Sean Foo: Economic Collapse in Japan, US and Europe

Sean Foo: Economic Collapse in Japan, US and Europe

Welcome. Today we are joined by Sean Fu, an economist and China expert uh to discuss what is happening in the world. Uh thank you very much for coming back on. Hey sure, Glenn, anytime. Great to be here. Well, under the unipolar era after the cold war, people look towards uh the United States, Western Europe, and Japan as the economic leaders as they had as well throughout the cold war. uh but now they all seem to have exhausted themsel uh in terms of debt and uh well many of the other basic economic indicators and uh struggling increasingly. So I I thought it would be interesting to start looking at Japan because the debt level there of course it’s always been well not always it’s been a problem over the past decades now uh but they keep introducing more and more stimulus. What do you see happening in Japan? Well, I think Japan is caught in a very dangerous trap. Either way, either solution that they choose, it’s going to cause problems down the road. So, right now, the immediate problem with Japan is uh imminent industrial collapse. Well, firstly, when you are selling a lot to the US and suddenly you are facing like 10 or 20% tariffs, a lot of your exports are going to go down. Japan’s exports to the US has fallen at least five to six consecutive months and that is not really good. And if we look at what the administration really wants, they want Japan to move a lot of their facilities, a lot of of their factories, whether it’s automobile plants, whether it’s some of their semiconductors to US shores. So Japan is feeling the threat from that area, right? And if we look on the currency side, the Japanese yen has been collapsing for over six to seven months against the dollar and understand that the dollar itself has been collapsing against other currencies, right? Whether that is the euro or whether that’s the Chinese R&B. So if your currency is collapsing against the dollar, which is collapsing means you’re really in big trouble. And when the Japanese yen collapses, suddenly all their cost of inputs goes up. Now we have to understand that Japan after the Fukushima uh nuclear disaster, a lot of their energy is being imported in. Now I don’t care whether that’s oil, doesn’t matter if it’s LG, even coal. Around 85 to 90% of the entire energy mix gets bought in from the global markets to Japanese shores. And if the yen continues to collapse right now, everything will cost more. Whether you’re talking about the standard of living in Japan, domestic prices goes up. Whether you’re talking about industrial inputs trying to make a new car is going to cost more. So right now, Japan is facing a very difficult situation and they have to choose between do we compromise the debt long-term sooner or later it’s going to default and things will just blow up. We do not know when that will be. it’s uh it’s a black hole for now black box or do we see our industries collapse tomorrow next year so obviously by introducing the stimulus Japan has chosen the short-term fix but there with it comes a lot of problems as well yeah the heavy dependence on uh energy imports at a time when energy prices go up and the currency continues to weaken that seems like a yeah trap will be the correct uh word to frame it. Uh but what does this happen for the wider economy, the Japanese uh bond deals and uh their ability to well I guess hold US debt? Because if you look at the countries that hold US debt now that the Chinese and Russians are getting out of it, Japan seems to be uh quite important in terms of also maintaining the American economy. Right. All right. So, Japan does hold a lot of US debt and I made a bit of an error over the last one to two weeks when I I postulated that Japan most likely to save the yen, they will be dumping a lot of US treasuries, right? You know, you hold a lot over $1 trillion worth of treasuries and if you dump a couple of hundred billion, you’ll be able to easily cover the stimulus, you’ll be easily able to at least keep the Japanese economy afloat for quite a while longer. However, we all know the relationship between the US and Japan. Now, the US definitely don’t want their friends to dump their holdings of US Treasury bonds, not in this period of time. So, what Japan just did over the last week was the BOJ, which is Japan Central Bank, the Bank of Japan, has hinted a concrete move to jack up their own interest rates. Now, this is quite unthinkable for a lot of reasons. Firstly, Japan’s debt to GDP is around 230 or 250% uh compared to GDP. That’s the debt to GDP ratio. Now, if you will jack interest rates up, suddenly the interest payments will continue to uh get higher. That’s one. But when you jack interest rates up, it actually gives an incentive for the markets, at least your own local people, to bring back money from other markets, right? because now you’ll be able to uh gain a higher yield. The yen most probably is going to continue will do a reversal and it will go up. So a lot of money uh Japanese money that’s floating around the global economy especially US stocks especially in US bonds there’s a very big chance of it flying back to Japan. So yes you do not dumb US treasury. So that side of the equation is fine. However, a lot of domestic money from the corporations, from the