From Wedlock to Deadlock: The East-West Divorce - with Brent Johnson and Louis Gave

In this thrilling discussion, Louis Gave and Brent Johnson informally debate the fate of the US dollar in the years to come.
The US dollar has been the big bully on the playground since 1971, but a new challenger has emerged in the form of China. Through a range of geopolitical maneuvers and various strategic alliances, including BRICS and the Belt and Road Initiative, China is offering emerging market countries an alternative to the dollar in the form of the yuan. Dethroning a bully, however, is not easy.
The US dollar is thoroughly entrenched in the global financial system, and moving away from it could be akin to divorce, in which all parties involved are worse off after the fact.
Brent and Louis are both highly regarded in the macro community and are considered the foremost experts on de-dollarization. They are joined by Ronnie Stoeferle and Niko Jilch.
Biography's of our guests:
Louis-Vincent Gave ist he CEO of Gavekal, a Hong Kong based company he co-founded over twenty years ago with his father Charles and Anatole Kaletsky. Gavekal has grown to become one of the world’s leading independent research providers to institutional investors around the globe. Louis has written seven books, the latest being Avoiding the Punch: Investing in Uncertain Times with reviews how to build a portfolio at a time of rising geostrategic strife, and when very low interest rates and strecthed valuations on most assets announce constrained returns on most assets over the next decade.
web.gavekal.com
Brent Johnson brings twenty five years of experience in the financial markets to his position as CEO of Santiago Capital. He has a long career in finance, having also been Managing Director at BakerAvenue, a USD 2bn Asset Manager and Wealth Management firm. Before joining BakerAvenue, Brent spent nine years at Credit Suisse in their private client group. He got his start as part of the training program at Donaldson, Lufkin & Jenrette (DLJ). He joined Credit Suisse in the fall of 2000 when the bank purchased DLJ.
santiagocapital.com
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0:00 Introduction and opening remarks
7:18 Louis's opening remarks
11:00 Brent's opening remarks
14:48 US's comparative advantage and the rise of China
20:33 Will China be successful?
25:00 How is the Dollar Milkshake Theory Playing out?
27:20 What does "winning" look like?
35:42 Let's talk about gold
44:09 Brent's take on gold
49:47 China's plans for a gold backed RMB system
52:25 Who do you trust when you trust China?
54:40 What about Europe?
58:15 Europe outplayed in geopolitics
1:04:16 Everyone will take a hit!
1:07:48 All debt is not equal
1:17:47 Oil and energy in RMB?
1:21:34 Eurodollar market development
1:30:35 What Louis and Brent really disagree upon
1:34:50 The Euro and Bitcoin

[@HuiChyr]

Does anybody care about Europe? ... Burst of Laughter. I replay that part ... 🤣🤣🤣

[@davidkantor3609]

No - they are 2nd tier

[@ericshang7744]

EU’s leadership does not act on EU’s best interest, they work for US. Plus, they are not that capable to start with.

[@johns4412]

Always enjoy listening to Louis

[@fredfrond6148]

Louis Gave one of the few men who understand’s China, the west and the relationship between the two.

[@user-pr6fd4gp2f]

He certainly still the show :)

[@junkscience6397]

And he never once mentioned "Property bubble", "dictatorship", or "demographic collapse". LOL. Whoopsie.

[@PauloAdriano-zo2ng]

​@@user-pr6fd4gp2f Still?🤔 *Steal?*

[@user-vt5ln7qq4j]

​@@junkscience6397 oh u poor thing. must have offended yr neocon ego 🤡 whoopsie 😛😝😜

[@Mdaddy4]

The big misconception the US have of China-excluding the bias negative media coverage encouraged by its governments-is because China has progressed so fast the US has not realized that the timing of China emerging as a threat to catching up to the US to surpassing it has already occurred within the span of a decade. The US was thinking 25-50 years. Now tbh it’s already too late to take the lead economically militarily or technologically.

[@automateeverything2341]

I've generally agreed with Brent in the past, but I'm starting to have doubts. Louis presented a compelling argument that's got me reconsidering. Right now, I'm kinda on the fence. Great conversation guys.

[@nvda2damoon]

no Louis is wrong.. he just sounds like he understands EM... but he's off base on the numbers he provided. check the performance of EM bonds, they are all dogs even compared to the US bonds... and don't get me started on crypto... stay with Brent.. he is correct.

