

Not even a bad economic theory. Not even a wrong economic theory. I can do that because that's predictable. Just no economic theory. Just on whim. All right.

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All right, let's see. Um,

Now, it looks like the huge dumping of U.S. bonds yesterday, last night, was being done by Japan, not China, although it's hard to tell these things, but that's what it seems like. And it's what forced Trump's hand. I don't know what the world looks like at the end of all this, but I do think what America is doing is exact opposite of what Trump claims he wants to do. He wants to prevent China from becoming a hegemon in Asia. Well, this trade stuff is going to

make China the hegemon in Asia, the dominant power in Asia. The Chinese, the South Koreans, and the others are not going to trust the United States. They're not going to trust us to defend them. They're not going to trust us to trade with them. And they're going to have to hedge their bets. And they hedge their bets by warming to the Chinese, in spite of the Chinese growing authoritarianism. They need a hedge. And this is true across all of Asia.

Note that the one country the United States did not put tariff on is Russia. Trump's basically granting Russia dominance over, I think, any area that Putin wants. And Europe either fends for itself or falls under the dominance of Russia. But the United States is no longer data protected. So we are going to have what I've been talking about for weeks now is only becoming more and more and more real as this ridiculous trade war manifests itself.

we have a, you know, these fears of influence, these dominant hegemons. We're going to have Russia, Europe, if it steps up, the United States, maybe in the Americas, although the way it's alienating Canada and Mexico, it's not clear that anybody's going to want to align themselves with the United States. And then China in Asia and maybe in Latin America, because the United States, again, nobody will want to deal with this. I mean, yeah, I mean,

He's making the Chinese look good, which is hard, which is hard. I am taking super chats, but I usually take super chats an hour plus into the show. So once I finish talking, I've got things I want to say. All right. I don't know if we're heading towards a recession, but I wouldn't be surprised. Not because of the tariffs per se, but because of lack of investment that results on the tariffs. All right. I did want to say something about Netanyahu because we talked about him last week.

And and Netanyahu's visit to the U.S., you know, there were three things that Netanyahu wanted to get out of this. He wanted to get to discuss with Trump about Iran and want to get a U.S. commitment to support an attack on Iran or the U.S. attacking Iran or the Israel attacking Iran. But he wanted to get his support. He wanted to get the U.S. support for continuing the war in Gaza and for Israel putting a lot of pressure on Hamas to release the hostages through military force.

And he wanted Trump to do away with the tariffs because Israel had already reduced its own tariffs vis-a-vis the United States to zero, which is the right thing to do. Everybody should do that. And Netanyahu basically went 0 for 3. He struck out. He did not get the tariff reduction. I mean, he got it because everybody got it today. But when he met with Trump, Trump said, nah, I'm not going to give you, it's still going to be 17%.

Today, it was lower to 10, but not because of anything Netanyahu did. He did not get a commitment from about Iran and quite the contrary. What Trump told him was, you keep quiet. We are starting to negotiate with Iran this weekend. And, you know, if we need to put military pressure on Iran, we will. But for now, we're in negotiating mode. We are talking to Iran directly starting this weekend. And three, Trump basically said, look, I want this war to be over.

Enough. Enough of this war in Gaza. It's distracting. We don't need it. Just end it. And if that end means compromise, compromise. Just end the war. So Trump basically completely didn't give Netanyahu anything. And if you look at the Israeli press, both right wing and left wing, they clearly view this as a complete failure.

for Netanyahu. He achieved nothing, not a single one of his goals going into Washington, D.C. And what's interesting is this is a meeting Trump asked Netanyahu to come for. He invited him over to tell him you're not getting anything. I've been telling you, and particularly my Israeli friends, that at the end of the day, Trump is not a friend of Israel's. Hard for them to grasp the

Hard for them to accept that. But I think it is a reality. He will turn against Israel when his whim dictates. So we've got a strong man who has whims and those whims are what guide him. All right. I think let me just summarize. Look, I think that pausing the reciprocal tariffs is a good thing.

I think the pausing is very weak in the sense that it still creates a lot of uncertainty in the marketplace. That's why I don't think this increase in the stock market is permanent. I think the investors are going to realize what does it mean? What happens in 90 days? What else could he be doing? What other stuff will happen? It would have been better to eliminate them. A 10% tariff is still pretty bad. It's 5x on tariffs than what it was before.

I think it's really interesting. We should all watch the bond market. We should watch the bond market to see what happens to the interest rates. It's going to be very interesting. The bond market is asserting itself. That hasn't happened in a long time. And when the bond market starts asserting itself, interesting things happen. It'll be interesting to see the extent to which it can discipline Trump. And that'll be terrific. Trump will take credit for it.

But we will all know, because I will have told you, that it was really the bond market responsible. I don't know. Did you guys see all the Navarro, Elon Musk stuff? It was pretty entertaining. Let me just scan this and see what else I want to say. Oh, yeah. I mean, I've got a nice graph here.

that shows that basically China has been dramatically reducing tariffs. So if you go back to 1978, tariffs in China were above 50%. Today, they're below 10%. And going down, they went down. Now, you know, so tariffs are well below 10% today in China. And China didn't get rich because of tariffs. China indeed got rich because it eliminated tariffs.

As tariffs were eliminated, China got rich. I'll show this graph to you tomorrow. I've got a graph that actually illustrates what's happened in the middle class. Peter Navarro over the week yesterday said that he doesn't care if Vietnam reduces tariffs to zero. So this is not about getting everybody to zero. The problem is we buy too much from them and they don't buy enough from us. So again, it's all about the trade balance issue.