non-governments, from uh individual investors themselves, they’ll pull the money out because we have to understand that uh Japan’s a lot of Japanese investors, they’re quite risk adverse. They rather earn like a 2 to 3% yield, which is constant versus trying to speculate uh in a casino. So, right now, you have appreciating yen. The dollar chances are is going to fall because of recent events in the Federal Reserve. Chances are money is going to leave the US flow into Japan and that’s also creates another kind of funding squeeze uh for the US Treasury for Scott Bessen. So there’s really no nice way this entire situation is going to end without some kind of collapse or crisis. Well, what do you see happening on the American side though? Because I know when the global financial crisis hit, uh it was um uh the the Russians and the Chinese they began to indicate that there was a need to reduce dependence on the United States. The references to a post American world simply given that uh the fiscal responsibility of the United States was questioned that they weren’t able to get their house in order. It was after this the Chinese began to uh well launch this belt and road initiative. Um it began to yeah launch this um Asian infrastructure investment bank again financial um diversification. But in 2009 the US debt was at 9 trillion. Now it’s at 38 trillion. So and it doesn’t seem to be slowing down. If anything the debt levels are increasing. So what does this mean for the United States? What are its options? Um what will happen to its currency if it not if asset continues down this path? Well, I think the US is caught in a trap. There’s no other alternative but to inflate or lose the entire global economic war. We talk about how China was uh building out their own belt and road initiative. right now the US themselves they are on a one-way mission to try to survive to try to maintain hijgemony and that means firing on all cylinders now if you look at the administration they have been going around the world trying to sign a lot of weird deals with Australia with Southeast Asia on how to rebuild their supply chains especially when it comes to herbs now that needs a lot of money a lot of money is needed to invest in those countries a lot of money is needed to buy stakes in a company in a yeah in the companies and all the tariff revenue coming in is simply not enough. So the the deficit will need to be borrowed from that and that’s just on the supply chain side. Now if we look on uh the more prevalent and a more uh important war when it comes to semiconductors when it comes to AI a lot of money needs to be borrowed in order to keep the bubble afloat as well. Now the US has doesn’t have much of an advantage industrially when it comes to battling with China, when it comes to fighting with the bricks. Now that battle has already been lost, but what the US does have is a bit of a clear advantage when it comes to technology, right? And there’s no other way to keep that advantage without pouring in large sums of money. So if you look at the entire of 2025, this is simply one big uh orchestrated move to take money from main street US consumers goes to the federal government and the money is used to uh dump it all the way to the AI companies helping companies lower their funding costs giving them opportunities to build more data centers. So, industrial America, the consumers are being hollowed out in order to fight and win the AI war against China. Simply put, well, at the end of the cold war, this was these were the golden years though of not just the US but the political west. Traditionally, you know, you fix the roof while the sun is shining or you mend your nets when the sea is calm. that is uh during the good times is when you get your financial house in order. Uh instead during those decades uh the US as well as yeah the rest of the political west went on a big party uh and that is um yeah spent a lot of money. So given all the need now for developing its tech um getting its debt in order it’s it’s really the s wrong wrong time as you say to fire from all cylinders to do this at this critical point doesn’t seem to be um a a good option but do do they at least have any chance you think for for yeah for improving the economy that is to re-industrialize uh win this tech war with the Chinese because I know the AI bubble is a growing concern um in in the United States now. Well, I think it’s rather obvious what the United States is trying to do. Now, if you’re talking about outright win against China, I don’t think that’s really possible. Of course, China has just too many advantages. Now, one idea we need to have is when it comes to winning the tech war, you kind of need two components. You need the ability to out innovate the brain power. Now, uh the US obviously has some of that. Some of the top education institutions are still there. You still have a lot of talent in Silicon Valley. You still have a lot of talent when it comes to Nvidia, AMD, all this uh top-notch companies. But the other side of the equation is something China has in spades where the US almost doesn’t have much of it as well. And that is the industrial capacity for manufacturing. And all this creates a very virtuous loop, right? If you have innovation, you’ll be able to um upgrade your manufacturing capabilities. When that manufacturing capabilities