[@tjkoch408]

This was easily the best video I've watched on YT in months. Fantastic questions and fantastic guests. You guys should do this quarterly.

[@costaselgreco]

Louis Vincent Gave makes the more convincing argument. He has a superior grasp of geopolitics and global macro issues, while Brent Johnson's main theme appears to be sabre rattling. He comes accross as an influencer. It was a very interesting contrast of modern thinking versus legacy thinking. Thanks to Ronnie Stoeferle and Nico Jilch.

[@robwindridge7804]

I’ve never seen Brent more stuck for words , Louis seems to know his stuff and Brent seemed to struggle to argue or out his points across .

[@user-vt5ln7qq4j]

brent lives in 1990. Louie lives in 2024.

[@nvda2damoon]

Brent might have appeared stuck for words because he's trying to be polite lol.... I'd feel the same way because the other guy was so wrong it's difficult to get the point across without hurting his feelings lol.

[@brainwashington1332]

Let me guess, u are American

[@HuiChyr]

Brent doesn't understand China's mindset. Louis does because he is located in Hong Kong. China doesn't care about Renminbi to be the "dominant" global currency. China just want Renminbi to trade with their trading partners (apart from US). Many countries in ASEAN and Asia has bilateral swap agreement amongst themselves. Meaning they will settle their trade with each others currencies. Leaving USD out of the game. I don't care which currency is used in the trade as long as I get the commodities, products or services I need.

[@Mdaddy4]

Spot on. Although Brent is smart he is too US centric and not taken the time to seriously study China. It’s very telling that he is focused on the stock market whereas Xi and China don’t really care about stonks

[@dankwok3]

THANK YOU LOUIS GAVE!...SOMEONE THAT UNDERSTANDS CHINA AND XI IS FINALLY EXPLAINED TO AN AMERICAN!...THANK YOU SIR!!!

[@johnbracken7032]

Felt to me that Lois Gave made more compelling argument.

[@HuiChyr]

Louis is located in Hong Kong. He has first hand experience on the situation outside US and in Asia. Brent is too US centric and still stuck in 2008 Financial Crisis events. Many things had changed since then which is 15 years ago.

[@jackchiang7793]

Brent is wrong that the recent global growth was coming from US. If you look at the GDP growth, China is still multiple ahead of US. Stock market does not represent economic growth. The reason US stocks are up is bc of increase of liquidity (printing money) from the Fed.

[@highthereguys]

The Soviet Union had good growth rates too than bam it collapsed. Sometimes 1 party authoritarian states lie

[@Vikingpoints]

Look at how China calculates gdp. It isn’t by products sold. It is by products produced. If they aren’t selling, how is that productive? It isn’t. If you make a million cars, and don’t sell them, gdp is high, but money isn’t coming in.

[@claymanwayfaerer]

Its up because of developing countries and fuck even the Swiss recycling massive amounts of capital into our markets.

[@alanmrsic893]

Great stuff, thanks again! In Gold we Trust!

[@HermanEmerson-ht1te]

Listeners Are the winner of this information

[@torstenlange2418]

Great discussion, Gentleman,!

[@CAL-zq3dk]

Louis Gave won this one .😊

[@user-ch7xh3oe4n]

Louis Vincent-Gave wins this debate IMO.

[@junkscience6397]

"Win"? Or "Long WIN-ded?" I vote for the latter LOL. I mean, thrice the man admitted it himself, in between kissing China's arse....

[@juliencockpit9248]

Knockout victory!

[@lapuntadelfin]

The USD is the Microsoft of the world. A priceless introduction.

[@fredfrond6148]

And Apple is the Chinese Yuan. 🤔

[@prabhakar0076]

But RUPEE is the HARDWARE of the world 😂

[@junkscience6397]

@@fredfrond6148 Yeah. NO ONE would EVER say that. Not even Chinese, LOL.

[@youknowkbbaby]

​​@@junkscience6397he just posted it as a comment....so technically someone said it 😅

[@David-Yeung]

Great discussion. Brent is too US centric and many of his views are based on "faith" and the idea of unending dominance of the US because there is "no alternative" to the dollar. Louis is more rational and his arguments are based on facts on the ground. I would put my money with Louis and investing in emerging markets as he alluded.