And anyway, Trump continues to be a narcissist, a whim worshiper, and pretty ignorant and unsophisticated when it comes to economics. All right, let's call that my segment. I think we're entering a new world. It's going to be really interesting. Trade is going to shift. Oh, I did want to say trade is going to shift. So China is going to find new markets for its goods. It's going to find new markets for the stuff it imports. So for example,

It's not going to buy agricultural products from the United States. Trump is going to have to give the farmers a subsidy. China is going to. This is a huge boost for Brazilian agriculture. China will start buying from Brazil, Argentina, maybe now that Argentina has fewer tariffs and fewer export controls. Maybe Argentina will be exporting a lot more agricultural products to China.

So China will be buying from other countries. It also starts selling more to other countries. I wouldn't be surprised if China signed a bunch of free trade deals with other Asian countries, African countries, South American countries, that China presents itself as now the champion of free trade, which is kind of a joke given its authoritarian nature. But Xi has been known to do that.

So expect Chinese imports from the United States to drop dramatically. Now, it could be that Trump and Xi sign a deal or cut a deal. I don't think things are ever going back to the way they were. I just don't see it. Because I don't think anybody's ever going to trust America again. I don't think anybody is going to assume that America has friends. I don't see a political leader in our future that can resurrect trust.

I just, you know, maybe I'm wrong. I just don't see it. And I think we now had entered the era of American strongmen. American strongmen ruling by their own whim. Whatever deal we have with China will be no better than where we were before there was a deal. Or where we were before tariffs were raised. We're going to gain absolutely nothing from what Trump has done. We're going to lose a lot of money.

lose a lot of economic growth, lose a lot of employment, lose a lot of relationships. We are going to be poorer for what Trump has done. The world is going to be poorer for what Trump has done. And, you know, he might cut some deal, but it will be meaningless. And it's not guaranteed there's going to be a deal. As I said, China was lowering tariffs anyway. So it's not like Xi says, OK, I'll lower tariffs. Will you be happy? Trump is going to say no.

Because we still have a trade deficit with you. And there's no way to get rid of that trade deficit. There just isn't any way. Again, China on a per capita GDP is a poor country. America is a rich country. The Chinese cannot afford what we have to sell. And we can afford a lot of what they have to sell. So there's no way to erase the trade deficit. And nothing Trump does is going to get rid of the trade deficit. What he is going to get rid of is our relatively high standard of living. That's what he's trying to get rid of.

Not consciously, but that's what's going on. All right. Let me remind you of our sponsors, alexsubstack.com. Please subscribe to Alex's Substack. Alex is the preeminent voice out there for freedom when it comes to energy, when it comes to climate change, environmentalism.

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We're a little behind this month, but let's keep it going. We've started great here. So more questions, $20, $50, $100 questions are particularly welcome. We've got a lot of the $5, $10, $2 questions. It's going to be a while for me to answer all of those. So $20, $50 questions will get priority and will help us get our goal much faster. All right.

Let us get started. Randall says, Hey, Iran, in Australia, there's a debate over multinational gas companies paying tax. As many see it as fair. Well, I get the economic benefits of no tax. I struggle with the fairness argument. What's the best moral justification for them not paying tax? Well, this is inverse, right? What is the moral justification for anybody paying tax? What's the moral justification for cursing people, for forcing people into paying taxes?

corporations don't really exist. They are entities, legal entities, owned by individuals. Those individuals have already paid taxes on the money they use to invest in these corporations. Those individuals typically pay taxes on the dividends they get from the corporations, and they pay taxes on the capital gains that they generate from sale of stock in those corporations.

So, you know, the income of the corporation to the extent that it excrues to the individuals involved as income is already is taxed. Corporate taxes are in a sense a double taxation. The tax, your tax on your investment in the corporation, both at the individual level and at the corporate level. How is that fair? How is that right? So look.

Taxation in and of itself, gross taxation is immovable. What the right way to tax should be, it should be determined by, if you're going to tax, should be determined by what generates the revenue necessary to fund the government and what does so with minimal distortions to the economy. A corporate tax is incredibly distortive economically. And as I've told you many times, corporations don't pay it.

It's passed on to mostly to employees who get lower wages, and it raises the cost of goods. And maybe a fraction of it is paid by shareholders. So in other words, it's a hidden sales tax. It's a hidden employment tax. It's a double tax on shareholders. Corporations should not be taxable entities. Only individuals should be taxable entities. Business should not be taxed. Now, again...

It's not clear what the least destructive tax regime would be. Probably consumption tax would be the least destructive tax regime or a flat, no deductions, no deductibles, no nothing income tax. But again, that would involve getting rid of corporate taxes and everything else. So, you know, I'm not sure what the thinnest argument that says corporations should be taxed amounts to. Where does it come from?

Why should they be taxed? If it doesn't make economic sense and it's a tax and we're against taxes and taxes are unfair and taxes are unjust, corporations are producing huge benefits for all of us. We trade with them and we're in relationships. Why do we penalize them for producing the values that are necessary for us to survive and to thrive? I mean, again, corporations produce all the goods that we benefit from.

They produce the wealth. They produce the stuff that we need in order to survive. You're talking about gas companies. What would we do without gas companies? There'd be no gas. So why are we penalizing them for offering us this amazing product at relatively cheap prices? Indeed, at incredibly cheap prices, given the cost of extracting and shipping and producing the gas. All right, not your average algorithm. $50. Thank you.

Even if the stock market comes back, economic dislocation and destruction of wealth caused by tariffs will persist for a long time. Companies and individuals can't take risks because the investment will be ruined at the drop of a hat. Absolutely. I mean, what Trump has done, again, is he's basically put the market, it's told the market, we're going to run things for the next four years on whim, my whim, whatever I feel like.

And he's told the market, I am ignorant of economics and I don't really care. I don't care if I'm ignorant of economics. We're just going to do what I think, feel is the good thing to do. That is how I'm going to run the economy. Well, that does not encourage investment. That does not encourage long-term planning. You know, I might put on tariffs. I might take them away. If they grovel, I might treat them nicely.