gets upgraded, it feels even more innovation. So the US right now only has that innovation which is fueled by debt and deficits which is something really weird and unheard of. But if we look at the grand scheme of things, can the US economy survive even thrive? I would say yes. But it will be at the expense of the G7 allies. So if we look at how the US is playing their cards, they are actively trying their best to bifocate the war. Right? The US is uh having a lot of exposure, a lot of attention being paid to the Western Hemisphere. We just need to look at recent actions. It’s not very complicated to realize, right? you know, giving Argentina like a what was it 10 or$20 billion bailout in order to help uh Javier Malay win the elections. The US is not doing it from the bottom of their heart. They want to be able to have more of a financial influence and say in Argentina. And we just need to look at the situation going on in Venezuela right now, right? We have ships patrolling the Caribbean seas. We have Trump trying to close down the airspace. Why? because Venezuela is a very oil rich company uh oil rich country. So the US definitely wants to clamp down uh when it comes to the western hemisphere. And if we look at all the trade deals going on with Europe which is strangely enough still very subservient to the Americans I think the US is understands that when it comes to bricks when it comes to the east when it comes to global south it’s really going to be hard for them to compete with them as when it comes on a when it comes to the basis of economics when it comes to better products at a better price they can’t win but can they can definitely still arm twist their allies to fuel the US economy uh so that they will thrive, GDP will grow. It’s basically uh vaporism, right? You know, count Dracula. I call it the count Dracula strategy. Yeah. Well, there’s some um cannibalization of course of US allies as well, trying to extract some wealth from allies to get over this difficult time. uh but you mentioned before that the Japanese for of course political reasons or also the security arrangement uh has some limitations in terms of its ability to drop uh US debt and um again this was quite evident in the 1980s as well that is its uh ability to resist US pressure is again limited because its security depends on United States but this is not the case for China it is uh again it is the opponent of the US in this economic war and um they of course are looking now at the United States with greater concerns. Uh how do you see the you that China holds will willingness to keep on holding US debt though and if if they do do get rid of it what would they actually replace it with? Well, I think China has woken up to the idea that you can’t really hold US debt for a variety of reasons. you know the Russian uh confis the confiscation of Russian assets is a clear one. I think in the 24 point or 28 point peace plan uh you know between Russia and Ukraine one of the clauses was uh the US will be using Russian assets to repay back uh I think for Ukraine’s rebooting efforts and the other half of it was to come up with some sort of bizarre venture with the Russians to to possibly build up supply chains. Now the thing about this is that if you have money caught up in the western financial system whether that is in Europe or whether that is in uh the US they can always use the money without your permission. How they want to is up to them. So right now China has many avenues to spend their money in. Right now the first way they’re doing it obviously is to buy a lot of gold. Right now, China over the last 12 months to 18 months have been publicly buying gold out there. Uh they have officially reported small purchases of like one to five tons every month. But a lot of expert analysis from western banks like Goldman Sachs, they’ve all realized that China is actually buying 10 times the amount. They’re just not reporting it. So that is one uh obvious sign that we we have to watch. And right now there’s so little gold and silver in the western markets that recently a lot of volumes have been pulled out from China. So westerners they are buying a lot of gold and silver from China right now. And another avenue we have to consider is how China is going around globalizing the world as well. The brakes the belt initiative China has a lot of money to pour into this projects. And at this point of time when the US is going out trying to build their own supply chains ineffectively, but it’s still a threat to China. So if China has around $1 trillion in US treasuries, that’s if you lump in Hong Kong. They have a lot of firepower to fire on all cylinders. Now what is the Chinese endgame after the US treasuries? I think they will still hold a nominal amount. Maybe that’d be 100 to 300 billion just to facilitate trade. But I guess the inflection point will be once China is able to buy the majority of their crossber trade settle it in the Chinese yuan. Once that happens, there really isn’t any need for them to hold treasuries in any great amounts. And to accomplish that, it is actually directly linked to China’s export capability and their manufacturing capability. So everything at the end of the day right now it all points back weirdly enough to the AI race. Can China come up with very good AI models to supercharge their factories. Can