[@MrRyan83]

in time, he will be wrong.

[@HuiChyr]

@@MrRyan83 Who will be wrong? Brent or Louis?

[@Timothy_Pitt]

@@MrRyan83 Please explain

[@dandrysdale9015]

Water your plant Brent it’s dying like the dollar 😂

[@Drone-RawRecords]

Yee:'DD

[@andrewlim7751]

He'll probably water them with Budweiser. 😁😁

[@dandrysdale9015]

Jokes aside very educational 2hours 🙏 thanks Ronnie

[@sbain844]

1:30:35 I like Brent, but I think he is grossly overestimating the US in terms of global economic power. It is true that the US has the biggest economy, but what matters most is its share of global trade. China is already twice as big as the US in terms of global trade and it is growing rapidly, as are China's emerging market trading partners. For this reason, I have to side with Louis. In previous discussions I have heard Brent argue that, ultimately, the USD is backed by the US military. The point being that, if push came to shove, the US could invade the middle east and confiscate its oil so as to ensure that the petrodollar survives. Again I believe that Brent is grossly overestimating US power - the strength of it's military is primarily naval, and much of its navy is antiquated and vulnerable to modern missile/drone technology. In terms of the US land army, Col. Douglas Macgregor, and others, argue that it is much diminished in recent decades whilst those of it's rivals have grown exponentially. Additionally, the US manufacturing base is gone, with no realistic capability of producing/supplying a new army capable of conquering the middle east (especially since Iran et al would likely receive massive assistance from Russia/China were they to be invaded). Then there's the question of whether the American people would even allow the expense and barbarity of such an invasion... In short, I expect fiat currencies (including the USD) to fall faster than Brent's DMT predicts, but time will tell.

[@Vikingpoints]

Not recently. US just had their biggest export month on record, and China is dropping. This is why the gains growing go between them. China was within 5 trillion of the US a few years ago. Now it is 10 trillion. China is falling off. Exports to the US dropped by over 100 billion in 2023. I don’t expect it to suddenly pick back up more trade with the US and EU not buying as much. There isn’t another grouping that can cover those losses.

[@sbain844]

@@Vikingpoints As was explained by Louis, most of China's trade is with emerging markets, so it's trade with the US is a side issue. Total China exports amount to more than $3.3TN, the US does only $1.8TN. The US is a slightly bigger importer though. I already explained that GDP is irrelevant, so I'm not sure why you mention that, but the gap there is largely due to the overvalued USD. If you look at PPP figures you'll find that China actually has a bigger GDP.

[@Vikingpoints]

@@sbain844 ok so is gdp irrelevant? Why bring that up at the end? Also the reason US is 1.8 is the massive domestic market. We don’t rely on other countries nearly as much. I see the future being more like indias model. Countries wanting everything built in their own countries. That means Chinas economy gets routed. If all these developing countries have as cheap or cheaper labor, why import? They will develop their own industries. China will not have any advantage outside of their own borders. Neither will any other country. The west holds a massive chip advantage which I am surprised they didn’t talk about at all. But that is run by the west very dominantly. Also if energy is a major driver, the US and other western counties are the most advanced in nuclear fusion. If we develop that first, it is a game changer. It is becoming a multi polar world. Which means less reliance on ANYONE else. Chinas rare earths have collapsed recently. Why? The US has built several new mines and the facilities to process them. Btw, trade with China was 575 billion in total. But the big number was US imports from China dropped 20%. The US economy isn’t built on exports. Even though we just had the biggest month ever in march. So if the world becomes more bifurcated, which it is, then China stands to lose the most. Why would Brazil import cars from China if they can build them? This goes for all products. The dollar will be the last fiat standing, but that is like being the smartest kid with Down’s syndrome. Fiat will not matter soon outside of everyone’s own respective country. The dollar is to ingrained in every single country. No country is going to want to use anyone else’s currency soon. The only way to have a world currency now is something like bitcoin where none of them can control it. That is my thoughts.

[@sbain844]

@@Vikingpoints Lol, are you trolling me? I made the GDP point because you brought it up. As for countries not trading and producing everything themselves.... I don't know what to tell you, perhaps get a basic book on international trade and comparative advantage lol. As for your other remarks, you're all over the place and completely missing the big picture. Look, it's fine if you disagree, there's no obligation to agree with me and I may well be wrong. Like I said, time will tell.