If they say something I don't like, I might penalize them. Think about how he's treated law firms, media companies. He is running our economy like a mafia boss. Does not encourage investment. By the way, I wonder what happens to Apple with 125% tariffs. I wonder what's already happened to iPhone prices. So I don't know what happens to Apple given these tariffs. It's going to be really, really, really interesting. I assume supply chain shift happens.

Apple does not import phones from China to the United States, but the phones it sells in the United States, it tries to import from Vietnam and India. The Chinese manufactured iPhones are sold everywhere else in the world, but not in the United States. I think it has to rejig its supply chains. That's how it avoids raising prices by 125%. Now, Apple has a healthy profit margin, but not 125%.

So it's going to be interesting. Apple will be a good test case, just like the auto companies are a good test case in terms of the auto tariffs. It's going to be really fascinating how supply chains change. And again, a completely new world order in terms of where products are made, how they're shipped, where they're shipped to, who protects the shipping lanes. One thing to consider is if you can't trust America to defend the shipping lanes, will China now have to deploy its Navy across the world? How will America view that?

China deploying its Navy across the world. We know Trump is upset because the Chinese are in Panama. What happens when the Chinese are in the Suez Canal, in the Red Sea, in the Indian Ocean, all over the Pacific Ocean? They have more boats now than the United States Navy does. What exactly happens? And how can we blame China for trying to protect its trade interests by deploying a Navy all over the world when we won't protect those same trade interests?

Yeah, I completely agree with you. Not the average algorithm. The uncertainty that has been caused by what Trump has done is incredibly destructive to the U.S. economy and ultimately to the stock market. So for the stock market to go back to where it was before all this, it just doesn't make any sense given what's happened over the last few weeks, over the last week. Liam, while Trump is a nightmare, the Democrats are not a meaningful alternative.

Yeah, but you say the Democrats are not a meaningful alternative. In what sense? In spite of Biden's flaws, Biden didn't do anything as destructive to the U.S. economy as these tariffs. As horrible as what Biden did, and he did horrible things,

Biden didn't do as awful things to the rule of law as some what's happening with the deportations or what is happening with threatening, not threatening executive orders against particular law firms. So why are Democrats not an alternative, particularly if Democrats can move to the center on economic issues and dump the woke D.I.B.S.?

I know we hate the Democrats. I agree with you. Hate the left. But at some point, you have to vote for the less of two evils. And given what Trump has done in the first two months, three months, I don't think he is the less of two evils. I think he is by far, as I warned you, the greater of two evils.

He is changing America, changing American politics, changing the American system of government, changing America's relationship with the world, all for the worst, in ways that no Democrats could get away with. So at this point, would Kamala have been better? Yeah, probably. Less destructive, less damaging. She would have been bad. Really, really, really bad. But in a conventional way. In a way that's fixable. Trump's evil...

are not fixable. What he's doing right now is not going to be easy. This genie's out of the bottle. It's not going to be easy to put it back in. It's not going to be easy to regain trust. It's not going to be easy to reaffirm our commitment to trade. Now, it is if it was somebody like me who came in and just said zero tariffs on the rest of the world, and that would be done. I mean, Trump's stuff would be gone. But nobody's going to do that. There's no way to put back into the bottle trust.

The massive abuse of executive orders. Now, again, this is a process that started probably with, it started way back, but was intensified by Bush and then Obama and then Trump won and then Biden and then Trump too is taking it to a new dimension, new level. I mean, just think of the kinds of people that Trump has appointed to head our health and human services, the kinds of people that Trump has placed at the head of the FBI or the Justice Department. This is a new low.

a new low in American history. So, you know, Democrats might be the alternative, but again, they will cling to power not by merit, but by default. I think we're into a period where either party, whoever wins, is going to be there by default. I don't see anybody in the political horizon, I don't see anybody in politics today who could win by merit. It's all by default. It's all the less of two eagles.

That's the world in which we live in today. Andrew, I agree with you totally on trade. But when Peter Schiff says trade deficits are a product of the U.S. sickness, a big government, massively inflated dollar, I find it compelling also. Does he have a point he's against tariffs? No, I don't think he has a point. I really don't. I think he's wrong on this. I think the only deficit that matters is the government deficit.

I don't know that the dollar is inflated. You know, if it is, why would the world inflate the value of the dollar? Now, again, everything's off right now. But, you know, again, Peter Schiff is excellent and 100% right on tariffs. He's been excellent in attacking Trump on tariffs. He's been very, very good on it. I don't buy his idea that there's something wrong

inherently wrong with the trade deficit. Now, his argument is we're consuming, we're not producing. And what we're using to consume is not production, but debt. But the very fact that people are willing to lend to us means that our bankers, in this case, the rest of the world, believes that we will produce in the future. So,

I am I do not think the deficit are sign of weakness. I think they're a sign of strength. They're a sign that the rest of the world wants to hold dollars. The sign of the rest of the rest of the world wants to invest in us, lend borrow, lend us money that the rest of the world believes in the U.S. economy and our ability to produce.

Otherwise, they wouldn't lend money to us. Now, they're losing that, quote, faith in us. They're losing their trust in us. And you can see that in the bond market right now. And that's a real problem. The real deficit that matters is the government deficit. That's the only deficit that matters. And every piece of energy, thought, focus needs to be placed in what Doge really should be about.

which is basically shrinking government, but shrinking government in a smart way, shrinking government around the proper role of government. That is getting rid of those functions of government that government should not be engaged in. And again, I've specified many times in the past how I would do that in great detail. I've done my State of the Union, the first 100 days, what I would do in the first 100 days. All of that is available. You can look it up.

And, you know, you just cut government systematically and thoroughly and you go after the Medicare and you go after Social Security. But you start with subsidies and corporate taxes and deregulation. You start with business and then you go to entitlements. And the last thing you do is cut the welfare state.