China come out with uh next generation chips that are cheap enough they can export to the world? They can get more market share and China can go all right we have this AI chip. It’s on par with the Americans. It’s 30% or 40% less and you don’t need to pay dollars with it. you can just pay us in R&B and once that happens I think it will supercharge a whole new wave of um the dollarization. Well, uh the US dollar is not just um yeah held as a reserve currency but also as a trading currency but what are the main I guess obstacles for countries like China, Russia to to shift out of the dollar because there’s a learning curve there isn’t it? Yeah. Okay. when it comes to the US dollar and what’s holding up the economy. Now, in the past, it used to be the petro dollar system. We kind of know what that meant, right? You know, uh I think it was Nixon signed with Saudis with OPEC that all right to buy oil, you to sell oil, buy and sell oil, you need to use US dollars. Now that was the old system that was holding up uh the entire US dollar strength and as well as postwar US had very strong industrial base at that point of time. Now it’s different. The main pillar holding up US dollar demand. US bond demand is something called the Euro dollar market. And this market is simply the usage of dollars and the demand for US dollars outside of the United States. And this market is horrendously big. It’s anywhere from 30 to $100 trillion strong. So a lot of countries like uh let’s say uh Saudi Arabia or XYZ country they borrow dollars from the rest of the world. So they issue dollar denominated debt. Why do they do it? Because the dollar is still the reserve currency and investors will be more comfortable. You know they loan in dollars and they get back their returns in dollars. Now, this is an incredibly big market to break and it’s going to take China, you know, years. It’s going to take them decades to really try their best to unwind it. Even if they can, I guess they don’t really want to unwind the whole thing. Just at least reduce their dependency on it. So, this is the main killer that is holding up the entire system. Now, the biggest threat to this Euro dollar market itself is actually the United States. when it comes to all the endless uh borrowing, all the endless deficits, they are destabilizing the entire Euro dollar market, especially when the underlying value of the asset itself, which is dollars, is losing more and more value every day. If that’s the case, a lot of countries will be thinking, all right, what’s the point of issuing dollar denominator debt when the value of the dollar keeps fluctuating? Uh, you know, like a pinball machine game. they will look for other currencies. That’s why a lot of countries out there, they are beginning to shift more towards Chinese R&B debt, right? Because strangely enough, over the last two to three years, especially during the Trump presidency, the R&B has been incredibly stable and has been um actually appreciating 3 to 6% against the dollar this year. So, a lot of borrowers and lenders are moving more towards the Chinese currency in I expect. And if we think about it, there isn’t really much risk because most of your industrial import or most of your industrial imports, all the inputs are going to be bought from China anywhere any anyway. So in that aspect, I think China is moving slowly conservatively to really dtoriize the world. It won’t be easy, but uh I think it’s inevitable over the decades. Well, you know, and um they often consider Iran to be this uh well, an expert on uh getting around sanctions since it’s been all always so heavily sanctioned uh which allows it then to create more or less a parallel economic system working outside the US dollar and the US-led economic system. But um when they went after Russia though, this is quite a different country. It’s a a huge economy. it as a lot of dependencies around the world especially on its energy. Um but uh h how how is the again huge sanctions against Russia trying to strangle its economy and unsuccessfully so how has this affected uh essentially the creation of a post-western financial system because uh one gets the impression that that it’s the Russians and the Chinese who are spearheading a lot of this efforts to develop a new economic system. Of course it’s other countries are gravitating towards it but it seems to be at the core. Now China obviously has a economy which can’t be compared to the Russian one. It’s uh huge but uh given the sanctions on Russia um this duo of Russia and China together it seems to only have intensified u this creation or decoupling from the US-led financial system. Sure. I think since 2022, 2023 after the Biden sanctions on Russia and Trump just making things worse, they have essentially pushed China and Russia together for the foreseeable future. And this is really in a very insanely strong combination. And if we look at Russia and China as one unified economic block, everything really makes sense. All the cheap commodities from Russia, all the availability of metals, oil, gas, they get pushed to China because there isn’t any avenue elsewhere for them to sell off in big quantities. And if we look at the geography itself, Russia is just next to China. there’s going to be even more infrastructure being built leaking all the oil and gas to uh from Siberia from northern from