[@Vikingpoints]

@@sbain844 I am not trying to troll you. I am all over the place because there are so many factors they didn’t even talk about that it is hard to even put them into something cohesive without it being too long. My point on the trade is also several things. Any country or region of any purchasing significance, is going to want the products built there. That means that it wont really benefit China. Even if their company is building it. Kinda like how the US hasn’t benefited a ton from our manufacturing going over seas. Take out their handouts to their businesses, and will they really have an advantage? Just like Tesla isn’t going to be crushed by BYD, they will both get shares. The whole podcast was about currency. My point is that China will never take that spot from the US. I am in Mexico now and spend a lot of my time here. There are dollar exchange shops EVERYWHERE here. Not a single yuan one. Same with all of the world. Dollars are so ingrained that nothing will be able to overtake it now. Nobody in venezuela wants the yuan. Even though the US I would say is hostile to them. Their population still wants dollars. It would take generations to change that. I can’t see a world in which that happens. Add in currency controls on the yuan, and market that has transparency issues, it isn’t all of the sudden going to become a haven for the rich to invest. If I can’t pull millions or billions out of the market quickly, then it isn’t an option. I know that the dollar will diminish as the world currency. But the only thing I can see replacing it is something like Btc or Btc itself. China also doesn’t really have resources. Their income came from manufacturing. That can be done anywhere. So without that, what do they really have of value. I think Russia and the US are 2 of the most truly independent nations. The US literally needs nothing from other parts of the world. China on the other hand needs food and energy. Pretty big Achilles heals. The world is all pulling away from China as much as possible. I don’t see that changing, and therefore cannot become the currency that replaces the dollar.

[@davidzoller9617]

Nice to see a civilized discussion with contrary views. I think it was a very good reflection of the economical and geopolitical views that are out there. I'd have liked a lot if Brent could have give his view to the last statements from Louis, it felt like a too sudden ending of the dialog.

[@Timothy_Pitt]

It almost became uncivilised!

[@davidzoller9617]

@@Timothy_Pitt 🤣Almost.

[@toicheung5559]

Fabulous debate ! ❤❤❤

[@truthseeker8581]

Well done to both of you! You came together in what I see as a complementary manner to provide an informative and thought provking debate.

[@HuiChyr]

I'm surprised Brent didn't use his trump card to support his case. US military will coerce the world to use USD.... But Louis make a solid case and it's on going now.

[@automateeverything2341]

I see where you're coming from, but I do have my doubts. While the US certainly has the miliatry might, Brent seems to assume our leadership is competent enough to recognize the problem before it's too late. I'm not entirely convinced they do.

[@HuiChyr]

@@automateeverything2341 I believe US government does recognize the problem. And they are using military approach as Brent would suggest. They target the 2 major members in BRICS. Russia and China. US government started the war with Russia, using Ukraine as proxy by encouraging them to join NATO. Do you think Zelensky got the balls to oppose Putin if US doesn't back him up? Why do you think Nancy Pelosi visited Taiwan? Also to start a war with China. Xi JInPing is smart enough to avoid that. Now US is using Philippines to start this war. Starting wars allow US to justify using USD as a weapon against them. Confiscation of Russian assets and block them from using SWIFT. Now US is using tariff to prevent China accumulating USD, while USD is still valuable, hoping that would collapse China economically. But it only hasten the process of China trading with other nations with RMB. China just need the commodities to be factory of the world. As long as there is no HOT war with China, BRICS (via China) can continue to weaken USD as global currency. So it's a progressing event. In my opinion, both China and US want to go to war but they are playing a childish game of "making the opposition the bad guy". This is to rally others nations behind them. The oppressor and the oppressed. RUssia and China are supporting Hamas in the Gaza war, painting US and Israel as the oppressors. Another proxy war between US and China.

[@Catalonia]

​@@automateeverything2341or that the military has the capacity. Defense is like alot of America right now. Grift, high mark up, big ticket weapons systems etc. I can't imagine the F35 in a conflict, let alone in a US China fight. We have vastly overvalued overvaluations here, and that includes defense.

[@harryharry3193]

@@Catalonia can we now have a standing ovation to all the corporations who outsourced into china????....along with the chief architect in the 1970s who opened china to the us for the goal of cheap labor (which is always the goal). Germany industrial production is TOAST. China achilles heal.....FOOD.