Hopper, the head of the IRS just resigned because Trump's immigration thugs want to collect tax data on illegal immigrants. He wants to deport people who are working and paying taxes into a system they will never receive benefits from. Yes, but more than that, you know, one of the principles around the IRS has been in the past that, you know, we don't, the government agencies don't share information about

about individuals across platforms that, you know, and this was the IRS scandal under Obama related to using text data to discriminate against conservatives. Well, you know, you're not supposed to be digging into the tax records of individuals. Yeah, I mean, illegal immigrants are paying taxes. Now, it's not true that they never receive benefits from. I mean, as people will point out to you, they drive on the roads, they

They send their kids to public schools. They use the infrastructure that the federal government supplies. They benefit from police and military and all the other protections, right, supposedly, unless it's ICE thugs. They don't receive Social Security benefits and they don't receive Medicare benefits.

But everything else they do receive and they pay taxes and they work. But the idea of deporting working people is just nuts. Legally illegal. Who cares? They're working for a living. Why are you butting in? That's the rights violation. I mean, I understand deporting people who are leeches on the state, who are leeches on their fellow Americans who don't work, who are not working. But if they're working, leave them alone. So good for the head of the IRS.

Good for the head of the IRS for resigning over something like that, for standing on principle. Andy, can you explain treasury bonds and yields matter and are concerning? Yeah. So treasury bonds are basically bonds that the US government issues. They sell the bonds in the marketplace, and that's how they raise money to pay for government expenditures. Because government spends more than the tax revenue that comes in,

It needs to borrow money from whoever's willing to buy government bonds. Treasury bonds are government bonds. They're just ways to fund the deficit. That's all they are. And the government has to pay interest on those bonds, and they have to pay the principal back at the end of the period, right? Could be a one-year bond. It could be a five-year bond. Could be a 10-year bond. Could be a 30-year bond. The government primarily issues short-term bonds.

three months, six months, one year, up to five years. But it does issue 10 and 30-year bonds as well. Now, these bonds trade in the marketplace. So I can go now and buy a bond that the government issued a year ago, a five-year bond the government issued a year ago, and I can go in and buy it today. The price that I get, the price that I'm willing to pay for it, will determine my return on the investment. Let's say I pay $1,000.00,

let's say I'm buying a $1,000 bond, so I will get $1,000 when it matures in four years. But if I buy it for $900, I'm going to get the interest payments that come in every month, plus the $100, the difference between $900 and $1,000, which I will get in four years.

And that determines the yield on those bonds. That is the return that the price I'm buying it at today implies for the next four years. And if I hold them for four years, I'll get exactly that return because the cash flows don't change in a bond. The bond says we will pay 5% a year on a monthly basis for five years. And we'll pay you $1,000 back at the end of those five years. Now, the interest rates...

that are the yields, the interest rates, which basically represents the return on my investment, basically reflect the market's estimate of what the risk is in the marketplace and what inflation will be in the future and what chance there is that the U.S. government defaults on its debt. So for example, in the 1970s and early 1980s, 10-year bonds went up to like 15%, 16%, 17% because of inflation. People said, you're going to pay me $1,000 in four years and

But inflation is like 15%. I want to be compensated for inflation. So you're going to have to give me more than 15% over the next four years, 15% a year over the next 14, four years. And then if you looked at Greek bonds in the, let's say 2011, 2012, they were like, I can't remember how they went, but they went really, really high, maybe 50, 60%. Why? Because there was a real chance the Greek government will never pay those bonds back.

So instead of selling, I'll give you $900 for getting $1,000 in a few years plus a 5% interest payment. Now they're selling it maybe $100 because I'm demanding a very high return because there's a chance I won't get anything. So when yields go up, that is prices go down. As the price goes down, your return goes up. So if you pay $100 for $1,000 in the future...

That return is very high as compared to $900 for $1,000 in the future. That return is very low. So price and yield are inversely related. And when interest rates go up, that means that people believe there's higher risk or higher risk of inflation or higher risk of default in the marketplace. And when the 10-year bond goes up, mortgage rates go up. A lot of other interest rates in the economy that affect consumers and affect business go up as well because people use interest

The markets buying and selling a bond and the interest rates implied by them are a signal regarding where interest rates should be and how much to charge for loans over a similar length of time. So I think that's the best I can do for a short explanation of those relationships. Take my finance class at ARU to get a more detailed explanation. Randall, another hundred Australian dollars. Thank you, Randall.

The argument for hiking taxes from lefties is research shows 56% of gas exports from Australia attract zero royalty payments, effectively giving a public resource to multinational gas corporations for free. It's time the gas industry started paying its fair share. I mean, I don't know if that's exactly true that they pay zero royalties on that, but let's say it is true. Why should they pay any royalties?

The problem here is not that they're not paying royalties. The problem here is that somehow natural resources are considered state property and that corporations should pay any royalty to the government over them. Basically, the natural resources should be owned by the people who produce the natural resources, the oil companies, the gas companies. They're the ones drilling. They're the ones extracting.

They're the ones piping. What is the government doing to get its royalty? Now, you might say the government owns the land. Well, government shouldn't own land. That land should be private. And then private entities can negotiate royalties with gas companies. And indeed, what's more likely is the gas company will just buy the land from the landowner and then no royalties are needed. The whole system is statist.

The whole system is wrong, and what it ignores is the contribution of the gas company to making the gas available. Gas is not just there. Somebody has to extract it. They shouldn't have to pay a royalty to a government that's done nothing to generate that gas. Now, again, if it was a private property, then a private property owner...

would have the ability to negotiate a deal, the best deal that they could with a gas company. But the government, government shouldn't own that land. Indeed, all the distortions happen because of government so-called ownership of land. Land should only be held by private individuals, by private entities. That's where the fundamental challenges, and that's why the leftists don't get it, because they think it's owned by the state, but it's not.