eastern Russia all the way down to eastern China as well and when this happens I think the finance minister of Russia said that the dollarization between trade with China has reached 99.1% might as well be 100%. They are either buying using the Russian ruble or they’re buying using the Chinese yuan. Most probably it’s going to be the latter. Now, if this happens, it helps China because they can just finance their own buying using R&B. They don’t really need dollars anymore. And for Russia, this gives them an excess of R&B. Now, ch uh Russia does have a trade surplus with China, which is quite rare. Most of the time we hear we hear other countries have trade deficits with China, right? They buying more from China than what they sell. But Russia is selling so much commodities to the point that they have a glut of Chinese R&B. So over the last few weeks, over the last few months, we are seeing Russia going out there and saying, “All right, we’re going to issue our own R&B denominated Chinese bond uh bond denominated in Chinese currency.” And this is quite unheard of. So Russia is in fact helping China create an overseas Chinese bond market in respects. So if we look at throughout the entire spectrum of this economic war the west really made horrible mistake and right now we are seeing the snowball effect. China is definitely getting cheap energy from the Russians so they can survive or and even thrive during this tariff war from Trump. And right now the demand for US treasuries, the demand for dollars is going to get compromised because Russia Russian economy is going to grow obviously and that means they’ll be issuing more R&B bonds to the world. So this is really a self virtuous loop that I don’t think will stop anytime soon. Yeah, this is the problem with all of the sanctions on Russia. you have this vast amount of energy energy resources now being sent to Asia instead a wall more specifically or at least primarily to to China. So I think this is one of the reasons why the Trump administration would like now to end the Ukraine war besides losing it though but uh also because of um the additional competitive advantage it gives to China. One often points to the power of Siberia 2 agreement for example where you have all this gas from the Russian Arctic which was supposed to go to Europe to fuel its under its industries over the next few decades making Europe more competitive in this critical time of more industrial competition. Instead now all of this gas which was intended for Europe is now being sent to China for the next what 30 plus years. This is uh this means they will get cheaper energy. The Europeans will get more expensive. So it’s it’s not just about Russia anymore. It’s the economic advantage. Uh one is handing over to Asia while Europe will will continue to plummet. So it’s quite uh dramatic which is why these sanctions never really made that much sense at all given that the Russians always had opportunity to export to China which seemingly has an uh yeah unlimited thirst for more energy. It seems to be able to absorb anything that Russia wants to send. Uh but uh how how does all of this affect uh the US efforts though to I guess uh not cancel China but derisk or decouple uh from from the Chinese uh given that they continue to only grow. Well I think the US can decouple from China. They can derase from China to a certain extent. The issue right now is US supply chains are going to take at least 10 to 20 years to rebuild. You know, Scott Basson, Treasury Secretary said that he’ll embark on project W speed to get supply chains up from 12 to 24 months. And this is really really bizarre. When Scott Besson came out and waved his little back, his little I think it was magnet around uh on CNBC, it was quite hilarious because it shows that US supply chains, US manufacturing is so horrendously uh behind that just creating the first magnet is suddenly a very big uh PR issue. It’s a PR victory. I think the the US will have to spend a lot of money in order to make this happen. And right now their only solution that seems to be left is just taxing the rest of the G7. Uh focusing a lot on South America, the Western Hemisphere to get all the commodities out to let’s say sign more deals with Argentina. They’re sitting on a lot of lithium in order to extract it out to fuel the US economy. So can US economy growth uh be sustained? Can the entire economy grow? I I would say yes. And it’s predicated on two things. Now the first is getting all the allies to submit and shift a lot of factories to the US as well as all the investment pledges and buying stuff goods from the US. And right now it seems to be working. The pledges have not been officially ratified right now. But yes, the US is in a sense winning the trade war against most of their allies. Not against bricks, but against their allies. Now, the second way the US can win is if their AI gamble pays off without the entire debt situation imploding without entering a recession first. But even that has risk. But the entire US plan of shuffling trillions of dollars into AI is they want to reach a state called AGI, artificial general intelligence, which is the next level. This is where AI can think for itself. It can just uh you know it can leaprog human intelligence and is able to just self-inovate from that point. Now how far are we from that? We have