[@Mdaddy4]

I think the whole US #1 military needs a sober assessment. You sure US still has the most capable military? China had much much bigger industrial capacity. Have you noticed everything military is morphing into drones. Who makes the most drones?

[@HermanEmerson-ht1te]

Thank you great discussion very good

[@noname-yh2fv]

louis > brent, brent is extremely bias, he gets upset when people talk badly about the US

[@ericshang7744]

Agree, though I’d hear both sides, there is truth from both sides.

[@terrkamp]

Excellent discussion. So it hinges on whether China can still export it's production to non US countries.

[@motiveation1]

Great conversation

[@SaSa-fs8sb]

Gold price, USD 2412 ,

[@bokkenrijder172]

Gold price now: almost $100 less…

[@Mdaddy4]

This discussion spot on in what I have gleaned over the last while. Which is US GDP and spending is based on transfer payments unproductive wars and Wall Street financialization whereas China spending is on manufacturing and infrastructure. And they’ve developed a whole ecosystem around that which is hard for any country to catch up to let alone compete

[@zarathustra105]

Excellent discussion.

[@mayloo2010]

What a great conversation, Thanks for sharing!

[@richardsutcliffe98]

65 euro for two salads, two glasses local wine in a cafe in turkey!! nothing flashy, trust me it’s expensive in many places not just the US.

[@BatmanBoss]

Thanks guys

[@ODIN.20]

Gave won.

[@TeaMasters]

There's reason to think that we can avoid violence and Thucydides' trap. René Girard's concept of mimetic desire shows that the more similar two people are (ex: twins), the more similar their desires, which leads to violence. China can lower the tension with the US, because it isn't really interested in world dominance. China is large and complex enough for Beijing. The more China shows that it is different from the US, the lower the tensions. Capitalism isn't a zero sum game. All can grow at the same time

[@amraceway]

It is simply a matter of socialism and capitalism. The USA cannot accept socialism, but China although 100% socialist is happy to work with capitalist countries.

[@TeaMasters]

@@amraceway I don't think so. Did you know that public spending is higher, as a % of GDP, in the US than in China. I think that US politicians are looking for a scapegoat for their own failings. That's the only thing that Washington still agrees on.

[@holden5082]

Thanks for sharing this great conversation

[@kulveersehra1674]

The issue with Brent's theory of military intervention to protect the US dollar assumes that they have military power. Against Russia, China, and Iran, there is no way US and Europe wins.

[@rookiedad9747]

whenever I hear someone talk about china infrastructure I think tofu-dreg and ghost cities. The US for sure has wasted money in foreign wars, government handouts, etc. but to juxtapose that with China as if they were good stewards of government spending doesn't add up. The US is far from capitalist, but lets not forget that china is a communist run country and history has not shown that economic system to end well.

[@SaSa-fs8sb]

Copper US$ 5.00, Silver USD 30.00

[@automateeverything2341]

I wish, I got mountains of wire to scrap haha.

[@SaSa-fs8sb]

@@automateeverything2341 those are quotes from Friday Copper is at $5, 5 bucks

[@ericshang7744]

If we take on the analogy of Apple vs MS in operating system, if you remember, Apple OS(Mac, iOS) really take over windows starts not in PCs but in mobile phones. Windows tried to compete in mobile platforms with windows Phone, but failed miserably. Microsoft failed because they think they use the same tricks in the mobile platforms, which proved horribly wrong. So, to date, Microsoft has not meaningful presence on mobile platforms. It’s the same with US dollar system. RMB is not replacing US, why would China want to do that? RMB is facilitating international trade and investment, as long as RMB achieve that, it’s already winning. Also, in the past 3 decades, the world growth is mostly from China, not US. US may have a gigantic share market, which is accumulated wealth from the western world.

[@nlbooks6614]

Totally agree with Louis comment on Asia's standard of living compared with Europe and US. just returned from Asia and standard of living, cost of living and above all culture in terms of respect honesty safety the west has alot to learn. In 20 years all Asia India Vietnam Thailand will catch Japan Singapore any ? korea

[@andrewlim7751]

Ex India.