It can't be owned by the state. The state is not an entity that should own anything. The state is an entity that protects rights. Indeed, all the problems, pollution and the so-called problems of the commons, all problems created by having commons, that is having state ownership, rather than all these problems go away once you privatize the commons, the so-called commons.

That Dutabani, even though the Enlightenment is much stronger in the U.S. than Europe, we have John Dewey, which makes us dumber and more emotional than Europeans. Could this make fascism more susceptible to spreading here than in Europe? I mean, it's hard to tell where it will spread more easily. In the past, Europe has been more susceptible because Europe is dramatically more collectivistic than the U.S. As the U.S. is now becoming more tribal, partially because of John Dewey,

That is changing. Its advantage was always its individualism, but its individualism is in decline. And that is making it far more susceptible to fascism. Now, whether more so or less so than Europe is very hard to tell at this point. Part of Europe's resistance of fascism is the fact that they have firsthand experience with it. They know their history and have rejected it. Americans don't know history and have never had the experience firsthand.

and therefore much likely to embrace it out of a certain ignorance. Mary Alain, a relative owns a successful beauty salon. She knows tariffs will increase her cost, but says we shouldn't want instant gratification. We will eventually become the powerful country we used to be. She's deeply religious. Yeah, I mean, this is faith. How are we going to become a powerful country?

How is that going to happen? What's the mechanism by which that happens? They have no idea. No idea. Basically, she believes it because Trump said it. She believes it because she heard it on Fox. She believes it because she wants to believe it. But there's no economic reality. The reality is the tariffs make us weaker, make us poorer, make us less powerful. America's far less powerful today than it was three months ago because of what Trump's done over the last three months, including the tariffs.

So religious mentality is an epistemologically authoritarian mentality, which makes it susceptible to taking on faith what somebody like Donald Trump says. But that's all she has. She has no ability to articulate how this is going to make America more powerful. Harper, the tariff rhetoric strikes me as the same pitch as utopian communism.

The initial slavery is just transitional period. We have to go through the old structures have to be torn down to make way for the paradise to come. Yeah, I mean, there's a sense in which that's true. The communists are more idealistic. They have a clearer picture of where they're heading. But this is typical statists. You know, trust the authorities. They know what they're doing. And yes,

There's going to be a period of pain, but there's a wonderful outcome on the other side. Just go with it. Just trust them. Just believe. And that's communism and it's Christianity. And it's because it's Christianity, right? Just suck it up in this world. This world sucks. You're going to suffer. You're going to sacrifice. But it's OK. There's a utopia at the other side of death. So just hang around. Everything's going to get better. You know, Trump will fix it. So don't worry.

Michael, will Trump settle down for the remainder of his term? It seems like a few adults have entered the room. If not, is there a chance he can be impeached in 2026 when the Democrats take both House and Senate? No, I get no sense that there are any adults in the room, not in any systemic way. It's true that I think Elon Musk gets trade in a way that Navarro does not. And the power between those two might shift over time.

and might alternate from day to day, as we saw in the last few days. And it might be that Trump throws Navarro a bone and throws Elon Musk a bone to keep them somehow in balance. But I don't see any adults in the room because while Elon Musk might be okay on tariffs, he's terrible on other things and feeds the worst elements within Trump. So I don't know any adults in that room. We thought Bessette was an adult, Bessette.

But based on what he says on television, he's a complete sellout. So I don't think there are any adults. I think it's just that Trump panicked because the markets are panicking, particularly the bond market. So I don't consider that adult. I mean, the adults in the bond market, the adults in the stock market, but not in the Trump administration. Will he settle down? I don't know. He might.

Just because you'll run out of energy, you know, the inertia will dissipate. Congress is already unbelievably slow. And am I slowing down? Will he be impeached? No, nobody's going to impeach him. I mean, you'd need significant Republican support. You need two thirds in the Senate. It ain't happening. And if it does, what do we get? J.D. Vance? No, thank you. No, thank you. I'll take Trump over J.D. Vance.

J.D. Vance would be a lot more methodological in his nationalism and his authoritarianism than Trump is. Trump is all over the place. And that's good for us in some sense. Jennifer, if someone is married to and stays married to a horrible person, is it legitimate to criticize them for that? Or maybe they're afraid to leave and more information is needed to judge them? Yeah, I mean, I think you need to be careful about judging somebody's

intimate, personal relationships. You don't know what's going on behind closed doors. You don't know what they're psychologically getting out of the other person. I think it's very tricky to judge, you know, assuming the person is all there and is capable of making those judgments for themselves. I mean, you can bring it up, you can criticize, but I think you have to be cautious and you have to be willing to walk away and just accept that this is a choice that they've made.

And you don't know, you don't understand because we only, you know, relationships are tricky things. They're very intimate things. And we don't have the kind of information we would need to really in with full context, make a judgment. Jonathan, Jonathan says, God, make this tariff madness stop.

Jonathan's still in the markets. I don't know. I'm glad my hedge fund is closed. I don't know how I would deal with what's going on right now in the markets. God. Yes, it would be nice if it stopped, but then what? Where's the next madness coming from? We know madness is in the cards because we've got a madman running this country, literally a madman running the country.

Liam says Trump is more of a fluke than a tsunami. Americans already can't stand him. MAGA snuck into power due to the incompetence of Democrats in 2028. The phenomena is gone. You know, I'm not convinced they didn't just, you know, remember MAGA also snuck into power because of the incompetence of Republicans. They're the ones who had a primary and elected Trump to be their representative. There are enough Republican crazies, enough Democrats crazies.

to keep us on our toes, to keep craziness in our politics for a long time to come. So maybe this particular manifestation of MAGA goes away, the phenomena is not going to go away. The phenomena will only expand and grow because there is no alternative to it. What is the alternative? What is the alternative? Boring centrism? That's not an alternative. What excites? What's going to get people motivated? There's just no alternative. What we need is an exciting moment

pro-freedom movement, but we don't have that. We just don't have that. Islam Ali, Argentina had to enter a recession to heal the economy, but America does not. Can you explain the difference here? Well, Argentina didn't have to enter a recession to heal its economy. I mean, you mean by what Millet did? Yes, but notice it was a very short recession. I'm not sure Argentina ever made it to a recession under Millet.