no idea. It can be one year, it could be 10 years, it can be 50 years. So right now the US is just making a very big gamble. It’s a race against self-implossion I would say. But um China though it also has some of its own problems. Uh I don’t know there’s some new numbers coming out now in uh December and it suggests that China is uh has slowed down a bit partly. Yeah they have some unemployment problems. uh the industrial output uh I think retail sales also uh hasn’t uh well had the results they used to have. So there’s now all this talk about um China having peaked to some extent or well peaked I think is probably an exaggeration or not an appropriate term. Uh but at least the growth is now more limited. Um, and to some extent this is fueling assumptions in the US that they can sustain a long-term economic competition with the Chinese. Do you see this as a reasonable assessment by the United States? Well, I think it’s 50% true and other 50% is mired in fantasy. Right? Now, the thing is China, every country right now has a lot of economic problems, especially after the tariff war. Definitely some Chinese industries are struggling. They have their own budget wars especially when they are still exporting things to the US. So maybe they do undercut prices here and there. However, we are moving towards a global state of inflationary expansion. A lot of debt and deficits they going to come from every country out there. It’s going to come from Europe is definitely happening in the US. Japan just revealed their own as we know $120 billion stimulus is coming. And right now, China, there have been rumblings in the central government about creating their own stimulus. Now, this is the difference between China and American stimulus. China right now has the ability to ramp up the stimulus like no other, especially when it comes to bond yields. Now, if we look at the US 10-year cost of borrowing, it is still somewhere between 4 to 4.2%. Now, if you look at China, it’s 1.8 to 1.9%. So you’re looking at double the borrowing cost and US debt is higher than China. So right now you have a bit of imbalance there as well. Now if we look at how the money how the money is being spent is also not a fair fight. The edge still goes to China. We know that cost in the US is very high. Salaries are much higher than in China. are the cost of almost everything even steel aluminum because of the tariffs they are 20 to 30% higher. So let’s say you spend $1 in the US maybe you get a$120 of output for example but if you spend a dollar in China you might be able to get $2 or maybe 250 worth of output. So China on a realistic basis they can stretch their money even further. So I think what the what the Americans what the Washington thinks is that they will be able to outlast China. But I don’t really think so. I think they will come to the realization sooner or later that they will need to have aable divorce with China before the debt implodes before the wealth inequality gets out of control and before people just revolt on the streets because of the collapsing dollar. I think we are going to reach that uh eventuality the endgame. So decoupling completely from China then in separate like geoeconomic blocks. This is the solution you think for the United States. I think that is going to be uh yeah the solution. Well I’m not saying that US and China trade will forever stop. There will definitely be some remnants of trade in hundreds of billions of dollars. Definitely talking about two gigantic economies that even after the terrorists for example right um 60 to 70% of toys made or bought in the US comes from China and that’s after the brutal tariffs so there will still be quite a bit of random remnants of trade but when it comes to the big things that really move the global economy like chips semiconductors I believe these two blocks will be quite separate it’s going to be unthinkable if you’re the US to allow allow all your G7 allies to buy Chinese chips. At the same time, if you’re China, you’re supplying the whole world with your cheap chips. Why would the rest of the world, especially bricks, Russia, global south, buy US chips that are 40 to 50% more expensive that some people say they have a back door in them? So, I guess a multipolar world or bifocation of economic blocks is going to happen sooner or later. Yeah. Well, the United States doesn’t want to isolate itself completely. So, if it forms geioeconomic blocks, the whole purpose would be then to capture those markets. Uh have them sever themselves completely from not completely but largely from China and commit themselves only to the United States. Uh this is difficult to keep in place though because if it makes more economic sense to trade with China, there has to be some reliance on um yeah other reasons for example security arrangements to keep this uh uh geoeconomic blocks together. Um but uh Europe though I think is a good example that is u the United States has now more or less told the Europeans and Europeans are obeying the idea that they should instead buy much more expensive American energy as opposed to Russian and the Europeans are following this they’re but of course this is intend increasing the energy prices in Europe um which is not an isolated problem of its own because now the industries are not competitive which means that uh at least the heavy industries