[@hiatuz3512]

This was amazing. 🙏

[@sophiezhu7738]

Excellent interview! Appreciated:)

[@garryw-vc6qm]

They both made very good points and they were both correct on most of their assertions. I have following the dollar debit for decades and was in the camp of a declining dollar before 2008. I have been mostly neutral since then. I do believe there are key levels and the dollar is not too far away from a plunge to 90 on the DXY..... but I think Brent is right when he notes that major world crisis drive the dollar higher, especially if US interest rate shock people by going higher. De~dollarization is going to proceed but i suspect it will be a slowish process UNLESS the US has a major internal crisis.

[@nlbooks6614]

Totally agree with Louis comment on Asia's standard of living compared with Europe and US. just returned from Asia and standard of living, cost of living and above all culture in terms of respect honesty safety the west has alot to learn. In 20 years all Asia India Vietnam Thailand Indonesia et. al will catch Japan Singapore korea. Asia will be the cultural leaders and model for the world. Us will be a wealthy country with half the population living on the street. disrespect dishonesty still thinking money and the dollar is the king

[@rof8200]

Thanks. Great conversation

[@lapuntadelfin]

Luke Gromen has often made the observation that the ultimate EM is US flyover country like Ohio. Empires do not understand this.

[@johnbracken7032]

What does that mean? Drug abuse and lethargy are endemic in fly over country, not so in emerging markets.

[@jamespier7801]

how do you talk about Renminbi as a store of value and not even mention that they employ capital controls?

[@Timothy_Pitt]

Economics 101 fail

[@mangoburrito2102]

This was a great and interesting discussion

[@vincentguerard2656]

Very interesting. Great

[@BatmanBoss]

Go Gold 🥇

[@georgelien]

Well done !

[@davidlai399]

Would love to see Louis debating Peter Zeihan

[@mistman5640]

1:00:59 Japanese economy is contracting with yen at 155. How is that happening?

[@SavanaT]

Both guests hit it out of the park! Great China perspective from Mr. Gave... ❤

[@roddiechan]

why is it people always say that China wants to replace the dollar? China simply wants to de-risk using the dollar less to protect its assets

[@jp92382]

only thing you need to watch to see what will happen with US Dollar is, which central bank will cut interest rates last and keep interest rates highest?

[@0l_pops531]

I think you need to get Peter Zeihan on your program as furthering everyone's education here. He has a very deep understanding of the geopolitical issues around this very issue which I really did not hear being discussed.

[@blueeyes6192]

lmao 😂😂😂😂

[@garryw-vc6qm]

...and totally wrong on the Russia Ukraine war. So his "very deep understanding of the geopolitical issues" was wrong there right? Additionally, this is debate between reasonable and thoughtful folks. Zeihan has very strong opinions and is intolerant of opposing views. I have his latest books and enjoyed them..... but he expresses his opinions too forcibly and with too much hubris.

[@Mdaddy4]

Bro Zeihan is an idiot. So many more better geopolitical analysts. Try Will Schryver

[@jamesburke3803]

2 points: 1) Luke Gromen suggests the global payment system will shift to using local currencies, with balances settled out in gold. These two gentlemen were suggesting the gold had to be lodged with a Fed equivalent, but gold is valuable enough that balances can be flown in a single jet, delivered weekly (or whatever). Small price to pay to be able to use your own currency and avoid dollar tyranny. 2) As global corporations leave China, they aren't necessarily moving to North America. Most of it is moving to Indonesia, India and other emerging markets Louis describes. China's loss is the emerging markets gain. 3) Louis's analysis about Europe's lost opportunity to price Russian gas in Euros really highlights the immense cost of the Ukraine war, and the loss of the Nordstream pipeline. (Europe is fucked). Great debate/discussion! I'm a great fan of Brent, but I think Louis made some excellent points! I'll be watching him much more closely in the future!

[@b4bmm]

Of course not, planes would be dropping out of the sky daily.

[@Mdaddy4]

The only explanation wrt Europe is that its leaders were and are all placed there with the influence of the US. Otherwise why would they suicide themselves for the benefit of US

[@rohitkothari3890]

Wow. A great debate. Good points brought on by both Brent n Louis. My belief is if CCP was replaced by a logic bot, they would easily win over next 10 years. Bc the US is over-financialized n over-leveraged n is vulnerable. But u need to be able to put together a credible geopolitical alliance for that - something chna has not been able to do. Its their weakest point. Because of chnas extreme short-sightedness in international policies nobody trusts them for even a penny. So their grade in playing the game is a D. All we (the west) need to win is to not play at F grade. The way the USG has been making decisions recently I m not sure.