Has Argentina been in a recession since Millet was there? I don't think that's true technically. So, no, I don't think you have to go into a recession. I don't think Argentina went into a recession during Millet. I mean, if they did, it was very, very short. So what you need is a period of readjustment. What you need is a period of restructuring investment. And that would happen when the government starts really cutting costs

subsidies, cutting spending, cutting programs, cutting whole departments, then you're going to get a reallocation of resources. And that will result in disruptions. That will result in some people losing their jobs, having to move investments, some investments losing money because they were based on subsidies and capital flowing into other investments. So you will have dislocations.

And maybe that involves a recession. But the recession we're talking about causing in the United States is being caused by tariffs. And there is just no need for tariffs. In other words, you're not going to fix the U.S. economy by raising taxes. You need to fix the U.S. economy by cutting spending. Trump is choosing to fix the American economy forever.

By raising taxes, that's an impossibility. And therefore, you won't fix the economy. He'll just drive it into a recession. Nothing good will come of it. Businesses will go out of business. Not the right businesses will go out of business. The businesses that go out of business because of taxes, because of tariffs, which are taxes, are different than the kind of businesses that would go out of business if you cut dramatically government spending.

So it would be a completely different type of restructuring, a completely different type of recession if government's cutting spending even leads to recession. So, no, I don't think you have to go into recession. Plus, whatever changes we have to do in America to get it healthy are far smaller than the changes that Argentina had to do. Argentina had to go through much more radical surgery. And in both cases, in all cases, no, I mean...

raising taxes to the extent that Trump wants to do is inappropriate as a way of trying to, quote, fix the economy. Opposite. Ultimately, you want to get to a place where because you've cut spending, you can cut taxes, but only after you cut spending. Say, do you think Millet's example might have inspired Trump to take more drastic action, hoping for similar long-term results? I don't understand what drastic action means.

Trump is doing that could be inspired by Millet. Trump is the opposite of Millet. He's increasing government power. He's increasing government control. And he's dramatically raising taxes. So he's not being inspired by Millet. He's the counter Millet. He's the opposite of Millet. Millet was really radical. Millet has taken really drastic actions, drastic action towards more freedom.

Whereas Trump is taking drastic action towards less freedom, more statism. Trump is a statist. Millet is a free marketer, at least as much of a free marketer as anybody is in this world right now. K.O., did you hear Lawrence Wong, PM of Singapore, Prime Minister of Singapore speech? Yes, it was very good. I mean, he defended free trade. He defended markets and he called Trump's tariffs what they are. I can't remember the exact words he used there.

but it was quite good. Not your average algorithm. What do the far left and MAGA have in common? Almost everything. The idea that the future good of all requires the destruction of the present, that's part of it. They have in common a real intolerance for any ideas that are different than theirs. They have in common the willingness to

to use the state to impose their will on other people. They have in common a complete ignorance of economics. They have in common a complete ignorance of what America is, what it stands for, what it represents, what it's founded on. Complete ignorance of the Constitution, complete ignorance of the Declaration. They have in common a real racist thread in both. So they have a lot in common. That's why...

It's become popular and I call woke right because, yeah, they behave like the woke left. James, does all malevolent behavior come from low self-esteem? I don't know. I think so. But I don't know. I'm not a psychologist, so I'm sure there are other causes that I can't think of right now. Esoteric dichotomy. The market rebound is cold comfort. Trump is holding the U.S. world hostage.

He should get no credit or praise. It's not even full rebound. It's madness. Yeah, I mean, you wouldn't expect a full rebound and it might still go up tomorrow, but he should get no credit or praise because he caused the decline to begin with. And he still placed 10% tariffs on the world, which is not good. There's just nothing good is coming up for this. Nothing. So I'm glad he paused the tariffs. He paused, but...

He hasn't paused the madness, and he can't because he is the madness. He hasn't paused uncertainty because he is the uncertainty. James says, if we do collapse into pure fascism, I don't suspect it will last long. I hope not. I hope not. It's very hard to tell. It's very hard to tell. How people align and what forces align against it is going to be interesting.

Doug, is Trump making the world more selfish? For instance, Europe pivot to defend itself? No, I don't think so. I mean, maybe what Trump is doing is good for Europe in the long run because it's forcing them to be accountable to themselves. But I don't think that is going to be true of other countries and other places.

And I think that it's emboldening the bad guys. So at the same time, it's emboldening China. It's emboldening Russia. It's emboldening Iran, North Korea. So I think on net, no. I mean, it's not making the world more selfish, even if it is good ultimately for Europe in the sense that they become more responsible for their own future, unless dependent on the United States. Michael, you said an irrational mind is an inconsistent mind, but the Nazis were very consistent.

while being extremely irrational and mystical. You know, I don't know that they were consistent. I don't know what that means exactly in the context of the Nazis. What was consistent about them? That they hated Jews? Okay. But was their economic policy consistent? No, I don't think so. Was their military strategy consistent? No, I don't think so. Yeah, I don't know what exactly was consistent about the Nazis. Country first, state first?

The party first, sure. But beyond that, I just don't know. An irrational mind is detached from what allows consistency, which is reality. All right. Let's see, Jonathan, how many futures did Ron Vera buy before the announcement? Just unfair manipulation. Yeah, I mean, Donald Trump actually tweeted this morning something like, I had it here, but I deleted it.