are now have strategies of relocating to the United States. So they they kind of get the Europeans at both ends here. Uh but just my last question is what what do you see happening to Europe? Because the whole idea of this geoeconomic blocks is uh uh yeah is to is create a pre preferential position for the United States in as you said the G7 countries primarily. But this also means that its allies will not just be cannibalized but they will be weakened severely as well as you see with Europe. I mean I think this is why the Indians were cautious not to fall in this trap because they would be economically weaker and politically more of a vassel to Washington if they would accept being pulled into such a block. U but what do you see happening for for Europe? I think Europe is caught in a very bad situation. Well, there is a way, but I would give it a 99.999% chance it won’t happen. Now, a good way to for Europe to regain their competitive advantage is to frontr run the Americans and create a sort of separate deal with the Russians, right? If you are able to bring back cheap Russian energy, if you’re able to tap onto Russian labor and Russia has a lot of land and I’m quite confident that for example environment environmental regulations there are less stringent than in the EU. Now if you’re able to do that and front run Trump in such a manner uh that the Americans suddenly lose the leverage on the EU to buy expensive US energy for example Europe will be able to kickstart their economic engine. Now, Europe is not totally done right now, but all the actions that we see that I see that I’m sure that you see is just very confounding, right? Like they still want to continue supporting Ukraine to the bitter end when there’s a lot of evidence shows that sooner or later, whether that’s one year, 5 years, everything will just come to a screeching halt, right? And even more land will be lost to the Russians if you don’t really uh come to agreement sooner or later. And I guess Europe, if they are able to find a way to work out with one of their biggest neighbors, they’ll be able to wrestle a lot of advantages away from the US as well from China, right? China is getting a lot of cheap energy from the Russians. Why? Because they don’t have any other outlets to sell. Now, the Russians themselves, I’m not saying that the Russians will abandon China, but it’s just good economic statecraftraft policy to diversify your customers. So some volumes will flow to the EU. You know, Russia is still supplying Hungary with energy as well. So it’s it’s definitely possible for the Russians to sell a bit more energy to the EU, but the EU is just blocking their own progress. They’re just blocking their own outlets. A lot of the economies are facing either economic degradation or ind deindustrialization. Especially when it comes to Germany, I so I would say it’s not really much of an economic issue. It’s more about uh political indecision, block politics, and they just can’t ring themselves to say, “All right, we lost this one. Let’s prepare for the next one.” Yeah. Well, this is the difficult shift that has to take place in Europe. That is uh after the cold war, we redivided Europe because um well through NATO expansion in order to keep the United States in Europe. This was seen as the uh the recipe for prosperity. However, now that the United States in given that the world is multipolar is has all this incentives to leave Europe and uh well focus on the western hemisphere and Asia uh and also shifting to a pulse of extracting wealth from its allies. This is no longer a a good strategy. It’s the whole formula has ended. But now the solution I think for Europe to regain its prosperity is to end the dividing lines in Europe. That is to the exact opposite and end this new cold war against Russia. Uh but this is really an impossible idea to sell in Europe because the the hatred here of Russia that you know Russia is the source of all evil. If we just break them then America will come back and we’ll go back to the ‘9s. This is kind of the the thought. So there’s no political imagination after 80 years of lying of sorry living under the dominance of the US. There’s no political imagination to do something radical like not redivide and remilitarize uh the dividing lines of Europe. But um anyways uh thank you very much for yeah taking time to yeah share your insights. It’s uh really fascinating things which are happening now. Yeah sure. Thanks uh for having me here. Always a pleasure. And oh, can I ask you where where can people find you? Uh yeah, but only on YouTube right now. So just search Sean Fu. YouTube.com/shanfu gold. You can find me. I talk quite a bit about uh geopolitics, but mainly about economics, uh investing, finance, gold, and silver. So check me out. We definitely have something for you. Yeah. Well, when the when the global financial crisis began in 2008, the gold, I think, was at $800. Now, it’s at $4,200. So, I really recommend that people follow your channel to see why gold is exploding. So, thank you very much. No problem, Lord. Thank Thank you, CL.

Sean Foo is a financial analyst and a China expert. Foo discusses the deepening economic problems developing in Japan, the US and Europe.

Follow the excellent work of Sean Foo: https://m.youtube.com/@SeanFooGold

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