[@junkscience6397]

Everything you just said about the US can also be said about China. Its money printing, debt levels in all sectors of the economy, property bubble and overmanufacturing are all simultaneously reaching absolutely uncharted historical proportions, while it still has over 600 million (or about twice the pop of the US) getting by on less than 100 USD a MONTH. We'll soon see how well China's plans to dump its overcapacity on the rest of the world withstands tariffs and political pushback (it won't). The only exception would be the geopolitical alliance, which the US certainly has, but China does not.

[@captainmajed84]

Respectfully, Brent skips over one theme that unfortunately invalidates his perspective...the fact that the West by choice got rid of their manufacturing base and financialised their economies... that process has become unsustainable and thats why we are at this current crossroad.... unless everything is seen from that perspective... then debt levels/stock market performance/so called growth.....are irrelevant.... he said "winning" for US would be maintaining current status quo...but the fact is current situation is unsustainable not for the east...but for the west...he has a belief that rest of the world are trying to overthrow the US...wen in fact the rest of the world are simply "hedging" in expectation for the US to overthrow their own monetary system for a new one that favors them.

[@angelominghelli6129]

If the dollar gets replaced, the euro will get replaced too.

[@aleaiactaest8354]

"Does anybody care about Europe?" 😂 The adopted kids that has no home after the divorce.

[@jaytan915]

Thanks for the very stimulating discussion. BJ is totally correct from the highly financialized US perspective. Of course the Dollar is the only game in town and the best return to investment. However, higher is not better and there's the industrial hollowing out and social inequality. LG has a more global view which correspondes with the situation faced by the rest of the world outside the West. He can appreciate that poor people just want to have a better life. Here I can see that local currency trading is competing with the Dollar and Gold with US bonds. I think that the Dollar system will remain for some time yet but there is definitely an alternative emerging. The number of countries which have no choice but use the non-Dollar route is increasing all the time and they are motivated to make it work. On the matter of Europe, I feel that their options are still very much in the air. Going with the US is probably not the most pleasant choice. I suspect the US needs to confront their debt addiction much sooner than they think.

[@prashantmandare2875]

Brent says China can sell to non US countries but only at lower prices. Well their currencies will appreciate which will largely compensate for it. The prices are lower right now for emerging markets in terms of US dollars.

[@MRJDD63]

I follow Brent , just to see when he is going to face the facts and drinks his milkshake. He is clearly struggling to keep explaining the slow but sure collapse the US is in….great analysis from Louis Gave …

[@thakurvk]

Great stuff guys !!! Everyone rushing towards maximalist positions, violent moves coming soon . Who has paper and who has real stuff show down coming.

[@aleaiactaest8354]

excellent discussion! I think an in depth discussion of Europe is needed here. Seems to be the coming underperformer...

[@Timothy_Pitt]

What is there to discuss? Europe is finished

[@jongbongkim4386]

Thanks, Incrementum team. By the way, Brent needs to come to South Korea in person to realize what the dedollarization really look like. Here in South Korea, your ally country, people's hearts and minds are running away from garbage dollar at a bullet speed all of a sudden. All of a sudden.

[@JoeHo-vp2wn]

Brent may want to consider this : 2023 US /China trade ：USD 575B，2023 China total international trade USD 5.87T。US constituted

[@frankdattilo1836]

Brent's preoccupation with DXY is a flaw in his argument...Louies rejoinder of US social degradation is not only persuasive but true

[@zacharylockhart4550]

Louis comments about social indicators of winning arise from past policy mistakes (1960s in general), and could be corrected by policy choices if certain folks had the balls to address core problems like quantity and source of immigration flows.

[@dawner84]

The discussion was exciting, even i am a chinese .

[@blueeyes6192]

2 point of views east and west. Let’s see how this plays out in the future. More nuanced insight provided by East.

[@MegaBoolaBoola]

They are both right. USD will do fine for decades, but ex-USD trade will grow much faster.

[@user-ch7xh3oe4n]

All the real growth in the world is coming from the US????