Now is the best time to buy. Like a few hours before he made the announcement that he was going to, let me just, let's see if I can find this. Where is the quote? Yeah, I don't have it. But just a few hours before he made the announcement that he was pausing. So how many people indeed bought on the insider knowledge? And did Trump, did Navarro, did others? It could very well be

real manipulation. Although I don't think it's the reason for it. I think, well, if you're going to change and you get a pause, I might as well buy some stock. Just give me a couple of hours to get my broker and everything aligned. Richard, I think the Democrats are in denial about how poor Kamala Harris was as a candidate. They don't admit their mistakes like Trump would admit his. Yeah, I think that's right. Although I'm sure inside the Democratic Party, there's a lot of discussion of that. And you can see already,

the different Democrats aligning themselves, you know, with running. So you're seeing the governor of California, you know, we basically changing his views on all of the woke stuff and moderating. Jared Polis, the governor of Colorado, has been very, very good on tariffs and good in some economic freedom issues. And clearly he's positioning himself as the kind of

moderate, centrist, pro-market, relatively speaking, candidate. So I think Democrats are going to look for somebody a lot stronger than Kamala when the time comes for 2028. Michael, I'm hoping some major deregulation will offset some ridiculous tariffs. I suspect Trump's fascist advisors are not crazy about deregulation. A lot of them are not. So it's going to be interesting to see what deregulation we get and where. We'll get it where

MAGA is behind it, like in energy and environmentalism. I'm not sure if we'll get it elsewhere, but I do think we'll get it there. But yeah, it's still to be done. Clark, did Jamie Dimon and Elon Musk corner Trump and make him dial back these tariffs? I don't know if Jamie Dimon has any in with Trump. I don't know. Elon Musk spent the whole weekend talking against the tariffs and against Navarro. It's possible that he cornered him.

But hard to tell. I mean, Elon Musk was losing hundreds of billions of dollars or tens of billions of dollars of his wealth on a daily basis. Michael, do you think much of the justification for nihilism or being destructive is the feeling the world screwed me in some way? Yeah, it's some sense of which I don't belong in this world. I'm not suited for this world. The world is somehow against me. It screwed me in some deep way. And yeah, yeah.

I'm going to screw it back. So yes, I think there's something there to kind of the two-way attitude. Trevor says, what a time to be alive. Indeed. What a time. All right. Uh, these tariffs are crime. Yes. This is a crime against American people. This is theft. This is stealing our wealth. Trump is evil. I agree with all of that. Um,

Clark, most voters did not vote for a trade war. Republicans were expecting some tariffs, but not this monstrosity. The MAGA movement is over. A transient moment of rage and confusion. I hope you're right. I hope you're right. We will see. We will see.

Supercast, the conservative agenda, make us poor so we'll worship God and be dependent on religion and family. Yeah, stop being so materialistic. All this wealth. We're anti-left, but we're anti-wealth as well. We're anti-capitalism. We're anti-freedom. Yeah, I think that's an attitude. Michael, what Israelis think of Trump? I mean, they still love him because they think that he is pro-Israel and will stay pro-Israel.

So I think he's the Israelis still. He probably gets more support among Israelis than he does among Americans, primarily because they really believe that he will ultimately back back Israel. I think they're in for a surprise. Michael, only in Magaworld do you worship the Confederacy and then sneer the free trade in slavery. I don't understand that.

You praise the men who owned people, then clutch your pearls over a tariff-free iPhone. Oh, you sneer, that free trade is slavery. Okay, I get it now. Yes, I mean, MAGA is crazy. Yes, they are tolerant of the Confederacy and of slavery in the Confederacy. But, you know, they want, they're horrified by actual free trade. They don't like freedom. They don't want freedom. They don't believe in freedom.

That's the reality. Harper Campbell, COVID lockdowns, physical confinement, universal tariffs, economic confinement. The proponents agree. Your freedom does not matter. Remember, Trump was the one who endorsed and initiated lockdowns, the physical confinement. And he's the one now doing economic confinement. This is completely consistent for Trump. Freedom does not matter to him. Freedom does not matter to him. People forget that.

that COVID lockdowns happened under Trump. They somehow think it was Biden, but no, it was Trump. And Trump supported lockdowns, was enthusiastic about lockdowns. Bonnie says, how can none of this be impeachable? Because you need Congress with balls to impeach. You need politicians with integrity to impeach a president over this. And we have a dysfunctional Congress with politicians without integrity that have sold their souls.

So it's impossible. Doug, Obama promised fundamental transformation. Has America fundamentally changed? Is this Obama's vision? How did Obama contribute to where we are? Is he proud? Oh, no, I don't think this is what Obama wanted. But certainly Obama was one step in this direction. I don't think we ever would have gotten Trump without Obama. I mean, Trump was, Trump 2016 was incredible.

not just a hatred of Clinton, but was a repudiation of Obama's presidency. It was a repudiation of his attitude of Obamacare, of kind of an aloof, detached president who looked down on, I think, a lot of common people, on the people who constitute MAGA, and who basically introduced ever-growing statism into America.

Did Obama transform America? Indirectly, by giving us Trump. Indirectly, by being one more stepping stone towards authoritarianism. One more stepping stone towards a strong man ruling America. Is Obama happy? No, he hates Trump. But that's more to do with personality than it is with policies. I don't think Obama...

necessarily objects to tariffs. He objects to the stupidity in which Trump is doing the tariffs. But I don't think Democrats on principle object to tariffs, just the kind of tariffs and the way Trump is doing them. This is particularly bad. Adam, fear of U.S. trade sanctions was holding the CCP back from taking over Taiwan by force. Could you discuss the consequence of TSMC under CCP control?

Yeah, I mean, you know, I think I don't know that fear of trade sanctions was holding back the CCP. A lot of things were holding back the CCP. I think the main thing holding back the CCP was their fear of getting bogged down in a war they couldn't win. And American involvement in such a war was a big part of what they feared. I do think the probability of China invading Taiwan has increased dramatically, dramatically in the last week.