[@timothycarne3151]

You can tell who has Chinese clients…

[@blueeyes6192]

irrelevant

[@brainwashington1332]

The middle class outside of the US buy gold because because we have savings, the American middle class is broke. Let's not pretend that Americans are not effected by inflation Brandt

[@fredfrond6148]

Gold, silver, copper and bitcoin. You know tangible assets.

[@lifefun1987]

selling to developing country offers better profit due to less competition.

[@lifefun1987]

US is ruled by u know who. china is ruled by king who want to build reputation in hustory. that is why china got EV so strong that US need 100% tarriff to compete.

[@richardaurre4840]

It takes a lot of money to rule the world!

[@bokkenrijder172]

Brent is talking the CIA/Economic Hitman Narrative, similar to Kyle Bass, nor realizing that times have changed…A LOT.

[@harryharry3193]

China is FINANCING these sales. DEBT. Brents POINT is china can sell anything, at a lower price--thus lower profit..and there is their weakness--to service that debt. THEN when does china UNPEG from the dollar? this is not a simplistic set of outcomes. Producing at a Loss....such a Brilliant concept. I am in agreement with Brent. Japan adjusting currency to compete with China...more pressure on the PEG

[@nlbooks6614]

the one ring rules them all. The ring of power the ring of gold

[@RafaelSkywalker]

So not only did Louis destroy Brent by finally getting him backed into a corner with his argument that the bully U.S can force everyone else to do as they say at the end, it seems he didn't get the Microsoft/Apple analogy either. The fact is that Apple surpassed Microsoft in both market cap and earnings.

[@jamesho8820]

Having lived and worked in HK, Louis is far more knowledgeable with regard to the economics and financial scene in China and Asia. Brent is clearly not and his narrative wreaks of American exceptionalism and anti-China rhetoric. I have been to China at least 15x over the last 40 years, can speak Mandarin and have a good understanding of China and its economy. Louis is spot on!

[@HICHAM-FINANCIER]

Hello, can we have a debate between louis Gave and Peter zeihan on China? they have opposite points of view on china, I think it will be a pasionate debate!

[@Mdaddy4]

Bro Zeihan is an idiot. Much better geopolitical analysts. Try Will Schryver

[@mechannel7046]

38:50 most demands for physical gold are in emerging mkts. When emerging mktsndo well, gold does well 40:20 Japanese buy gold 43:20 China largest buyer and producer of gold 54:40 Europe biggest loser. Germany deindustrialization 1:09:20 China trade surplus trippled as it moved up the value chain and became the biggest car exporter 1:01:30 Europe can't live with cheap Yen 1:02:30 USD bearish 1:07:50 China and US debt very different 1:12:50 US energy production underpins USD. China will be leading new energy 1:14:50 the game of nominal value of money is over 1:20:00 China now guys most oil gas with RMB 2:23:00 euro dollar 1:27:20 US twin deficits 10% 1:31:00 china's trades with emerging mkts increasing, with the US decreasing 1:42:40 Russia selling resources to emerging mkts at a discount fuels the boom in those countries. Turkey, india, etc all outperformed the Us

[@caseyrindal1815]

In the not to distant past Brent's fall back has been the us will sick its military on you for not using the usd. That seems to not aging very well.

[@dondit]

US dominance is over. It is declining. It may not be swift but it is happening slowly at faster pace year on year whether Brent thinks or not

[@richardsutcliffe98]

maybe Louis also needs to consider the quality of many chinese items, aspects that isn’t that great. There’s a reason why they build so fast no different as to there’s a different reason why the west is now so slow!

[@angelominghelli6129]

The world specially China print proportionally 2-5 times more money than the US. So if we talk about printing that is not an avenue of discussion.

[@user-ch7xh3oe4n]

We could ask Professor Michael Hudson about what is real growth…

[@JohnLee-]

Winning = tariffs

[@youknowkbbaby]

"Brent CNN-News Johnson" coming at ya once again 😅.

[@richardsutcliffe98]

china has a small military window in the next year to move on south pacific, after that US will catchup. so we shall see huge change, maybe then USA will re engage its war footing and EU. no one is winning, it’s about who looses the most and anyone that can will still go to dollar, key western aspects of living.

[@Mdaddy4]

What makes you so sure US can catch up? It’ll need massive change in politics culture and education to even have the possibility of catching up. China is very much ahead

[@Mdaddy4]

Louis is more convincing than Brent. I think the issue is that China has progressed so fast Brent didn’t realize