I think the more we try to isolate, the more we separate China from the U.S., the more we would dislodge, the more likely war is, the more Trump makes it clear he's not interested in freedom around the world, he's not interested in defending anybody, he's not interested in the world more broadly, the more likely it is the Japanese will assess that he won't intervene in Taiwan. So, yeah,

I think the probability of China invading Taiwan in the near future is still very low, but it's a lot higher than it was even a week ago. Suddenly, before Zelensky episode, I think every week that Trump does one of these crazy things, China becomes more emboldened and the probability of China invading becomes more real. China invading...

I don't know that TSMC would be under CCP control because my guess is that one thing the United States might do is blow TSMC up. That is, it would destroy that factory, destroy its capability, and prevent ASML from selling more machines to Taiwan under China. I don't know that for a fact, but I think that's probable. But if China got a hold of TSMC, it basically gets a hold of

All the chip manufacturing for Apple, for AI, NVIDIA, for basically everything that the United States does. And now a lot of that will have to shift to South Korea. But in the meantime, it'll take a while for South Korea to be able to ramp up. It would also mean that China would have the most sophisticated chip manufacturing plant in the world supplying it with chips. So...

It would be a disaster, a geopolitical disaster. But notice that one of the things that Trump has said is that he wants to increase tariffs on chips, on microchips from Taiwan to 100 percent. So he might stop importation of chips from Taiwan anyway. Yeah, imagine if he did that, what that would do to tech in the U.S. Doug, why doesn't Israel get to expand sphere of influence? Who will get that sphere?

Israel is just too small, a small population, a small country. Turkey would like to spread it, and the influence around it is Muslim, and they're not likely to listen to Israel or to care about Israel. They hate Israel, indeed. So much more likely as influences in the Middle East is Turkey, Saudi Arabia, Iran, Egypt, any one of those countries is more likely than Israel, given the Muslim character of most of the countries in that region.

Doug, is it a coincidence that major world news breaks when you travel just asking questions? I'm not going to answer that question because, you know, I'd rather keep you guessing. Keep asking questions. They're really interesting questions. Maybe there's something there. Maybe there isn't. I don't know. Maybe there is. Maybe there isn't. Justin, did you read the article in The Atlantic about the Atlantic Peacock? What do you think of it? I did not read it and not interested in discussing it. I probably will read it.

but I'm not interested in discussing it any more than, I mean, yeah, I can't quite bring myself to read it, put it that way. Doug, if you had a supersonic jet, the show would have less downtime. You could spread the word at speed of sound. Glad Jesus didn't have a jet. He did pretty well spreading the word in spite of that. Yeah, if anybody wants to buy me a jet, I am all for that. And yes, we'd have a lot more shows.

A jet would be the best gift anybody could buy me. Andrew, the protectionists are unswayed by a low standard of living. Maximizing standard of living is not a goal. No. And this is the point of nationalism. Nationalism is not about standard of living. It's about some mystical good of the nation, undefined. If you want to ask questions, you do it using the super chat. Don't ask in the chat. I don't answer them in the chat.

Ask using the super chat. Put $2 behind it, $50 behind it, $300 behind it, whatever you want. But I'll answer it if it's in the super chat. Don't have a lot of time because we only have two questions left. Andrew, is Trump an empiricist? How do you evaluate a psychopistemological method? I don't think he has a method. I mean, he's an empiricist in the sense that he's at the perceptual level. All you have is, I guess, empirical data.

But it's an insult to empiricists to call him an empiricist. He's a whim worshiper. He's an emotionless, unthinking moron. I mean, I think it was Greg Salmieri who said he's not philosophical. You can't attribute a philosophical method to it. He said calling him a pragmatist is not right because a pragmatist has a view.

about the world and about how the world, about reality, about, and Trump doesn't have a view. He just, he just makes it up. And the same with an empiricist. It's not like he's read the philosophical literature and yeah, that's the way human knowledge works. It's that he's just emotes. Instead of looking like a leader, baby looks like a coward and a loser next to Trump. Who's baby? I don't know what you're talking about. I think Trump now looks like a loser and a coward.

Justin, last question. Given how influential the Atlantic is, someone from the objectivist community should respond to it. But you can't respond to it. And a lot of it has to do with personal stuff that Leonard could respond to if he wanted to, but it's personal. So the stuff on objectivism, the objectivists could respond to, but I just don't think it's worth interacting with stuff like that.

Apollo says, anything positive you can say to wrap up the show? Yeah, the tariffs were paused. That's good. Prices won't go up quite as much as you expected. The economic disaster will not happen quite as fast as we thought. And, oh, you mean baby? Instead of looking like a leader, BB, not baby, BB looks like a coward and a loser next to Trump.

Well, that's something given how much of a coward and a loser Trump is. But yeah, Netanyahu looks weak. Netanyahu looks super weak next to Trump because he's letting Trump bully him. But that's okay because Netanyahu is a bully too. Yeah, there's 90 days left to party, as Jennifer says. So that's good news, right? We can party. Prices are not going up for 90 days. Somebody sent me a really positive news article yesterday.

I'll use it tomorrow. I'll have a positive tomorrow. But, you know, science continues in spite of the government cutting significantly into funding of all the things they decided to cut on the spending side. Science is what they decided to cut. Beyond that, I don't know. What is positive? I'm sure there's positive stuff. I'll promise to bring in positive stuff on tomorrow's show. How about that? But right now,

I'm starting to feel like I'm losing my voice. Maybe it's time we stop. It's been two hours and 15 minutes on jet lag. I'm surprised I can even actually, you know, express myself in any coherent way. My mind is basically mush at this point. Let's call it a night. Thank you to all the super chatters. Thank you to all the listeners. Don't forget to like the show before you leave. Don't forget to subscribe if you're not a subscriber.

Don't forget to become a Patreon supporter if you're not a supporter. And I will see you all tomorrow. Have a fantastic night. Bye, everybody.